Serving Minnesota and Northern Iowa.

Many proposals for spending AGRI fund dollars

By Janet Kubat Willette
jkubat@agrinews.com

Date Modified: 03/20/2013 9:06 AM

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ST. PAUL — A pot of money in the agriculture department budget is generating a lot of ideas.

At least three bills in the House of Representatives rely on funding from the Agricultural Growth, Research and Innovation Program, which has $20 million over the biennum.

Rep. Paul Anderson, R-Starbuck, introduced HF349, which targets AGRI fund dollars to blender pump installation grants.

Anderson's bill targets $200,000 per fiscal year for biofuel blender pump grants. Under the proposal, owners of gasoline service stations may be reimbursed for up to 75 percent of the total cost to install a biofuel blender pump and related components, up to a maximum of $20,000 per pump.

The cost to install one blender pump was $30,000 last year, Anderson said. The cost depended on the amount of underground piping and tanks that were needed.

"The reason I feel strongly about blender pumps is it's the best way to increase ethanol consumption," he said.

The federal government has approved the use of E15 in model year 2001 and newer vehicles, but it hasn't caught on, Anderson said. Blender pumps allow motorists to pick their ethanol blend. Many say the best mileage from ethanol comes at a blend somewhere between E20 and E30.

The bill is awaiting a hearing in the Agriculture Policy and the Natural Resources, Environment and Agricultural Finance Committee.

Rep. David Bly, DFL-Northfield, introduced HF632, which allocates $1,395,000 in fiscal years 2014 and 2015 to fund the Forever Green Agriculture Initiative, which seeks to protect the state's natural resources by incorporating perennial and winter annual crops into existing crop rotations.

Bly said he introduced the legislation because it's a good idea to protect soil from erosion and provide new crops for farmers. It also moves agriculture into the direction of more diversity.

He wants to see how farmers can make use of cropland at times when it would normally be open to erosion.

Bly said part of the reason for introducing the legislation is to raise awareness of the Forever Green Agriculture Initiative. The bill will be heard in the Natural Resources, Environment and Agricultural Finance Committee.

Rep. Rod Hamilton, R-Mountain Lake, has introduced HF407, which allocates money to the Agricultural Utilization Research Institute, Minnesota Agriculture Education Leadership Council, 4-H, Center for Rural Policy and Development, Farmamerica, Minnesota FFA Association and Minnesota Agriculture and Rural Leadership program.

There's a lot of opinions on how the money should be spent, said agriculture commissioner Dave Frederickson, but he urges people to focus on making sure the money stays in the agriculture department for now.

"Let's not try to prune the tree for special programs," he said.

The AGRI fund language doesn't say anything about moving money to educational units, rural think tanks or leadership development.

"I think they're all great ideas," Frederickson said, but he supports the governor's recommendations.

The ag department is in a good situation to figure out how to spend those dollars and will reach out to folks about how to best use the money.

Once the funding is secure in the department, they will issue a request for proposals.

The governor's proposal calls for spending 15 percent of the fund on farm to school local foods market development; 20 percent on livestock development; 52.5 percent on agricultural business development and 12.5 percent on biofuels and renewable energy.

The AGRI fund money is commonly referred to as the tails from the ethanol program. It is part of the dollars that formerly went to ethanol plants. That money built an industry in Minnesota, Frederickson said. There are 20-plus plants operating in Minnesota.

"Again, it's a work in progress and I hope the groups that have an interest will support that," he said.

The AGRI fund isn't a revenue stream that can be counted on from year-to-year, Frederickson said.

It was the good work of former lawmakers to establish it and the governor has included the funding in his base.

It's up to this Legislature to decide if the department will keep the money and how it will be spent.