Gov. Tim Walz recently released a proposed biennium budget for Minnesota that includes $112 million for agriculture’s general fund.

The overall $52.4 billion budget proposal focuses on pandemic recovery in several areas, including agriculture. Walz also proposes tax increases, including an income tax hike on those earning more than $1 million annually.

The state reportedly faces a projected $1.3 billion deficit for the two-year budget cycle.

Minnesota Department of Agriculture Commissioner Thom Petersen says the governor did not want to cut ag’s budget and wants to help strengthen the rural economy. The proposed general ag budget represents a 3.1% increase from 2021.

“Agriculture’s budget is one-half of 1% of the state’s general fund,” Petersen says. “Yet 25% of the state’s GDP is driven by ag.”

According to the State of Minnesota 2022-23 Biennial Budget report, general fund requests for agriculture include:

$4 million for a biofuels infrastructure grant program. Only 15% of service station sites were estimated to be compatible with E15, leaving 85% of sites needing replacement of underground storage tanks, piping, dispensers and other miscellaneous equipment. The proposal follows up on the Governor’s Council on Biofuels recommendation to fund a program to assist biofuels infrastructure, particularly for independent retailers and small chains.

$2 million for the Agricultural Best Management Practices Loan Program. The one-time appropriation would increase the program’s lending capacity for water quality projects and practices. The AgBMP Loan Program provides low-interest financing through local lenders to farmers, agriculture supply businesses, rural landowners and water-quality cooperatives. The proposal would help reduce a funding shortfall.

$1.5 million for a bio-incentive program. Another recommendation from the governor’s biofuels council, this would spur private investment in production of advanced biofuels, renewable chemicals and biomass thermal energy.

$1 million to provide grants to support meat, poultry, egg and milk processing. The one-time increase would support the Agricultural Growth, Research and Innovation Program to offer grants specific for startup, expansion and modernization of processing facilities.

$500,000 to establish a Minnesota Agricultural Water Quality Certification Program Climate Smart Farms project. The project would help quantify and incentivize climate supportive practices in agricultural operations. Participating eligible farms would receive annual payments for implementing specific practices and management to project endorsement.

$450,000 to fund the noxious weed program. This request would re-fund the program following a reduction made to the plant protection department’s budget. Without adequate funding, MDA officials say they will not have the resources to address increasing problems with existing noxious weeds and emerging terrestrial invasive plant threats. The request would mostly support weed program staff. Such staff were critical when Palmer amaranth was found in Minnesota. The invasive weed has been identified at almost 30 sites in the state since 2016. Due to outreach efforts and seed testing, the infestations were discovered early, and MDA staff have worked with landowners to eliminate them. Currently, there are four sites where Palmer is being controlled and eliminated.

$220,000 for meat and poultry inspection. The additional funding would support current staff and fill one inspector vacancy so the state’s meat and poultry inspection program can maintain mandated inspection service levels for small meat processors.

$150,000 for farm transition programming. Funding would be used to support efforts to help farm transition to the next generation. MDA’s FarmLink online program, which connects retiring farmers with people looking to enter the farm business, would be updated. Plus, funding would be available for a pilot project, Farmland Access Teams. The pilot would provide technical assistance to potential beginning farmers and be modeled similar to the Minnesota Dairy Profitability teams that currently are funded by MDA and implemented by the Minnesota Dairy Initiative.

$132,000 for MDA’s Laboratory Services Division for capital equipment. New equipment is needed to replace old in the lab’s microbiology and chemistry-toxicology units.

$100,000 for international trade expansion. Proposed funding would support international trade promotion and development projects, including a pilot in-market representative in Taiwan to represent Minnesota producers and processors. Taiwan was the sixth-largest U.S. food and agricultural export market in 2019. Because of its dependence on imported agricultural products, Taiwan is expected to remain a large and growing destination for Minnesota exporters.

Increase of $100,000 for mental health programs, services and outreach in rural communities. Current funding was a one-time appropriation of $50,000 per year in fiscal year 2020-21.

$50,000 to complete infrastructure for licensing and managing data for hemp producers and processors. Support for IT development is requested, given the increased number of licensed growers (from seven in 2016 to 583 in 2020) and now that the state’s hemp program is formally conducted under USDA.

Additional $40,000 for MDA’s Farm Advocate Program. Funds would be used to pay farm advocates contracting with MDA. No changes to the program itself are proposed. The program’s current general fund base is $267,000 per fiscal year. The recommended increase would address the need for service in southeast Minnesota.