A provision in the overhaul
of the U.S. tax code had some unintended negative side effects on certain
agribusinesses across the country. The provision gives producers a chance to
cut down on their taxable income if they sell their commodities to agricultural
cooperatives. It appears that farmer-owned cooperatives like CHS, Inc., came
out ahead of other agribusiness giants like Cargill and Archer Daniels Midland.
The Republicans who crafted that part of the tax bill were John Thune of South
Dakota and John Hoeven of North Dakota. Both say they were trying to preserve
an important provision from the previous tax code and that the outcome for
co-ops was not intentional. They’re now working with other lawmakers and
officials from the agriculture industry to find a reasonable solution. USDA
Undersecretary for Marketing and Regulatory Programs, Greg Ibach (Eye’-baw),
says the aim of the Tax Cuts and Jobs Act was to spur economic growth across
America, including agriculture. The goal was to preserve the benefits of
Section 199A for cooperatives and their patrons. He says the current language
picks winners and losers in the ag marketplace, which is not something that
should happen.
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