By KEVIN WALKER
Michigan Correspondent

LANSING, Mich. — The two-year budget Gov. Rick Snyder unveiled last month contains significant cuts to agriculture-related programs and services and has drawn relatively positive reviews from agricultural leaders and stakeholders.

“I have been clear that the months ahead will not be easy,” Snyder wrote in a letter to Michigan citizens accompanying his budget document Feb. 17.

“They will involve difficult but necessary changes to bring Michigan’s budget into structural balance. There will be shared sacrifice, but through that shared sacrifice, Michigan will emerge as a stronger and more vibrant state. This budget will lay the foundation for economic growth, job creation and our robust collective future and quality of life.”

Highlights of the proposed budget include elimination of the Michigan Business Tax and the addition of a flat 6 percent corporate income tax as a partial replacement, elimination of the state earned income credit, virtual elimination of the motion picture industry credit, a new tax on retirees’ pension income, and a reduction in the state income tax from 4.35 percent to 4.25 percent.

For the Michigan Department of Agri-culture (MDA) the governor is recommending a budget of $71.5 million for the 2012 fiscal year.

The budget recommendation for FY 2013 for MDA is $72.9 million. The 2012 recommendation represents a 6.5 percent cut from current funding.
Proposed cuts to the MDA include several inspection programs, including the dairy farm milk program, nursery plant pest program, bovine tuberculosis eradication program, animal feed analysis program and animal shelter inspection program.

The governor is also proposing new fees to fully fund the state’s producer security program, which provides insurance to producers in the event of a grain elevator failure. He’s also planning to make changes to the intercounty drainage district program.

MDA’s Chief Deputy Director Gordon Wenk addressed some of these items last week.

On dairy inspections, Wenk said the certified on-farm inspections will be handled by industry, but the department will still inspect the 79 dairy processing plants as it’s been doing. It will realize savings in the bovine tuberculosis eradication program, also.

“We feel we will be able to close the check point at Mackinac Bridge, because Cheboygan County will soon be TB free,” Wenk said. “We’re excited about moving forward this year. There will be some layoffs at the bridge, but we don’t anticipate large numbers of layoffs.”

Regarding plant pest inspections, Wenk said industry will be able to inspect regulated nursery stock that’s being moved within the state and that the department will still be doing the kinds of things that led recent detections of Hemlock woolly adelgid at an area nursery. The state will still inspect regulated nursery stock that’s being moved outside the state.

He also said that state inspections of area animal shelters will continue, but they’ve been able to work with shelters to achieve some efficiencies that will save the state money.

Also, Wenk said the governor is proposing a new annual assessment on grain dealers as well as producers to pay for the producer security program. These will include a charge to participating producers of 30 cents for each $1,000 of farm produce, as well as an increase in the grain dealers annual license fee.
With regard to intercounty drainage, Wenk said the proposal is a mandatory $500 assessment on every intercounty drainage district, of which there are 1,100 in Michigan.

State officials serve as chairpersons of boards that help administer policies and proceedings with regard to drainage matters.

“Right now there is no fee at all for the service,” Wenk said. “It’s a very involved process.”

Michigan Farm Bureau was positive about the overall direction of the new budget.

“Michigan farmers have been waiting for this kind of open and honest conversation about Michigan’s budget for the better part of a decade,” said MFB President Wayne Wood.

“Farm Bureau members look forward to a new phase for Michigan where the state can finally put its debt behind and live off its means with a responsible and balanced budget that doesn’t rely on one-time injections of financial support.”

Other ag officials sounded not so much enthused about the budget as relieved.
“We understand the state’s got to make cuts and to tell the truth our group didn’t get cut as much as some others,” said Gary Trimmer, a spokesman for the Michigan Milk Producers Assoc. (MMPA).

Trimmer said several food and dairy division inspectors at MDA retired in January; those positions won’t be replaced. Under the grade A milk law it’s legal to have industry representatives perform farm dairy milk inspections, as long as they are properly certified.

Instead of four inspections a year at a given dairy farm, there will only be two, those that are performed by MMPA personnel.

“We hope to have full funding and we hope that the economy turns around eventually,” said Trimmer, hoping that this is a short-term solution. “That’s the governor’s proposed plan. It’s got to be voted on and that probably won’t happen until the early summer.”