dissenting.
I dissent from the majority opinion.
The Administrative Hearing Commission’s (AHC) interpretation of revenue laws is reviewed rife novo by this Court. The decision will be affirmed “if supported by the law and competent and substantial evidence on the whole record and ... not clearly contrary to the reasonable expectations of the General Assembly.” L & R Egg Co. v. Director of Revenue, 796 S.W.2d 624, 625 (Mo. banc 1990). Here, the AHC decision, and the majority opinion, misses on all counts.
Section 1U-0S0.2(1) exempts from sales tax:
... seed, limestone or fertilizer which is to be used for seeding, liming or fertilizing crops which when harvested will be sold at retail or will be fed to livestock or poultry to be sold ultimately to processed form at retail....
The primary rule of statutory construction is to give words their plain and ordinary meaning. State ex rel. Union Elec. Co. v. Goldberg, 578 S.W.2d 921, 923 (Mo. banc 1979). This Court, however, should not construe a statute so as to reach a result not intended by the legislature. L & R Egg Co., 796 S.W.2d at 625.
The parties differ in their interpretation of the word “fertilizer”. Conagra maintains that if an item is purchased as an ingredient of fertilizer and, to fact, is combined with other ingredients and used as fertilizer for exempt purposes, then the item should be exempt. The Director contends that because the shavings had no independent value as fertilizer at the time of transfer and must be combined with the turkey droppings for value as fertilizer, the exemption does not apply.
Unfortunately, the majority adopts the position of the AHC based upon this analysis of § 144.030(2), a subsection not at issue here. Section 144.030(2) provides an exemption for component parts used to the manufacturing of “new personal property.” A brief review of this section shows that it speaks to an entirely different situation, the manufacturing of personal property, than does § 144-030(1), the pertinent part of which concerns itself with agricultural activity. Whether the wood shavings would or would not be exempted from tax pursuant to § 144.030(2) simply has nothing to do with whether they are exempted under § 144.030(1). By focusing on the language of the wrong statute, the majority almost wholly ignores the controlling language and reaches a result out of context with the law, facts, and policy that should be the core of this case.
Section 144.030(1) exempts “fertilizer which is to be used for ... fertilizing crops.” There is no distinction in the statute as to whether the fertilizer is whole or part, mixed or unmixed, completed or uncompleted at the time of transfer. Instead, the “modifier” is one of a functional nature which eliminates the need for such esoteric analysis. It focuses on use.
Here, there is no doubt that the wood shavings were intended to be used and were used as fertilizer. The record reveals that the shavings enhanced the value of the droppings as fertilizer and that the combined droppings and shavings were actually used by the growers as fertilizer. The record also indicates that wood shavings were the chosen medium because of their ability to release the nutrients from the droppings slowly into the soil. This avoided nitrogen burning, ecological damage from runoff and provided for a release of the nutrients into the soil over time as needed.1 Significantly, Conagra selected its turkey growers partly on the basis of their ability to use all the litter on then-fields as fertilizer.
*921Conagra may well have designed its method of contracting in hopes of enjoying this particular tax benefit. There is no reason to penalize Conagra or its growers for doing so. As long as such programs are grounded in fact and reasonable business purposes, it is in the state’s interest to foster a climate that encourages both in-state and out-of-state businesses to contract with Missouri farmers and to develop business relationships within the state. This has long been recognized as one of the legislative goals of § UL030. In State ex rel. Ozark Lead Co. v. Goldberg, 610 S.W.2d 954, 957 (Mo.1981), it was said:
Although the exemption is construed strictly against the taxpayer, that requirement should not nullify the legislative purpose in making the exemption available. As pointed out in West Lake [Quarry & Material Co. v. Schaffner, 451 S.W.2d 140 (Mo.1970) ], one object of the exemption is to stimulate the economy by encouraging the production of products which are subject to the sales tax. An equally important object of such exemption is the furtherance of industrial development in the state, regardless of whether the products involved might become subject to the Missouri sales tax. Floyd Charcoal Co. v. Director of Revenue, 599 S.W.2d 173, 177 (Mo.1980).
To tax the transfer of wood shavings for use as an ingredient of fertilizer is inconsistent not only with the language of § 144.-030(1) and the facts at issue, but also with this statutory purpose. It is unlikely the legislature intended to penalize farmers for procuring essential fertilizer ingredients separately as opposed to premixed fertilizers. It is also inconsistent with the purpose of this statute to hinder the type of carefully constructed commercial relationships that will allow our farmers to prosper in a complex and competitive world.
. It is not at all unusual for farmers to buy chemicals which, if applied directly to crops, would be absolutely useless and may even damage the crop. These chemicals must be mixed with other ingredients or inert carriers to be of any real use. Under the majority's analysis, such chemicals, because they must be combined with other ingredients, are not fertilizer but component parts of fertilizer and are not entitled to the exemption. The folly of this result exhibits the need for focus on the use of the item as fertilizer, not the process of preparing it for use.