Across rural America, where farm fields stretch to the horizon and small towns pepper the landscape, agricultural cooperatives stand as pillars of strength and resilience.
These businesses, including the farmer-owned and locally focused company I lead here in eastern Nebraska — Frontier Cooperative — play a crucial role in driving our nation’s competitive agriculture sector while sustaining the economies of our rural communities.
From the outside, agriculture cooperatives may look like any other business. But they are so much more. And at a time when U.S. farmers are playing an increasingly vital role in feeding a growing global population, it’s never been more important to understand and support the community-based, local-first co-op business model that puts our trusted farmer-members first.
At their core, agricultural cooperatives embody the spirit of collaboration and mutual support. The cooperative I lead serves more than 6,000 farmers across 75 communities, helping empower Nebraska farmers and their communities through economies of scale, stronger bargaining positions and support that only suppliers intimately familiar with their producers can provide.
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Our strength is built by pooling resources and leveraging our collective voice. Working together as a cooperative system helps our farmers stay competitive in an increasingly consolidated and global marketplace. We strive to ensure that member-farmers have the tools to meet the evolving challenges that could threaten our ability to produce a safe and abundant food supply.
That means providing direct business support and essential services such as purchasing inputs, processing crops and marketing products more effectively than our members could individually.
In recent years, a tax provision known as Section 199A has helped co-ops like mine support our farmer-members and facilitate reinvestment in the local communities we operate. However, while the corporate tax rate was permanently reduced in 2017, the rules that apply to cooperatives across Nebraska and the rest of the U.S. are scheduled to expire next year. Without an extension of Section 199A, Nebraska’s farm families would face a significant tax increase while already struggling with soaring interest rates and inflation.
I thank Rep. Adrian Smith (NE-3), a key member of the House Ways and Means Committee, for cosponsoring the Main Street Tax Certainty Act, which would make Section 199A permanent. This legislation would allow farm cooperatives and Nebraska’s farmers to remain competitive and able to invest back into their local communities.
I recently joined a roundtable with Smith and Iowa Rep. Randy Feenstra in Omaha, where I was joined by fellow cooperative leaders, to discuss how vital Section 199A is for the future of agriculture. I used the opportunity to share a recent example of how Section 199A made possible an investment in our new Nebraska facility that has created over 30 jobs and contributed significantly to the local tax base.
As an owner of Land O’Lakes, Inc., my company is part of a broader family of cooperatives as well, serving as advocates for farmers, including those across the Cornhusker State who help contribute more than $21 billion to Nebraska’s economy and provide one in four jobs in the state. Most of our Frontier facilities are in small towns throughout Nebraska, and if those communities don’t have a hospital or school district, we’re usually the largest employer.
An extension of the Section 199A tax provision is an investment in the future of rural America, our farmers, our families, our communities and their institutions. That’s why we are urging Congress to pass an extension, or make permanent, these important tax provisions.