Legislative Updates

Bipartisan budget deal and special session

On Sunday night, Speaker of the House Melissa Hortman, Senate Majority Leader Paul Gazelka and Gov. Tim Walz announced a compromise budget deal just one day ahead of the legislature’s constitutional deadline. Leaders agreed that, while they didn’t get everything they’d hoped, the $48.3 billion two-year spending deal represents a step forward for not just negotiations, but also for the state.

At MFU, we’re pleased to see that the deal included commitments on a number of key priorities including a repeal of the sunset of the provider tax, a commitment to tax conformity and a modest increase in funding for agriculture programs in the state. Here’s more on that deal from MPR and MinnPost.

The repeal of the sunset of the provider tax is particularly significant for MFU given that health care has been a main priority for our membership this session. With so many farmers being hit by high health care costs – along with all the other stressors of the current ag economy – protecting a proven investment in affordable health care is critical. The provider tax — which is now lowered to 1.8 percent instead of 2 percent — raises some $700 million each year which plays an important role in funding MinnesotaCare, Medical Assistance, the Office of Rural Health and a number other programs that help make up the rural health care safety net.

Despite a deal being reached, a special session is all but inevitable based on the work that committees have left to do negotiating their respective budgets. A particular challenge will be the thousand-some page Health and Human Services bill. The agriculture finance committee, on the other hand, could be wrapped up quickly.

This seems even more likely given that the ag policy bill passed unanimously off the floor of both the House and Senate before earning the signature of the Governor. The largely non-controversial bill includes a number of requests from the Minnesota Department of Agriculture along with a five-year extension of the Organic Advisory Taskforce, expanded eligibility for beginning farmer loans, food safety provisions and a number of other items.

Of course, everything will be developing quickly through Monday at midnight and MFU’s legislative team will be at the Capitol, making sure that the voices of family farmers are heard. If you have any questions or thoughts on MFU’s legislative work don’t hesitate to reach out to Stu at stu@mfu.org, (320) 232-3047, or @stulourey on Twitter.

One week left

At the Capitol, legislators have just over one week to wrap up legislative business ahead of the constitutional deadline on May 20. However, much of that work is stalled due to a lack of agreement between the Senate GOP, the House DFL and the Walz administration on overall state spending. That said, once leaders reach a compromise agreement and define spending targets for individual conference committees, legislators will have to work quickly to finish their business and avoid a special session. Throughout session, and in these final weeks, the MFU legislative team has retained a steady presence at the Capitol, advocating policies that lower the cost of health care, provide property tax relief to farmers, repair crumbling roads and bridges in rural Minnesota and create and expand markets for farmers.
As of today, the Senate GOP’s offer remained some $2 billion dollars away from the spending proposal put forward by the Walz administration and the DFL-controlled House at the start of session. That gap – which includes the Governor’s proposed investments in the ONECare buy-in plan, road and bridge repair, and increased support for students across the state – makes the difference between the House and Senate agriculture proposals seem less severe. While the House, led by Chair Poppe (DFL-Austin), proposed new investments in meat inspection, markets for hemp, ag emergency preparedness and other important initiatives, the Senate, led by Chair Westrom (R-Elbow Lake), proposed no new spending, leaving the two houses about $6.5 million dollars apart.
As they have for the bulk of the session, repealing the sunset of the provider tax to protect the health care safety-net and increasing the state’s gas tax to pay for roads and bridges remain the defining questions for leaders to negotiate. MFU has been out front in support of retaining and building on investments in affordable health care and making responsible investments in infrastructure across the state.

Two weeks left…

According to the Minnesota constitution, legislators need to come to an agreement on state budgets and otherwise wrap up their work by May 20 – or risk having to call a special session. As the Legislature nears this deadline, MFU’s legislative team has been working to advance proposals that make health care more affordable, provide property tax relief to farmers, make responsible investments in deteriorating roads and bridges and other priorities defined by our members.

Monday, May 6 marked another deadline (this one self-imposed) for House and Senate leaders, along with the Walz administration, to agree on the amount of money each conference committee can spend in their respective budgets. Whether or not they reach an agreement by this deadline, conference committees will continue to meet, working on compromise bills that will define the budgets for agriculture, health care, transportation and other important areas.

As of Monday, the agriculture budget conference committee has yet to meet to start ironing out differences between the bills passed by the House and Senate. However, conferees were named and the committee will includes members with a strong knowledge of farming and the needs of the ag community. Conferees are: Chair Poppe (DFL-Austin), and Representatives Hausman (DFL-St. Paul), Pelowski (DFL-Winona), Vang (DFL-Brooklyn Center) and Gunther (R-Fairmont) from the House and Chair Westrom (R-Elbow Lake) and Senators Weber (R-Luverne), Goggin (R-Red Wing), Draheim (R-Madison Lake) and Dziedzic (D-Minneapolis) from the Senate. As these legislators begin their work on a compromise bill, MFU will continue advocating for increased investment in the Farm Advocate program, addressing the backlog in meat inspections, investments needed to combat noxious weeds, farm to school, the Good Food Access Fund and other priorities. Of course, the conference committee’s ability to make new or increased investments is dependent on strong budget target.

In addition to the agriculture budget, MFU has also been working with legislators and others to make progress on repealing the sunset of the provider tax that funds important health care programs, increasing the Ag2School tax credit, fully conforming with Section 179 for equipment expensing, and making needed investments in transportation infrastructure. If you have questions, thoughts, or concerns, don’t hesitate to reach out to Stu at stu@mfu.org, (320) 232-3047 (C), @stulourey on Twitter.

Budget bills move forward

As we near the end of April, the legislature is ramping up to finish their work ahead of their May 20 deadline. MFU is at the Capitol working hard to make sure the interests of farmers and rural communities are heard in final negotiations and reflected in legislation.

Last week, the House and Senate passed important budget bills off the floor, which means these bills are headed to conference committees where leaders in the House, Senate and Walz administration will work to reach a compromise. MFU priorities in question include the agriculture budget, the ONECare buy-in proposal, property tax relief and funding for roads and bridges.

Both Houses passed their agriculture budget bills and, importantly, the House bill was passed with strong bipartisan support. Chair Poppe (DFL-Austin) earned the votes of nearly all DFLers as well as almost half of Republicans, including Ranking Member Rod Hamilton (R-Mountain Lake). The House bill includes an increase to the agriculture budget, investing in addressing the backlog in meat inspections, farm mental health, funding to combat noxious weeds, developing new markets, Farm to School and other MFU priorities.

The House also passed its omnibus tax bill, which includes property tax relief in the form of a 30 percent increase to the Ag2School tax credit, full conformity with section 179 and a provision intended to ensure that farmers who pass their farm business on to the next generation don’t lose their homestead tax status. In the Senate, Tax Committee Chair Roger Chamberlain (R-Lino Lakes) released his bill, which includes section 179 conformity and a homestead fix, but wouldn’t provide further property tax relief via the Ag2School tax credit. MFU testified in his committee to thank him for these provisions and request that both an increase to the Ag2School credit and compensation for buffers are included in a final package.

Early next week, House and Senate leadership are expected to announce their joint compromise budget targets, which will serve as a starting point for conference committee negotiations.

On the federal level, the U.S. House is expected to vote on a new disaster relief proposal that includes resources to address urgent needs in the Midwest, including flooding in Iowa, Nebraska and Missouri. MFU President Gary Wertish submitted comments to the Environmental Protection Agency (EPA), calling on the agency to clear the way for year-round sale of E15. He also urged the agency to stop issuing hardship waivers that allow refineries to avoid blending renewable bio-based fuel in compliance with the Renewable Fuel Standard (RFS), decreasing the use of and demand for ethanol.

As always, if you have any questions, thoughts, or concerns, don’t hesitate to reach out to Stu at stu@mfu.org, (320) 232-3047 or @stulourey on Twitter.

Recess and floor debates

While the Legislature was in recess last week, legislators were back in their home districts, meeting with constituents and gathering feedback for the final weeks of session. Similarly, the MFU staff was traveling across the state, meeting with dairy farmers in Greenwald and hosting a Rural Voices Discussion in Alexandria. Both of these meetings and the stories, ideas and feedback members and others shared will help the legislative team make their case for MFU priorities, including rural health care, broadband funding, responsible transportation funding and programs at the Department of Agriculture.

The Legislature is back in full swing with both chambers debating and voting on the large spending bills that will determine the state’s budget for the next two years. The Senate started out by taking up their agriculture budget (SF2226) and environment budget (SF2314), while the House started with education (HF2400) and a large package that includes provisions related to economic development, state government operations, telecomms and energy (HF2208). In the House, where amendments to bills need to be submitted in advance, there were more than 200 filed to be debated on the floor.

Today, the House is set to take up their health and human services bill (HF2414), which includes two MFU priorities that will help address high health care costs: Gov. Walz’s ONECare proposal and a repeal of the sunset of the provider tax, which funds important health care access programs across Minnesota. In the Senate, Tax Committee Chair Roger Chamberlain (R-Lino Lakes) will release his committee’s omnibus bill, where MFU will watch for provisions important to family farmers. This includes an increase the Ag2School tax credit and Section 179 full conformity, both of which were included in the House tax bill championed by Chair Paul Marquart (DFL-Dilworth).

All week, MFU staff will be at the Capitol reviewing amendments, engaging with legislators and making sure that the final budget bills the needs and perspective of family farmers and rural communities. Don’t hesitate to reach out to Stu Lourey at stu@mfu.org, (320) 232-3047 or @stulourey on Twitter.

Farmers Union urges implementation of E15 waiver, commonsense provisions for higher level ethanol blends

As the U.S. Environmental Protection Agency (EPA) works towards allowing year-round use of E15 gasoline, National Farmers Union (NFU) is concerned EPA’s proposed rule will make it harder for retailers to sell higher level blends of ethanol.

In a letter to EPA Administrator Andrew Wheeler, NFU President Roger Johnson urged EPA to rewrite a provision contained within the rule that could amount to a cap on ethanol. It is viewed within the farm community as yet another barrier to family farmers and ranchers being able to sell farm products for biofuel production.

“Farmers Union is eager for EPA to follow through on its promises to get an E15 waiver out of the door by June 1,” said NFU President Roger Johnson. “But we are concerned that certain provisions within EPA’s rulemaking unnecessarily work against expanded use of higher level blends of ethanol.”

NFU’s concerns stem from EPA’s interpretation of the “substantially similar” clause of the Clean Air Act, which prohibits the sale of any fuel or fuel additive that is “not substantially similar” to fuels or fuel additives used in the certification of new vehicles. In 2017, E10 gasoline—gasoline blended with 10 percent ethanol—became

the nation’s certification fuel, making higher level blends of ethanol, like E15 and E30, substantially similar. Yet in its proposal, EPA has limited its  “substantially similar” interpretation to only an E15 blend, making the prospects of using higher level blends of ethanol harder to achieve.

“Unfortunately, EPA’s substantially similar determination is limited to E15,” said Johnson. “While we do not necessarily disagree with EPA’s interpretations that would allow for E15 year-round, we believe the statute clearly allows for higher ethanol blends as part of the substantially similar determination based on E10 certification fuel.”

“Indeed, higher ethanol blends would further reduce emissions and provide similar or better engine and vehicle performance,” he added.

Johnson noted EPA should continue to consider the needed changes to facilitate and promote use of mid-level ethanol blends. “These fuels provide enormous societal benefits and represent a win-win-win for automakers, consumers, the environment, and farmers,” he said.

“For that reason, we respectfully request that EPA clarify that the Clean Air Act’s “substantially similar” provisions for gasoline do not cap ethanol at 15 percent.”

Ag, health care and transportation funding passed out of committee

This past Friday marked the Minnesota Legislature’s second deadline, by which all bills that spend state funds needed to be heard by the relevant committees and sent to the House or Senate Floor for a vote. That said, a lot of changes can—and will—happen before these bills have the chance to be signed into law by Gov. Walz, making MFU’s continued advocacy over the next two months important.

First, there will be amendments to these bills on the House and Senate floor. And second, there will undoubtedly be significant differences between the bills passed in either house, meaning that members will have a lot of work to do to reconcile the bills once they make it to conference committee. The House proposes investing an additional $6 million in the agriculture budget, funding meat inspections, noxious weed control and rural mental health. The Senate, on the other hand, cuts staffing at MDA and funding for existing initiatives, like Farm to School, in order to maintain current levels of spending while adding new priorities, including dairy modernization grants. The House health and human services budget bill includes the governor’s health care buy-in proposal (ONECare) along with a number of important provisions to MFU, while the Senate bill doesn’t include this recommendation.

Friday’s deadline also marked the end of a busy week for MFU at the Capitol. Intern Emily Pliscott testified in the House Tax Committee about the significant difference a 30 percent increase to the agriculture school building bond tax credit would mean for farmers and rural school districts. Significantly, the change would provide $30 million in agriculture property tax relief. MFU President Gary Wertish also testified in the House Tax Committee in favor of repealing the sunset of the provider tax, which funds Minnesota’s rural health care safety net. He also testified about the need for a strong, responsible transportation funding package that will pay for needed repairs to roads and bridges, particularly in rural Minnesota. All of these priorities were voted out of committee and sent to the House floor for a vote.

This week, the Minnesota Legislature is in recess. Watch for town halls and other opportunities to connect with your representatives and make sure they understand the issues that are important to you as they get to work in the final moths of session.

On the federal level, Tom Emmer (R-MN06), Rep. Pete Stauber (R-MN08), Jim Hagedorn (R-MN01), Angie Craig (D-MN02) and House Ag Committee Chair Collin Petersen (D-MN07) signed a letter requesting $2 million for the Farm and Ranch Stress Assistance Network (FRSAN). Senators Amy Klobuchar (D-MN) and Tina Smith (D-MN) introduced the bipartisan Family Farmer Relief Act, which would raise the Chapter 12 operating cap.

Ag Census paints a clearer picture of U.S. agriculture

After much anticipation, U.S. Department of Agriculture released the results of the 2017 Census of Agriculture last week. The Census, which is taken every five years, is the most complete set of data for American agriculture, providing an abundance of information about land use, farm ownership and decision-making, demographics, production practices, income and expenditures.

This is the first Census that allowed operations to list more than one principal operator, thus offering a more accurate picture of the role of women and young farmers, who in previous years were often listed as secondary operators regardless of their level of involvement. As a result, the number of women producers jumped almost 27 percent, with more than half of farms listing at least one woman as a decision maker.

Though the number of beginning farmers grew as well, to 27 percent of total farmers, they are still overwhelmingly outnumbered by older producers: for every producer younger than 35, there are more than six farmers older than 65. This alarming trend has pushed the average age of farmers up to 57.5 years old. If older farmers retire at a faster rate than new farmers join the industry, it will put significant strain on the agricultural system as a whole.

The census points to some other troubling changes in farm-level consolidation and the farm economy. For one, the overall number of farms and ranches dropped by 3 percent, to just over 2 million, and total acres cultivated fell by 1.6 percent, to 900 million. Additionally, while the number of large- and small-sized farms grew between 2012 and 2017, the middle-sized farms fell. Unsurprisingly, as farms consolidated, so did farm production; just over 5 percent of farms accounted for 75 percent of all sales. That doesn’t mean farmers are making more money. To the contrary, 56.4 percent of operations lost money in 2017.

National Farmers Union President Roger Johnson expressed concern about some of these shifts. “We’ve got older farmers, fewer farms and fewer farm families on the land,” he said in a statement. “None of that is positive for American agriculture or our rural communities.”

However, there were some more promising data points; for one, many farmers are in engaged in on-farm energy production. Since the last Census was taken in 2012, the number of farms and ranches with renewable energy production systems, including solar panels, methane digesters, and wind turbines, grew by more than 100 percent. Direct marketing and value-added sales are on the rise as well, at a market value of $9.03 billion and $4.04 billion, respectively.

Though not all the results are encouraging, Johnson stressed the importance of the Ag Census in data-driven policy making. “The ag census is important to federal, state and local policymakers, as well as farmers and ranchers. The data will inform farm policy, rural policy, and long-term decisions made over the next five years,” said Johnson. “We’re grateful to the farm and ranch families who put in the time to fill out the 2017 Census of Agriculture, thereby giving a voice to their operations and their communities.”

Read more in the NFU release, and read the full Census here

MFU at State of the State!

MFU has been working hard at the Legislature and with the new administration on a number of policy priorities, including bringing down health care costs, providing tax relief to farmers and rural landowners, securing responsible funding to repair our roads and bridges and more.

In the past weeks, staff and members have joined Gov. Tim Walz for a series of roundtables on his health care buy-in proposal, ONEcare. His plan would provide people on the individual market more options and leverage the state’s buying power to negotiate lower prices for prescription drugs. At committee hearings and across the state, we’ve worked to build momentum for this proposal and make sure that rural voices are part of this important conversation.

On April 3, the Governor delivered his State of the State address and featured his guest, dairy farmer and MFU Goodhue County President Deborah Mills in his remarks. In addition to highlighting the strain that high health care costs put on farm families, he also made the case for increased mental health resources for farmers. Our hope is that Deborah’s story, along with continued advocacy from MFU and others, will help push the MN Senate to move forward on providing increased resources for both rural mental health counseling and the farm advocates who support that work, both of which passed unanimously out of the MN House.

At the Legislature, it’s been a busy week with both the House and Senate unveiling their agriculture omnibus bills. While both houses are working within budget targets that force committee members to choose between worthy investments, the House committee led by Chair Jeanne Poppe (DFL- Austin) largely did a good job balancing needs of the agriculture community with budget constraints. This bill includes a number of MFU priorities including funding for farm advocates, Farm to School. The Senate bill invests in dairy modernization grants but makes steep cuts in a wide variety of areas, including meat inspection, noxious weed control and ag emergency preparedness. Once both bills pass out of their respective houses, they’ll go to conference committee, where we’ll work to make the case for the positive proposals in the House bill.

Finally, in the House Property and Local Tax committee, Rep. Paul Marquardt (DFL-Dilworth) championed a 30 percent increase to the Ag2School tax credit, which would offset a greater portion of a school district’s construction bond levied on agricultural land. MFU President Gary Wertish testified in support of this proposal, describing how this is a win-win for farmers and rural schools and would provide needed property tax relief to farmers under significant economic stress. This proposal, along with the rest of the tax bill, still needs to be voted off the House floor and then reconciled with whatever deal is reached in the Senate.

Help farmers affected by flooding

The recent bomb cyclone has devastated rural communities in other parts of the Midwest, such as Nebraska and Iowa, with floods. According to DTN, livestock losses in Nebraska are estimated at about $400 million, and Iowa farmers have reported $214 million in losses.

If you’d like to donate to rescue efforts, here are a few places you can contact:

Farm Rescue: farmrescue.org

Agriculture Disaster Exchange: https://www.nefb.org/ag-disaster-exchange

Nebraska Farm Bureau Disaster Relief Fund: https://www.nefb.org/get-involved/disaster-assistance

Nebraska Cattlemen Disaster Relief Fund: http://nebraskacattlemen.org/disaster-relief-fund/

American Red Cross Disaster Relief Fund: www.redcross.org

Legislative update

Last week, MFU President Gary Wertish participated in a news conference at the State Capitol in support of investing in our transportation infrastructure, alongside LiUNA!, Minnesota Transportation Alliance, American Society of Civil Engineers and others. Our members have strongly supported raising the gas tax so roads throughout the state can be improved. “We’ve been kicking the can down the road for so long that it’s fallen into a pothole,” President Wertish said.

President Wertish also testified in favor of a bill sponsored by Rep. Paul Anderson, R-Starbuck, that would establish an indemnity fund to protect farmers caught up in grain elevator financial wrongdoing, such as what happened at the Ashby Cooperative. We are the only agricultural organization that has supported such a fund so far.

Other issues we worked on this week were a bill to expand benefits of solar gardens, funding for the Good Food Access Program, Farm to School and Right to Repair. This Friday, March 29, is the second committee deadline for bills, which means that committees must act favorably on bills, or companions of bills, that originated in the other chamber of the Legislature. We’ll be at the Capitol all week keeping track of this and sharing updates on Twitter.

Nominees needed for 2020 Beef Board

The U.S. Department of Agriculture (USDA) Agricultural Marketing Service is requesting nominations by June 17 to fill positions that will become vacant on the Cattlemen’s Beef Promotion and Research Board (Board) in January 2020. There will be one position open for Minnesota.

Any beef producer who owns cattle or any importer that imports cattle or beef may be nominated. Producers and importers must be nominated by a USDA certified producer organization (of which MFU is one) and submit a completed application. USDA will select appointees from the nominated producers and importers. Nomination forms and a list of certified producer organizations in each state or unit are available on the Cattlemen’s Beef Board page on the AMS website. If you have suggestions for whom MFU should nominate, please contact us.

The Cattleman’s Beef Board is authorized by the Beef Promotion and Research Act of 1985 and is composed of 99 members representing 34 separate states, five units of geographically grouped states and one importer unit.

For more information, contact Barbara Josselyn at (202) 690-2611 or Barbara.Josselyn@usda.gov or fax (202) 720-1125. You may also send mail to Research and Promotion Division; Livestock and Poultry Program; AMS, USDA; 1400 Independence Avenue, SW.; Room 2610-S, STOP 0251; Washington, D.C. 20250-0251.

Committee deadline!

You know the legislative session is heating up when the first committee deadline passes. Last Friday was the last day for bills to be heard in at least one of the legislative chambers to be able to continue moving forward. Many issues pertinent to MFU members came up in bill hearings.

Most importantly, both chambers unanimously passed SF2225, which would allow the MDA Rural Finance Authority to free up funds for farm weather disaster recovery by including snow, sleet and ice as eligibility conditions for disaster loans. With around 100 barn and shed collapses in the state so far, according to Minnesota Milk, we are glad to see strong legislative cooperation on this. Gov. Tim Walz signed the bill this afternoon. The Rural Finance Authority Board will meet soon to consider whether to declare a disaster.

Meanwhile, we encourage you to contact your local FSA office for federal disaster assistance you may be able to use. And let us know how we can help, too.

The ONEcare health care initiative proposed by Gov. Walz has been heard in the House Commerce Committee and Health and Human Services Policy Committee so far. We continue to support that and work to build further legislative support. MFU President Gary Wertish, Executive Committee Chair Carol Anderson and Stearns County President Mike Orbeck participated in a roundtable with Gov. Walz and other health care advocates in St. Cloud last week, where we expressed the need for easier health care access. The ONEcare plan would be a step in the right direction.

The House Agriculture and Food Committee heard several bills of interest to us – HF1569 for funding the Forever Green Program, HF2202 to establish a next generation farmer development program and HF1546 to modify the Beginning Farmer Tax Credit to set aside credits for socially disadvantaged farmers. The committee also heard the omnibus agriculture policy bill, which we are currently studying.

That’s just a glimpse of what’s happening at the Legislature right now. More information about our legislative work this session is available at www.mfu.org/legislative-updates/. Our full legislative agenda is available here.

Trump budget ignores economic troubles in agriculture

Last Monday, President Donald Trump released his proposed fiscal year 2020 budget. As in years past, the proposal would make steep cuts to farm, food and rural development programs while providing additional funding for defense initiatives. Though Congress is unlikely to take all of the President’s recommendations into account, the budget is a good indication of the administration’s priorities for the coming year.

Under Trump’s proposal, the U.S. Department of Agriculture (USDA) would receive 15 percent less funding in 2020 than 2019. Some departments would be hit harder than others; the Supplemental Nutrition Assistance Program (SNAP) – also known as food stamps – would lose 20 percent of its budget. This would theoretically be achieved by both switching the flexible EBT card to a prepackaged “Harvest Box” as well as by tightening existing work requirements further.

The proposal would also cut crop insurance and commodity program spending by $28 billion. It would change eligibility criteria for commodity programs, capping maximum adjusted gross annual income to $500,000 and reduce the average premium subsidy for crop insurance from 62 percent to 48 percent.

Other USDA agencies would experience significant cuts as well. Rural Development would lose 12 percent of its funding, largely from programs that assist with rural housing and economic development. Rural Energy for America Program (REAP), a Farm Bill program that supports renewable energy production in rural communities, would lose all of its mandatory funding. Additionally, the proposal would entirely eliminate the Conservation Stewardship Program.

Though the budget proposal would direct additional resources towards rural broadband and opioid misuse, on the whole, it disregards the challenging economic circumstances in farming communities.

“Despite the rapid decline in the farm economy, additional damages from self-inflicted trade disruptions, increasing demand for credit, overloaded farm hotlines, and deteriorating infrastructure in rural communities, the White House today called for significant cuts to the one department tasked with serving farm families, rural residents and those struggling with food insecurity,” said NFU President Roger Johnson. “Major relief is needed to weather these tough times in agriculture. It’s time the President’s policy proposals and rhetoric acknowledge the financial pain in farm country.”