Congressional lawmakers have reached a deal to effectively roll back a deduction for farmers who sell their commodities to co-ops that they are members of.

Agri-Pulse reports that the fix to Section 199A will equalize tax treatment of commodity sales, meaning that farmers who sell their grain or livestock through their cooperative will receive the same tax benefits as those who sell through a non-cooperative, whether that’s a major grain handler or independent elevator.  Under the tax law passed in December, farmers who sold their commodities to a co-op could deduct 20 percent of the gross value of their product, compared to 20 percent of the net value if sold elsewhere.

Democrats had objected to its inclusion, demanding expansion of low-income housing tax credits.  Republicans initially balked at the idea, but several rank-and-file lawmakers threatened to vote against the entire spending measure if the fix for Section 199A was not included.

The fix is supported by the National Council of Farmer Cooperatives and the National Grain and Feed Association.  However, National Farmers Union president Roger Johnson blasted the deal, saying in a statement that suggested fixes that would have helped small independent elevators were ignored in favor of language that benefited corporate interests.  An omnibus spending bill must pass Congress by Friday to avoid another government shutdown.