Kevin Cramer’s tax reform bill is bad for sugarbeet growers, co-ops and other ag producers
Elimination of popular deduction will take money out of producers’ pockets, hurt rural communities
In addition to hurting homeowners and homebuilders, college students and K-12 teachers, and working and middle class families, Kevin Cramer’s tax bill will also hurt cooperatives and ag producers, particularly sugarbeet growers.
Co-ops, sugarbeet growers and other ag producers have expressed concern about the elimination of a popular deduction that allows co-op members to keep money in their pocketbooks. The Domestic Production Activities Deduction, also known as Section 199, allows co-ops to return to their farmer-members all proceeds — nearly $2 billion annually — gained from ag products that are manufactured, produced or marketed through cooperatives.
“North Dakota’s economy was built by agriculture, and the history of co-ops here is one of pride, community and shared values,” said Ben Hanson. “Taking tens of millions of dollars out of North Dakota farmers’ pocketbooks each year will hurt families and the rural communities that are the backbone of the state. Kevin Cramer should make this deduction a line in the sand to get his support on the final version of the tax bill.”
On Monday’s episode of the Red River Farm Network show, Kevin Price, American Crystal Sugar Company Vice President of Government Affairs, said, “Section 199 works well for American Crystal and its shareholders. The loss of it will mean a big tax increase for sugarbeet growers. We’re working every angle we can find to keep it. We’re trying to find ways to preserve it in this tax package. I’m hopeful, but there is no guarantee that it will be preserved. So we have to do everything we can to make sure Congress is aware that eliminating Section 199 is a big problem for farmers.”
“As a fourth generation rancher, my family has depended on, and benefited from, membership in a whole lot of co-ops,” said Ryan Taylor. “I’ve seen the positive impact that co-ops have on rural communities across the state. Working with other cooperative members, and co-op employees, has been good for our ranch, and good for North Dakota. It’d be a real shame to see this deduction eliminated when co-ops play such a critical role in agriculture and our state’s economy.” Taylor is a former state senator and state director of USDA Rural Development.
In addition to the sugarbeet growers and the National Council of Farmer Cooperatives, Land O’ Lakes is strongly opposed to the elimination of Section 199; the American Soybean Association is against the tax bill not including a multiyear extension of the biodiesel tax credit; and the National Farmers Union has concerns that, by raising the deficit by $1.5 trillion, it will make it more difficult to get in 2018 a strong Farm Bill, which is critical for states like North Dakota.
