4/15/2003 -- NEWS RELEASE -- State Representative Al Juhnke
House GOP Farm Bill Plows Under Ethanol, Rural Development
A Republican-designed budget plan for farm programs cuts ethanol support by more than one-third, imperiling the future of at least two production plants in Rural Minnesota and damaging rural economic development, Rep. Al Juhnke said after the budget gained preliminary approval Tuesday.
'This is a budget that plows under some of the most successful economic development programs Rural Minnesota has seen,' said Juhnke, Lead DFLer on the Agriculture Finance Committee. 'The Republicans will try to claim they treated ethanol better than the governor, but the fact is every Republican member of the Agriculture Finance Committee is now on record voting to cut ethanol.'
Juhnke noted that the budget plan proposed by House DFLers last week limited the cut in ethanol support to 5 percent, or a penny a gallon. It also limits cuts in other farm programs to 6 percent.
The GOP bill provides a producer payment of 13 cents a gallon, down from the current 20 cents but up from the 10-cent level proposed by Gov. Pawlenty. The committee did accept a Juhnke-authored proposal that would extend producer payments beyond the current 10-year limit, so all plants now in production would eventually receive all the dollars they are entitled to under the current system. Still, that won't help some plants now in difficult financial straits.
'We've had the farmer-investors from at least two plants come into the committee and say they can't live with cuts of this size, and even if they are made whole sometime down the line, there's a question if they'll still be around after this summer,' Juhnke said.
That raises the prospect that large corporations might come into Minnesota and buy the troubled plants at discounted prices. DFL Rep. Aaron Peterson offered a proposal designed to discourage hostile corporate takeovers and encourage plants to sell to other farmer-owned cooperatives, but it was rebuffed.
In addition to slashing ethanol, the bill approved by the finance committee would:
* Merge the Agricultural Utilization Research Institute into the Department of Agriculture, a proposal from the governor that was opposed by every major commodity group. 'AURI will get lost in the St. Paul bureaucracy,' Juhnke said. 'AURI has been successful in developing new uses for farm products and locating those new industries in Greater Minnesota. Now it will lose its freedom and flexibility.'
* Raise a host of fees on farmers and agribusinesses. While some fees would not be raised, overall agricultural fee revenue is expected to rise by 8 percent.
* Funding for county fairs and agricultural societies is preserved at the current level for the next two years, but the panel voted down a Juhnke proposal to restore the $357,000 that was cancelled by the governor from this year's budget.
'This budget bill shows the true priorities of House Republicans,' Juhnke said. 'They say they support ethanol, they say they want rural economic development, but they won't put their money where their mouths are.'
