Sen. Grassley Notes Congress May Be Close to Section199A Tax Fix

DTN Ag Policy Editor Chris Clayton reported yesterday that, “Congress may be close to an agreement to replace the Section 199A language in the new tax law to curb the advantages for farmers selling products to cooperatives instead of private companies.

“Sen. Charles Grassley, R-Iowa, told reporters on Tuesday he understands a possible fix would essentially give farmer cooperatives similar tax benefits that they had under the old Section 199, the Domestic Production Activities Deduction. That tax break amounted to roughly 9% of a cooperative’s income, up to half the amount of wages paid by the cooperative. The co-ops then passed the benefits of that deduction down to farmer-members.

“‘I think it has reached a point that there isn’t a complete agreement, there’s enough agreement within the Congress that if we can do what we originally intended to do of maintain(ing) the status quo for co-ops, we’re going to go ahead do it even if the co-ops aren’t completely satisfied with what we’re doing,’ Grassley said.”

The DTN article noted that, “Basically the fix would be to reinstate the law was prior to the 2017 tax bill and reestablish the Production Domestic Activities Deduction the way it was over past 12 years.”

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Legislation to Improve Organic Farming Research Introduced

The Associated Press reported recently that, “A pair of U.S. senators is introducing legislation designed to improve organic farming research.

“Democratic Sen. Bob Casey of Pennsylvania and Republican Sen. Susan Collins of Maine say their legislation would reauthorize and incrementally increase funding for the U.S. Department of Agriculture’s Organic Agriculture Research and Extension Initiative.

They say federal investment in organic agriculture research hasn’t kept up with the growth of the industry. One of the consequences of that, they say, is that U.S. production of organic products has not kept up with demand from consumers.”

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Startups Have Unusual Pitch for Homeowners Strapped for Cash: Let’s Own This House Together

Peter Rudegeair and Christina Rexrode reported earlier this week at The Wall Street Journal Online that, “Some well-funded startups have an unusual pitch for homeowners strapped for cash: Let’s own this house together.

“A handful of companies, including those backed by marquee Silicon Valley names such as Andreessen Horowitz and Mark Zuckerberg’s philanthropic organization, are experimenting with a product that essentially lets them take an ownership position in a house along with the homeowner. The agreements, called shared-equity contracts, provide a new way for investors to get exposure to rising home prices across the U.S.

“Shared-equity products are aimed at new buyers who need help with a down payment, or current homeowners looking for an alternative to a cash-out mortgage refinancing or a home-equity loan. The first use has caught the attention of mortgage-finance giant Freddie Mac ,which recently agreed to buy loans on properties where one firm, Unison Agreement Corp. , contributes to the down payment.”

“Silicon Valley Explores a New Investment: Your Home,” by Peter Rudegeair and Christina Rexrode. The Wall Street Journal Online (February 18, 2018).

The Journal writers explained that, “The length of the contracts can vary from a few years to 30. Homeowners can repay early, including if they sell their house before the term ends. How much they end up owing depends on how the value of their home changes. Because the funds are equity, not a borrowing, they don’t require monthly payments.”

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Culver’s to Award $15,000 in Educational Funds to FFA Chapters

A news release yesterday from Culver’s stated that, “Culver’s is celebrating National FFA Week in a big way. Through its Thank You Farmers® Project, the restaurant will launch its fourth annual FFA Essay Contest on Feb. 19. The three winning essay writers will win $7,500, $5,000 and $2,500, respectively, for their FFA chapters.

“The FFA chapters are encouraged to use their prize money to support educational opportunities for their members, like attending the National FFA Convention & Expo in Indianapolis, Oct. 24–27, 2018. FFA members can submit their essays at Culvers.com/essaycontest.”

The release added that, “This year’s essay contest prompt is:

  • The 2017 National FFA Convention & Expo theme was ‘I can. We will.’ What does this mean to you, and how will you apply it in your future ag career?

“The contest ends April 6, 2018, at 5 p.m. CST.”

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Monsanto Lawsuit Regarding Dicamba Ban in Arkansas Dismissed

Associated Press writer Andrew Demillo reported on Friday that, “Arkansas’ ban on the use of a weed killer blamed by farmers in several states for crop damage will remain in place after a state judge dismissed a legal challenge by a maker of the herbicide.

Pulaski County Circuit Judge Chris Piazza dismissed the lawsuit by St. Louis-based Monsanto seeking to block the state Plant Board’s decision to ban dicamba from April 16 through Oct. 31. Arkansas has the toughest restriction in place on dicamba, though several states have imposed other restrictions or requirements.

“Arkansas enacted the ban after receiving nearly 1,000 complaints last year about the weed killer drifting onto fields and damaging crops not resistant to the herbicide. Arkansas is one of several states where farmers have complained about dicamba drifting. Monsanto was also challenging an earlier rule that specifically targeted its brand of dicamba. BASF and DuPont also make dicamba weed killers.”

The AP article added that, “Dicamba has been around for decades, but problems arose over the past couple of years as farmers began to use it to kill invasive weeds in soybean and cotton fields where specially engineered seeds had been planted to resist the herbicide. Because it can easily evaporate after being applied, the chemical sometimes settles on neighboring fields planted with seeds that are not resistant to dicamba.”

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ADM, Syngenta Settle Lawsuits Over Biotech Corn

Gregory Meyer reported on Friday at The Financial Times Online that, “Archer Daniels Midland and Syngenta, two giants of industrial agriculture, have settled lawsuits over the release of a new biotech corn strain that upended US grain exports to China.

“ADM, an international grain dealer, had accused Swiss-based seed company Syngenta of negligence when it introduced two new varieties of genetically modified corn to US farmers.

“The strains had not yet been approved by authorities in China and in 2013 were turned away by inspectors in Beijing, costing the grain-trading industry tens of millions of dollars.”

Mr. Meyer noted that, “Syngenta was also sued by farmers and Cargill, an ADM competitor. The farmers reached a $1.5bn settlement with Syngenta last September. The Cargill case is set for trial this September, Syngenta said. An annual report ADM filed late Friday revealed it reached confidential settlements with Syngenta in December.”

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Lawsuit Calls for EPA to Vacate Dicamba Registration

DTN writer Emily Unglesbee reported earlier this week that, “New details are emerging from a lawsuit calling for EPA to vacate the registration of Monsanto’s dicamba herbicide.

“Originally filed in January 2017, the lawsuit’s newly released briefs claim EPA ignored key requirements of the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA) and violated the Endangered Species Act when it registered Monsanto’s XtendiMax herbicide, designed to be sprayed over the top of dicamba-tolerant crops.

“It also argues that the agency was inappropriately influenced by Monsanto during the registration process.”

The DTN article stated that, “The lawsuit’s plaintiffs — The National Family Farm Coalition, Center for Food Safety, Center for Biological Diversity, and Pesticide Action Network — are among a crowded field.

Just two weeks ago, a panel of judges ruled that 11 separate lawsuits on dicamba drift damage should be consolidated in a federal court in St. Louis.  These lawsuits cover a range of complaints, but contain mostly farmer defendants seeking damages for crops injured by off-target dicamba movement and focus on the companies that sell the new dicamba formulations: Monsanto (XtendiMax), BASF (Engenia) and DuPont (FeXapan).

“The lawsuit by National Family Farm Coalition et al. goes further by targeting EPA and demanding it scrap the registration of XtendiMax entirely.”

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Reps. Fudge and Evans Introduce Bill to Reauthorize the Healthy Food Financing Initiative

A news release on Wednesday from Rep. Marcia Fudge (D., Ohio) indicated that, “Today, [Rep. Fudge] and Congressman Dwight Evans (PA-02) introduced legislation to reauthorize the Healthy Food Financing Initiative (HFFI). The Healthy Food Financing Initiative Reauthorization Act of 2018 authorizes $125 million to provide loans, grants and financing opportunities for food retailers, farmers markets, cooperatives and others who face barriers to carrying and selling fresh fruits and vegetables.

“‘Over 2 million Ohioans, including more than half a million children live in neighborhoods with too few supermarkets and places to purchase healthy, affordable food. This lack of access to healthy and nutritious food undermines the health and wellbeing of our communities,’ said Congresswoman Fudge.  ‘The Healthy Food Financing Initiative provides a proven way to ensure our children grow up with the resources they need to live healthy lives.'”

The release added that, “Accessing healthy food is a challenge for too many Americans.  The U.S. Department of Agriculture (USDA) estimates that 40 million people live in neighborhoods without easy access to fresh, affordable, and nutritious food options. This is particularly a challenge for low-income neighborhoods, communities of color, and rural and tribal areas.  The Healthy Food Financing Initiative Act of 2018 presents an effective and economically sustainable way to the problem of limited food access and can help improve the health of families and children.

“In addition to the direct nutritional benefits experienced by families, healthy food retail improves the economic health and well-being of communities and can help to revitalize struggling business districts and neighborhoods.  Healthy food businesses help to create jobs across the food system, increase or stabilize home values in nearby neighborhoods, generate local tax revenues, provide workforce training and development, and promote additional spending in the local economy.”

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Some Agricultural Companies Revamping Operations to Avoid Being Stung by New U.S. Tax Law

Jacob Bunge and Richard Rubin reported today at The Wall Street Journal Online that, “Some agricultural companies are revamping operations to avoid being stung by the new U.S. tax law.

Ethanol makers and family-owned grain companies are setting up new agricultural cooperatives to benefit from a provision in the law that gives farmers larger tax savings for selling crops to that kind of business. Executives say that if Congress doesn’t change the law or they can’t get their companies recognized as farmer-backed cooperatives, processing plants could run short of crops and small grain elevators could be driven out of business.

“Green Plains Inc., the world’s second-largest ethanol producer by capacity, registered part of its business as a cooperative in January after studying the new tax law. ‘We jumped on this right away as a backup plan,’ said Todd Becker, chief executive of the Omaha-based company, which buys more than 2,000 truckloads of corn every day. Scoular Co., another major grain company based in Omaha, is also forming a cooperative in response to the law, a spokeswoman said.”

The Journal writers noted that, “In Turon, Kan., Colten Katz said he has filled out the paperwork to set up a cooperative for his grain business, Turon Mill & Elevator Inc. If he doesn’t act, Mr. Katz said, local farmers will sell to nearby co-ops instead of to him, potentially bankrupting a company that has been in business since 1892.”

Today’s article added that, “Lawmakers, including the provision’s authors, say they’re working to change it, but they haven’t reached a deal yet. Sen. Orrin Hatch, chairman of the Senate Finance Committee, said Wednesday he was committed to ‘develop a solution to this issue that does not choose winners and losers and is fair to everyone involved.’

“A spokeswoman for Cargill said the Minnesota-based agriculture conglomerate ‘will continue planning for ways to remain competitive in the U.S. market’ under the new tax law, though Cargill hopes for Congress to resolve the matter.”

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Crop Insurance: Sales Closing Dates Near for Most Crops

A  news release earlier this week from the U.S. Department of Agriculture’s Risk Management Agency (RMA) indicated that, “Last year’s hurricanes, wildfires, and droughts, devastated parts of the South, Midwest, Northern Plains, and California, and were a stark reminder that agriculture is an inherently risky business. Federal crop insurance indemnities for these disasters totaled more than $1 billion in 2017.

“‘The prosperity of the rural economy depends on our farmers and ranchers and their ability to bounce back from adverse conditions,’ said Farm Production and Conservation Acting Deputy Under Secretary Robert Johansson. ‘Crop insurance is central to a strong farm safety net, and producers should talk with their agents to purchase their coverage before the sales closing date.’

“To prepare for this year, the [RMA] urges farmers to sign up for crop insurance before the sales closing dates for eligible 2018 spring crops. The sales closing dates for most spring-planted crops is February 28 or March 15.”

The RMA update added that, “Sales closing dates vary by crop, state, and county. More information about deadlines are available in the RMA Actuarial Browser. To discuss dates and options, producers should contact their local agent. Learn more at www.rma.usda.gov.

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