You are here

U.S. lawmakers nearing deal on tax law's impact on grain market

WASHINGTON, Feb 8 (Reuters) - U.S. lawmakers are close to
resolving a problem with the new federal tax law that gives
grain cooperatives an unintended market edge over private
companies, but have had a hard time getting agreement among
members of the farm sector, a Republican senator said on

A provision in the Republican tax overhaul that President
Donald Trump signed into law on Dec. 22 allows farmers a 20
percent deduction on payments for sales of crops to farmer-owned
cooperatives, but not for sales to private or investor-owned
grain companies such as Archer Daniels Midland Co and
Cargill Inc.

That has driven fears among U.S. ethanol producers and
privately run crop handlers they could be squeezed out of the
competition to buy farmers' harvests.

Senator John Thune told reporters that lawmakers are aiming
to get a solution into spending legislation that Congress would
need to take up next month. That would replace a measure to keep
the government funded through March 23, which lawmakers hoped to
adopt on Thursday.

"We haven't gotten consensus within the stakeholder
community on the language, but we have I think probably as good
as we're going to get at a solution," the South Dakota
Republican said.

He declined to disclose details of the prospective solution.

Thune and other Republican lawmakers from grain states have
been working to find a solution with interested parties for
about six weeks.

"What we found was trying to satisfy co-ops and private
grain operators was a challenge, and trying to get both of them
to agree on final language has been a real challenge," Thune

Lobbyists initially expected an agreement to be attached to
one of the short-term funding bills that Congress has considered
this year.

But Thune said it could find a home in a longer term
spending measure, if Congress can agree on a proposed two-year
spending plan now before lawmakers.

"It'll give us a little more time to perfect it. But I think
... we've got it about as good as we can,” he added.
(Reporting by David Morgan; Additional reporting by Tom
Polansek in Chicago; Editing by Chris Reese)

© Copyright Thomson Reuters 2018. Click For Restrictions -

Read more about

Talk in Marketing

Most Recent Poll

Do you agree or disagree with President Trump’s negotiating style for trade agreements?