Summary of HF 4963 (2025-2026) – Minnesota
Title: Eligibility for agricultural growth, research, and innovation program modified
Purpose and intent
- The bill modifies eligibility and appropriation structure for Minnesota’s agricultural growth, research, and innovation program (AGRI). It reorganizes funding allocations across various agricultural programs, expands or clarifies authorized uses, and extends administrative and reporting provisions. The effective date is July 1, 2026.
Key provisions and changes
- Reallocation and amendments to AGRI funding (Laws 2025, ch. 34, art. 1, sec. 2, subd. 3):
- Existing line items under Agricultural Marketing and Development and related programs are retained with specified annual appropriations.
- Dairy development and profitability programs: $634,000 in both Year 1 and Year 2 for continuation of the dairy profitability teams and dairy business planning grants (Minnesota Statutes, §32D.30).
- Organic certification and transition support: The commissioner may use funds for annual cost-share payments to resident farmers or entities for organic certification costs; can aid those transitioning from conventional to organic.
- Mental health outreach: $100,000 in Year 1 and Year 2 to mental health outreach and support for farmers, farm workers, and related communities; includes a 24-hour hotline, stigma reduction, and education. Any unencumbered balance from Year 1 remains available in Year 2. Base funding in 2028 and beyond is $50,000 annually.
- Local food purchasing grants: $700,000 in Year 1 and Year 2 for the Local Food Purchasing Assistance Grant Program; unencumbered balances carry to Year 2.
- AGRI program (overall): $18,257,000 in Year 1 and $18,007,000 in Year 2 for the Agricultural Growth, Research, and Innovation program under Minn. Stat. §41A.12. Base funding set at $17,449,000 in FY 2028 and annual thereafter.
Allocation framework for AGRI funds (subd. 3, paragraphs f–g):
- Eligible funding areas (subject to caps and administration):
- Startup, modernization, and expansion of livestock operations (priority for robotic milking equipment) and overall modernization/improvement.
- Value-added agricultural businesses, market access, and diversification (including aquaponics; preference for hemp fiber processing equipment).
- Startups/expansion of other beginning and transitioning farms; loans under Minn. Stat. §41B.056.
- Sustainable on-farm research and demonstration; development/expansion of food hubs and alternative local distribution.
- Renewable energy infrastructure and usage; crop research (including turfseed), Farm Business Management tuition assistance.
- Supporting commercialization of innovative materials from agricultural coproducts to produce PFAS- and plastics-reducing fiber-based packaging.
- Assistance to process agricultural commodities into alternative protein products.
- Good Agricultural Practices (GAP) and Good Handling Practices (GHP) certification support.
- Administrative cost cap: Up to 7.5% of the AGRI appropriation may be used for program administration (subject to 16B.98, subd. 14).
Specific programmatic allocations under AGRI (Section 1, subsections g and h):
- County fairs: $1,000,000 Year 1 and Year 2, distributed equally to each county fair to preserve/promote Minnesota agriculture.
- Incentive payments: $3,000,000 Year 1 and Year 2 under sections 41A.16–41A.20 (if more funds than eligible producers exist, remainder available for other purposes under this paragraph).
- Biofuels infrastructure: $2,750,000 Year 1 and Year 2 to assist retail petroleum dispensers in upgrading to certified E25-capable equipment; grants up to 65% of project cost, not exceeding $200,000 per station. Requires 20% cost-share; report due annually by Jan 15 to legislative committees. Cooperative implementation with stakeholders and financial institutions.
- Meat, poultry, egg, and milk processing facilities: $350,000 Year 1 and $250,000 Year 2; grants up to $200,000 each.
- Food for schools/early childhood: $1,594,000 Year 1 and $1,544,000 Year 2 to increase access to fruits, vegetables, meat, poultry, grain, and dairy; includes grants to reimburse schools/child care providers for procurement equipment; statewide Farm-to-Institution coordinator: $150,000 annually.
- Urban agriculture: Up to $1,750,000 Year 1 and Year 2 for urban agriculture development including youth education, community/economic development, value-added processing, and vocational training.
- Food retail improvement and development: $1,000,000 Year 1 and Year 2.
- Cooperative development grants: Up to $200,000 Year 1 and Year 2.
- Avian influenza protection grants: Up to $250,000 Year 1 and Year 2; one-time appropriation with 20% cost-share (may be reduced to $2,000 for time/labor).
- AGRI Works grants (regional/state services): Up to $525,000 Year 1 and Year 2; preference to entities advancing agricultural/horticultural/rural development, marketing, and research; grants capped at $200,000 each; one-time appropriation.
- Unspent/rolling provisions: The AGRI appropriation in paragraph (e) does not cancel at the end of Year 2 and remains available through June 30, 2029; encumbered funds persist to June 30, 2032. At end of FY 2027, funds from canceled contracts prioritized for AGRI Works grants.
Administrative and reporting provisions
- The commissioner may use federal cooperative buying funds (up to 7.5% of the federal total) for state administration.
- Annual reporting required for the biofuels infrastructure program, detailing project metrics (types, leverage, geography, market impact, demographics, costs, and minority/female-owned grant recipients).
- Effective date: July 1, 2026.
Who is affected
- Minnesota farms, ranches, and agricultural businesses eligible for AGRI funding.
- Beginning/transitioning livestock operations and value-added/agro-processing businesses.
- Organizations administering grants (including county fairs, urban agriculture initiatives, meat/poultry/milk processing facilities, food hubs, and food-institutions programs).
- Stakeholders in dairy, organic transition, mental health services for agricultural workers, and biodiesel/biofuel infrastructure providers.
- Counties and rural communities benefiting from county fair funds and AGRI Works grants.
Timeline and process
- Introduction and first reading completed; referred to the Agriculture Finance and Policy committee (April 13, 2026).
- Effective date of statute: July 1, 2026.
- Certain appropriations extend through fiscal years 2027–2029 and beyond, with encumbrance and sunset-like provisions for grant continuity through 2032.
