Missouri governor's proposed budget cuts spare farmers, but not biodiesel debt | St. Louis Public Radio

Missouri governor's proposed budget cuts spare farmers, but not biodiesel debt

Feb 22, 2017

With Missouri facing slower income growth, Gov. Eric Greitens isn’t sparing the state’s Department of Agriculture from proposed budget cuts. 

The agency will receive about $14 million dollars less in the coming fiscal year, which new agriculture director Chris Chinn says is more like "belt tightening." But she made it clear that farmers and ranchers will receive the same level of services they currently see.

"We just don't have a lot of extra money to do a lot of promotion and education, which was something that we were looking forward to being able to do," she said. "But we've got to do our part, and we're happy to carry the water with the rest of the divisions in state government to make sure that we can be accountable to our taxpayers."

Credit Marshall Griffin|St. Louis Public Radio

What’s taking a hit? Biodiesel, a soybean-based product for which the state’s incentive program ended 10 years ago. Yet, Missouri still owes $4.5 million to farmers and biodiesel plant operators.

Chinn said Missouri will make only a partial payment on that debt for fiscal year 2018, which begins July 1.

"This is kind of a liability out there on our books that we are going to work at getting back to the biodiesel industry," she said. "The governor did allow us to have a million dollars in the budget this year to help that, and I think that's a great step forward."

Past attempts to pay off the debt were repeatedly delayed during budget battles between Democratic governor Jay Nixon and the Republican-led legislature.

A plan is needed as soon as possible to pay back the rest, Missouri Soybean Association CEO Gary Wheeler said — he hopes within two years.

"Those biodiesel plants are 51 percent owned by Missouri soybean farmers," he said. "Are they hurting from it? Well, sure ... it's $4.5 million that needs to be paid to these plants, and it either can make or break a dividend to these growers."

Corn and soybean farmers in the state say the agriculture industry is more at the whims of the environment than state funding.

Michael Willis grows both types of crops and raises cattle near King City in northwestern Missouri.

"Back a few years ago, I can't remember if it was 2008, when there was a drought, I think, in Russia, no one really had planted much wheat (here), and then prices spike in the summer," Willis said. "The people who kept doing their typical rotation – corn, soybeans and wheat – they actually did very well because they had that higher wheat price to benefit from."

But Richard Oswald, who grows corn, soybeans and hay near Rock Port, also in northwestern Missouri, is concerned that Missouri farmers are about to face tough times due to dropping commodity prices.

"Right now there are storm clouds on the horizon," Oswald said. "We've had a pretty good period of prosperity on most farms and now we're living off that prosperity, because the last couple of years we've seen declining prices and some yield problems, too, based on growing conditions.”

Other than biodiesel, Greitens' cuts aim to make permanent the temporary reductions former Gov. Jay Nixon, a Democrat, put in place. They included:

  • Missouri Agriculture Product Promotion (new program), $500,000
  • Fisher Delta Asian Carp Control (new program), $250,000
  • Northeast St. Louis County Community Garden Project (new program), $50,000
  • Jefferson City Farmer’s Market (new program), $250,000
  • Dairy Revitalization (existing program), $1,175,000
  • State Fair Pavilion in Sedalia (new program), $500,000

Nixon also withheld $1.9 million from biodiesel repayments last July and $2.9 million in September, both times saying it was necessary because of excessive spending by Republican lawmakers. But he restored $3 million for biodiesel in October after some extra revenue became available.

Follow Marshall Griffin on Twitter:  @MarshallGReport

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