More could qualify for beginning farmer tax credits

Among the numbers and statistics to come from a debate in the House Agriculture Policy Committee Thursday was this one: Less than 10 percent of the farmers in Minnesota are under age 35.

The Legislature has taken steps to encourage new farmers in recent years with loan and tax programs for beginning farmers, and those efforts would continue under a provision of HF4133, the Department of Agriculture’s policy bill, which the committee laid over.

Sponsored by Rep. Paul Anderson (R-Starbuck), the committee chair, the bill would make a number of policy and technical changes to statutes, including a revision that would expand access to Beginning Farmer Tax Credits to spouses and family members of farmers.

The credit, which provides tax breaks on some assets and income to help new farmers get started, went into effect at the beginning of the year, but only $550,000 of the $5 million to fund the program has so far been encumbered.

Whitney Place, the department’s government affairs director, told the committee her department recommended the policy change because “those who want to stay in rural areas and farm should be incentivized to do so.”

WATCH The bill is presented to the House Agriculture Policy Committee

Anderson said there is still “a pretty good pot of money available for the program and … there was a thought of let’s get this money out there.”

Several committee members raised concerns that expanding eligibility for the credit could prevent some farmers from taking advantage of it.

“Although we want to get the money out there, we do want to make sure it doesn’t get spent so quickly that it doesn’t get to the people who need it,” Rep. David Bly (DFL-Northfield) said.

Anderson said he shares those concerns but with the economic challenges facing agriculture at the moment, he believes it’s important to offer help to as many people as possible and that lawmakers could again make changes in the future if needed.

Some other provisions of the bill would:

• allow Grade A eggs to stay on the shelf longer before they must be removed from sale;
• prohibit haulers, with some waiver exceptions, from picking up milk if it has been stored on a farm for more than 72 hours;
• allow the Rural Finance Authority to include loans that facilitate the purchase of a livestock farm in its livestock expansion loan program;
• expand eligibility for RFA disaster recovery loans by including “a market disaster” or other emergencies declared by the MDA; and
• increase the cap on RFA livestock equipment and farm opportunity loans from $40,000 to $100,000.

The companion, SF3536, is sponsored by Sen. Bill Weber (R-Luverne) and awaits action by the Senate Agriculture, Rural Development and Housing Policy Committee.