State agriculture officials seek additional $117 million over next four years

The Department of Agriculture comprises less 0.5% of the total state budget, and like other departments, it, too, is looking for more money.

And Gov. Tim Walz would like to oblige.

Commissioner Thom Petersen told the House Agriculture Finance and Policy Committee Tuesday the governor’s budget seeks an additional $45.5 million above its base appropriation for the 2024-25 biennium and $71.1 million for the following two budget years. Money would be used to expand staff in a few key areas, offer new services, update technology and provide more money to popular grant programs.

The budget proposal includes $17.6 million annually for the Agricultural Growth Research Innovation Program, which grew out of ethanol producers’ payments and currently assists in the development of new products. The department would also like to extend the program’s sunset date from 2025 to 2035.

There is an ask of $5 million in one-time spending to create a grain indemnity fund, to protect growers when a buyer or elevator becomes insolvent. Neighboring states have had success with such a program, said Deputy Commissioner Andrea Vaubel.  

[MORE: See the governor’s budget recommendations]

Developed with public input, the department’s budget request includes several of the approximately 300 spending ideas submitted through a public portal. Among the suggestions is a meat processing liaison, who could help smaller processors with issues such as zoning or plumbing. The department needs $150,000 annually to fund the position with half the money coming from the federal government. 

The office is also looking add to its emerging farmers office and hire a full-time international trade representative.

Among other budget requests in the proposal are:

• S8.1 million in the 2024-25 biennium and $9.6 million in the 2026-27 biennium to maintain service levels as costs increase for things like salaries, IT services and lab costs;
• $5 million in and $10 million in the ensuing biennia for claims on an incentive program encouraging innovation in advanced biofuels, biomass thermal energy and renewable chemicals;
• $4 million in the next biennium for the healthy soil grant program, which builds on a $500,000 pilot project from last year. It awards grants for equipment and machinery for soil health management practices;
• $4 million for this biennium and $3 million going forward to address a funding shortfall for the Agriculture Best Management Practices revolving loan program;
• $3.8 million to modernize the department’s food licensing processes;
• $2.4 million in 2024-25 to update the department’s IT systems and authorization to pay fees going forward;
• $1.5 million for biofuels assistance grants to service stations;
• $822,000 the first year and $676,000 ongoing to cover costs the Agriculture Department expects to incur if cannabis is legalized; and
• $100,000 per year ongoing for a program that pays market rate prices to underserved farmers and  donates the food to hunger-relief organizations across Minnesota.

There’s no impact to the General Fund, but the department would also like to increase fertilizer tonnage fee by 25 cents per ton. Fees fund inspections, permitting and nitrogen point source evaluations. The request received extra scrutiny from several committee members.

“Keep in mind this is one more burden farmers have to bear,” said Rep. Bobbie Harder (R-Henderson).