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Winning formula: MSGA makes moves to cap 2023 legislative session

May 24, 2023 / Categories: Uncategorized

Democrats took full advantage of their complete, yet slim, control of the Legislature in 2023. After regaining the majority for the first time in nearly a decade, the DFL checked off nearly all of its campaign pledges, from cannabis legislation to paid family medical leave.

With a dearth of DFL rural representation, farm groups braced for the worst at the outset. And while the 2023 session started at a brisk pace and rarely let up, when the dust settled after lawmakers adjourned on May 22, the Minnesota Soybean Growers Association (MSGA) helped secure long-lasting policy wins across several committees for its members and the state’s nearly 28,000 soybean farmers.

“I’m very proud of our team for making the most of a difficult session,” MSGA President Bob Worth said. “Advocating for – and against – legislation is never easy, and it especially wasn’t in this environment. But at the end of the day, we got the job done for our farmers. Did we get everything we wanted? No, but we found compromise where we could and appreciate legislative leaders working together to pass the ag bill in a timely manner.”

The state’s $72 billion budget included a $2.6 billion infrastructure package, along with the state’s largest ever bonding bill. MSGA’s biggest win may have come out of the Tax Committee, which included legislation that raises the agricultural homestead credit to $3.5 million for assessment year 2024. In 2022, MSGA Treasurer Ryan Mackenthun was the only farmer to testify in support of the credit. Minnesota Pork also helped push the legislation across the finish line.

“By easing the tax burden of people like myself who actually farm the land, this legislation helps keep family farms around longer for the next generation,” Mackenthun told lawmakers in 2022.

This bipartisan bill was first debated during MSGA’s Pre-Resolution meeting in late 2021 and brought to the floor during MSGA’s Annual Meeting in January 2022.

MSGA Secretary Brad Hovel (middle) and Director Jeff Sorenson (right) discuss MSGA’s priorities with Rep. Paul Torkelson during the 2023 Hill Visits.

“That’s what great about how we go about our business,” Worth said. “The push for this homestead credit began with discussions at the county level and moved all the way to the governor’s desk. That’s exactly how grassroots advocacy is supposed to work.” 

The legislation, introduced by Sen. Bill Weber, will reduce farmers’ tax burden by millions of dollars and aims to assist the next generation of farmers in land transition.

“With ag land values going up due to inflation and demand for solar, this was a top priority for MSGA, and we were thrilled to see it included in the budget,” Mackenthun said. “The tax relief for farmers is significant, and we thank Senators Weber and Ann Rest for their leadership.”

The tax bill also included a partial rollback of Social Security taxes. MSGA was also pleased that ag land sales were excluded from increases to capital gains taxes. MSGA supported the Beginning Farmer Tax Credit, which increases the credit amount for eligible sales of agricultural assets (farmland, machinery, etc.) to 12% for sales to socially disadvantaged farmers and 8% for sales to other beginning farmers. In addition, the bill boosts the maximum credit amount to $50,000 for eligible sales and expands eligibility to include the sale of assets between family members.

“In the tax bill, Minnesota agriculture did about as well as it possibly could,” MSGA lobbyist Cory Bennett said.

Before the session wrapped, Gov. Tim Walz signed the Omnibus Agriculture Appropriations Bill, which increases General Fund spending for agriculture programs and personnel by $148 million in the next biennium. MSGA was disappointed that the new target left many challenges and demands on agriculture – the state’s second largest industry – unfunded. However, the organization was encouraged that lawmakers included several MSGA priorities in the ag budget.  

“Agriculture is central to our state’s identity, and this bipartisan law will empower Minnesota’s farmers, ranchers and producers to succeed for years in the future,” Gov. Walz said. “This budget provides security for our farmers and producers and ensures we can continue growing and innovating in our nation-leading agriculture industry.”

Highlights from the agriculture omnibus bill include:

Grain indemnity fund

The bill, supported by MSGA (albeit at a fully funded $15 million) includes $10 million to establish the state’s first grain indemnity fund, providing protections and security for producers who have unpaid grain sales when grain buyers or warehouses become financially insolvent. Since 2015, the state averages about one grain elevator failure per year. Farmers choosing to participate in the program pay premiums only if the fund dips below $8 million.

“Along with Minnesota Farmers Union, we helped set up the safety net and ensured there’s not a ‘blink on’ at $8 million,” MSGA Executive Director Joe Smentek said. “That was a huge win for us and our industry.”

Funding for international trade

MSGA successfully introduced a provision that increases funding for MDA’s international trade staff by $300,000 to support International Trade Manager Jeffrey Phillips and grow markets for Minnesota agricultural products. Smentek, who has accompanied MDA on several trade missions, said increased funding puts Minnesota on par with other states’ export promotional budgets. Soybeans are the state’s top export, valued at more than $2 billion each year.

Expanding high-speed broadband

The amendment includes $100 million to expand high-speed broadband and help achieve the state’s goal of ensuring Greater Minnesota has better access to high-speed broadband.

Soil health equipment grants

The bill provides $1.25 million to build on the new Soil Health Financial Assistance Program that began as a pilot program in 2022. These grants help farmers implement soil health management practices by awarding funds to access specialized equipment and machinery.

Combating noxious weeds

Funding includes $1.6 million toward noxious weed grants to combat invasive species, such as Palmer amaranth, and protect Minnesota crops.

Supporting farm safety, health and wellness

The ag budget provides farm safety outreach and equipment cost-share payments to farmers; stress and mental health outreach, promotion and support to farmers and others in agriculture; and a pass-through grant to the Minnesota FFA Foundation to engage FFA chapters in creating innovative education, training or outreach projects that respond to community needs to mitigate stress and promote mental health.

Ag Emergency Account

Funds of $1 million for fiscal year 2024 are provided to replenish MDA’s Ag Emergency Account to address ag-related emergencies in a timely manner.

The Northern Crops Institute also received $100,000 in state funding.

Additionally, a fertilizer inspection fee will be set by MDA, rather than the legislature, with a minimum of 39 cents and maximum of 70 cents per ton. Use of PFAS substances in pesticides and fertilizer would be phased out. Pesticides and fertilizers with intentionally added perfluoroalkyl and polyfluoroalkyl substances would be prohibited after Jan. 1, 2032.

Membership matters

Often, what’s excluded from a bill matters as much as what’s included. To that end, MSGA helped prevent House provisions that would have regulated pesticide-treated seeds; Smentek twice testified to Committee members against the regulation.

MSGA Executive Director Joe Smentek testifies against proposed treated seed regulations during the 2023 legislative session.

“The language remained problematic for us,” Smentek said. “We felt this would distract from important work MDA has to do and most of this language was redundant.”

In the environmental bill, a provision allows cities of the first class to prohibit using pollinator-lethal pesticides within their borders. However, MSGA’s advocacy prevented authority from extending to agriculture land or MDA’s noxious weed laws. MSGA also pushed back against low carbon fuel standard legislation that would have punished agriculture.

“Some of the bills were really coming after biofuels hard,” Smentek said, “but we protected the biggest attacks on agriculture from making it into the biofuels bills.”

Worth said MSGA’s successes are a testament to the organization’s teamwork. Farmers set the direction, while Smentek, staff and lobbyists Cory Bennett and A.J. Duerr promote and execute MSGA’s priorities through multiple channels.

Membership is the foundation of MSGA, and Worth encouraged his fellow farmers to join the nation’s longest-running state soybean advocacy group. Currently, less than 10% of the state’s soybean farmers are active MSGA members.

“It takes a lot of resources to keep boots on the ground throughout the session, and we can’t do this work without members to sustain it,” Worth said. “We have a great board, staff and lobbyists, but we need those members to continue pulling our weight at the Capitol.”

The legislature reconvenes on Feb. 12, 2024.

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