Most of the agriculture industry supports changes lawmakers have agreed on to revise Section 199A tax reform language, which currently gives farmers a financial incentive to sell through cooperatives.
The proposed changes “restores the balance of competition within the marketplace and provides fairness in the tax treatment of farm and ranch businesses,” says American Farm Bureau Federation president Zippy Duval.
“The need for swift passage is critical to provide certainty to farmers and ranchers as they sell stored commodities and make marketing decisions for this year’s crop,” he continued in a letter to members of the House and Senate on Wednesday.
Similarly National Corn Growers Association president Kevin Skunes, said the agreement is “extremely important for addressing the provision’s unintended consequences and restoring certainty to the marketplace for farmers.”
The International Dairy Foods Association also praised the agreement on Wednesday.
“IDFA applauds the leaders in Congress who care about the state of the U.S. agricultural economy and worked tirelessly to find a solution that will allow farmers to sell their agricultural products to their buyers of choice without being unduly influenced by tax code considerations,” said Michael Dykes, D.V.M., IDFA president and CEO.
Not all farm groups are pleased with the changes though. Roger Johnson, president of the National Farmers Union urged Congress to strike down the changes.
“Corporations just received one of the largest tax breaks in their history, the addition of 199A was an attempt to level the playing field for cooperative businesses,” he said. “To repeal parts of this important tax break would be to strike at the single most important benefit family farmers received from tax reform. Not only would corporations be better off, but farmers would be disadvantaged by working with their cooperatives.”
In his letter, Duvall urged Congressional leaders to include the changes to Section 199A in the omnibus spending bill that will be before lawmakers later this week.