Under the new 199A deduction, farmers can sell their production to a coop and take a tax deduction for net earnings at up to 20 percent of the gross value of their sales. By contrast, if they sell to a non-coop business, their maximum deduction is 20 percent of earnings. The profit implications are huge, and this will strongly encourage farmers to sell to coops rather than to other private or publicly traded agribusinesses. In fact, some of the manipulations being considered to exploit or maneuver around the new law include:

Accountants are advising family farmers to convert their farm structure into small coops. Since coops (especially in the South) cannot handle the volume of trade soon to be diverted their way, they are considering h...