Missouri’s agricultural showcase begins Thursday as the State Fair opens in Sedalia.

State Agriculture Director Jon Hagler says the State Fair does indeed showcase Missouri agriculture.

"Agriculture is the backbone of Missouri’s economy and the State Fair is our annual celebration of the best that we have to offer in this vital industry," Hagler said during a news conference at the Missouri Department of Agriculture in Jefferson City.

Opening Day ceremonies begin at 10am Thursday, with the parade at 6 that evening. Admission costs only a dollar the first day. Cross Canadian Ragweed and Cash Cowboys play that evening. Entertainment includes the MRCA Exceptional Rodeo, Heart, Kansas, Shinedown and Brooks & Dunn. The Governor’s Ham Breakfast will be held the 20th. The Fair wraps up Sunday, August 23rd.

Governor Nixon says he enjoys it all, but his favorite aspect?

"My favorite part is seeing the number of young 4-H’ers that are there, showing their animals," Nixon replied. "It just gives you a sense that agriculture, as an industry, in the state of Missouri has a long history, but also a bright future."

More than 4,600 FFA and 4-H students will exhibit livestock during the 11 days of the State Fair.

The State Fair drew 313,000 people last year. Officials hope to draw 320,000 this year.

Download/listen Brent Martin reports (:60 MP3)

House Speaker Ron Richard wants the legal issues clouding a grain fraud case to clear away a bit before he appoints a task force to study the issue further.

Rural members of the House , alarmed by both the fraud case emerging in east-central Missouri and the grain elevator bankruptcy in northwest Missouri, quickly put together legislation to address the issue ( HB915 ). A bill increasing the bond required of grain dealers and elevators and making it a misdemeanor for a licensed grain dealer to act outside the scope of his license passed the House, but failed to move in the Senate.

Speaker Richard, a Republican from Joplin, tells the Missourinet the cases raised questions he believes need to be addressed.

"We want accountability to make sure that if people are selling or buying grain they are insured, bonded," Richard says.

During the legislative session earlier this year, Richard had said he would appoint a task force to study the problem. Now that federal and state criminal charges have been filed against Cathy Gieseker of Martinsburg, he says he would like to see the case work through the legal process before considering appointing a task force.

Richard expects to gather rural legislators together during the Veto Session in September to discuss whether a task force should be formed.

"I’ll probably wait until Veto Session and have a meeting with all the ag guys and say, ‘Where do we go from here?’" says Richard.

Two cases shook rural lawmakers at the Capitol during the legislative session. The Gieseker case was beginning to surface, with estimates that it could grow to a $15 million dollar fraud case. Federal and state charges have been filed. The total has grown to $27 million with federal prosecutors speculating that it could grow to $50 million. Even as worries centered on the east-central Missouri case, another development took place across the state in northwest Missouri’s Gallatin. The Gallatin Grain Company went bankrupt. In February, Danny Froman voluntarily surrendered his warehouse and grain dealer licenses to the Department of Agriculture after an inspection of the company. Both cases have left hundreds of farmers will little hope of recovering millions in losses.

The major legislation discussed by lawmakers has been an increase in surety bonding requirements. The maximum bond a grain dealer or elevator has to carry in Missouri is $300,000. One bill sought to raise that to $1 million, but industry leaders stated that that high a bond could force elevators out of business. A revised measure sought a maximum bond of $600,000 and a minimum of $50,000. Bond requirements would be based on the amount of business handled by a grain operation.

Some legislators expressed frustration on how to attack the problem. They noted that even a bond of $600,000 wouldn’t come close to compensating farmers for losses and they pointed out that addressing a fraud case is different from addressing an elevator bankruptcy case.

Download/listen Brent Martin reports (1:15 MP3)

Industry insiders, shocked by a huge grain market fraud case, caution the legislature against an over-reaction.

Executive Director Steve Taylor with the Missouri Agribusiness Association says the criminal case being built against Cathy Gieseker, a grain dealer out of Martinsburg, wasn’t as surprising to his members as you might think.

"When Gieseker was operating and they (his members) were getting out-bid by a dollar or more a bushel, they knew something was up," Taylor says.

Taylor says grain dealers and elevators will compete hard for a nickel difference in the price of a bushel of grain; even harder for a difference of a dime or a quarter.

"So, when you’re getting beat out for business over more than a quarter a bushel, you sit back and think, ‘How is this happening?’"

The most popular recommended response to the Gieseker fraud case is to increase the surety bond grain dealers and elevators are required to have on hand. The bonds are used to compensate farmers who lose money when a grain dealer or grain elevator goes bankrupt. Taylor has two objections. First, he notes none of the bonds being discussed could even come close to compensating farmers in the Gieseker case. Second, he says that increasing bond requirements too much could force some of his members out of business.

Talk at the Capitol has centered on increasing the bond from the current maximum of $300,000 to $600,000 and establishing a minimum $50,000 bond. The bond would be based on about 1% of sales. Federal and state charges filed in the Gieseker case accuse her of defrauding nearly 200 farmers out of at least $27 million, perhaps as much as $50 million.

Taylor says his members, agricultural wholesalers and retailers, have discussed a certification process so farmers know they can trust who they deal with.

"We need to look how we can, as an industry, work harder, work with the department ( Missouri Department of Agriculture ), work with grain producers and make sure, as much as we can, that this never happens again," Taylor says.

Download/listen Brent Martin reports (1:15 MP3)

An alleged $30-to-50 million grain fraud case in north-central Missouri has sparked calls for changes in state law, calls the State Agriculture Director has heard.

Missouri Agriculture Director Jon Hagler says he will work closely with legislators reacting to the Gieseker grain case.

"What I think is important is that we find the right balance," Hagler tells the Missourinet. "When you have a lot of small dealers and a lot of small warehouses, if you raise the cost of business too much, it puts them out of business and then there’s not enough competition in the marketplace and farmers suffer."

Talk now centers on increasing the surety bond requirements for grain elevators and grain brokers. Bonds now are based on the business done, generally 1% of sales. Legislation considered this session would have raised that half a percent, with the maximum bond requirement doubling from the current $300,000 to $600,000. A minimum $50,000 bond would be required as well.

Such increases, though, wouldn’t even come close to compensating farmers for the losses claimed in the Gieseker case. State and federal officials have charged grain broker Cathy Gieseker of Martinsburg with defrauding nearly 200 farmers, mostly in north-central Missouri, out of at least $27 million, perhaps as much as $50 million. The charges were filed five months after the State Agriculture Department moved to seize the assets of T. J. Gieseker Farms and Trucking Company after a routine agriculture audit disclosed discrepancies in Gieseker’s financial records.

There have been no talks about creating an indemnity fund to compensate farmers for losses, a much more expensive solution that some states have implemented. There has been some discussion about creating a misdemeanor crime for a grain dealer to operate outside his or her license, an allegation raised in the Gieseker case.

Hagler says such problems such as the Gieseker case force agencies to take a hard look at their operations. He says the Agriculture Department will consider improvements to its auditing to catch such problems earlier, though he adds it’s difficult to discover fraud when a company might be using two sets of books.

Hagler calls this a tragedy of great proportions.

"This has impacted real lives," Hagler says. "So I think it’s incumbent upon us as a department to sit down with folks and to figure out what will work best for them. Because we don’t want to see this again, but we want to make sure they have an opportunity to do business and I think that’s where these talks will be fruitful."

The Gieseker case has everyone’s attention, but at nearly the same time, a grain elevator in northwest Missouri went bankrupt. In February, Danny Froman voluntarily surrendered his warehouse and grain dealer licenses to the Department of Agriculture after an inspection of the Gallatin Grain Company. More than 100 farmers submitted claims to the department. Grain auditors reviewed them for an administrative hearing held at the end of May.

Download/listen Brent Martin reports (1:15 MP3)