US ags lobby looks to pin S199 resolution on key Feb 8 shutdown deal
A consortium of US agriculture interests working to fix controversial tax changes introduced in December are hoping to pin a legislative solution to the crunch financing package that Congress needs to pass to avoid another shutdown.
According to an update from the US industry group National Grains and Feed Association, released January 31 and sent to its members, a resolution will be attached to a bill to be introduced as early as next week.
The NGFA is working with the National Council of Farmer Cooperatives and representatives from major agribusiness interests such as Cargill, Louis Dreyfus and ADM, along with political figures to find a solution.
“Staff members of the Senate Finance Committee, in consultation with the House Ways and Means Committee, already have begun drafting legislative language to enact a solution,” the statement from the NGFA confirms.
The controversy erupted earlier in the year, when it became apparent that the flagship tax reform introduced as part of President Donald Trump’s campaign promise had unwittingly repealed and replaced a key agriculture tax break - known as Section 199.
The replacement, Section 199A, reinserted a tax condition for farmers that gave them a hefty discount if they traded with US-based cooperatives, including such major agribusiness players as CHS, but not with privately-owned businesses.
That effectively meant a significant portion of the US supply chain, including giants such as Cargill and ADM, could be frozen out as farmers focused on cooperative deals.
“Congressional staff and NGFA are focused on attaching a legislative correction to Section 199A to what likely will be one or more stop-gap spending bills to continue funding federal government operations,” the statement continues.
That ties together two dominant strands of current US legislative narrative - the redress of Section 199 alongside the gathering impasse around the enactment of President Trump’s agenda.
On January 20, the US government was shutdown for nearly three days following a congressional failure to find agreement on key elements of the Trump legislative agenda.
That provoked a standoff over passing of an extension to government funding, which was ultimately resolved when the Republican Party made concessions around discussing key Democrat demands.
However, that only provided funding through to the February 8 deadline, meaning battle lines will once again be formed as the key vote draws nearer.
Attaching it to the funding bill is likely to increase the chances of it being passed, with the NGFA expecting one or more spending bill opportunities to occur between February 8 and early March.
“It goes without saying that our preference is sooner rather than later,” the report says, pledging that the Joint House-Senate Committee on Taxation is also engaged “in an effort to ensure that a legislative solution to this complex issue is done correctly this time around.”
The NGFA also sets out its twin goals in the current negotiations; to restore the competitive landscape to ensure a marketplace and choice for all agricultural producers, and to replicate the tax benefits that have been extended to cooperatives prior to the December 22 change.
While the NGFA has stressed that its members are drawn equally from cooperatives and privately owned and independent businesses, the so-called ABCD giants of the agribusiness have worked hard to redress the situation, with most issuing statements underscoring their restrained dismay at this situation and pledging to work with their peers to resolve.