Farmers, grain cooperatives to benefit from new tax law
Friday, March 09, 2018
QUINCY -- Farmers seem to be one of the groups that will benefit the most from the Tax Cuts and Jobs Act.
Under the new tax law, farmers in 2018 will be able to deduct 20 percent of their total sales when they sell their crops to a cooperative, which for some farmers could mean zero taxable income.
Reuters reported last month that ethanol producers and privately run grain handlers fear they will be cut out of the equation. ADM told Reuters it was evaluating the provision and "various potential solutions" to it.
"It is going to put us out of business as a private if something is not changed right off the bat," said Doug Bell, president and general manager of Bell Enterprises Inc. "There is just no reason whatsoever why a farmer would do business with anyone other than a co-op."
Some farmers seeking to take advantage of the new deduction are already asking about transferring grain they have stored at private elevators and selling it to cooperatives, Bell said.
The Associated Press reported that the provision was inserted into the tax law bill by Senate Committee on Agriculture, Nutrition and Forestry members John Hoeven, R-N.D., John Thune, R-S.D., and other legislators just before the bill was sent to President Donald Trump. Hoeven and Thune are negotiating changes to the provision with the National Council of Farmer Cooperatives and the National Grain and Feed Association, Agri-Pulse Communications said.