 This is the Agricultural Law and Tax Report. I'm Roger McCullen. Many farmers are members of an ag co-op. A co-op can distribute cash as well as non-cash patronage to the patron. Qualified distributions allow the co-op to deduct both the cash and non-cash payments to reduce its income. Non-qualified distributions may also be made. But what are the tax effects to the farmer patron? I'll be back in a moment to discuss.