While it's clear that the Minnesota Department of Agriculture-administered Rural Finance Authority needs to be re-funded if it is to continue to serve farmers, a review of recent legislative press releases and updates reveals that Republican lawmakers don't agree when the depletion of funds will happen.
Although a MDA staffer told a House committee that the fund would be depleted by February 21, the Minnesota Senate author is operating under a different assumption.
We've contacted the Minnesota Department of Agriculture to find out when the kitty was empty--or will be empty--and will post the answer here.
UPDATE: In a phone interview, Minnesota Department of Agriculture Commissioner Thom Petersen told Bluestem Prairie that while about $100,000 remains in the RFA, the fund is depleted for practical purposes as many individual loans to farmers are larger than that amount. But given the sprint toward passage by the bills in both chambers, that wouldn't be a problem.
Applications are being taken, in anticipation of swift passage of the bill, he said. The bill will be voted on in the Minnesota House on Thursday and has received approval by the Senate Finance Committee and a second reading in the upper chamber, as we note at the end of this post.
Petersen said that he had told lawmakers and stakeholders that he didn't see a problem with the current pace of the bills moving in either chamber--and that the governor would sign it upon passage. Were the bill to take over a month or more, there might be a problem--but this isn't the case.
One upside of the political spin spread by the House Republicans' floor action and press releases was that more farmers learned about the RFA, the ever-optimistic Petersen said, and they told the MDA that they were considering applying for assistance.
He also was pleased that the funding for the agency had been increased to $50 million. [end update]
What the Minnesota Senate Republicans say about the RFA
On Monday, Morris, Minnesota, KMRS/KKOK radio reported in Westrom Carrying RFA Bill:
State Senator Torrey Westrom of Elbow Lake is carrying a bill through the state legislature to provide $50 million in additional authorization to the Rural Finance Authority. Westrom told the KMRS Legislator’s Corner that the RFA works similarly to giving small business loans to farmers.
“The current RFA, we authorized $35 million two years ago, and that’s running out in the next week or so,” noted Westrom. “And so we want to make sure that is backfilled, so farmers in more of a credit crunch given the ag economy can access this as an option if they can’t get conventional financing.”
Farmers would work through their local banks and lenders in partnership with the RFA, Westrom explained. Legislator’s Corner can be heard Sunday mornings during the 10 o’clock hour on KMRS.
The Legislator's Corner was aired on Sunday, March 1. On Friday, February 28, WZFG, The Flag, posted an article with a similar prediction of an empty bank account for the RFA, Three Major MN Proposals – E-15, Rural Broadband, and RFA move through Senate:
A bill providing $50 million in bonding authority to the Rural Finance Authority (RFA) is moving through the Senate, as well. The bill, chief authored by Sen. Westrom, will make funds available to beginning farmers and those facing financial challenges in securing a traditional farm loan. RFA is Minnesota’s main agricultural lending arm and is almost one week away from running out of their current allocated bonding authority. It was established in the 1980’s during the “Ag. Crisis” and has proven a successful model for helping beginning farmers, or those in a cash crunch. The RFA is a user financed bond, so it does not rely on any taxpayers to help pay back the bonds. They partner with community banks to provide qualified farmers with lower interest rates. Sen. Westrom’s bill requires priority to be given first to beginning farmer loans, second to seller-sponsored loans, and third to agricultural improvement loans.
That frame appears to come from a Senate Republican Caucus press release of the same headline, posted on the Minnesota Senate Republican Caucus website on Friday, February 28.
The senate version of the bill was introduced on February 20 while the House bill dropped on February 11, an interesting fact in light of what House Republicans said about DFLers. Let us now turn to that discourse.
What House Republicans say about the RFA
The "next Friday" RFA depletion mentioned in a February 28 press release varies considerably from House Republican messaging, which seems intended to paint Democratic members as hating on farmers.
On February 19, Agri News' Sarah Mearhoff reported in Minnesota legislators accuse one another of political games as farm loan program runs dry:
Minnesota state legislators are accusing one another of playing politics as the state's fund for a farm loan program nears empty.
According to the state Department of Agriculture, funds for the Rural Finance Authority — a state loan program designed to assist farmers — will run dry on or near Friday, Feb. 21. Calling the situation "urgent," state Rep. Rod Hamilton, R-Mountain Lake, on Wednesday unsuccessfully motioned to bring a bill funding the program to a floor vote.
Although the bill has not yet been heard in a committee, Hamilton said farmers can't wait long for the funding to be replenished. But Rep. Jeanne Poppe, D-Austin, who authored the bill, encouraged her colleagues to wait until the bill receives its scheduled hearing next week.
House Majority Leader Ryan Winkler, D-Golden Valley, also urged House members to hold off, and said members behind Wednesday's motion had "not done their homework" or discussed a fast-track for the bill with committee chairs or House leadership.
He went on to say that introducing "a surprise motion on the floor (...) suggests not urgency, but politics."
After his motion failed by a 72-53 vote, Hamilton bit back in an afternoon news release, saying a majority of House members failed to "to act with a sense of urgency" for Minnesota farmers.
“Farmers don’t have time for political games," he said. "We need to make sure the dollars are there for RFA loans and available to the farmers in need."
If passed, House File 2959 will allocate $50 million to the RFA program, which offers low-interest loans to farmers. It is scheduled for a hearing Tuesday.
A couple of samples of those Republican press releases. Here's Hamilton's MINNESOTA HOUSE DEMOCRATS BLOCK PROPOSAL TO REPLENISH FUNDS FOR RURAL FINANCE AUTHORITY LOANS. Hamilton's press releases always feature screaming caps, regardless of the message.
A much more modestly titled Legislative report from Starbuck Republican Paul Anderson includes the same terrible news about Democrats.
Cold Spring Republican Lisa Demuth used House Democrats block proposal to replenish funding for farm loans as her headline.
Perhaps more problematic? Browns Valley Republican Jeff Backer' RELEASE: Rep. Jeff Backer Statement on House Democrats Vote to Block Proposal to Replenish Funding for Rural Finance Authority .
On Wednesday, Minnesota House Democrats unanimously voted against and blocked a proposal to move a bipartisan bill that would have allocated funds for the Rural Finance Authority (RFA) loan program, which runs out of funds on Friday, February 21st according the Minnesota Department of Agriculture.
State Representative Jeff Backer, R-Browns Valley, issued the following statement in response to the vote.
“I am disappointed that House Democrats voted against the interests of farmers and rural communities today,” said Backer. “The legislature had a chance to do the right thing and provide these funds to farmers as they begin preparing for another planting season. Sadly, the needs of farmers and rural Minnesota have once again been ignored by House Democrats.” . . .
Why is that a problem for Republican messaging? Simple: Backer represents half of Senator Westrom's district. Since Westrom and the Senate Republicans seem to be under the impression that there's a bit of time--this coming Friday--before the fund depletes, that might just leave farmers and other citizens of the far western Minnesota district puzzled.
What the bill's chief author in the Minnesota House says
In a column posted on the Austin, Minnesota, Daily Herald on Saturday, February 29, An update on farm safety and Rural Finance Authority funding, bill chief author and Minnesota House Agriculture and Food Policy and Finance Division chair Jeane Poppe, DFL-Austin writes:
. . . Farmers are facing uniquely challenging times, from the alarming increase in preventable accidents to historically low commodity prices, extreme weather events, and trade uncertainty. As a result, resources at the Rural Finance Authority (RFA) have recently been depleted, and lawmakers are following the proper legislative processes to appropriate new funding in a way that is transparent and accountable. RFA’s low-interest loans are helping to keep many Minnesota farms in business and we are quickly moving forward to replenish the fund. It is important that lawmakers don’t turn this issue into an election year political football.
Recently, Representative Rod Hamilton, the Republican lead on my committee, sought to forego the legislative process, attempting to declare an urgency on the bill to provide new funding (HF 2959) and bring the matter directly to the House floor. As chief author of the bill, I can assure you this process is moving as quickly as possible. For reference, the last time RFA funds were depleted was December of 2016 and it took the House Ag Finance committee, chaired by Rep. Hamilton at the time, until February 19, 2017 for the bill to be processed and signed into law by the Governor.
I am concerned with the attempt now to turn this into a partisan battle over which political party more greatly supports our farmers. We all know 2019 was one of the worst years in decades for farming. Our efforts should be focused on moving policies forward and setting politics to the side. As long as I have served, the Agriculture committee members have been the proud participants of the least partisan committee in the Minnesota House. As Chair of the committee, it is my sincere intention to continue toward a collaborative and fruitful outcome, reducing partisan tensions as much as I am able.
HF 2959 seeks $50 million in general obligation bonds. This is a sizable increase from past requests in order to accommodate the need. On Monday, March 2, I will present the RFA funding bill before the Ways and Means committee. The bill will then advance to the entire body of the House with floor action taken in a timely manner.
We're not sure when the Senate will bring the bill to the floor, but we're assuming they won't be dragging their heels, even if they haven't been on the same panic agenda as their House Republican colleagues.
Where the bills are in the process
HF2959 is the first bill Poppe introduced as a chief author this year. According to the chronological list of actions for the bill, the latest action is:
House rule 1.21, placed on Calendar for the Day Thursday, March 05, 2020
We doubt there will be many--if any--no votes from any caucus in the House floor session on Thursday.
The last actions for the Senate companion bill, Senator Westrom's SF3408 was subject to these:
[Finance]Comm report: To passpg. 5015
Second readingpg. 5015
We'll add the senate calendar for the day when this bill is scheduled to be considered for a floor hearing and vote in the Senate.
Again, we have to wonder why the House Republicans didn't share their concerns with their Senate colleagues, who control the upper chamber. After all, having a unified message is a deep Republican concern this election year.
Related posts:
Image: If one listened to House Republicans who moved to suspend the rules a couple weeks back, Minnesota farmers were as bad off as these poor actors in John Ford's Grapes of Wrath.
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