Legislative Updates

If you have any questions about MFU policy, contact Stu Lourey at stu@mfu.org or (320) 232-3047.

2022 Legislative Session Updates

Legislative Update – May 24, 2022

At midnight on Sunday, May 22, the legislature hit their constitutional deadline without reaching major deals on tax relief, education, healthcare spending, and public safety. That said, a bright spot of bipartisan work and agreement was a budget for long-awaited drought relief, agriculture, and broadband, which passed with a nearly unanimous vote in the Senate that evening.

With deals seemingly close-at-hand, Governor Tim Walz (DFL) and Speaker Melissa Hortman (DFL-Brooklyn Park) were quick to call on legislators to continue their work on deals with the goal of reconvening for a short special session. These shorter sessions—which are called by the Governor but adjourned by the legislature—have become common practice in recent years.

“You don’t get the ball to the 1-yard line and go home,” said Governor Walz during a media availability Sunday night. “You finish the job Minnesotans expect us to do.”

Senate Majority Leader Jeremy Miller (R-Winona) was less optimistic and described being farther apart on important items. That said, at least as of Sunday night, he wouldn’t rule out the possibility of a special session.

“Never say never,” he shared with reporters late Sunday.

The week prior, legislative leaders and the Governor agreed to a global budget deal that split the historic budget roughly into thirds: approximately $4 billion for taxes, new spending, and ongoing reserves, respectively. You can see the one-page deal here.

Guided by this framework and a more detailed budget agreement struck later that week, lawmakers worked long hours through the weekend and late into Sunday night. A notable step forward was a deal on a tax package that—according to Chairs Carla Nelson (R-Rochester) and Paul Marquart (DFL-Dilworth)—would have delivered the largest tax cut in state history.

Important for MFU, the final tax deal would have:

Expanded the Beginning Farmer Tax Credit (BFTC) to family members
Increased the Ag to School Tax Credit to 85 percent
Increasing ag homestead limit to reflect increasing land values
And supported Soil and Water Conservation Districts (SWCDs) through a new local government aid program

The agriculture, drought, and broadband bill, which passed on a party-line vote in the House and one vote shy of unanimously in the Senate reflected many of MFU’s top priorities going into the session.

First, the bill included $18.4 million for the long-awaited drought relief. This is the same that MFU first asked for in August and that Governor Walz proposed last October. The package for drought and emergency response includes:

$8.1 million in ‘Rapid Response Grants’ for livestock and specialty crop producers
$2.5 million for the Rural Finance Authority’s (RFA) disaster loan revolving loan account
$1 million for the Veterinary Diagnostic Lab (VDL)
$1.5 million for High Path Avian Influenza (HPAI) response
And $5 million for tree planting and $300,000 for well remediation at the Department of Natural Resources (DNR)

Unfortunate for some members, we were unsuccessful in broadening eligibility for Rapid Response Grants to all counties. Producers in four counties that are not contiguous with federal disaster counties—Winona, Wabasha, Goodhue, and Rice—will not be eligible for grants according to our analysis of the eligibility language.

In the coming weeks, the Minnesota Department of Agriculture (MDA) will be working swiftly to establish a grant program and get money out to producers. What we do know is that livestock and specialty crop will need to provide an “inventory of expenses” resulting from the drought to be eligible for an up-to $7,500 reimbursement. You can read the text of the bill here (line 46.1).

We’ll keep members updated in the coming weeks as we learn more from the MDA. That said, it’s safe to say that farmers who plan to apply for a drought relief grant should begin compiling receipts and other documentation related to expenses incurred last growing season.

In the agriculture bill, there are important wins for MFU despite the bill being much smaller than was originally proposed by Governor Walz and advanced by Chair Mike Sundin (DFL-Esko) and House DFLers. The House’s proposal would have spent around $60 million on agriculture in 2023, while the final deal appropriates around $7.5 million.

Across this and future years, the final deal struck between Chairs Torrey Westrom (R-Elbow Lake) and Sundin includes a number of priorities MFU worked hard to secure. These include:

$1.5 million for meat processing, including over $1 million for processors and $350,000 for K12 meat processing grants;
$2 million for ag emergency response;
$500,000 for new voluntary soil health grants;
Reauthorizing Cooperative Development grants;
$3.08 million for new and emerging farmers, including:
- $2 million for a new down payment assistance program;
- $837,000 for technical assistance, premium assistance, and a purchasing crops from emerging farmers through the Good Acre’s Local Emergency Assistance Farmer Fund (LEAFF);
- $253,000 to better administer the Beginning Farmer Tax Credit (BFTC);
$1.26 million for research and supply chain development of perennial crops

The deal also provides support for the Agricultural Utilization Research Institute (AURI), the Crookston Ag Innovation Campus, makes an important fix for ag and rural mental health, and funds a report on local and regional foods. While not everything we had hoped for, the ag bill is a meaningful step forward and certainly reflects priorities our organization brought to legislators at the start of session.

Finally, a highlight for that package, the bill approves $210 million for broadband expansion, including $50 million for the state’s Border-to-Border grant program.

Going forward, MFU will be staying engaged with legislators leading into a potential special session. Healthcare spending, taxes, support for rural schools, bonding, and a host of other items have yet to be resolved and we’re hopeful that the legislature will come together to reach a deal quickly.

Of note on transportation spending, the state needs to approve funding to unlock most of the $7 billion available to the state from the Federal Infrastructure Investment and Jobs Act. Without action, this money could go to other states who have already put up matching dollars.

It’s been a busy session and we’ve so appreciated your advocacy with legislators and feedback on MFU’s priorities. Members made calls, testified in committees, met with legislators, and of course developed the grassroots policy that informed our work this session.

Legislative Update – May 17, 2022

It’s crunch time at the state legislature with the constitutionally-defined deadline for legislative work looming on Monday, May 23—now less than a week away. In these final days, MFU is working hard to make sure our members’ priorities are retained as budget deals are struck for agriculture, taxes, and other jurisdictions. In all our conversations, we’ve stressed the importance of leveraging the opportunity presented by the state’s historic budget surplus to make life better for family farmers and other working Minnesotans.

On Monday, May 16, we received welcome news: leaders in St. Paul reached a global budget deal necessary to strike compromises on major spending items and define budget targets for smaller budget items, like agriculture. The short, one-page document signed by Senate Majority Leader Jeremy Miller (R-Winona), Speaker Melissa Hortman (DFL-Brooklyn Park), and Governor Tim Walz agreed to:

$4 billion for taxes
$1 billion for education
$1 billion for health care
$450 million for public safety and judiciary
$1.3 billion for other spending areas (including agriculture, drought relief, etc.)
$1.5 billion bonding bill for capital construction projects

Broadly, the deal would spend $4 billion on tax relief, $4 billion on other spending, and carry forward an approximately $4 billion surplus into the next biennium. For reference, a $4 billion tax bill is larger than the house’s $1.6 billion tax bill and smaller than the Senate’s nearly $9 billion proposal. Work remains to define spending targets for individual committees – and to hash out the details of the tax bill – but defining this broad framework is a critical first step toward a final deal.

In the tax bill, MFU has a number of priorities reflected in both the House and Senate packages. All still in play, we’ve been working to build support among conferees for:

Expanding the Beginning Farmer Tax Credit (BFTC) by expanding the for sale of agricultural assets to family members and providing the Rural Finance Authority (RFA) funding to administer the credit, improving outreach to emerging farmers, create an online application, and otherwise better administer the credit.
Expanding the Ag to School Tax Credit to 85 percent provide property tax relief to farmers while also helping rural school districts make needed improvements to their facilities—a win-win for farmers and their communities.
Increasing ag homestead limit to keep pace with increases in land prices and help family farmers manage increasing land prices and retain family farm operations.
Repealing the sales tax on fencing equipment and making the change retroactive through last summer will provide many livestock producers with needed relief and allow others to reinvest in their operations in response to last summer’s historic drought.
Funding SWCDs through a new local government aid program will provide them with the stable, long-term funding they need to best assist our family farmer members in meeting their on-farm conservation goals.
Establishing a buffer tax credit that would help compensate farmers for acres taken out of production to be held in riparian buffers.

In the agriculture committee, conferees met throughout last week to discuss provisions that are well-aligned in both packages. For MFU’s part, we’re glad to see that both Chair Torrey Westrom (R-Elbow Lake) and Chair Mike Sundin (DFL-Esko) prioritized expanding meat processing, investing in voluntary soil health practices, ag emergency preparedness, cooperative development, and supporting beginning and emerging farmers.

Finally, we continue to push the legislature to approve a long-delayed drought relief package for specialty crop and livestock producers who can demonstrate need related to last summer’s historic drought. While the drought is over—and in an ultimate irony much of the state has access moisture—we’re continuing to hear from farmers for home the relief would be meaningful. Many still haven’t gotten back out on their pasture and others have unpaid bills related to the drought.

On the administrative side, Governor Walz has been quick to act on hours of service exemptions in an effort to aid with spring planting and storm related damage. On May 13, he approved relief from regulations on motor vehicle carriers transporting fertilizer, pesticides, and seed. And on May 16, he authored another for those transporting livestock following widespread storm damage across the state.

You can find a full list of conference committees here and an updated schedule of committee hearings here.

Legislative Update – May 10, 2022

Lawmakers are in the final stretch as now less than two weeks remain until the state legislature’s constitutional adjournment on Monday, May 23^rd. The Governor and legislative leadership have so far been clear that a special session—which is typically used to strike an end of session deal—is off the table. When the legislature adjourns, lawmakers go home to make their case to voters.

Conference committees have begun meeting to work out compromises, including agriculture on Monday, to work out compromises on budget jurisdictions. When thinking about the short timeline they have to make a deal, it’s important to note that the timeline is even more constrained than it might seem. That’s because once deals are struck between committee chairs, lawyers who work for the legislature need time to craft that compromise into legislative text. That can result in an unfortunate log jam if much of the deal-making is left until the final hours.

The upshot here being that it’s important to convey urgency to legislators (and to thank staff!).

While we’re focused on what’s left to do at the legislature, it’s helpful to remember what they’ve passed into law so far this session. Here’s a short list of what they’ve passed so far:

Replenishing the unemployment insurance (UI) trust fund ($2.7 billion) – late last month the legislature approved a deal to refill the fund which was drawn down during COVID-19. This averted a mandatory tax increase on around 130 thousand business. Following months of negotiations throughout session, allocates the remainder of the $1.1 billion in federal American Rescue Plan Act funding, and takes a bit out of the state’s $9.25 billion budget surplus.

Approving essential worker pay ($500 million) – as part of the deal on UI, the DFL caucus worked to secure $750 checks for workers who were put at risk for COVID during the height of the pandemic and meet certain income requirements. Frontline industries include long-term care and home care; health care; emergency responders; public health, social service and regulatory service; courts and corrections; child care; public education; food service; retail; temporary shelters and hotels; building services; public transit; ground and air transportation services; manufacturing; and vocational rehabilitation.Details and updated information on the application process can be found here.

Extending reinsurance ($700 million) – in March, the legislature approved another three years of the state’s reinsurance program, which pays insurance companies for a portion of their most expensive claims in an effort to keep costs lower on the individual market.Both parties agreed that it was warranted in order to avoid potential rate increases this fall, but many—particularly in the DFL—argue that a more long-term solution is needed. MFU has advocated hard for creating a MNcare ‘buy-in’ option that would allow farmers and others to purchase coverage from the state.

Stopgap funding for bird flu ($1 million) – in April, the House and Senate acted quickly and nearly unanimously to expedite $1 million to respond to the High Path Avian Influenza (HPAI) outbreak across the state. The disease, which is spread from wild birds, is a threat to both large commercial operations and small backyard flocks. The state has been working hard to find the disease, depopulate infected barns, educate the public on biosecurity, and minimize the effects of the outbreak on trade.On Monday, Commissioner Thom Petersen shared that they would need more support to continue to manage the disease. You can learn more about the HPAI outbreak and how you can help at the Board of Animal Health (BAH).

So, that’s a short list of what they’ve been able to accomplish. So what’s still left on the table? Here are a couple issue’s MFU is working on in the final days of session:

Drought relief – since September, the administration and legislative leaders have been talking about a plan to deliver $5,000 to $10,000 ‘Rapid Response Grants’ to livestock and specialty crop producers who can demonstrate financial hardship due to last summer’s drought.After the House passed Chair Mike Sundin’s (DFL-Esko) bill on March 10and the Senate followed suit on March 31, passing a version led by Chair Torrey Westrom (R-Elbow Lake). Despite largely aligned provisions for agriculture, little public progress to develop a compromise proposal.Only one formal conference committee hearing has been held, with the gavel now in the hands of the Senate. The main different between the two proposals remains the $13 million the House included for the Department of Natural Resources (DNR), championed by House Environment Chair Rick Hansen (DFL-South Saint Paul).MFU continues to get calls from members who are waiting for this relief. Members can also contact members of the conference committee to urge them to get a deal done. They include: Sen. Torrey Westrom (R-Elbow Lake); Sen. Bill Weber (R-Luverne); Sen. Andrew Lang (R-Olivia); Sen. Gary Dahms (R-Redwood Falls); Sen. Kent Eken (DFL-Audubon); Chair Mike Sundin (DFL-Esko); Rep. Samantha Vang (DFL-Brooklyn Center); Rep. Rick Hansen (DFL-South Saint Paul); Rep. Rob Ecklund (DFL-International Falls); Rep. Paul Anderson (R-Starbuck).
One piece in the ag provisions that MFU has worked to engage on constructively is around eligibility. Both the House and Senate proposals limit who can apply for this relief to a certain number of counties that were hardest hit by the drought according to official data sources. However, what we’ve heard from members is that the effects were disparate and don’t track cleanly onto a county map. We’ve requested that farmers from across the state be able to apply for relief, a change that will also make it easier for Department of Agriculture (MDA) to administer more quickly.

Agriculture budget – MFU is continuing to make the case for a strong supplemental budget for agriculture and Monday’s conference committee hearing represented a major step forward.“While agriculture is the foundation of Minnesota’s economy—generating $112 billion in economic impact and supporting more than 430 thousand jobs—the budget for MDA makes up less than 1 percent of the state’s overall budget,” said MFU President Gary Wertish in written comments to the committee. “Reaching a deal on a strong, proportional supplemental budget will help implement lessons learned in the past year to build an agriculture system that is more distributed, resilient and fair.”Though the Senate’s bill is much smaller—$5 million compared to about $60 million—both houses are well-aligned in prioritizing meat processing, soil health, agriculture emergency preparedness, reauthorizing cooperative development grants, and support for emerging farmers.The important action necessary for striking a final deal lies with House and Senate leadership who need to provide the conference committee with a spending ‘target.’ This essentially lets the committee know what portion of the overall budget they’re allowed to spend. That’s important, because without a shared understanding of the overall budget number, it’s hard to do the work of dividing it up between programs. With the consult of their caucus, Senate Majority Leader Jeremy Miller (R-Winona) and House Speaker Melissa Hortman (DFL-Brooklyn Park) need to agree to provide the ag committee and others with targets in order for the real work of crafting a bill to begin.

Taxes – finally—and because it includes MFU priorities and is central to final budget deal—MFU has been engaged on a supplemental tax bill. Last month, House Chair Paul Marquart (DFL-Dilworth) rolled out a $1.6 billion tax proposal that expands the child tax credit, eliminates the income tax on Social Security benefits up to $750,000, and expands the renters tax credit. The House bill also includes number of priorities for MFU and leaves room for spending on other jurisdictions.Important for MFU, Marquart’s bill would expand the Beginning Farmer Tax Credit (BFTC) by expanding the sale of agricultural assets to family members and proving the Rural Finance Authority (RFA) with funding to better administer the program and do outreach to emerging farmers. It would also repeal the sales tax on fencing equipment retroactive throughout the drought, expand the Ag to School tax credit to from 70 to 85 percent will help more communities benefit from this successful program, and fund Soil and Water Conservation Districts (SWCDs) through a new local government aid program that will provide them with the stable, long-term funding they need to best assist our family farmer members in meeting their on-farm conservation goals.In the Senate, Chair Carla Nelson (R-Rochester) updated her caucus’s proposal with some property tax and other provisions. Overall, it’s much more expensive. The original bill,, which was passed in April, cost approximately $8.4 billion over the next three years with $3 billion in income tax cuts in the first year. For agriculture, on Monday, the bill was updated with an aligned provision to repeal the sales tax on fencing equipment, offer property tax relief for land held in riparian buffers, and increase the homestead valuation limit to $2.5 million.

Legislative Update – May 3, 2022

The start of May brings the legislature’s final deadline closer—and that’s without deals on priority spending items including taxes, healthcare, and agriculture. For people who want to see the legislature use the historic surplus to help Minnesotan’s recover from the drought, expand processing, make healthcare more affordable, or help address rising cost, this highlights the urgent need for action.

That’s because the Governor and legislative leadership have said they will not call the legislature back into overtime to strike a final deal, as has been the case in years past. At midnight on Monday, May 23—deal or no deal—lawmakers are expected to return home to make their case to voters ahead of the November election.

That said, there’s reason to believe the legislature is building momentum and goodwill. On Thursday, House and Senate leadership announced a deal to replenish the unemployment insurance (UI) trust fund and provide “hero checks” to healthcare, food service, home care, manufacturing, and other workers who served in roles that put them and their families at risk for COVID-19 throughout the pandemic. This follows months of negotiations throughout session, allocates the remainder of the $1.1 billion in federal American Rescue Plan Act funding, and takes a bit out of the state’s $9.25 billion budget surplus.

The final deal allocates $2.7 billion to the trust fund, averting mandatory tax increases on around 130 thousand businesses. Unfortunately, the deal wasn’t reached in time for the state to reissue all bills to businesses, so the Minnesota Department of Employment and Economic Development (DEED) will have to work out a plan to reimburse or credit businesses who overpaid.

The $500 million in direct payments to frontline workers, is smaller than the $1 billion proposed by the House DFL, but larger than the $250 million allocated for payments last session. The money will come as $750 checks to frontline workers who meet certain income requirements. The frontline sectors included in the bill can be found here.

The broadly bipartisan deal was signed into law by Governor Walz immediately upon passage. Only six lawmakers voted against the proposal.

While that reflects a win for many families and business—including MFU members—there is much work left to do against an impending deadline.

First and foremost, the legislature has still yet to approve a drought relief package, now well over six months after it was first proposed by Governor Walz. After the House passed Chair Mike Sundin’s (DFL-Esko) bill on March 10 and the Senate followed suit on March 31, passing a version led by Chair Torrey Westrom (R-Elbow Lake). Despite largely aligned provisions for agriculture, these the chairs have made little public progress to develop a compromise proposal.

Only one formal conference committee hearing has been held, with the gavel now in the hands of the Senate.

The main and significant different between the two proposals remains the $13 million the House included for the Department of Natural Resources (DNR) to replenish tree stocks and help with well remediation. These provisions were championed by House Environment Chair Rick Hansen (DFL-South Saint Paul) who also serves on the drought conference committee.

MFU continues to get calls from members who are waiting for this relief. Members can also contact members of the conference committee to urge them to get a deal done:

Sen. Torrey Westrom (R-Elbow Lake)
Sen. Bill Weber (R-Luverne)
Sen. Andrew Lang (R-Olivia)
Sen. Gary Dahms (R-Redwood Falls)
Sen. Kent Eken (DFL-Audubon)
Chair Mike Sundin (DFL-Esko)
Rep. Samantha Vang (DFL-Brooklyn Center)
Rep. Rick Hansen (DFL-South Saint Paul)
Rep. Rob Ecklund (DFL-International Falls)
Rep. Paul Anderson (R-Starbuck)

Similar to drought relief, the deals on taxes, agriculture, and other jurisdictions are as of yet out of reach. The legislature will need to start developing consensus proposals quickly, because even the three short weeks until the end of session can seem misleading. Deals can’t be struck in the final hours, because staff attorneys need time to put complex proposals into bills that can be passed off the floor. All of this takes time, making the real deadline close at hand.

Legislative Update – April 19, 2022

Today the legislature returns from break with just five weeks to reach deals on legislative proposals for education spending, healthcare, taxes, public safety, agriculture. This is all against the backdrop of a $9.25 billion budget surplus—by far the largest in state history—and without a constitutional mandate to get anything done. As always, MFU is working hard to ensure that legislators understand the needs and perspectives of Minnesota’s farm families.

On Tuesday and immediately after returning from break, House and Senate Conferees will meet to develop a consensus proposal for drought relief. This follows both bodies passing their respective versions last month—the House on March 10 and the Senate on the 31.

“I want to reiterate how important it is that you act quickly,” shared MFU President, Gary Wertish, in written comments to the committee. “Livestock and specialty crop producers continue to face needs related to last summer’s historic drought. We continue to hear from members who are struggling to feed livestock until their pasture is ready, purchase inputs for spring planting, or finance water infrastructure investments that will make them more resilient going forward.”

In his letter, he shared support for non-competitive, easy to administer ‘rapid response grants’ to help livestock and specialty crop farmers with drought related expenses. On these grants, he asked conferees to:

Expand eligibility to more counties, which will avoid confusion on the part of producers and make the program easier to administer. The drought impacts were inconsistent and a proposal that limits to certain counties will inevitably leave out producers who need and expect this relief.
Reserve allocations for Specialty Crop and Livestock producers instead of capping the amount that can go to either category. This will again help avoid confusion and allow MDA to best meet the need.
Allowing “up to $10,000 per eligible livestock farmer or specialty crop producer,” which will give the department flexibility to meet producers’ needs.
Allowing for more grants, by allocating $7 million to the program.

He also shared support for replenishing the Rural Finance Authority’s (RFA) disaster loan account, including by:

Dedicating $5 million or more to the revolving loan account. Farmers in Minnesota are now facing two disasters with avian influenza (HPAI) on the rise. This will lead to more pressure on the account.
Expanding eligibility to more producers by adjusting the gross income requirement. This will allow more young and emerging farmers to access the program as they ramp up their operations.

Over the break, Senator Kent Eken (DFL-Audobon) announced his retirement after 20 years in the legislature. Eken is a strong champion for family farmers and a valued and reliable partner to MFU including on rural education funding, ag tax relief, flood mitigation, and soil health. In announcing his retirement, he joins House Ag Chair Mike Sundin (DFL-Esko), House Tax Chair Paul Marquart (DFL-Dilworth), and 32 other legislators.

Legislative Update – April 12, 2022

This week the legislature is on break and lawmakers are back in their home districts meeting with constituents, attending endorsing conventions, and preparing for the final sprint to the end of session. If you planned to connect with your representative on an issue that matters to you, this week is a good opportunity.

You can find who represents you and their contact information here.

When lawmakers return from recess, they begin the hard work of negotiating deals on bills that can pass both the Democratically-controlled House and Republican-controlled Senate. Debates on how to spend the state’s $9.25 billion budget surplus loom large though—unlike a budget session—no spending is required to keep the lights on in state government.

Legislative leadership has also made clear that deals need to be reached ahead of the end of session on Monday, May 23. Unlike budget years when a shutdown is on the line, officials do not plan to count on a short special session to wrap up budget bills—when the session is over, it’s over. This leaves just five weeks for legislators to reach a deal on healthcare affordability, replenishing the unemployment trust fund, education spending, tax relief, and of course a budget for agriculture.

As the election heats up ahead of the midterms this November, there is reason to think that bipartisan agreement could be difficult. That said, there are reasons to be hopeful. As just one example, on Thursday, April 7, the House and Senate acted quickly and nearly unanimously to expedite $1 million to respond to the High Path Avian Influenza (HPAI) outbreak across the state. The disease, which is spread from wild birds, is a threat to both large commercial operations and small backyard flocks. The state has been working hard to find the disease, depopulate infected barns, educate the public on biosecurity, and minimize the effects of the outbreak on trade.

You can learn more about the HPAI outbreak and how you can help at the Board of Animal Health (BAH).

“The 2015 HPAI outbreak in Minnesota and throughout the Midwest caused significant economic impact,” said MFU President Gary Wertish in a letter signed by a coalition of agriculture organizations representing poultry farmers, making the case for the funding. “Minnesota lost over 9 million birds and 108 farms were affected across 23 counties resulting in more than $647.2 million from lost turkey and egg production and processing . . . that experience now allows us to respond quickly with the appropriate resources.”

Unfortunately, action on drought relief was tabled until the legislature returns from recess. The House approved a package on March 10and the Senate followed suite on March 31and on Thursday, April 7 a conference committee was appointed to negotiate the differences between the packages. For agriculture, they are both generally in line with what the Governor first proposed in September: small grants and low-interest loans for livestock and specialty crop producers who can demonstrate that they were affected by last summer’s drought.

Members of the conference committee on the drought package are:

Sen. Torrey Westrom (R-Elbow Lake)
Sen. Bill Weber (R-Luverne)
Sen. Andrew Lang (R-Olivia)
Sen. Gary Dahms (R-Redwood Falls)
Sen. Kent Eken (DFL-Audubon)
Chair Mike Sundin (DFL-Esko)
Rep. Samantha Vang (DFL-Brooklyn Center)
Rep. Rick Hansen (DFL-South Saint Paul)
Rep. Rob Ecklund (DFL-International Falls)
Rep. Paul Anderson (R-Starbuck)

There is less agreement—at least as of yet—about what to include in a supplemental tax proposal. In the Senate, Chair Carla Nelson (R-Rochester) released the first version of her tax proposal which was approved by the full Senate last week. Despite this, Republican leadership has acknowledged that the final deal could look much different and some have suggested that a second tax bill will be released following the break.

The $8.4 billion Republican proposal would spend most of the state’s $9.25 billion budget surplus on ongoing tax relief. In the first year, the bill would cut taxes by $3.4 billion, achieving the total over the next three. The bill would lower the state’s first tax bracket from 5.35 to 2.8 percent and eliminate the tax on all social security benefits.

Despite a handful of DFLers voting for the package, members of the minority in the Senate expressed serious concerns about the proposal not helping over half a million taxpayers with lower incomes and not leaving room for investments in education, healthcare, or helping public safety. They also shared concerns about spending so much on permanent tax cuts given that the state might not be able to count on the surplus long-term.

In the House, Chair Paul Marquart (DFL-Dilworth) is advancing a $1.6 billion tax proposal that expands the child tax credit, eliminates the income tax on Social Security benefits up to $750,000, and expands the renters tax credit. The House bill also includes a number of priorities for MFU and leaves room for spending on other jurisdictions.

First, Marquart’s bill expands the Beginning Farmer Tax Credit (BFTC) by expanding the sale of agricultural assets to family members and proving the Rural Finance Authority (RFA) with funding to better administer the program and do outreach to emerging farmers.

Second, the House tax bill would repeal the sales tax on fencing equipment retroactive throughout the drought. Rep. Nathan Nelson (R-Hinkley) led this effort in the House, making the case with MFU that providing a retroactive reprieve from sales tax is one way the legislature can provide them with relief from the drought. Not only that, but long-term, this investment will help grazers reinvest in their operations, graze more intentionally, and remain resilient to future droughts. Much farm equipment is already exempt from sales tax, including most machinery, grain dryers, milking systems, and irrigation equipment.

Third, the bill would expand the Ag to School tax credit to from 70 to 85 percent, helping more communities benefit from this successful program. This credit provides property tax relief to farmers while also helping rural school districts make needed improvements to their facilities—a win-win for farmers and their communities.

And finally, the bill would fund Soil and Water Conservation Districts (SWCDs) through a new local government aid program that will provide them with the stable, long-term funding they need to best assist our family farmer members in meeting their on-farm conservation goals. Rep. Liz Reyer (DFL-Eagan) led this effort, making the case that the $22 million annual investment will help SWCDs better serve landowners, helping farmers adopt new practices that promote soil health and water quality. Importantly, this proposal will also free up money in the Clean Water Fund, which currently funds the Districts.

Legislative Update – April 5, 2022

Last week was another busy one for MFU’s legislative team with committee chairs in the House and Senate releasing budget proposals for agriculture, taxes, and other jurisdictions. For the most part—and while they could still change—these bills help define what proposals are still under consideration for the legislature this session. In all, MFU helped secured key provisions, including on meat processing, farmland transition, soil health, cooperative development, and rural education. For other priorities, like a grain indemnity fund, the path to passage this year narrowed significantly after they were not included in bills in either the House or Senate.

Each legislative committee’s comprehensive legislative proposal is called an ‘omnibus bill,’ which includes all (or most) of the funding and policy proposals the chair and committee members want to advance this session. To craft their omnibus, each chair takes parts or all of all the smaller bills heard that session in committee, tacking them together into a larger whole that will serve as the main vehicle through which policymaking gets done.

When crafting these bills, chairs think about not only what they want individually, but also what items they need to secure the support of their committee and their caucus—or at least a majority of legislators. Basically, can the bill pass.

Once omnibus bills do pass, they’re sent to conference for chairs and a joint conference of legislators to iron out the differences in the proposals. For many jurisdictions, that’s going to be a tough process made even more difficult by the fact that very little needs to get done this session. Unlike odd numbered years, the legislature will not shut down if lawmakers fail to reach a deal.

That said—and as we’ve shared at the capitol—missing the opportunity to leverage a historic $9.25 billion surplus to help rebuild the economy following COVID, help families and businesses manage inflation, and otherwise do good for Minnesotans would be disappointing.

At present—and since proposals passed both the House and Senate—the drought relief package is set to be heard in a conference committee. While there are differences between the proposals, farmers are counting on Senate Chair Torrey Westrom (R-Elbow Lake) and House Chair Mike Sundin (DFL-Esko) to work to find common ground on providing relief and helping the state manage the emerging outbreak of avian flu. While the House proposal includes $13 million for the Minnesota Department of Natural Resources, for agriculture both bills are fundamentally similar—they’re small, non-competitive, swift to administer grants to livestock and specialty crop producers who were harmed by last year’s drought.

In the best of worlds, a deal on the drought package could help build goodwill, paving the way for further progress on an agriculture omnibus bill and others.

On Friday, House Agriculture Chair Sundin released his omnibus spending proposal, which retained key MFU priorities. These included:

Expanding meat and poultry processing, including through:
- $3 million investment in the AGRI value-added program to help start up, modernize, and expand meat processing facilities.
- $500,000 in support for technical training programs (set to start this fall at Central Lakes College in Staples and Ridgewater College in Wilmar.
- $500,000 in grants for K12 schools (to purchase the equipment and secure the training needed to introduce students to meat cutting, and complement their existing ag and vocational training.
- $100,000 in meat processor training grants to help small processors upskill and retain current employees.
- $100,000 investment in MN state inspection program which will help get more processing plants online. Importantly, this will come with a 100 percent match from the federal government.
$6.7 million investment in a new soil healthy grant program that will help farmers implement voluntary practices that improve profitability and help farmers meet their goals to retain topsoil, hold water, and deliver ecosystem services.
$4.5 million for Animal Disease Preparedness and Response to help producers and the industry manage the current and potentially devastating outbreak of High Path Avian Influenza and prepare for a potential outbreak of African Swine Flu.
Cooperative development grants which could help groups of established and emerging farmers develop new and more resilient models for processing and marketing their products in the wake of COVID-19.
$6 million to support Emerging and Beginning Farmers, including through down payment assistance, services to immigrant and Black, Indigenous, and farmers of color, Farm Business Management (FBM) scholarships, and funding to better administer the Beginning Farmer Tax Credit (BFTC). Taken together, this over $6 million investment would help ensure that more young people can build a life in agriculture.
$1.25 million in Farmers Market support to help farmers markets remain resilient. This builds on incredible work throughout the pandemic to make sure that farmers markets were safe and accessible.
$2 million in noxious weeds grants to help with detection, control, and management.
$9 million in perennial cover commercialization support that will help establish new supply chains and markets for perennial crops.
Farm and rural mental health fixes to protect farmers data and maintain MDA’s mental health program.
Hunger relief, including support for the Good Acre’s Local Emergency Assistance Farmer Fund (LEAFF), which helps build new markets for emerging farmers.
Agricultural Utilization Research Institute (AURI) investments to modernize facilities, purchase equipment, and attract and retain qualified staff.
Farm-to-School expansion to help build on the departments work to improve local markets for farmers and provide kids with healthy, local food.
Food Safety Analysis will help streamline licensing and regulations, helping new food business succeed.
Local and regional food system report that will help highlight good work happening at the department and lift up opportunities to strengthen these important markets.

This is a much longer list than what was proposed in the Senate in large part because the House is proposing spending around $70 million more on agriculture over the next two years.

“I want to start by thanking you for successfully advocating for a strong budget target for agriculture,” said MFU President, Gary Wertish in written comments to the House committee. “Throughout COVID-19 and last year’s 30-year drought, producers demonstrated adaptability and identified opportunities to make our agriculture system more resilient. A strong supplemental ag budget—proportional to the state’s historic budget surplus—will help implement lessons learned in the past year to build an agriculture system that is more distributed, resilient, and fair.”

Even with the larger budget, however, the House did not yet address a couple priorities for MFU. First and foremost—and in line with the Senate—the House ag omnibus bill did not include the Governor’s proposed grain indemnity fund. This is despite good hard work on the part of MFU members and leadership.

Last week, MFU President Gary Wertish, Tim Velde (Yellow Medicine County), Greg Reis (Dakota County), Andrea Koller (Nicollet County), and Jim Falk (Swift County) met with both Chair Torrey Westrom (R-Elbow Lake) of the Senate Agriculture committee and Chair Mike Sundin (DFL-Esko) of House Agriculture committee along with several other legislators to share their perspectives as farmers and grain elevator operators.

Governor Walz included a grain indemnity fund proposal developed by MDA in his supplemental budget request. The fund would protect producers when grain elevators go bankrupt or collapse as has happened five times in the previous six years. Across these failures, the state’s current bond system has paid out only 11 percent of farmers claims.

This is an important issue for members who have been personally impacted by elevator failures. Most recently in the Pipeline Foods bankruptcy, one MFU family lost nearly $82,000. Overall, farmers have made $5.5 million in claims against Pipeline, but the bond they hold with the department will only cover about $500,000—par for the course. Currently, fourteen other states have grain indemnity funds, including most other top producing grain states such as North Dakota, Iowa, Illinois, and Wisconsin.

While neither the House or Senate included this proposal, these conversations are meaningful. Grain marketing is complicated and legislators will better understand how the current system is failing to protect farmers going forward.

Legislative Update – March 29, 2022

The legislature is in full swing and deals are taking shape. With first committee deadline passed last Friday, March 25, bills needed to have been heard in either the House or the Senate in order to continue advancing this session. By this coming Friday, April 1, all bills need to have been considered by committees in both houses, leading to long committee hearings that extend into evening hours.

As lawmakers make important decisions about the agriculture budget, healthcare affordability, taxes, and how to spend Minnesota’s historic $9.25 budget surplus, MFU’s team is working hard to ensure that the voices of family farmers are heard at the capitol.

On Monday, Senate Agriculture Chair, Torrey Westrom (R-Elbow Lake), released his updated supplemental budget request, which included around $5 million in new spending and some important policy provisions. This would reflect a far more modest investment than the upwards of $60 million requested for agriculture in the Governor’s proposed budget.

Given the small price tag, many priorities would be left for next session under the Senate’s opening proposal. That said, their bill includes a number of MFU’s key priorities. These include:

$1 million in grants for K12 schools to start meat cutting training programs
$700,000 to expand and modernize meat processing facilities through the AGRI value-added program
$30,000 in grants to meat processors to provide training to their employees
$600,000 for animal disease preparedness and response and updating equipment at the University of Minnesota’s Veterinary Diagnostic Lab—critical now that High Path Avian Influenza has been identified in the state
$100,000 for cover and a new soil health grant program
$50,000 for the helping commercialize perennial crops developed by the University of Minnesota’s Forever Green Innitiative
$10,000 to develop a report on regional and local food systems

The Senate also included $1 million in compensation for white-tailed deer farmers, $1 million for the Minnesota Department of Agriculture (MDA) to update their information technology, $500,000 to continue developing the Agriculture Innovation Campus in Crookston, and $10,000 to develop a state plan on aquaculture.

For non-cost, policy items, you can also see that the Senate includes:

Fixes for the Minnesota Department of Agriculture’s rural mental health program, including to protect farmers’ private information
Reauthorization of Cooperative Development Grants (though with provision that “state funds must not be used for grants”)
Establishment of a “state healthy soil management plan”
Increasing the project cap for the Agriculture Chemical Response and Reimbursement Account to $575,000 in 2027
Increasing the threshold of accounting reviews for grain buyers from $5,000,000 to $7,500,000
Adding Zoological Association of America to accredited institutions

Importantly, these investments do not include the proposed drought package, which is expected to be heard by the Senate this week.

The House approved their drought proposal on March 10 with the leadership of Chair Mike Sundin (DFL-Esko). Their bill is ready for conference committee as soon as the Senate takes action.

Chair Sundin and his committee are also working this week to craft their omnibus bill. Last Wednesday, they had a formal hearing of the Governor’s budget request, which is expected to form the basis for their final proposal. This includes:

$8.7 million for meat and poultry processing including,
$3 million to expand and start new processing facilities through the state’s AGRI value-added program o $3 million for small processors to attract and retain employees
$2.5 million in grants to Central Lakes and Ridgewater Colleges to support standing up their technical training programs
$200,000 to strengthen the state’s meat inspection program. Importantly, this will come with a 1 to 1 match from the federal government.
$27 million for supporting voluntary adoption of soil health practices
$5 million to create a grain indemnity fund
Reauthorizing cooperative development grants
$2 million to support emerging farmers
Animal disease preparedness
E-commerce cost share
Farmers market support
Farm Business Management (FBM) grants
Noxious weed funding
Forever Green commercialization funding
Hunger relief

In a letter to the committee, MFU President Gary Wertish shared his support for these provisions.

“We believe strongly that foundational investments in agriculture and family farmers will help rural Minnesota’s economy rebound from the disruptions brought about by COVID-19,” he shared. “The historic opportunity presented by the surplus and yet unspent federal aid can help build a farm and food system that is more resilient, distributed, and fair for farmers, workers, and consumers.”

MFU Swift County President, Jim Falk, also testified on the bill, sharing the organization’s support for creating a grain indemnity fund. The departments proposal builds on the work of 14 other grain-producing states who have indemnity funds and would make producers whole in the event of an elevator collapse.

With our current bond system, farmers in Minnesota have the lowest level of protection in the nation. This was most recently evidenced after Minnesota-based Pipeline Foods declared bankruptcy in Delaware. The company left approximately $5.5 million worth unpaid bills to farmers who delivered grain of which their bond will only cover $500,000. Of the past five elevator failures since 2016, the bonds have only paid out an average of 11 percent—cents on the dollar.

Last week, Attorney General Keith Ellison held a Continuing Legal Education seminar on Right to Repair. The event was hosted by the legal antitrust fellow supported by Farmers Union Foundation.

This follows a hearing on a slate of antitrust bills put forward by the Attorney General’s office. MFU expressed strong support for strengthening antitrust laws to keep pace with increasingly consolidated markets.

The first bill, HF4143, sponsored by Rep. Steve Elkins (DFL-Bloomington) would update Minnesota’s antitrust laws, strengthening the definition of monopoly power and defining monopsony power as a buyer’s power to control prices, to control market demand or exclude or suppress competition for input. This proposal would also increase the fines for antitrust violations.

HF4142, also sponsored by Elkins, would strengthen Minnesota’s price discrimination statue, similar to the federal Robinson Patman Act, which prohibits certain types of price discrimination.

A third bill, HF4144, sponsored by Chair Zach Stephenson (DFL-Coon Rapids) would adopt a new “abuse of dominance” standard for antitrust enforcement, outlawing large companies using their position to push out competitors or prevent new competitors from entering the market. This bill was tabled due to lack of time.

These bills were first proposed by Minnesota’s Attorney General, who testified in support of the legislation.

“Fair competition is supposed to be the backbone of markets,” Attorney General Keith Ellison said. “When markets don’t have fair competition, costs can go up, while quality, choice and innovation can go down. Consolidation of markets and decreased competition make it harder for all Minnesotans to afford their lives. Fair markets, on the other hand, help everyone in our economy do better.”

The Minnesota Chamber of Commerce and an umbrella group representing large tech companies including Meta (Facebook), Google, and Amazon shared strong opposition to these proposals.

Legislative Update – March 15, 2022

On Thursday, March 10th the House passed a drought relief proposal (HF3420) that would provide $10 million in drought relief to livestock and specialty crop producers on a broad bipartisan basis. Mirroring the request Governor Walz first put forward in September, this bill would provide $5 million in ‘Rapid Response Grants’ to producers who can demonstrate a need related to last year’s drought and $5 million in low interest loans through the Minnesota Department of Agriculture’s Rural Finance Authority (RFA).

“On top of challenges related to the COVID-19 pandemic, last year’s drought was devastating to Minnesota’s farmers and ranchers,” said House Agriculture Committee Chair, Mike Sundin (DFL-Esko) who led the proposal. “With the growing season just around the corner, they deserve financial relief right now.”

The Senate also acted on drought relief, though the proposal still has a potentially long path to passage. Chair Torrey Westrom (R-Elbow Lake) crafted a proposal (SF3479) that differs from the House version and passed it out of his committee on Wednesday March 9th. Importantly, his proposal includes $6.5 million in ‘Rapid Response Grants’ for livestock and specialty crop producers, with the latter being capped at $1.5 million. The Senate version included funding to prepare for an impending Avian Influenza outbreak and a small amount for cervid farmers. It did not include funding for the RFA or the broader funding package requested by the Department of Natural Resources (DNR), both of which were included the House version.

For MFU’s part, we’ve been working hard to share the urgency of getting something passed and are glad to see proposals moving forward.

Also on Wednesday, MFU members from across the state gathered virtually to meet with lawmakers as part of our annual Lobby Day. These meetings were well-timed given that lawmakers had just received notice that the state’s historic $7.7 billion budget surplus at swelled to nearly $9.3 billion—nearly a 5th of the entire $52 billion budget. With this unique opportunity to make new investments in farm families and all Minnesotans, and the first legislative deadline just two weeks away, MFU members made a strong case for investments in drought relief, local and regional processing, health care affordability, broadband, and a host of other priority issues.

To kick off Lobby Day, members met with Minnesota Governor Tim Walz who talked about the MFU priorities he included in his supplemental budget proposal, including the drought relief package he first proposed in December. Hearing members’ stories about the need for support purchasing feed for livestock, the Governor renewed his commitment to getting the package passed quickly.

“This should have been passed in August of last year,” he said, sharing that the package has momentum in the legislature when other issues seem to be stuck in partisan gridlock.

Later that afternoon, Chair Torrey Westrom (R-Elbow Lake) past a drought relief package out of his committee and on Thursday, the full House approved a plan led by Chair Mike Sundin (DFL-Esko). While the plans differ in important ways, they would both provide grants to livestock and specialty crop producers that can demonstrate expenses related to this summer’s 30-year drought.

In his meeting with MFU members, the Governor also talked about his proposed $8.7 million investment in building out the state’s local and regional meat processing system. In this he cited the need for workforce development and celebrated MFU’s hard work to support the development of technical training programs for meat cutting at Central Lakes College and Ridgewater.

“You and Thom Petersen made this happen,” he said. In closing he shared the importance of making our voices heard, for agriculture and for all of rural Minnesota. “Family farms grow families and communities too.”

From there, MFU members met with Revenue Commissioner Robert Doty to talk about tax proposals and expanding the Beginning Farmer Tax Credit. MFU member Brad Kluver shared that expanding the credit to family members would help with generational farm transition. And Luke Sanders and Harmon Wilts added that the credit could be streamlined so that landowners don’t decide that it’s too complicated to work with.

Commissioner Doty shared his commitment to continuing to work with MFU and our membership to strengthen the Beginning Farmer Tax Credit. Throughout the day, members also spoke with lawmakers about expanding the Ag to School Tax Credit, eliminating the sales tax on fencing equipment, and funding Soil and Water Conservation Districts through local tax aid.

Next, MFU members met with members of the House Agriculture Committee, including Chair Mike Sundin (DFL-Esko), Vice Chair Samantha Vang (DFL-Brooklyn Park), Ranking Member Paul Anderson (R-Starbuck), and Rep. Todd Lippert (DFL-Northfield). Chair Sundin emphasized his support for moving toward higher blends of biofuels, like E30, and discussed a dual path that’s compatible with electric vehicles. Vice Chair Vang discussed her work to support emerging farmers and create a cooperative development grant program at the Minnesota Department of Agriculture.

From there members participating in Lobby Day met with Agriculture Commissioner Thom Petersen, Attorney General Keith Ellison, Secretary of State Steve Simon, Senate Majority Leader Jeremy Miller (R-Winona), Senate Agriculture Chair Torrey Westrom, Senate Tax Chair Carla Nelson, Senator Nick Frentz, Senator Kent Eken, and Senator Erin Murphy. In these meetings, we had good discussions about supporting local and regional processing for meat and grain, creating a grain indemnity fund, skyrocketing input prices, and the need for stronger antitrust laws.

In all, it was a productive day of advocacy. And it was well-timed given that state budgeters had just recently announced an increased $9.3 billion surplus .

With over $10 billion on the table, however, legislators were quick to cite reasons for caution, chief among them the Russian war in Ukraine and its potential impact on global supply chains.

“The update part of this is good news,” Minnesota Management and Budget Commissioner, Jim Schowalter said. “But the uncertainty has not stopped. It’s a challenging time to issue a long-term forecast.”

Governor Tim Walz emphasized that while uncertainty lies ahead, this is a good position for the state to be in, particularly coming out of a global pandemic and its associated upheaval. To respond to inflation and the needs still experienced by many families, the Governor renewed his push to do direct payments to Minnesotans. Under the projected surplus, the Governor proposed tripling the “Walz Checks” he proposed earlier this year to $500 for individuals and $1,000 for individuals. This would be on top of the investments he proposed in his supplemental budget proposal, including for agriculture.

The Governor also signaled his openness to permanent tax cuts for lower- and middle-income Minnesotans.

In the Senate, Majority Leader Jeremy Miller (R-Winona) renewed his push for “permanent, ongoing tax relief.” This will include a bipartisan plan to refill the unemployment fund, preventing tax increases on businesses, and removing the tax on social security.

It’s important to remember that the legislature approved a two-year budget last session and doesn’t need to reach a deal to keep the lights on in state government this session. This, along with the upcoming midterm elections could make reaching a final deal elusive.

While legislators agree that there are reasons to exercise caution and disagree on some of where they’d like to spend, there is no question that this represents a meaningful opportunity for new investments in Minnesotans. For MFU, this means making the case for a strong agriculture budget, expanding meat and poultry processing, investing in climate resilience, expanding tax incentives to support beginning farmers, and otherwise building a farm and food system that’s more distributed, resilient, and fair.

MFU also offered testimony on a proposal that came up through county conventions. Pine County Vice President, Hannah Bernhardt, shared support for eliminating the sales tax on fencing equipment. As proposed in the bill led by Rep. Nathan Nelson (R-Hinkley) and Jason Rarick (R-Pine City), the change would be made retroactively in order to provide indirect drought relief to grazers who had to fence new pasture.

“For many [farmers] across the state, the drought meant fencing more pasture, some of which wasn’t even their own,” said Bernhardt. “The retroactive tax relief on fencing equipment is one way your committee could provide retroactive, targeted drought relief to livestock producers like me.”

Bernhardt also explained that the proposal would help more farmers adopt soil health practices, delivering important ecosystem benefits. The bill was received positively in Chair Paul Marquart’s (DFL-Dilworth) House Taxes Committee and, just a couple days later, in Chair Carla Nelson’s (R-Rochester) Senate Taxes Committee. In addition to this bill MFU is working to expand the Beginning Farmer Tax Credit (BFTC), increase the Ag to School tax credit, and create a tax exemption for land held in buffers as part a potential tax bill this session.

Outside of taxes, in the past week, MFU has offered testimony on soil health grants, meat cutting training for K12 students, cooperative development grants, commissioning a report on local and regional food systems, and providing UMN Extension with funding to help farmers prepare for extreme weather.

Legislative Update – March 8, 2022

At the end of February, state budgeters announced an increased $9.3 billion surplus—by far and above the largest in state history. This is increased from the $7.7 billion estimated in November and does not include the $1.1 billion in unspent federal aid. As with the previous surplus, the increase is made up of taxes on rising incomes, increased consumer spending, and forecasted corporate growth.

With over $10 billion on the table, however, legislators were quick to cite reasons for caution, chief among them the Russian war in Ukraine and its potential impact on global supply chains.

The Governor also signaled his openness to permanent tax cuts for lower- and middle-income Minnesotans.

With a newly expanded surplus, MFU’s Lobby Day on Wednesday, March 9 is well-timed. MFU members will meet with the Governor, Agriculture Chairs Torrey Westrom (R-Elbow Lake) and Chair Mike Sundin (DFL-Esko), Commissioner Thom Petersen, Attorney General Keith Ellison, and others. This is will be an important opportunity to strengthen relationships with policymakers, demonstrate MFU’s collective power, and help legislators and others understand what we need from them this session.

“I always look forward to our Lobby Day as it’s a great opportunity for our members to connect with their legislators,” said MFU President Gary Wertish. “On Lobby Day, MFU’s family farmer members bring their everyday experiences to share with their legislators. It’s heartening to see the connections made as farmers talk about the issues that are important to them and their communities. Sometimes, members and legislators share a common complaint or challenge. Other times, they talk of goals.”

In addition to a strong supplemental budget for agriculture and rural communities, MFU members who join for lobby day will be able to voice support for a drought relief package MFU worked hard to secure early in session. As a reminder, the deal that passed that was proposed by Governor Walz and passed unanimously by Chair Mike Sundin’s ag committee would include:

$5 million in ‘rapid response grants’ for up to $10,000 grants to livestock and specialty crop producers who can demonstrate losses due to the drought
$5 million in low-interest loans from the Rural Finance Authorities Disaster Loan Program

The Senate has yet to take formal action on the bill, but Chair Westrom did hold an informational hear testimony on the need last week. MFU Board Chair Carol Anderson gave strong testimony for MFU.

“For our farm, this year’s historic drought was a tipping point . . . we sold our dairy herd because the drought had driven up the price of feed, Anderson shared with the Committee. “I’m here today, because I don’t want any of my neighbors to be forced out. Whether they’re another dairy, an orchard, or a cow-calf operation, that’s a loss not just that family, but the entire community and our state.

Chair Westrom’s committee is expected to take formal action on the deal on Wednesday, March 9.

Bernhardt also explained that the proposal would help more farmers adopt soil health practices, delivering important ecosystem benefits. The bill was received positively in Chair Paul Marquart’s (DFL-Dilworth) House Taxes Committee and is up for a hearing in the Senate on Tuesday. In addition to this bill MFU is working to expand the Beginning Farmer Tax Credit (BFTC), increase the Ag to School tax credit, and create a tax exemption for land held in buffers as part a potential tax bill this session.

Finally, House Agriculture Chair Mike Sundin (DFL-Esko) announced that he would not seek reelection in 2022.

“I want to give my heartfelt thanks to the people of Carlton County and the surrounding areas who gave me the opportunity to serve our communities at the State Capitol,” Chair Sundin wrote. “It’s been a tremendous honor to be a part of some important work at the Legislature, but it’s time for a new voice to step up in this role. We still have a great deal of important work left before us this session and I look forward to helping ensure all Minnesotans can have a brighter future.”

Chair Sundin has been a great advocate for MFU priorities in his committee and his leadership will be missed. He joins Senate Minority Leader Melisa López Franzen, House Tax Chair Paul Marquart, Ag Committee member Todd Lippert, and nearly 30 other legislators in announcing their retirements so far.

Legislative Update – February 15, 2022

The state legislature is in full swing now in its third week of regular session. Despite all the big questions facing lawmakers, this is a shorter session typically used to pass a borrowing package and make tweaks to the state’s budget. Just five full weeks remain until the first legislative deadline when bills that weren’t heard last session need to be approved by a committee in either the House or the Senate. And 13 weeks remain until the session is set to adjourn on Monday, May 23.

As always—and particularly given the short timeline—MFU has been working hard to connect with committee chairs and other legislators to talk about drought relief, expanding meat processing, making healthcare more affordable, creating a grain indemnity fund, biofuels, and other priorities outlined in our grassroots policy. If you have questions about the legislature this session or want to learn more about our work, don’t hesitate to reach out to Stu at (320) 232-3047 (C) or stu@mfu.org.

Driving this week will be the anticipated release of new legislative maps on Tuesday, February 15. That day marks the constitutional deadline for the state legislature to deliver maps, a project they failed to complete as is consistent with past decades. Anticipating this, a panel of five Minnesota judges has been working to put together a plan for redistricting. The judges have said their districts will be drawn so that districts:

Include an numbers of residents;
Are contiguous;
Don’t infringe on voting rights of racial or ethnic minority groups or unnecessarily divide reservations;
Keep together counties and cities;
Keep together “communities of interest” (i.e. farms with farms);
Are compact;
Don’t promote or harm political parties or particular politicians.

Of course, some of these principles could come into conflict, which is what makes drawing new maps difficult. Needless to say that new maps will be a huge driving force for the rest of the legislative session. Legislators will inevitably be ‘districted in’ with colleagues, which could lead to even more legislative retirements. 17 legislators have already announced that they don’t plan to run for reelection.

Looking back at the past week, the House Agriculture committee held a hearing on bills to fund a statewide aquaculture plan and to create a fund to support the development of plant-based proteins. The following Wednesday, they heard an overview of the Governor’ budget proposal, for which MFU submitted formal written comments.

“We believe strongly that foundational investments in agriculture and family farmers will help rural Minnesota’s economy rebound from the disruptions brought about by COVID-19,” said MFU President, Gary Wertish. “The historic opportunity presented by the surplus and yet unspent federal aid can help build a farm and food system that is more resilient, distributed, and fair for farmers, workers, and consumers.”

He voiced support for the Governor’s proposed investments in:

$10 million drought relief package
$8.7 million for meat and poultry processing
$27 million for supporting voluntary adoption of soil health practices
$5 million to create a grain indemnity fund
Reauthorizing cooperative development grants
$2 million to support emerging farmers
Animal disease preparedness
E-commerce cost share
Farmers market support
Farm Business Management (FBM) grants
Noxious weed funding
Forever Green commercialization funding
Hunger relief

He also requested that the committee consider adding funding for biofuels, cooperative development grants, and land access.

This coming week, the House Agriculture Committee will hear the Governor’s drought relief proposal which includes $5 million for Rapid Response Grants to livestock and specialty crop producers and $5 million for the Disaster Loan Program at Minnesota’s Rural Finance Authority. MFU has worked hard to advance this package and are glad to see Chair Mike Sundin (DFL-Esko) leading in approving this package early in session. Commissioner Thom Petersen has continued to voice his support and insist that the bill needs to be passed with time for the department to get grants out to producers ahead of spring.

The Senate Agriculture Committee has yet to have a hearing on the drought. In the first two weeks of session, they’ve focused on informational hearings about the Board of Animal Health and Chronic Wasting Disease. MFU has been in touch with Chair Torrey Westrom (R-Elbow Lake) and hope he’ll be willing to take up the package soon.

If you feel like the state could make a difference with targeted, swift drought relief grants between $5,000 and $10,000 now is an important time to contact your legislators. An email goes a long way!

Finally, on Monday, February 15, MFU member Cindy VanDerPol from Kerkhoven delivered powerful testimony in support of creating a MNCare buy-in option. The House held their first hearing on their proposal, HF11, which they’re working to align with what the Governor proposed last month. VanDerPol gave brave testimony that centered on her cancer diagnosis last year.

“Thankfully we had MNCare,” she shared. “As the days went by, we had $97,000 in medical bills, most of which was covered. But we still had to pay in $4,500 . . . Still this year, if we make too much money, we could lose that coverage.”

VanDerPol made a compelling case about how lack of affordable health care options hurts farmers and rural communities. The bill will next be heard in the House Commerce Committee.

Legislative Update – February 8, 2022

The legislative session kicked off on Monday, January 31 with sessions held in both the House and the Senate. From there, hearings have ramped up and so has legislative work. As always, MFU has worked hard to ensure that legislators understand the needs and perspectives of family farmers and rural communities.

On Wednesday, February 2, the House kicked off the day with an informational hearing on the on the border to border broadband program in the committee charged with economic development. This follows Governor Walz proposal to dedicate another $170 million to broadband development out of the projected $7.7 billion surplus.

Later that afternoon, the House Taxes Committee heard a report from the Minnesota Department of Agriculture’s Rural Finance Authority (RFA) about the Beginning Farmer Tax Credit (BFTC). Chair Paul Marquart (DFL-Dilworth) voiced his strong support for the program, saying it was working “beautifully.” Lawmakers also discussed the proposal MFU helped advance last session to expand the tax credit for sale of agricultural assets to family members, to double that same credit for social disadvantaged farmers, and to get the RFA more funding to better administer the credit. This proposal (HF1456), led by Chair Marquart, made it into final negotiations of the tax bill last session, but wasn’t included in the final bill. This was likely due to the cost of expanding the program.

Though there wasn’t time for public testimony in that particular hearing, MFU has been making the case to lawmakers that the historic opportunity presented by the surplus coupled with this summers drought-related challenges make this year a good time to expand the credit and incentivize the sale of farmland, livestock, equipment, and other assets to beginning farmers.

Also Wednesday afternoon, the House Agriculture met to discuss interim updates from MDA, the Agricultural Utilization Research Institute (AURI), and the Board of Animal Health (BAH). MDA Commissioner Thom Petersen overviewed the challenges from the past year and the department’s actions to meet them. In particular, he stressed the impact of this summer’s 30-year drought and called for quick action on a drought relief package. For his agency—and for farmers—it’s important that this be approved early in session so that farmers have time to apply and receive proposed ‘Rapid Response Grants’ with time to buy feed and plan for the spring.

MFU staff has been keeping this at the top of our list for meetings with legislators, making the case for action as soon as possible. Legislators on the House and Senate are by-in-large supportive, but acknowledge that relief needs to be past quickly in order to be meaningful. It’s not an issue that can wait for final budget negotiations in May.

During AURI’s interim update, Director Shannon Schlecht informed Chair Mike Sundin (DFL-Esko) and other House Ag Committee members that MFU had successfully applied for the $500,000 to develop a mobile slaughter unit in Central Minnesota. Dale Lueck (R-Aitkin) who raises cattle, voiced his support for the initiative and for the technical training programs MFU is helping advance at Central Lakes and Ridgewater Colleges.

Finally, and to end a busy Wednesday, MFU field staff, Peter Ripka, shared testimony in support of digital Right to Repair legislation (HF1156) championed by Rep. Peter Fischer in the House Commerce Committee. Peter drew on his personal experience dealing with repair. This bill passed by a narrow margin and is advancing on to the House Judiciary Committee. MFU President Gary Wertish submitted written testimony to the committee.

“[Our members] care about this issue not only because it will have the practical effect of helping them get more timely repairs on their equipment, but also as a matter of principle,” he wrote to the committee. “They strongly believe that—as an owner of equipment—they have a right to make repairs.”

On Thursday, MFU member Tim Velde testified in support of spending money on transportation infrastructure this session. Last year, the federal government approved President Biden’s Infrastructure and Jobs Act, which would invest significant federal dollars into addressing the backlog in maintenance and repair. A significant portion of that funding will allocated competitively to states, meaning that states who put up state money could garner a larger portion of the overall investment.

Velde testified among a long list of representatives of municipalities and regional centers. He stressed the importance of improving farm-to-market roads.

‘We’re depending on you to get this done,’ he shared with committee members. ‘And if you eat, you count on us too.’

Outside of hearings and testimony, legislators are introducing bills. For example, Chair Paul Marquart and Sen. Kent Eken (DFL-Twin Valley) introduced legislative to take the Ag to School tax credit from 70 to 100 percent. Importantly, since this is the second year in the biennium, bills that were introduced last session are still able to be acted on and do not need to be reintroduced.

Legislative Update – February 1, 2022

The 2022 legislative session kicked off on Monday, January 31 with an 11:00am floor session in both the Minnesota House and Senate. As always—and for a third year mostly remotely—MFU is working hard to ensure that lawmakers make sound decisions on behalf of family farmers and rural communities.

When lawmakers last met in St. Paul this past June, they finalized the state’s two-year $52 billion dollar budget for 2022 and 2023. This means that this session, their work on the budget is technically done—unlike in 2021, there is no threat of a government shutdown to drive a final deal on a budget. In even-numbered, non-budget years, legislators typically use the session to approve a bonding, or borrowing, package for publicly owned projects like roads, schools, or water infrastructure.

That said, while there is nothing required of legislators to keep the lights on in state government, there is a historic opportunity. That’s because the state has a $7.7 billion surplus projected for the upcoming biennium in addition to $1.1 in unspent federal funds—the largest surplus ever recorded. On top of that, budgeters announced that revenues in November and December were estimated to be $833 million more than projected, making it seem possible that the next forecast set for late February is even higher.

Lawmakers and advocacy organizations alike have priorities for the surplus—and that includes MFU. As is customary, Governor Walz, Lt. Governor Flanagan and their administration were first to roll out a full proposal for the budget last Wednesday. This included frontline worker pay, increased funding for school and pre-k, and paid family and medical leave. One of the largest line-item in his budget is $700 million in direct payments of $175 to $350 to 2.7 million Minnesotans, dubbed ‘Walz Checks.’

Importantly for MFU, the Walz-Flanagan proposal includes:

$170 million for broadband expansion.
A MinnesotaCare buy-in option, which MFU members have long advocated for to help control health care costs.
An expansion of childcare across the state.
$183 million for universal school meals.

For agriculture, MFU helped secure some key priorities in the Governor’s budget, including:

$10 million for drought relief, including Rapid Response Grants for livestock and specialty crop producers to recover losses and make themselves more resilient.
$8.7 million for livestock processing including to expand and start new plants, recruit and retain employees, support technical training and strengthen inspection.
$27 million to help farmers tackle climate change through implementing voluntary soil health practices.
Reauthorizing Cooperative Development Grants.
$5 million to create a Grain Indemnity Fund to support farmers who are left unpaid for grain due to elevator mismanagement or collapse.
$1.5 million to help the state prepare for animal disease outbreaks.
$500,000 to help farmers build websites to sell products.
$2 million to support emerging farmers.
$1.5 million to help farmers markets remain resilient.
$500,000 to help farmers afford farm business management education.
$1 million to combat noxious weeds.
$3 million for the Forever Green Initiative at the University of Minnesota.
$6.5 million for food assistance, including $1.5 million for the Good Acre’s Local Emergency Assistance Farmer Fund (LEAFF).

“This isn’t a budget year, but the surplus does present an historic opportunity to invest in Minnesotans,” said MFU President Gary Wertish of the budget. “There are certainly things we look forward to working on with the legislature going forward, but overall, we’re glad to see these investments.”

MFU members should reach out to their legislators to highlight priorities they’re excited to see in the Governor’s budget. MFU staff and members will also continue advocating for biofuels infrastructure and an expansion to E15, funding for farm transition, an expansion of the Beginning Farmer Tax Credit, and other priorities that didn’t make the cut in this first proposal.

In order for any of these investments to become law, the Republican-controlled Senate and Democrat-controlled House need to approve them. Of course, both bodies have distinct priorities compared to the Governor. Debate throughout the session will shape a final package (if any).

While details are not yet released, Senate Republicans have been clear that they will prioritize “targeted, permanent” tax relief, increased support for law enforcement to address violent crime, expanding parents role in classroom education. On tax relief, public safety, and education Governor Walz’s proposal includes aligned investments indicating that there is common ground.

“The latest budget forecast is terrific news. It is a real testament to the hard work of Minnesota taxpayers who have kept the economy afloat through incredibly difficult circumstances,” said Senate President, Jeremy Miller of the budget surplus. “Now that the economy is on solid ground again, we should work toward bipartisan solutions that give Minnesota businesses and workers more certainty, stability, and support.”

On a more practical note, the House made it official that they will be conducting their business remotely throughout the session and the Senate formalized a plan for conducting hearings in person, but with limited availability. Legislators also agreed on committee deadlines for the upcoming session:

Friday, March 25 – Committees in either the House or Senate need to approve bills.
Friday, April 1 – Committees in the other body need to approve bills.
Friday, April 8 – Committees must act favorably on major appropriation and finance bills.

The final deadline comes a day before the annual Easter/Passover break, scheduled April 9-18.

Other important notes include the February 15 deadline to deliver redistricting maps, the updated budget forecast due in late February, and of course the deadline for legislators to complete their work this session on May 23.

Looking ahead, the first House Agriculture Committee is set to discuss updates from the Rural Finance Authority (RFA), Board of Animal Health (BAH), and the Agricultural Utilization Research Institute (AURI) this Wednesday at 1:00pm. Also at 1:00pm, the House Taxes Committee will hear a legislatively mandated report on the Beginning Farmer Tax Credit. At 3:00pm that day, the MFU will testify in support of digital Right to Repair Legislation in the Commerce Committee.

2021 Legislative Session

Legislative Update – May 18, 2021

On Monday, May 17, the Legislature officially adjourned in accordance with its constitutional deadline. That said, as of yesterday the bulk of negotiations that will make up the final two-year budget agreement had just begun.

That’s because yesterday Governor Tim Walz, Senate Majority Leader Paul Gazelka (R-East Gull Lake) and House Speaker Melissa Hortman (DFL-Brooklyn Park) finally reached a global spending agreement that provides needed guidance for conference committees from agriculture to health care to begin negotiating their respective budgets. While the agreement came long past their self-imposed deadline and just hours before both bodies adjourned, legislative leaders celebrated this agreement and highlighted the challenges that had made a budget deal illusive including remote work and vast ideological differences. You can read the broad two-page deal here.

Important for MFU members, joint budget targets included $10 million in new investments in the agriculture budget. This is short of the $11.5 million increase the House had proposed, but by far and above the zero increase put forward by the Senate. The deal also includes $70 million for broadband, a historic investment, and provides $75 million from the American Rescue Plan Act to fund summer learning programs.

“We appreciate the work that the Governor and legislative leaders put in to set budget targets and are encouraged to see new investment in agriculture on the table,” said MFU President, Gary Wertish in a release.

The $10 million target for agriculture reflects MFU’s call for a strong agriculture budget and leaves room for needed new investments including:

Expanding small and mid-scale meat and poultry processing.
Biofuels infrastructure to expand the use of E15 and higher blends.
Support for emerging farmers and assisting in land access and farm transitions.
Expanding the Farm Advocate Program.
Funding the noxious weed program.
Funding the Market Bucks and Good Food Access programs.
Expanding Farm to School and early care programs.

You can read about MFU’s priorities for in this letter to committee members here. These priorities and others will be negotiated ahead of an expected Special Session on Monday, June 14. In order to have bills ready, the budget deal stipulates that conference committee chairs must negotiate budgets by Friday, May 28 and have policy disagreements reconciled by June 4. The final deadline for passing a budget is June 30 when funding expires and the state could face a shutdown.

Budget targets are an important step forward. That said, it’s important to note that significant policy issues including police reform and accountability, car emissions standards, and the Governor’s emergency powers were not included in the agreement and still need to be addressed.

Outside budget talks, the agriculture conference committee, led by Chairs Sen. Torrey Westrom (R-Elbow Lake) and Rep. Mike Sundin (DFL-Esko), met over the weekend to reach an agreement on some limited policy changes. These changes, which were approved on a bipartisan basis in both bodies include:

A 5-year reauthorization of the Farmer-Lender Mediation program, while retaining the 90-day timeline. MFU worked hard on this provision and is glad to see the future of the program secured going forward.
A deal to help producers who sell food under Minnesota’s Cottage Food exemption from licensure by allowing LLCs to participate and allowing participants to sell pet treats.
An exemption from licensure for people who process less than $20,000 of wild game or fowl (or up to 200 deer) per year.
Adding another livestock producer to the Board of Animal Health and ensuring that at least one of the four producers on the board is a member of one of Minnesota’s 11 Native tribes.
Requires a report on proposed changes to the Agricultural Chemical Response and Reimbursement Account (ACRRA) program and not increasing the program’s cap, which could result in increased costs for farmers.
Other policy changes that can be found here.

“We’re especially pleased that Farmer-Lender Mediation is reauthorized in this policy bill,” President Wertish said. “We’d like to thank Rep. Todd Lippert (DFL-Northfield) for pushing for this program throughout the pandemic to support farmers in financial crisis.”

Legislators and the Governor also reached an agreement to conform with the federal government forgive Paycheck Protection Program (PPP) loans from state income taxes. This is important to many farmers, including sole proprietors, who received these loans during the past year. The Department of Revenue (DOR) is currently working on a solution to ensure that people don’t have to refile their taxes due to this agreed-upon change.

Energy highlight: ECO Act passes floor votes

A significant overhaul of the state’s energy conservation programs, championed by Sen. Jason Rarick (R-Pine City), Sen. Nick Frentz (DFL-North Mankato) and Rep. Zack Stephenson (R-Coon Rapids) was approved by both the House and the Senate and will get the Governor’s signature. This bill, the Energy Conservation and Optimization (ECO) Act, was supported by MFU because it stands to lower energy costs, create jobs in rural areas, and contribute to combatting climate change. It builds on the popular Conservation Improvement Program (CIP), which members have used to finance energy efficiency projects on their farms.

“The Conservation Improvement Program has been saving Minnesotans money on their utility bills for nearly 40 years and we’re pleased its legacy will continue,” said Michael Noble, executive director of Fresh Energy. “This bill is a powerful model for how stakeholders and legislators can collaborate on policy that will benefit all Minnesotans and help the state meet decarbonization goals in an equitable way.”

The language in the ECO Act is the result of significant stakeholder input from electric co-ops, municipal utilities, investor-owned utilities, the state’s largest natural gas utility, clean energy advocates including Center for Energy and Environment (CEE) and Fresh Energy, consumer advocates including the Energy CENTS Coalition and Citizens Utility Board (CUB), and others. The ECO Act is a critical component of Governor Tim Walz’s plan to eliminate greenhouse gas emissions from electricity in Minnesota by 2040.

Legislative Update – May 11, 2021

We are now less than a week away from the end of the regular state legislative session and days past a self-imposed deadline for a broad agreement on budget targets. The May 17 constitutional deadline for legislators to complete Minnesota’s next two-year budget is less than a week away. And last Friday, legislative leaders missed their self-imposed deadline to come to an agreement on the overall budget. This date was important not only because they set it, but also because that week was needed to negotiate the spending within the various budget bills—including for agriculture, taxes, and healthcare—and then for nonpartisan staff to draft the hundreds of pages of legislative text that make up the massive spending deals. With each passing day, legislators are more likely to need to push budget talks to a special session. And at this point at least a short special session to pass the budget is likely, if not guaranteed.

Legislative leaders in the Republican-led Senate and DFL-majority House are still trading offers. However, neither side has been quick to give up on their priorities in the name of compromise. That’s because absent a budget deal, state government will not face a shut down until the beginning of July. This makes the de facto deadline June 30, which is still more than a month away. Not only that, but Governor Walz has said, that he plans to extend his emergency powers to do with the pandemic for another month, ensuring that he will need to call another special session in mid-June.
Though some of the disagreements House and Senate leaders and the Governor have to do with money, the caucuses are not terribly far apart when it comes to overall spending. Instead, they need to reach agreement on a number of policy issues including whether to disallow certain traffic stops for non-safety-related moving violations, tax breaks for large businesses, the future of Walz’s emergency powers, and how to spend the $2.8 billion in federal relief from the American Rescue Plan Act (ARPA).

Details about how the state can spend ARPA funds were released by the federal government on Monday, May 10. However, instead of providing room for a compromise budget deal, the funding passed by Democrats in Congress and signed by President Biden on March 12 is a source of disagreement. State-level Republicans want to make sure that they get a say in where and how the funding is spent. Unlike the CARES Act dollars which went out at the end of last year, the state, counties, tribes, and cities will have three years to spend this money. According to the Treasury, funding can go to:

Support urgent COVID-19 response efforts to continue to decrease spread of the virus and bring the pandemic under control
Replace lost revenue for eligible state, local, territorial, and Tribal governments to strengthen support for vital public services and help retain jobs
Support immediate economic stabilization for households and businesses
Address systemic public health and economic challenges that have contributed to the inequal impact of the pandemic.

You can read the 150-page guidance document that state officials are wading through here. Soon after ARPA was past, MFU submitted recommendations for spending priorities, including building out local meat and poultry processing, biofuels infrastructure, providing direct support to farmers in crisis, and connecting emerging farmers with assistance. It is still valuable to reach out to your elected officials on this or other budget items—and know that while the state is receiving $2.8 billion another $2 billion is going directly to counties, cities and tribes.

Outside of federal spending, the state tax bill is central to the $50-something billion budget deal. That’s because the state relies substantially on taxes to fund state services from maintaining infrastructure, to funding meat inspection, to supporting rural hospitals. Well over half (60%) of the state’s budget comes from taxes, with about a quarter coming from federal passthrough funding and the remainder from service fees and other sources.

MFU has paid close attention to the Tax Committees this year, not only because it is central to the overall budget, but also because there are a number of provisions that members have expressed are important to them. First, central to both the House and Senate tax proposals is state tax forgiveness for income from federal Paycheck Protection Program (PPP) loans, which farms and other businesses received to keep them afloat through the pandemic. This would match a federal provision past in December. Yet to be determined is whether the state should fund a tax break for very large businesses—many of which did very well through the pandemic—by forgiving loans of $350,000 and up.

We have also heard from members affected by the fact that the PPP program ran out of funding for most borrowers last week, well ahead of the May 31 deadline for applications, and have weighed in with members of our federal delegation.

The House tax bill also includes changes to the Beginning Farmer Tax Credit (BFTC), which MFU worked hard on this session. These provisions would open up the credit to family members, provide an added leg up to emerging farmers, and provide the Minnesota Department of Agriculture (MDA) funding to get the credit application online and improve its administration. You can read a letter that MFU helped lead to tax committee conferees here.

Another provision in the tax bill would grandparents, stepparents, stepchildren, uncles, aunts, nephews, and nieces to the list of qualifying relatives for agricultural relative homestead. Prior to this change, only children, grandchildren, siblings, or parents of the owner of the agricultural property or of the spouse of the owner qualified for the credit. This change means that qualifying relatives are the same for agricultural relative homesteads and residential relative homesteads. Tax committee conferees who will be deciding these and other important issues are:

Chair Paul Marquart (DFL-Dilworth)
Rep. Cheryl Youakim (DFL-Hopkins)
Rep. Kaohly Vang Her (DFL-St. Paul
Rep. Dave Lislegard (DFL-Aurora)
Rep. Greg Davids (R-Preston)
Chair Carla Nelson (R-Rochester)
Sen. Bill Weber (R-Luverne)
Sen. Jeremy Miller (R-Winona)
Sen. Thomas Bakk (I-Cook)
Sen. Ann Rest (DFL-New Hope)

The Agriculture and Broadband conference committee held walkthroughs last week and adopted compromise language on a number of largely non-controversial policy provisions. Important for MFU members, the House and Senate came to an agreement on changes to the Cottage Food exemption from licensure for people who cook food for sale in their home kitchens. You can read that final amendment here.Outside of that a couple other non-spending items, the landscape has remained largely the same as the committee waits for updated budget targets from legislative leadership.

Legislative Update – April 27, 2021

With the May 17 end of session approaching, legislators have been working long hours debating the large budget and policy proposals that fund the state government. These omnibus bills – catchall legislative proposals that cover a particular area – are the product of each committee’s work throughout this session and pull together proposals brought forward by legislators. With rare exception, this is how policy proposals make their way through the Legislature. If you’re interested in catching up on floor debates, you can find recordings on the Senate and House YouTube channels.

This week, the House and Senate are set to finish approving their respective omnibus proposals, largely along partly lines. This means that focus will turn toward conference committees – new, joint committees typically made up of five Senators and five House members. They will be charged with hammering out a compromise position on budget and policy proposals that can pass both the Republican-led Senate and the DFL-led House.

For the agriculture and broadband omnibus bills (SF958 / HF1524), conferees are:

Sen. Torrey Westrom (R-Elbow Lake) Co-Chair
Sen. Gene Dornink (R-Hayfield)
Sen. Mike Goggin (R-Red Wing)
Sen. Bruce Anderson (R-Buffalo Township)
Sen. Erin Murphy (DFL-Saint Paul)
Rep. Mike Sundin (DFL-Esko) Co-Chair
Rep. Samantha Vang (DFL-Brooklyn Center)
Rep. Gene Pelowski (DFL-Winona)
Rep. Todd Lippert (DFL-Northfield)
Rep. Nathan Nelson (R-Hinckley)

“The conference committees are up against the challenge of crafting a budget in a divided government, but I’m hopeful that the agriculture conferees will find plenty to agree on,” said MFU President, Gary Wertish, in a release announcing conferees. “I’d like to congratulate Chairs Sundin and Westrom on their leadership of the committee and thank each of the conferees for serving.”

While we do not agree with every conferee on every issue, MFU has a strong working relationship with many of them which will help us make our voice heard throughout the last weeks of the session. You can find an updated list of legislators appointed to other conference committees here.

Joint budget targets, yet to be set by Senate and House leadership and the Governor, will define the budget that each conference committee has to work with, setting the bounds for their work. For agriculture, for example, the House proposed spending $11.5 million in new money on biofuels, meat processing, emerging farmers, and a number of other priorities, while the Senate proposed spending zero. Of course, agriculture is a small budget. Overall, the House proposed a $52.5 billion budget to support new investments aimed at helping students, workers and businesses overcome the COVID-19 pandemic, while the Senate proposed a $51.9 billion.

Developing a broad budget deal will be challenging and likely hinge on agreement about taxes, police reform, and spending federal relief dollars. An agreement on taxes is important, because it defines how much the state is able to spend. According to the Minnesota constitution – and unlike the federal government – Minnesota must pass a balanced budget.

To “[stand] up for those who have been hit hardest by COVID-19” and support additional spending in the ag bill and across the budget, House Tax Chair Paul Marquart’s (DFL-Dilworth) tax bill (HF991) proposes increasing taxes on the top .7 percent of income earners and works to prevent multinational corporations from sheltering income oversees. The income tax provisions would affect couples earning $1 million a year (approximately $20,000 every week). Important to many MFU members, Chair Marquart’s bill also holds income from Paycheck Protection Program (PPP) loans of up to $350,000 harmless from income taxes, provides additional aid to small businesses who weren’t able to receive a loan, and expands the Beginning Farmer Tax Credit (BFTC). You can read a summary of the House tax bill here.

The Senate, on the other hand, has drawn a hard line on raising new revenue, even from high income earners. Their bill (SF961), authored by Chair Carla Nelson (R-Rochester), doesn’t raise significant new revenue. Significant to many MFU members, her bill also conforms with the federal government in holding all PPP loans harmless from income taxes. It also includes a 5 cent per gallon tax credit for fuel retailers who sell ethanol blends above E15 and adds grandparents, stepparents, and others to the definition of “qualifying relative” for the purposes of agricultural relative homestead. A summary of the Senate bill can be found here.

Second, police accountability and reform is a top priority for many legislators and their constituents who have been rocked by recent events – including ex-Minneapolis police officer Derek Chauvin’s murder of George Floyd – making it likely central to a global deal.

Finally, agreement on how to dish out the approximately $2.6 billion in federal relief dollars coming to Minnesota from the American Rescue Plan Act signed into law by President Biden will affect the overall budget and will be a key negotiating point for legislators who have thoughts about where money should be spent.

These difficult dynamics make it possible that it will take time for caucus leadership and Governor to develop joint budget targets. That said, conference committees can and will start meeting to discuss the merits of various policy provisions that won’t significantly affect the budget.

For example, Chair Sundin’s House agriculture bill includes a number of policy proposals. Non-budgetary proposals that MFU supports include:

Reauthorizing Farmer-Lender Mediation and extending the timeline for mediations by 30 days, providing important relief for farmers who are facing financial crisis and are—at times—at risk of losing their home and farm. Like so many other sectors of the economy, the effects of the pandemic were not uniformly felt and many farm families are still struggling. This was championed by Rep. Lippert and Senator Kent Eken (DFL-Audubon) in the Senate.
Reauthorizing Cooperative Development Grants to help farmers add value to their products and build new, more resilient models in the wake of COVID-19. Vice Chair Vang championed this provision which could help emerging hemp farmers build food businesses and keep wealth in their communities.
Supporting small food businesses who operate under the Cottage Food exemption by continuing to develop a compromise that allows small food business to start and grow under the exemption from licensure, which was also championed by Vice Chair Vang.

All provisions in the House bill remained the same as it was passed off the floor and are detailed in this letter MFU sent to committee members. The bill also adds two members to the Board of Animal Health (BAH) and allows the Governor to appoint the Board’s director, changes largely framed within the broader work to curb the spread of Chronic Wasting Disease (CWD). Additionally, it requires that manufacturers of treated seed to put a caution statement on packages and makes clear that using treated seed for producing food, fuel, or oil (none of which is standard practice) is not allowed. You can find a House research summary of those provisions and others here.

In the Senate, Chair Westrom’s bill also makes changes to improve access to the Cottage Food program for farmers and others who are starting small food businesses. In addition, he proposes preventing the Minnesota Pollution Control Agency (MPCA) from restricting farms from applying manure in February, March, September, and October. You can read a summary of those provisions and others here and read MFU’s comments on the bill here.

The House Health and Human Services Finance bill (HF2128), authored by Chair Tina Liebling (DFL-Rochester) and passed by the House on Monday includes a number of policy provisions MFU strongly supports. Importantly, the bill would guard patients and taxpayers against exorbitant drug price increases and requires the Commissioner of the Department of Human Services (DHS) to develop a proposal for establishing a public option for purchasing health insurance coverage. While this doesn’t go as far as we’d like in allowing Minnesotans to ‘buy-in’ to public programs, the move would represent a positive step forward.

Legislative Update – April 20, 2021

Amid a relentless news cycle—and with urgent issues demanding their attention—legislators continued to meet for marathon floor sessions to advance budget bills ahead of their constitutional adjournment date on May 17. A final deadline for budget negotiations is June 30, at which point Minnesotans will face a government shutdown absent a deal on the budget.

Last Friday, Minnesota House Ag Chair, Mike Sundin (DFL-Esko) met with MFU County Officers to discuss the agriculture finance and policy package crafted by his committee (HF1524). His proposal, which includes a $11.5 million increase to Minnesota’s agriculture budget, includes provisions reflecting MFU priority issues including expanding meat processing, advancing the market for biofuels, supporting cooperative development, and helping emerging farmers.

This package has the strong support of MFU and was approved by his committee with the vote of Republican Lead Paul Anderson (R-Starbuck), who took a leadership role in crafting the biofuels infrastructure grant program included in the bill. His support highlights the bipartisan nature of the bill as it heads to the House floor for the consideration of the full body this Wednesday, April 21.

Rep. Sundin provided us with more specifics:

“The bill funds our noxious weed program, more resources for meat and poultry inspection, our industrial hemp program, and mental health outreach to allow Minnesota’s Farmer and Rural Helpline to continue operating.

Additionally, the bill includes the following measures:

new revenue from pesticide sales to fund pesticide education and equipment and additional staff to ensure that lakes, rivers and drinking water sources have safe pesticide levels
farm safety grants
funding for an Emerging Farmer Office at MDA
funding for our county fairs
requires people who label and sell agricultural, vegetable, flower or wildflower seed treated with neonicotinoid pesticides to include a caution statement on the product label
allows Minnesotans who sell homemade, shelf-stable foods and beverages such as baked goods, to more than quadruple their annual sales without a license
exempts small meat processors (with annual sales less than $20,000) who process fowl and game for hunters from state regulation
adds two members to the Board of Animal Health: one veterinarian and one person who has knowledge of animal health and is a member of a federally recognized tribe located in Minnesota
increases the period in which creditors are prohibited from enforcing debts subject to the Farmer-Lender Mediation Act from 90 days to 120 days
Agriculture is a relatively small part of the state budget but plays an enormous role in our state’s economic opportunity, not to mention ensuring we all have food to eat. I’m grateful for our farmers and everyone who works in agriculture, and this bill will help ensure a stronger future. A summary of the bill can be accessed here.”

You can tune in to watch debate of the House agriculture package here on their YouTube channel—please let us know your thoughts.

Last Wednesday, April 14, Senate Ag Chair Torrey Westrom (R-Elbow Lake) presented his omnibus agriculture finance and policy proposal to his Senate colleagues just before the dinner hour.

“This bill, the highlights are about broadband, biofuel, and meat processing,” Sen. Westrom explained in introducing how the package was designed to prioritize needs experienced by farmers and others in rural Minnesota. The package includes $40 million in new funding for border-to-border broadband development across the state and reprioritizes grant funding to go toward biofuels and meat processing.

Importantly for MFU, Chair Westrom included a provision that would support the development of a meat processing technical training program at the Minnesota State College System, including a mobile slaughter unit that will be used for training.

“This is an important opportunity, not only for our students, but also for workers who need retraining due to COVID-19,” explained Senator Carrie Ruud (R-Breezy Point), who led this proposal in the Senate. She also highlighted how the mobile slaughter unit could help serve small farmers, through doing on-farm slaughter.

The bill passed off the floor with bipartisan support (48-18), though some DFL members expressed concerns about the package.

“I think the biggest weakness of the bill was the zero base target,” explained ranking minority member, Erin Murphy (DFL-St. Paul), who ultimately voted for the proposal. “There are things like Farmer-Lender Mediation, the Farm Advocates Program, additional funding for mental health care . . . and food insecurity,” which is addressed by programs like Market Bucks.

Senator Foung Hawj (DFL-St. Paul) also expressed concerns about Urban Ag Grants going unfunded in the proposal and talked about the need to support urban youth who want to build a life in agriculture.

MFU expressed support for the additional investments in the package and echoed calls to restore cuts to programs as the bill works its way through conference committee. You can watch the full floor debate here.

On another top priority for MFU, omnibus healthcare legislation that includes provisions that would move us toward a public option (HF2128) is advancing through the Minnesota House. While it does not create a public ‘buy-in’ option like previous legislation that MFU strongly supported (HF11), it does call for a the Minnesota Department of Human Services (DHS) to work with the federal government and others to develop a more detailed proposal for creating a public option. This is an important step that will help MFU and others make a stronger case for expanding access to MinnesotaCare in future sessions.

On a related note, the American Rescue Plan (ARP) Act made changes to health insurance benefits. If you are shopping for health insurance on the individual market, you should review what tax credits you are eligible for via MNSure.

On the federal level, legislators have been busy working on climate-related proposals, including the Growing Climate Solutions Act, which seeks to provide more certainty to farmers who are working to earn a fair return from carbon markets. This effort was endorsed by National Farmers Union.

Senator Smith also led on bipartisan legislation to help farmers adopt voluntary conservation practices and help mitigate the effects of climate change. The Conservation and Innovative Climate Partnership Act, led by Sen. Smith and Sen. Todd Young (R-Ind.) will help get more university ‘boots on the ground’ experts to partner with farmers to meet their conservation goals.

“Strong farm programs that encourage conservation and climate practices will help farmers maintain sustainable and productive operations well into the future,” said Sen. Smith. “They will also help us reduce greenhouse gas emissions to fight climate change. This bill connects farmers with the information and resources they need to take action.”

Legislative Update – April 13, 2021

Last week, Senate Ag Chair Torrey Westrom (R-Elbow Lake) and House Ag Chair Mike Sundin (DFL-Esko) released their respective budgets (SF958; HF1524) and passed them out of committee. Both included key priorities that MFU helped shape throughout the session, including investments in meat processing and expanding the use of biofuels. These omnibus bills—large packages that include a number of distinct proposals—fund the Department of Agriculture (MDA), the Agricultural Utilization Research Institute (AURI), and the Board of Animal Health (BAH).

Since the Legislature convened in January, MFU has been clear about the need for a strong budget that not only preserves programs, but also invests in new initiatives that help farmers and others meet challenges presented by COVID-19 and set them on a path toward sustainable long-term recovery. As of the latest estimates, the Legislature is facing a $1.6 billion surplus going into the next two-year budget cycle. This is good news for MFU and others who want new investments and is largely due to the massive infusion of federal support brought about through the American Rescue Plan Act, which was signed by the President in March.

Within the context of a $1.6 billion surplus, Speaker Melissa Hortman (DFL-Brooklyn Park) and her team granted House Chair Sundin a $11.5 million target. In the Senate, on the other hand, Majority Leader Paul Gazelka (R-East Gull Lake) granted Chair Westrom a zero target for agriculture. This means that if he wants to do anything new, he will need to cut something else in his budget.

“While agriculture is the foundation of Minnesota’s economy—generating $112 billion in economic impact and supporting more than 430,000 jobs—our budget for MDA makes up less than 1% of the state’s overall budget,” said MFU President Gary Wertish, making the case for a strong budget to the Senate Ag Committee last week. “We support growing our investment in farmers and rural communities.”

Despite differences in budget targets, both bills included new initiatives strongly supported by MFU. These included provisions to:

Expand small and mid-sized meat and poultry processing to address the bottleneck experienced by producers across the state. Both bills invest in expanding the state’s inspection program and investing more in helping processors start new plants or expand their capacity, reflecting recommendations in the Governor’s budget request.
Fund biofuels infrastructure through a grant program to fuel retailers, which will expand the use of higher-octane, cleaner-burning biofuels. This again reflecting the Governor’s budget request and follows recommendations put forward by his biofuels council.
Invest in farm and rural mental health to ensure that farmers facing stress and crisis have help when they need it most.
Support small food businesses who operate under the Cottage Food exemption by continuing to develop a compromise that allows small food business to start and grow under the exemption. In addition to these changes, we ask that you clarify participants ability to sell pet treats (SF1610/HF2014).

These provisions all reflect MFU priorities that were included in the Governor’s budget for agriculture. The House bill invests portions of the addition $11.5 million he has in his budget target in MFU priorities including:

Additional investments in meat processing including new general funds dollars for grants and funding for a meat scientists at AURI.
Reauthorizing Farmer-Lender Mediation and extending the timeline for mediations, providing important relief for farmers who are facing financial crisis and are—at times—at risk of losing their home and farm. The bill extends the program for another 5-year period (from 2022 to 2027) and lengthening the timelines for mediation by 30 days (90-120). This legislation was drafted by MFU and was championed by Representative Todd Lippert (DFL-Northfield).
Supporting the voluntary adoption climate-smart practices that promote soil health and provide other ecosystem services, as recommended in the Governor’s budget.
Funding the Emerging Farmers Working Group and an additional outreach position, which will both improve MDA’s outreach to and service of Black, Indigenous, people of color and immigrant farmers. These initiatives were championed by Vice Chair Samantha Vang (DFL-Brooklyn Center) and Representative Jess Hanson (DFL-Burnsville)
Reauthorizing Cooperative Development Grants to help farmers add value to their products and build new, more resilient models in the wake of COVID-19, an effort led by Vice Chair Vang.
Assisting in land access and transition to help the next generation of farmers get on the land and build a life in agriculture.
Expanding the Farm Advocate program by increasing funding by $20,000 per year, allowing MDA to contract an additional farm advocate, providing needed capacity to the program.

In written testimony on the final House package, Gary shared that “the pandemic’s disruption of our largely consolidated food system made it all the more apparent that farmers, consumers, workers, and rural communities will all benefit from a food system that is more distributed, resilient, and fair. The new investments outlined in this package are a meaningful first step.”

To the Senate package, Gary’s letter thanked committee members and made the case for securing additional general fund dollars for new investments so that existing budget items are not displaced. An unwelcome result of including new funding for meat processing and biofuels (which MFU supports) without increasing the size of the overall budget, is that some other programs would go unfunded. For example, if the senate budget were put into law, Urban Agriculture Grants and Sustainable Agriculture Demonstration Grants in MDA’s AGRI program would go unfunded.

That said, as Chair Westrom has acknowledged, both bills have a long path to enactment and will need to be reconciled in conference committee. On Wednesday, his bill passed the Senate Finance Committee and can now be considered by the full Senate. During that hearing, he highlighted the bills investment in developing a meat processing technical training program at the Minnesota State College System which incorporates slaughter through a mobile unit. MFU helped put forward this proposal (SF2196;HF2316), which was championed by Senator Carrie Ruud (R-Breezy Point) and Representative John Poston (R-Lake Shore). This will help serve local producers, address workforce needs experienced by processors, and train new entrepreneurs to take over existing plants.

As described by Commissioner Thom Petersen, processing is a key challenge for processors. Throughout last year, plants shared that “it’s great to expand, and great to do more, but they need workers,” he explained in the Senate Finance Committee.

Legislative Update – March 30, 2021

On Friday, March 26, the legislature adjourned for a break that will last until Tuesday, April 6. While many legislators and others who work at the capitol will enjoy a welcome break and enjoy time with family, committee chairs are hard at work negotiating their respective budget bills. These ‘omnibus’ bills, which fund state agencies including the Minnesota Department of Agriculture (MDA), are the way most policy and funding initiatives make their way through the legislative process.

While we will not see the House or Senate Agriculture Chair’s bills until legislators return next week, we do have some context for what they will look like.

First, we know some about what money is available. As of the latest estimates, the legislature is facing a $1.6 billion surplus going into the next two-year budget cycle. This is much improved from estimates at the start of session, which forecast a deficit due to economic hardship wrought by COVID-19. This rosier picture of state finances is largely due to the massive infusion of federal support brought about through the American Rescue Plan (ARP) Act, which was signed by the President earlier this month, in addition

Within this estimated surplus, Majority Leader Paul Gazelka (R-East Gull Lake), Speaker Melissa Hortman (DFL-Brooklyn Park), and their respective teams set budget targets for each committee.

In the Senate, leaders gave the Agriculture Committee no increase in their budget, with the exception of one-time spending for broadband. This means that Senate Ag Chair Torrey Westrom (R-Elbow Lake) will have little room for new investments in things like small and mid-scale meat processing, biofuels infrastructure, or support for emerging farmers. If he wants to do anything new, he will need to cut something else—and that is out of an agency that makes up less than half of a percent of the overall state budget.

In the House, on the other hand, leadership proposed increasing the budget for agriculture by around $11.5 million. This leaves more room for House Ag Chair Mike Sundin (DFL-Esko) to make new investments. However, the great needs across so much of the state mean that he will have to make tough decisions as well.

Second, for predicting what House and Senate Agriculture omnibus bills might look like next week, we know each chairs priorities. Importantly for MFU, each committee heard bills related to a number of our key priorities including meat and poultry processing, biofuels, wolf depredation compensation, and other issues. In the House, Chair Sundin heard the Governor’s budget proposal, which will likely form the basis for his recommendations.

“While agriculture is the foundation of Minnesota’s economy—generating $112 billion in economic impact and supporting more than 430 thousand jobs—our budget for MDA makes up less than 1% of the state’s overall budget,” said MFU President Gary Wertish in written testimony to the committee. “We support growing that investment in farmers and rural communities.”

Third, we know that significant resources are coming to the state from the American Rescue Plan Act. Under the law, nearly $5 billion will come to Minnesota, including upwards of $2.5 billion to state government. This will help state agencies, including MDA, respond to the pandemic, much as CARES Act dollars did last year. In written comments about this new funding, President Gary shared support for expanding meat and poultry processing to meet producers demands, getting the biofuels industry back on its feet, supporting emerging farmers, and providing assistance to farmers in crisis.

Even outside of budget talks, MFU has a busy week. On Wednesday we shared strong support for House Tax Chair Paul Marquart’s (DFL-Dilworth) bill to strengthen the Beginning Farmer Tax Credit. His bill (HF1456) would allow family members (kids and grandkids) to use the credit for sale of agricultural assets (land, equipment, livestock), to assist in generation farm transition. Additionally, his bill would double that same credit for black farmers, indigenous farmers, and farmers of color (BIPOC farmers) recognizing that they often have a steep hill to climb in accessing land. According to MDA’s Emerging Farmers’ Report, BIPOC people make up less than one percent of the states farmers.

“This will provide additional and needed support to emerging farmers who too often are not coming into a generational operation, and who could benefit from the working relationships the credit helps broker with established farmers,” said President Wertish in written testimony.

MFU member Brad Kluver (Northfield) testified about his experience using the credit and how it could reach more beginning farmers by expanding to family members. He shared from personal experience how farm transitions can be complex, costly, emotional, and seldom easy. Any leg up for beginning farmers is a win for the state.

Finally, Senate Ag Chair Torrey Westrom heard a proposal to help develop a meat processing technical training program at the Minnesota State College System, which was strongly supported by MFU. The bill (SF2196), led by Senator Carrie Ruud (R) would provide grants to two year colleges for renovating their facilities, designing curriculum, purchasing equipment, and building market channels for end products. Importantly, this bill would also fund a mobile slaughter unit that could be used to incorporate slaughter into the curriculum, while also serving the needs of local producers.

There is precedent for this type of investment. Montana Farmers Union recently partnered with the state to purchase a USDA-inspected mobile slaughter unit to be used in part for technical training.

Legislative Update – March 16, 2021

On Thursday, March 11, President Biden signed the American Rescue Plan, a $1.9 trillion COVID relief package that will send $1,400 checks to most Minnesotans, provide resources for reopening schools, improves vaccine distribution to rural communities, increase the child tax credit and otherwise address the public health and economic needs of the country. This package is important for the state legislative session because it provides nearly $5 billion to Minnesota’s state, local and tribal governments. For context, Minnesota’s last biannual budget was approximately $48 billion. The stimulus payments and other initiatives aimed at jumpstarting the economy also improve the state budget officer’s revenue estimates (i.e. from collecting more taxes on purchases), contributing to a one-time projected surplus of $1.6 billion going to into the upcoming two-year budget cycle. This shot-in-the-arm from the federal government will make it more likely that legislators can deliver on MFU priorities like broadband development, meat processing and biofuels infrastructure—all of which require new spending.

Related to previous COVID relief, and important to MFU members who received forgivable Paycheck Protection Program (PPP) loans, the Minnesota Senate passed legislation that would conform with federal law and make sure that farmers and others won’t owe income tax on those relief funds. Senator Tom Bakk (I-Cook) led the $438 million package, which passed on with bipartisan support (55-12) in the Senate, though some DFLers raised concerns that, while important, the package should have done more for workers. MFU shared testimony in support of conforming with federal tax law—and doing so ahead of the end of session—because many farmers are already filing their taxes.

“PPP loans helped many of these farmers other rural small businesses cashflow their operations and retain employees through the ups and downs of the pandemic,” MFU President Gary Wertish shared in written comments. “This would provide needed relief to farmers and others, many of whom have seen their operations negatively impacted by the COVID-19 pandemic.”

The proposal still needs to be approved by the Minnesota House and signed by the Governor. On Monday, the House declined to suspend the rules to take up a vote and referred the Senate-passed package to the House Tax Committee where Chair Marquart (DFL-Dilworth) has been working hard to develop consensus around a similar proposal. PPP loans, which are forgivable if used for payroll and eligible expenses and are available to sole proprietors (which includes many farmers), are still available to new applicants until March 31. Since these loans are administered through local lenders, a good first step is to contact your lending agent to confirm that they work with Small Business Administration (SBA).

Also in the tax committee, MFU shared testimony in support of expanding a tax exemption for capital equipment purchases to meat processing plants. This initiative, brought forward by Rep. Swedzinski (R-Ghent), is another way to support the development of new small and mid-scale processing plants, for whom startup costs is a key concern. This type of an initiative would pair well with present and proposed state and federal investments in meat processing.

In the House Agriculture Committee, Chair Mike Sundin (DFL-Esko) heard legislation that would reauthorize cooperative development grants at the Minnesota Department of Agriculture (MDA). Vice Chair Samantha Vang (DFL-Brooklyn Center) introduced this legislation, which was brought forward by MFU. Mirroring a similar program that was available at the MDA some years ago, this proposal would allow the department to make grants to farm cooperatives of up to $50,000 for startup costs including of organizational development, financing, marketing analysis, and other investments need to start a processing or marketing agricultural products.

In introducing the bill to the committee, Vice Chair Vang shared how this initiative will help Minnesota farmers who are “growing new, often high-value crops, for which the market and supply chain is still emerging.” She is a champion for Minnesota’s industrial hemp industry in Minnesota.

MFU member and founding member of the Perennial Promise Growers Cooperative, Ben Penner, shared how this proposal would help his cooperative get off the ground and build a sustainable market for perennial grains developed by the University of Minnesota’s Forever Green Initiative. Miah Ulysse, representing 40 Acres Coop, talk about how his could help the black-owned hemp cooperative add value to their products through processing. The bill will be considered for inclusion in the Agriculture Omnibus Finance bill—the final end-of-session package that funds MDA.

On Monday, Chair Sundin’s committee held the first hearing of the Governor’s budget recommendations, which form the basis for the Ag Omnibus Bill. MFU shared strong support for increasing access to meat processing, investing in climate-smart agriculture, helping stations upgrade their pumps to use higher blends of biofuels, supporting land access and farm transition, and a number of other important initiatives.

“While agriculture is the foundation of Minnesota’s economy—generating $112 billion in economic impact and supporting more than 430,000 jobs—our budget for MDA makes up less than 1% of the state’s overall budget,” said President Wertish in written comments. “We support growing that investment in farmers and rural communities.”

President Wertish also gave strong testimony in support of increasing the state’s biofuel blend rate from 10 to 15% in the coming years. He explained to House Commerce Committee members that this provides important benefits to not only farmers, but also urban and suburban residents who will experience improved air quality and lower prices at the pump.

In the Senate, Chair Torrey Westrom’s (R-Elbow Lake) committee heard a proposal to increase funding for Minnesota’s Farm-to-School programs, which can strengthen local markets for producers all while introducing young people to nutritious food. This legislation, led by Senator Mike Goggin (R-Red Wing) seeks an additional $4 million for successful programs currently serving students and farmers at MDA.

MFU has also shared testimony in support of these initiatives and others, including making Community Solar more available to farmers, establishing an special license plate to pay for ag education, funding the emerging farmers working group and funding reimbursements for producers who experience wolf and elk depredation.

Legislative Update – March 9, 2021

Minnesotans received encouraging news at the end of February when the state’s Office of Management and Budget (OMB) released an updated forecast estimating the difference between state revenues (i.e., taxes and fees) and state expenditures (i.e., state staff salaries, grant programs and tax credits). The forecast showed a projected $1.6 billion surplus, a much brighter picture than the $1.27 billion deficit projected in November.

While this is certainly good news, officials were quick to note that this is likely a short-term surplus due to lower spending on state services during the current budget cycle and higher projected revenues going forward, thanks to a likely $1.9 trillion federal stimulus package that is still under negotiation. To put that surplus in perspective, last biennium’s budget came in at around $48 billion. Still, there are opportunities to make short-term investments that will have long-term positive impacts for agriculture.

MFU priorities earned hearings in key House and Senate committees. In early March, Senate Agriculture Committee Chair Sen. Torrey Westrom (R-Elbow Lake) and his committee heard Sen. Andrew Lang’s (R-Olivia) bill that would invest $1 million in local meat and poultry processing facilities across the state and to start new plants. This proposal reflects an investment outlined in the Governor’s budget. MFU Executive Committee Member Josh VanDerPol testified about what this investment could mean for his farm business, Pastures ‘a’ Plenty. President Gary Wertish added in written testimony that this is a “top concern” for MFU members across the state.

“[This investment will] help new and existing meat and poultry processors expand their capacity to provide needed relief to farmers who are wondering how they will bring their animals to market,” President Wertish said. “At MFU, we continue to hear from farmers who are considering building their own plants, in large part due to their frustration with trying to find slaughter capacity near their farm.”

Legislation to move the state’s biofuel blend standard from 10% to 15% (SF 1178/HF 1433) was put forward by Governor Walz, carried by Chair Westrom and Rep. Luke Frederick (DFL-Mankato), and supported by MFU and others. In committee hearings, President Wertish gave strong testimony referencing not only market benefits for many farmers, but also the opportunity to reduce greenhouse gas emissions.

Bipartisan legislation to make needed investments in broadband development across the state (SF 22; HF 14) was also heard in both houses.

“Family farmers rely on the internet to connect with customers, monitor market trends, educate themselves on the latest farming methods, and make use of modern farming technology—it’s increasingly essential to running a farm business,” said President Wertish in written testimony. “High speed internet isn’t a luxury—it’s a need.”

Finally, one bill that has only received formal hearings in the House so far is an effort to reauthorize the state’s Farmer-Lender Mediation program and extend the timeline for farmers from 90 to 120 days. This legislation (SF 1329; HF 80) is championed by Rep. Lippert (DFL-Northfield) in the House and Sen. Kent Eken (DFL-Twin Valley) in the Senate. Rep. Lippert has heard from constituents and others about the importance of this program—it can help farmers and lenders find mutually agreeable ways to resolve agricultural debts. MFU strongly supports this program and President Wertish testified multiple times on how it helps level the playing field for farmers who are facing extreme financial stress.

MFU has weighed in on a host of other issues including creating a public buy-in option for health care, strengthening energy conservation, expanding the Beginning Farmer Tax Credit, creating a special agricultural license plate to fund ag education, federal tax conformity and supporting county fairs.

Legislative Update – Feb. 16, 2021

The start of February brought colder weather and ramped up legislative work, both on the state and national level. In Minnesota, the state legislature dug into details of Governor Walz’s budget proposal, and on the federal level, Congress held confirmation hearings for key cabinet officials, including former Secretary Tom Vilsack for USDA, and advanced another COVID relief package through key procedural hurdles.

As always, and though now via phone and Zoom, MFU is working hard to make sure that legislators, cabinet officials and other policymakers understand the needs and perspectives of family farmers and rural communities.

At the start of this month, the Minnesota House and Senate agriculture committees spent committee time considering the budget proposals brought forward by Governor Walz. These proposals will form the basis for the agency funding and policy bills, which will be formally released in the coming days. They also reflect the Governor’s “opening offer” on budget negotiations with the House and Senate. The Governor’s budget includes many of MFU’s key priorities, including investing in small and mid-scale meat processors, funding for broadband buildout across the state, investments in biofuels, farm transition and investments in climate smart agriculture.

While the state’s budget is limited due in large part to the need to balance spending with revenues each biennium, many of these proposed investments could leverage additional federal dollars, maximizing their impact and bringing more investment to the state. For example, as part of the $900 billion COVID-19 relief package passed in December, Congress approved a modified version of the RAMP-UP Act which invests $60 million in upgrading custom exempt and ‘equal to’ processing facilities to federal inspection standards. This bill was a top priority for National Farmers Union (NFU) and was championed by then-Chair Collin Peterson (D-MN7), Senator Amy Klobuchar (D-MN). The $1 million for meat and poultry processing in the Governor’s budget could help match these federal funds, attracting more investment to Minnesota.

Similarly, the Governor’s proposed investments in biofuels infrastructure will leverage federal investment and could help serve as a match for federal dollars. We were pleased that he submitted a letter to President Biden last week in support of the biofuels industry, on behalf of the Governors’ Biofuels Coalition which Walz chairs.

In Minnesota, much of the conversation about the budget has centered on how to make up for a projected $1.28 billion budget shortfall going into the next two years. The Governor proposes closing the gap through a mix of tapping the state’s reserves, carrying over some funding from the current budget, and increasing taxes on the 0.7% of the highest income earners in the state (couples earning over $1 million annually), and some corporations.

Those families in lower tax brackets would see a modest decrease in their tax liability under the Governor’s plan.

Next week, the Legislature will receive an updated forecast estimating the difference between state revenues (i.e. taxes and fees) and state expenditures (i.e. state staff salaries, grant programs and tax credits). This will revise the December forecast estimating a $1.28 billion shortfall and will provide the basis for budget negotiations going forward.

Coming soon after the February forecast is the first legislative deadline on Friday, March 12. Prior to this deadline, most policy bills need to have been approved by at least one committee or they’re no longer up for consideration. This helps legislators, advocates like MFU, and members of the public narrow their focus to a smaller number of proposals. This is particularly important given that well over 1,000 bills have been introduced so far this session—and more are coming.

Instead of voting to approve a measure, committees can also lay the bill over for possible inclusion—if you watch the agriculture committees, you’ll see them take this tack often, including for MFU priorities. This means that the committee has considered the proposal and could add a version of it to the omnibus finance or policy bill. This is what was done with Rep. Lippert’s (DFL-Northfield) bill to lend more time to farmers who are subject to farmer-lender mediation, the first bill heard by the House ag committee.

On the federal level, the Senate Ag Committee considered the nomination of Agriculture Secretary Tom Vilsack, who has been re-nominated to serve in that post by President Biden. As part of the hearing, Senator Klobuchar (D-MN) confirmed his strong support for biofuels and Senator Smith (D-MN) asked him about his plans equitably administer programs and make sure that underserved producers are supported by the USDA. If you want a window into the early days of the new USDA, you can watch the full hearing here.

Also in Washington, progress continues on President Biden’s $1.9 trillion stimulus package, which includes larger stimulus checks, additional aid for folks who are unemployed, and funding to ramp up vaccinations. Important for agriculture and as highlighted by National Farmers Union, the bill includes $16.1 billion in support for farmers, farm workers, people facing hunger, meat processors and others.

Progress on this package is also important for state legislative work given that Biden has proposed sending significant funding to state and local governments, schools and others.

Legislative Update – Jan. 26, 2021

Now a full three weeks in to the state legislative session, legislators, the Governor and Lt. Governor, Commissioners and staff are hard at work holding virtual committee hearings, debating policy proposals, and starting the craft the states next two-year budget. Similarly, MFU has been hard at work making members’ voices heard on priority issues including health care, the agriculture budget, climate change, biofuels and broadband.

Last week, MFU members joined meetings with Governor Walz and Lt. Governor Flanagan, Attorney General Keith Ellison, Senate Ag Chair Torrey Westrom, House Ag Chair Mike Sundin, Commissioner of Agriculture Thom Petersen and other policymakers as part of MFU’s Virtual Lobby Days. Meetings held over three days provided an important opportunity to talk about issues that are important to farmers, their families and their communities.

In the meeting with Commissioner Petersen, MFU members learned more about the department’s response to COVID-19 and shared the importance of expanding access to meat and poultry processing across the state, new investments in climate smart agriculture, and support for new and emerging farmers. We were glad to see some of those conversations about meat processing picked up by the media here and here.

In the Governor’s budget proposal, which was released on Tuesday, these priority issues and others were put forward as the Governor’s opening position for budget negotiations that will continue throughout the session. Reflecting MFU’s priorities, we saw the governor propose:

$1 million for meat processing grants, plus $220,000 to expand access to inspection
$150,000 for assisting in farm transition and funding to expand the Department’s Farm Link program
$100,000 for farmer mental health programming
$4 million for biofuels infrastructure, paving the way for E15 and higher blends
$500,000 to spearhead a Climate Smart Farms Project to help farmers invest in climate solutions
$6 million for the Minnesota Agricultural Water Quality Certification Program
$3.9 million for the Forever Green Initiative
$2 million for the Ag Best Management Practices Loan Program to help farmers make upgrades needed to incorporate cover crops, conservation tillage or precision agriculture
$40,000 to help hire an additional Farm Advocate
$50,000 to make sure the state’s hemp licensing program works for farmers
$50 million for the Border-to-Border broadband grant program

The Governor’s $52.4 billion budget proposal, which can be found here, also invests in getting bars, restaurants and other small businesses back on their feet, kids back in the classroom and helping families who’ve been most hurt by COVID-19. To make these investments, the Governor proposes a 1.5% tax increase for those earning over $1 million dollars and other revenue generating measures aimed at high income earners.

“Not every Minnesotan was impacted by the COVID-19 pandemic equally. We know the COVID-19 pandemic hit our working families, small businesses, and students particularly hard. They need our help,” Walz said. “The budget I am unveiling today will make significant strides in helping those Minnesotans stay afloat.”

Senate and House Republicans were quick to push back on the budget, beginning the long debate that needs to conclude with a final budget by the deadline at the end of June.

Also on the docket today was a first hearing of a bill to expand MinnesotaCare with a public option—a top priority for MFU. During a meeting with bill author Rep. Jennifer Schultz (DFL-Duluth) last week, MFU members shared how expanding MinnesotaCare with a public option would help family farmers by giving them needed options to purchase healthcare. Rep. Schultz’s bill would also eliminate the “family glitch” that prevents spouses of people with employer sponsored coverage from purchasing health insurance on the individual market—even if the employer-sponsored coverage is unaffordable. MFU member Cindy VanDerPol voiced the support of the organization in addition to sharing her own story about lacking meaningful access to affordable health coverage. MFU President Gary Wertish also submitted formal testimony, which you can read here.

“As small business owners, family farmers disproportionately purchase health insurance on the private market and are hit hard by high premiums and lack of choice between health plans in rural areas,” he said. “Our members believe strongly that everyone deserves affordable, comprehensive health coverage when they need it. . . . We can and must do better.”

Finally, the House and Senate Ag committees met virtually last week to hear testimony about Farmer-Lender Mediation, which ensures that farmers get a fair shake when working to resolve agricultural debt—in some cases, the program helps keep farmers in crisis on the farm. In both hearings, President Wertish testified about the importance of the program and the strain that COVID has put on farmers, lenders and the mediation program as a whole.

That’s why we were eager to see Rep. Todd Lippert (DFL-Northfield) champion a bill to stretch out mediation timelines from 90 to 150 days, recognizing that it would give needed breathing room to farmers who are working through extreme financial difficulty. What farmers and mediators have found is that it’s much harder to come to a mutually beneficial resolution over the phone or Zoom, given the high-stress nature of negotiations. Not only that, but mediations often require procuring tax documents, having land surveyed, drawing up deeds, appraising equipment and a host of other functions, all of which take longer when working remotely.