Ag panel hears plan to expand farm down payment assistance program

A state program to help people get into farming may dole out more money to those interested in trying their hand at working the land.

Current law permits the Department of Agriculture to give grants of up to $20,000 in down payment assistance to people purchasing farmland.

A bill laid over by the House Agriculture Finance and Policy Committee Monday would double the maximum grant award to $40,000, but only for people who purchase more than 75 acres of farmland. Current law caps the grants at $20,000 regardless of the amount of acreage purchased.

Committee Co-Chair Rep. Paul Anderson (R-Starbuck) sponsors HF3548, and he said the changes are intended to give prospective farmers “a little jump start” in the profession, plus allow existing farmers to expand their acreage.

Rep. Paul Anderson

The provision in the bill to grant up to $40,000 for purchasing more than 75 acres of farmland didn’t sit well with Co-Chair Rep. Rick Hansen (DFL-South St. Paul). He noted the program — called the Emerging Farmer Assistance Grant program when it was created in 2022 — was designed for prospective farmers.

Hansen said permitting a higher amount of money to go to those farmers who apply for assistance to buy more than 75 acres will leave less money in the fund for truly beginning farmers.

For Fiscal Year 2023, the Legislature appropriated $500,000 for the program, later increasing it to $1.25 million for Fiscal Year 2025. Grants are awarded by a lottery system, and each award must be matched with at least $8,000 of other funding. Awardees must agree to farm the land for at least five years.

Anderson said his intent is not to stack the odds against small farmers seeking the grants but open the program to larger farmers to increase their efficiencies through adding more acreage.

“This does not hurt a small farmer,” Anderson said.

The bill would also restrict who would be eligible for these grants, specifically not allowing funds to be used to purchase land in an area zoned for residential use.

Elyssa Eull, who manages the California Street Farm in northeast Minneapolis, said it’s not fair to discriminate against micro farmers like herself who operate in urban areas.

She would like to use the program next year to help her buy 10 acres in Buffalo, in a residential zone, to expand her business of growing vegetables and flowers.

Members from both parties expressed concerns about the restriction on farming in residential zones, and Anderson pledged that the next iteration of the bill would take out that restriction.