Nixon OKs new grain dealer rules

Tuesday, July 12, 2011
Speaking from a warehouse at the MFA grain storage facility in Mexico, Mo., Gov. Jay Nixon addresses reporters about an omnibus agriculture bill. He signed the bill into law Monday. (Tim Sampson ~ Missouri News Horizon)

MEXICO, Mo. -- On a hot summer day when most farmers would be moving hay up to the loft, Gov. Jay Nixon signed a comprehensive package of agriculture provisions into law.

Toward the end of session, lawmakers attached a number of measures all related to agriculture. The act contains sales tax exemptions for farmers, establishes an animal protection fund and places tougher restrictions on grain dealers.

"One of the most important things [the law] does for Missouri farmers is give them additional security when it comes to grain. This bill protects grain producers by reducing the risk of failure by grain dealers by requiring increased financial security and oversight," Nixon said.

The rules are a direct response to a 2009 case in which Cathy Gieseker, a grain dealer from Martinsburg, Mo., was arrested and was convicted of defrauding roughly 180 farmers out of $27 million in a Ponzi scheme.

The law will now raise the minimum surety bond requirement for licensed gain dealers from $20,000 to $50,000 and raise the maximum from $300,000 to $600,000. The act also requires dealers to maintain a minimum net worth of 5 percent of the total amount of grain purchased in the previous fiscal year. Dealers will also be required to include annual grain purchases on financial statements that are audited or reviewed by a certified public accountant.

'A single bad actor'

Nixon said those and other requirements will bring Missouri more in line with the policies of other grain producing states.

"Together we'll make sure that we never see another case like the one we saw in Martinsburg in 2009, where a single bad actor can steal assets from hundreds of hardworking farmers -- never again," he said.

The bill's original author, Sen. Brian Munzlinger, R-Clarence, was on hand at the bill signing ceremony, which took place at the MFA grain storage facility in Mexico. He was quick to champion two pieces of the bill that provide direct financial assistance to Missouri farmers.

The bill establishes state and local sales tax exemptions for farm machinery. It also creates the Missouri Farmland Trust, authorizing the Department of Agriculture to accept or acquire farmland in the state for the purpose of leasing the land to beginning farmers.

"This bill is something that does a lot of different things and a lot of very good things for agriculture," Munzlinger said. "Not only for those of us who are in agriculture right now, but [the Farmland Trust], that's going to help our next generation come to the farm."

The act also establishes the Puppy Protection Trust Fund, which allows individuals and corporations to donate a minimum of $1 on their tax returns -- or $2 on a joint return -- to be used by the state for the administration of the Canine Cruelty Prevention Act. The fund is part of revised Proposition B legislation signed into law earlier this year.

The agriculture bill also contains new protections against noxious weeds that threaten crops and allows the Department of Agriculture to begin publishing its annual brand book online-- a provision expected to save the state a significant sum on printing costs.

Rep. Tom Loehner, R-Koeltztown, who carried the bill through the House of Representatives, said the final product would help protect the growth of Missouri's agriculture sector.

"It was a pleasure to serve all of agriculture," Loehner said of his work on the bill. "Agriculture is my life."

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