Archer Daniels Midland Co. is seeking ways to offset a provision in the new U.S. tax law that gives farmers an incentive to sell their crops to rival cooperatives, Reuters reported.
Under the provision, farmers get a 20% deduction on payments for sales to farmer-owned cooperatives but not for sales to private or investor-owned grain companies. The provision has raised concerns among U.S. ethanol producers and privately run crop handlers that they could be excluded from the competition to procure farmers' harvests.
CEO Juan Luciano said ADM has already suffered a minor commercial impact from the rule and that the company is urging lawmakers to work with grain companies and cooperatives for a legislative response to the issue. "Of course, the team has been looking at options," Luciano said, after the company released its quarterly earnings. "We're not going to sit idle and see ourselves losing share," he added.
The company did not clarify what specific options it is considering or the impact of the provision on the company. A representative from the company declined to provide details, Reuters said.
