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Multi-million dollar tax credit bill for Missouri farmers advances

by Cameron Barnard and Sean Brynda | May 12, 2022 at 4:00 a.m.
Mike Bernskoetter

The Missouri Legislature passed the Agricultural Economic Opportunities bill Tuesday, which would add a litany of new and extended tax credits pertaining to state agriculture.

The bill would extend the tax credits on meat processing facility expansion and modernization and wood energy credits.

The bill is sponsored by Rep. Brad Pollitt, R-Sedalia, who said farmers need a lot of tax credits and incentives to keep providing products from their farms to markets.

"Right now, farmers are paying in hay and fertilizer to keep their farms going," Pollitt said. "This has caused an issue for cattle farmers who rely on that hay, which is adding more problems to the supply chain."

Missouri is the third-largest producer of cattle in the United States, according to the Missouri Department of Agriculture.

In an interview, Pollitt said farmers must schedule the butchering of cattle around one to two years out due to current lack of butchering availability. That's something he hopes this tax credit would alleviate by incentivizing those facilities to expand and become more efficient.

"To give the small producers that are out there, that've got five employees and may butcher six beef a day and five hogs a day, the ability to expand and double their employees and double the amount of animals that they could slaughter in a day's time in order to meet that demand," Pollitt said.

Sen. Mike Bernskoetter, R-Jefferson City, said the wood energy tax credit is needed to incentivize the use of discarded sawdust and other wood refuse.

"It's cheaper just to let it sit on the ground than it is to pay somebody to haul it away," he said, "but you can't really let it sit on the ground because it causes problems."

The bill would also create new tax incentives in the form of an ethanol blended credit and a biodiesel fuel credit. They would give a credit of $0.05 per ethanol fuel gallon sold and $0.02 for each biodiesel gallon produced.

Pollitt said he hoped it would encourage the greener fuel and expand jobs on farms creating the biodiesel and ethanol fuels.

He added it's important these tax credits alleviate some of the issues in the current agricultural supply chain.

"We need to continue to pump money into those rural communities, so they'll continue to create jobs and create that value-added product," he said.

Added to the bill was an emergency clause that would cause it to go into effect as soon as it is signed by the governor, allowing the agriculture industry to quickly begin to use the tax credits.

The bill would cost the state general revenue fund $11 million-$40 million by 2025, according to a staff analysis.

A tax credit for rural jobs was removed from the bill after concerns the program would end up costing too much. Bernskoetter said a similar program in Georgia wasn't paying for itself.

Rep. Barry Hovis, R-Whitewater, agreed with Pollitt's goals in providing additional support for farmers.

"There will be an add-on of problems for farmers and the global economy if this emergency clause is not passed," Hovis said.

Eventually, Pollitt's bill, House Bill 1720, passed on a 115-20 vote. It then passed the Senate on a 28-6 vote and now awaits the governor's signature.

The work of the Missouri News Network is written by Missouri School of Journalism students and editors for publication by Missouri Press Association member newspapers.

Click the links below in our digital edition to read the full bill:

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• HB 1720: Agricultural economic opportunities

Sponsor: Rep. Brad Pollitt


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