Private grain buyers working with senators to correct tax overhaul provision that helped grain co-ops - Entrepreneur Generations

"Republican U.S. senators are working with some of the world's biggest agricultural merchants to undo a last-minute provision in the tax overhaul that threatens to distort the grains market and starve private firms of corn, soy and wheat supplies," Tom Polansek reports for Reuters. "The provision gives farmers a 20 percent deduction on payments for sales of crops to farmer-owned cooperatives, but not for sales to private or investor-owned grains handlers."

It was intended to compensate co-ops and the farmers who own them after the tax overhaul eliminated a part of the tax code, Section 199, that had benefited them for more than 10 years. But private grain companies could lose out since farmers have an incentive to sell to co-ops.

"If legislators do not address the provision by the autumn harvest, private grain companies could lose out on deals to buy billions of bushels of corn and soybeans. Farmers already are looking at how they can transfer grain stored at private elevators to co-ops to take advantage of the new law," Polansek reports.

Co-ops praised the move. "Chris Pearson, chief executive of the South Dakota Wheat Growers co-op, said on Twitter on Wednesday that the law 'gives farmers some nice tax advantages when doing business with the ORGANIZATION THEY OWN!'" Polansek reports.

Large private grain traders like Cargill Inc. and Archer Daniels Midland Co., who would lose out with the provision, have urged senators to change it--and it looks like they're listening. The National Council of Farmer Cooperatives and the National Grain and Feed Association have been working with Republican senators John Hoeven of North Dakota, John Thune of South Dakota and Pat Roberts of Kansas to find a more palatable solution. The U.S. Department of Agriculture said last week that it expects a solution soon.



from The Rural Blog http://ift.tt/2Djxh50 Private grain buyers working with senators to correct tax overhaul provision that helped grain co-ops - Entrepreneur Generations

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