This past week marked another busy and consequential one for policymaking in Washington and St. Paul.

On Tuesday, Republicans in the United States House narrowly passed a stopgap funding bill, setting up a Senate showdown ahead of the Friday deadline to fund the federal government. And also on Tuesday, DFLers won the Special Election in Roseville, shifting the balance of power in the state House back to a 67-67 split tie.  And amid all of this, state lawmakers continued their work to craft a new, biannual state budget after receiving an updated budget forecast. Since the last update, MFU testified in support of fully funding the Beginning Farmer Tax Credit, expanding ag homestead to small farmers, funding mental health outreach at MDA, providing direct support to those purchasing health insurance on the individual market and maintaining Minnesota’s net metering law.

To start on a bright note, on Monday, the Minnesota House took a final vote to approve a first agriculture bill.  The bill (SF1552), led by Sen. Rob Kupec, DFL-Moorhead, and House Ag Chair Paul Anderson, R-Starbuck, would right size reporting requirements for small grain buyers including independent elevators, feed mills and farmer co-ops. Importantly it does this without compromising MDA’s ability to evaluate their financial position and act to protect farmers.

This adjusts regulations that were put into place in 2019 when—in reacting to grain elevator failures—lawmakers adopted new reporting requirements for all grain buyers, from your local feed mill to a multinational corporations.

This year, lawmakers acted quickly upon learning that regulations requiring small grain buyers—under $7.5 million in annual purchases—could face financial hardship or even be shut down for not being able to secure an audit from a Certified Public Accountant (CPA). Under this change, those under $7.5 million would need to submit a financial statement from an independent accountant including the same information. Those above $7.5 million and up to $17.5 million would need to have their books audited, and those above $17.5 million would still need be required to do a full CPA audit.

While this is a big deal for many small businesses and farms who sell to them or rely on them for feed, the change will effect a small amount of grain sold in the state. According to MDA, 99 percent of grain purchased in Minnesota is purchased by an entity subject to a CPA review or full audit. It is also significant because—as lawmakers remarked upon passage—it signals that compromise can work and a uniquely configured legislature can get things done.

Deadlines announced

Other MFU priorities are also moving forward, though most will be carried in omnibus bills—large, catch-all budget proposals for each jurisdiction. These will (hopefully!) be finalized and agreed upon between the House and Senate in the coming weeks and ahead of the constitutional end of session on May 19. And we should know more about proposals from each body soon given that newly agreed to committee deadlines are just around the corner.

According to an agreement between House and Senate leadership, deadlines are:

• April 4 – for all bills to be heard in both the House and Senate. Any bill not heard by 5:00pm that date won’t be heard this year (with exceptions).
• April 11 – for all committees to approve omnibus bills—the large spending packages made up of small bills heard previously in committees.

Deadlines don’t apply to the taxes or bonding committees.

Ahead of this deadline state legislative committee’s continued to take action on MFU priority bills.

The Senate Tax Committee, chaired by Anne Rest, DFL-New Hope, heard two bills that would help new farmers get started and build successful farm businesses.

First, MFU leaders Tessa Sadae Parks and Brad Kluver testified before the Senate Tax Committee in support of Senate Ag Chair Aric Putnam’s, DFL-St. Cloud, bill to eliminate the cap on funding for the Beginning Farmer Tax Credit (SF1419). The bill passed as amended and was re-referred to the Senate Agriculture Committee. It’s companion bill (HF1626), authored by Rep. Samantha Vang, DFL-Brooklyn Center, has been introduced and referred to Taxes. Over 20 agriculture organizations signed MFU’s letter in support of the bill.

Parks, a livestock farmer and MFU’s Rice County President shared how the tax credit has benefited her and her spouse as a beginning farmers, enabling them to be competitive on price when negotiating on rent and buying land.

“We benefited from the tax credit first when we received the educational credit for enrolling in Farm Business Management,” Park said. “This allowed us to get that education and farm financial assistance cost-free, which was vital…the tax credit has been central to our conversations with one of our landowners who wants to transition his land to the next generation of farmers.”

Kluver, a farmer who raises pigs in Rice County, shared with legislators that the BFTC was instrumental in helping him establish his operation and secure feeder pigs to raise for market. Kluver explained his challenges as one of the many farmers who was turned away from the program due to lack of funding.

“Not being able to count on the credit creates uncertainty for owners and can make them less likely to work with young farmers in the future,” said Kluver. “I can only imagine how challenging that would be for someone who’d negotiated a land purchase deal under the assumption they could rely on the credit.”

Next, specialty crop farmer and President of MFU’s Chisago County chapter, Kelsey Love Zaavedra, testified before the Senate Tax Committee in support of Putnam’s bill to allow small famers to participate in the Ag Homestead Tax Credit (SF1498), regardless of their acreage as long as they earn $5,000 annually in gross income.

Zaavedra emphasized the importance of the tax credit for small farmers who sell directly to consumers, stating that “missing out on this tax credit matters to me because I operate on a slim profit margin—and property taxes are a significant expense.”

“Keeping farmland taxes affordable will help keep me and others on the land,” she said in closing. “Today I am speaking in support of this bill so that all farmers—no matter the size of their farm—can enjoy the benefits they deserve. We work hard to feed our communities and value your support of this bill.”

Finally, MFU’s Government Relations Director, Stu Lourey, shared support for a bill that would pilot a $5 per acre tax credit for acres enrolled in MDA’s Minnesota Agriculture Water Quality Certification Program (SF1269), authored by Sen. Steve Drazkowski, R-Mazeppa. He pointed out that this could generate new interest and demand for the program which has demonstrated upwards of a 40 percent decrease in nitrogen loss on certified farms.

Last week in Senate Agriculture Committee, Peter Schwagerl, MFU’s Big Stone County President, testified in support of Sen. Heather Gustafson’s, DFL-Vadnais Heights, bill to increase funding for the Minnesota Department of Agriculture’s Soil Health Financial Assistance Program (SF882). The companion bill (HF985), authored by Rep. Nathan Nelson, R-Hinckley, has not yet been heard.

“In late 2023 we applied for and received a Soil Health Equipment Grant that allowed us to take our first step towards realizing our future vision and goals,” Schwagerl shared with the committee. “With that award we were able to purchase a no-till drill and immediately began experimenting with and implementing no-till techniques on our farm, eliminating tillage passes and opening up additional cover cropping opportunities to keep our topsoil covered and protected for more months out of the year.”

Schwagerl emphasized that the bill is a win-win for farmers and our state. This program ensures that soil health practices are implemented across more acres while helping farmers overcome the significant financial hurdle for starting these practices.

In the House Agriculture Committee, MFU’s Southeast Outreach Coordinator and Rice County farmer Gail Donkers testified in support of Chair Paul Anderson’s, R-Starbuck, bill to continue investments in farm and rural mental health and safety (HF1702). She shared how this investment has allowed MDA to be a national leader in helping farm families and others manage stress, prioritize their mental health, and stay safe on the farm.

“In November of 2019 I had the opportunity to attend safeTALK, a four-hour face-to-face workshop, that was sponsored by MDA,” Donkers shared. “The training was completely full, there was a waiting list for attendees. I am grateful for this training and have used it multiple times.”

Finally, in an unusual move, House Agriculture Chair Anderson released a budget proposal (HF704) ahead of receiving budget targets from House leadership. The bill—which he acknowledged is a partisan proposal crafted without input from DFLers—is set to pass out of committee ahead of the DFL earning even partisan balance in the body and on each committee on March 17. As noted before, a final budget bill will require 68 votes on the floor—and the support of at least one DFLer—to clear that body. A final deal to fund agriculture or do anything else this session will require bipartisan support.

On the federal level, House Republicans voted on a stopgap funding package that could avert a government shutdown on Friday. This sets up a showdown in the Senate given that at least eight Democratic votes are needed to approve the bill. And that’s despite the bill including none of the Democratic requests to curtail the administrative cuts and layoffs led by Elon Musk’s DOGE.

DOJ confirmation

Perhaps less reported, the United States Senate voted 78-19 on Tuesday to confirm Gail Slater as Assistant Attorney General for Antitrust at the Department of Justice (DOJ). Sens. Amy Klobuchar, D-Minn., and Tina Smith, D-Minn., voted to confirm Slater who has bounced between the public and private sectors throughout her legal career. Her work in the public sector includes serving as a staff attorney at the Federal Trade Commission, a special assistant on technology matters to President Trump during his first term, and most recently as an adviser to Vice President JD Vance.

There are some early signs that Slater could continue the approach of her predecessor, Jonathan Kanter. In her confirmation hearing Slater, like Federal Trade Commission Chair Andrew Ferguson, committed to continuing the use of the stronger merger guidelines adopted by the Biden administration in 2023. Last week it was reported that DOJ has opened an investigation into the role major egg producers have played in the rapid increase in egg prices and the agency also reaffirmed the Biden administration’s push to break up Google.

Something MFU will be keeping an eye on is Slater’s approach to the Packers and Stockyards Act. While USDA has primary responsibility for enforcing the law, it can refer cases to the DOJ and under Kanter both DOJ and USDA signed a memorandum of understanding meant to strengthen enforcement and improve information sharing between the two agencies. It remains to be seen whether that approach will continue.

If you have questions, thoughts, or concerns, please reach out to Stu at stu@mfu.org or (320) 232-3047 (C).