Bill providing $50M in loans to Minn. farmers moves quickly at the Capitol
By ANDREW DEZIEL firstname.lastname@example.org
A bill in the Minnesota’s legislature to provide $50 million in new loans to farmers in crisis is needed now more than ever, according to the Rice County Farmers Union president.
Steven Readsaid says the program provided a crucial safety net when stormy weather hit throughout the winter months. That need hasn’t abated as farmers work to recover from a difficult stretch.
“With the farm crisis we’re experiencing, the money that the legislature allocated last year has already been used up,” he said. “They need to refill the coffers to keep that program to keep those opportunities available to the farmers who need them.”
Farmers have had a rough few years, with commodity prices low, in large part due to uncertainty in trade markets. A new trade deal with Canada and Mexico could help to stabilize that, but the future of the Chinese market is less certain. Inconsistent weather conditions have also taken a major toll locally. Back-to-back late and wet planting seasons in 2018 and 2019 hit area farmers particularly hard, damaging yields throughout the region.
The bill has quickly advanced at the Capitol after a popular loan program ran out of cash in late February. Founded in 1986 during the heart of the Farm Crisis, the Rural Finance Authority Loan Program is designed to help farmers facing crisis or transition. Funds can be used by farmers for capital improvements and to overcome lean times.
The RFA generally partners with local lenders to provide the assistance, which is specifically targeted for small- and medium-sized farmers along with beginning farmers. Only farmers with less than $850,000 in equity are eligible.
The RFA’s loan program has proven popular and successful, providing nearly $300 million to Minnesota farmers over its duration, about a third of which are outstanding. Over that time, it’s only incurred $555,707 in loan losses.
The bill was introduced Feb. 11 in the House by Rep. Jeanne Poppe, DFL-Austin, and in the Senate by Sen. Torrey Westrom, R-Elbow Lake, with local Rep. Todd Lippert, DFL-Northfield, an original co-sponsor. Poppe and Westrom serve as Agriculture Committee chair in their respective branches of the legislature.
The House passed the bill by an overwhelming bipartisan margin on March 5, with only Rep. Steve Drazkowski, R-Mazeppa, and Rep. Cal Bahr, R-East Bethel, in opposition. Drazkowski and Bahr are members of the four-member “New Republican” caucus in the House, which has expressed displeasure with the leadership of Republican House leader Kurt Daudt.
The bill now advances to the Senate, where local Sen. Rich Draheim, R-Madison Lake, is a co-sponsor. With planting season on the horizon, groups like the Minnesota Farmers Union are urging swift passage.
“This is an issue that attracts broad, bipartisan support, because everyone knows it’s important,” said Sen. John Jasinski, R-Faribault.
It’s possible that 2020 could hold some good news for area farmers. Weather permitting, yields could be set to rebound significantly in 2020. According to projections from the U.S. Department of Agriculture, carry over stocks of corn could reach their highest levels since 1988.
However, a U.S. Department of Agriculture report in February suggested very little increased net return over the next decade on corn or soybeans. With the stock market reeling over coronavirus fears, the short-term market picture isn’t pretty either.