US shutdown unlikely to hinder Section 199 resolution: NGFA

The US government shutdown is unlikely to have an impact on the coalition of US agribusiness interests working to resolve the unintended consequences arising from a change in US taxation, a spokesperson at the National Grains and Feeds Association told Agricensus.

“The government shutdown should have no effect on our ongoing work with NCFC to arrive at an equitable solution,” Sarah Gonzalez the Director of Communications and Digital Media at the NGFA said Monday.

The repeal and replacement of Section 199 just ahead of the Christmas break caused some disquiet in early January, when it was realised that a tax break introduced for US farmers gave them a substantial incentive to trade with cooperatives.

That left some of the world’s biggest agribusiness companies, companies like Archer Daniels Midland, Bunge, Cargill and Louis Dreyfus, at best trading at a disadvantage and at worst frozen out of a key link in the US grains supply chain.

The NGFA, which includes the so called ABCD companies in its membership as well as cooperatives such as CHS, stated earlier in January that it was heading up a coalition of industry interests to work alongside the National Council of Farmer Cooperatives (NCFC) to address the issue.

Staff of the two senators who had initially championed the Section 199 change, Senators Thune and Hoeven, are also involved in finding the resolution – although it’s not entirely clear how the issue can be addressed now that the legislation has been passed.