Ag21 program funding questioned

A successful grant program that received one-time funding last year could see further funding, but at the expense of another program.

Overall the Department of Agriculture’s 2010-2011 biennial budget would see a 5 percent General Fund decrease ($1.6 million) to $77.9 million, under a plan proffered by Gov. Tim Pawlenty.

However, the plan includes nearly $9 million in new Clean Water Legacy program spending for pesticide monitoring and assessment, and more than $4 million in new funding for the Pesticide and Fertilizer Management Division.

But it is the proposed diversion of funds from a popular grant program that caught the attention of House Agriculture, Rural Economies and Veterans Affairs Finance Division members Feb. 3.

Last year the state provided one-time money for the Livestock Investment and Next Generation Energy grant programs to advance the agricultural and renewable energy industries.

Pawlenty’s proposed budget calls for continuing the investment by redirecting funds to a new initiative called the 21st Century Agricultural Reinvestment Program.

In each year of the next two biennia, the governor would redirect $500,000 from the Dairy Profitability and Enhancement Program for livestock producer grants. The program’s current funding is a little more than $1 million annually.

Rep. Andy Welti (DFL-Plainview) is concerned about taking funds from the successful dairy program. “I know that program has kept a lot of farmers on the farm.”

Quinn Cheney, director of policy development for the Agriculture Department, said the funding shift was made in consultation with the dairy industry, but she would not be specific about which groups gave input.

Rep. Al Juhnke (DFL-Willmar), the division chairman, said the concept sounds like an “either, or situation” — either shift the funds to livestock grants or lose it. “We’ve had $150 million of applications for livestock investment grants … realize that $500,000 isn’t getting us very far. We need to come up with some ideas to get some money into the program this year.”

He said one source could come from the $50 million in tax credits the governor is recommending for Main Street businesses. “Ten million of that could be directed to the livestock investment grant. … That is jobs on the ground and will support local industries,” he said.

Funding to support the Next Generation Energy grants, as proposed by the governor in the Ag21 program, would come from the scheduled phase out of the Ethanol Producer Payment Program.