Bill excises tax error favoring farm co-ops

Congress’ approval Friday of an appropriations bill included a fix to earlier legislation that favored farmer-owned cooperatives over private buyers of grain and other agriculture commodities.

An apparent error by lawmakers in the federal tax law approved in December gave a bigger tax break to farmers who sold their goods to co-ops than to farmers who sold to private companies. Two Arkansasbased co-ops — Riceland Foods and Producers Rice Mill — stood to benefit.

Until Friday’s vote, the tax law allowed farmers to deduct 20 percent of their gross sales to cooperatives. Farmers who sold to other companies saw a 20 percent deduction on net income, a considerably smaller tax cut, according to critics.

Correcting the error “was a fundamental issue of fairness,” U.S. Secretary of Agriculture Sonny Perdue said in a statement Friday. “We should not be picking winners and losers through the federal tax code by favoring one side over another,” he said.