U.S. ag secretary addresses trade issues at NGFA meeting

by Jay Sjerven
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USDA Ag Secretary Sonny Perdue
Perdue said it was critical to rectify the unintended incentive given to producers in the tax law to sell their crop to cooperatives in preference to private companies.
 
SCOTTSDALE, ARIZONA, U.S. — Secretary of Agriculture Sonny Perdue, in remarks made March 19 to members of the National Grain and Feed Association attending their annual meeting in Scottsdale, acknowledged these were anxious times for U.S. farmers given many were operating at break-even or even below break-even because of relatively low crop prices and because of concerns over trade and other government policies. Perdue’s comments were wide-ranging touching on USDA reorganization, infrastructure, Renewable Fuel Standard policy, the farm bill, trade and the need to “fix” the infamous Section 199A of the recently enacted tax law. Most emphasis was accorded to trade and Section 199A.

Perdue said it was critical to rectify the unintended incentive given to producers in the tax law to sell their crop to cooperatives in preference to private companies. Essentially, Section 199A as written allows producers to deduct 20% of their gross sales if they sell to cooperatives whereas they may deduct only 20% of their net sales if they sell to a non-cooperative business. Industry has worked with members of Congress to draft language aimed at fixing the problem they hope will be attached to the omnibus spending bill that may be voted on this week to prevent another government shutdown.

Perdue said it was important and in everyone’s interest to get the matter resolved “so we can put it in the past and move forward.”

He also praised the efforts of the NGFA to resolve the Section 199A issue.

Perdue affirmed his support for an improved NAFTA. He acknowledged President Trump’s negotiating strategy is “a little unorthodox” but he asserted the president’s threat to withdraw from the pact opened the way for the current talks. Perdue similarly suggested the administration’s exempting Canada and Mexico from the tariffs on steel and aluminum also may improve prospects for negotiating a better NAFTA.

Perdue noted that the administration also was investigating whether it might be possible to rejoin the Trans-Pacific Partnership if better terms could be secured than those negotiated by the Obama administration and that currently form the basis of the TPP as it exists today.

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