Broad MDA budget bill advances; grain-fee increases draw industry opposition

Chair Anderson presented House File 2446, the Minnesota Department of Agriculture’s omnibus bill covering a wide range of proposals including operating adjustments, AGRI grant changes, biofuels infrastructure eligibility, urban-ag program expansion, Good Food Access revisions, Ag BMP loan changes, livestock investment grant eligibility expansion, PFAS product prohibition alignment, seed potato program statutory updates, food-licensing modernization, milk-marketing modernization, updates to bonded loan program rules, and increases to grain license and inspection fees.

MDA Deputy Commissioner Andrea Vawbel told the committee the bill includes maintaining current service levels to cover rising operating costs (salary, rent, lab rent) and said the department expects about $1,000,000 in new annual lab rent costs that were not previously anticipated. She described targeted changes such as increasing the maximum administrative allowance for AGRI grants, raising the eligible site-count limit for a biofuels infrastructure grant from 10 to 20 dispensing sites, broadening urban-ag eligibility to include training and workforce acceleration, and proposing cancellation of $3,000,000 from a one-time green fertilizer appropriation (leaving about $4,000,000 available).

On seed potatoes, Vawbel said MDA requests repeal of a statutory prohibition on using general funds for the industry program (not seeking a general-fund appropriation now, but removing the prohibition to increase program stability) and asked for statutory changes to reflect existing program rules. She outlined a food-licensing modernization that would reclassify categories and increase fees to sustain regulatory capacity, and milk-marketing updates to clarify licensing for entities that buy and market milk.

Laura Lemke, executive director of the Minnesota Grain and Feed Association, testified in opposition to the proposed grain-license and inspection-fee increases. She said grain license fees had not been raised in 20 years and that the proposed increases would raise costs “between 40–250%” for many licensees; she estimated small independent elevators could face fee increases of $2,000 or more and larger cooperatives could see fees rise from about $18,000 to more than $40,000. Lemke said the industry’s slim margins make abrupt, large increases untenable and warned some facilities might opt for federal licensing instead, which would reduce state revenue.

MDA plant-protection director Mark Abrahamson confirmed that a proposed per-location fee (noted in bill language) would be charged per location; Department witnesses said about two-thirds of license holders would see relatively small increases while the largest facilities would shoulder larger increases because MDA spends more inspection time on those sites. MDA estimates net additional revenue from the broader proposal would be about $450,000, and that recent statutory changes (repeal of certain bonding requirements) will produce estimated industry savings of about $1,500,000.

Committee members asked technical questions about program thresholds, loan-account limits, and grain-testing standards (including a request for follow-up on moisture-tester calibration standards). The committee laid HF 2446 over for further consideration.