Section 199A fix faces eleventh hour statute book tussle  

A plan to fix a tax loophole that is affecting the US supply chain may be derailed by divisions within the US government, as some Democrats threaten to block its inclusion in a budget bill scheduled to be passed this week, sources at the NGFA’s convention said Monday.

The tax anomaly was introduced in December with the passage of the Tax Cuts and Jobs Act, which scrapped and replaced a tax break for farmers, but only if they sell to co-operatives and not privately held companies - a move that has rankled big agribusiness players.

“The change has caused significant stress, but some Democrats are not willing to get it on the bill,” one source said, referring to the language that has been agreed to address the anomaly.

Remedying the tax situation relies on inserting the agreed language into an upcoming fiscal omnibus bill, that has to be passed by the end of this week. 

While most sources are confident that the Senate will approve the inclusion of the wording, it may face a tougher ride through the lower chamber - the House of Representatives.

Failure to get the wording into the bill may further delay addressing a solution that has seen some of the big global players of the US agribusiness, such as Bunge, Cargill, Dreyfus and ADM, potentially frozen out of their typical trading relations. 

During a presentation to the NGFA’s convention in Arizona, the US Secretary of Agriculture, Sonny Perdue, spoke of the need to urgently address the situation.

“It’s in all of our best interests to get this fixed so that the market disruptions don’t bleed over,” Perdue told the gathering.  

The Fiscal Omnibus bill is due to be discussed and approved by March 23.

Failure to do so could trigger another US government shutdown.