Summary of SF 5027 (Session 2025-2026) — Eligibility modification for the Agricultural Growth, Research, and Innovation (AGRI) Program
Date introduced: April 9, 2026
Jurisdiction: Minnesota Senate
Author: Senator Kupec (Co-sponsor: Rob Kupec)
Committee referral: Agriculture, Veterans, Broadband, and Rural Development
Effective date: July 1, 2026
Purpose
- To modify eligibility and distribution parameters for the Agricultural Growth, Research, and Innovation (AGRI) program, as established in Laws 2025, chapter 34, article 1, section 2, subdivision 3. The bill adjusts funding allocations and permissible uses, expands or clarifies support in several program areas, and adds reporting and administration provisions.
Key provisions and changes
- Reallocation of AGRI program dollars (subdivision 3, paragraph e):
- The bill confirms and adjusts the annual appropriations for the AGRI program, with the first two years showing:
- AGRI: $18,257,000 (first year) and $18,007,000 (second year) for the program, with a baseline of $17,449,000 in FY 2028 and ongoing.
- The appropriation may be allocated across multiple priority areas listed below, subject to statutory limits and program rules.
Eligible areas and funding scope (paragraphs f and general program language):
- The commissioner may allocate AGRI funds annually to a broad set of activities, including:
- Startup, modernization, improvement, or expansion of livestock operations (with preference to robotic milking equipment for dairy and related operations).
- Value-added agricultural businesses (to access new markets or diversify), including aquaponics and hemp fiber processing equipment.
- Startups/expansions of beginning and transitioning farms; sustainable on-farm research and demonstration.
- Development or expansion of food hubs and alternative community-based food distribution systems.
- Enhanced renewable energy infrastructure and use.
- Crop research (including turfseed research); Farm Business Management tuition assistance.
- Supporting commercialization of innovative materials derived from agricultural coproducts or waste streams (e.g., fiber-based packaging to reduce PFAS and plastics).
- Assisting value-added processors to convert agricultural commodities into alternative protein products.
- Good Agricultural Practices (GAP) and Good Handling Practices (GHP) certification assistance.
- Up to 7.5% of the AGRI appropriation may be used for administrative costs.
Additional program-specific allocations (Section 1, subdivisions g and h):
- County fairs:
- $1,000,000 per year (first and second years) distributed equally to each of the state's county fairs to preserve and promote Minnesota agriculture.
- Incentive payments under AGI-related statutes:
- $3,000,000 per year distributed for incentive payments under specified sections (41A.16, 41A.17, 41A.18, 41A.20), with any excess available for other purposes under this paragraph.
- Biofuels infrastructure grants:
- $2,750,000 per year (first and second) to support grants for retail petroleum dispensers and related equipment upgrades to achieve E25 certification, including a cap of 65% of project cost and a $200,000 per site cap.
- Requires collaboration with biofuel stakeholders; annual reporting by January 15 to legislative chairs and minority members detailing projects, leverage, geography, demographics, costs, and minority/female-owned grant recipients.
- Meat, poultry, egg, and milk processing facility grants:
- $350,000 (first year) and $250,000 (second year), with grants not exceeding $200,000 per award.
- School and early childhood nutrition provisions:
- $1,594,000 (first year) and $1,544,000 (second year) to increase access to fruits, vegetables, meat, poultry, grain, and dairy in schools and related settings, including reimbursements for equipment and agricultural products. A statewide farm-to-institution coordinator is funded at $150,000 per year (part of the total appropriation).
- At the Commissioner’s discretion, up to 7.5% of total federal cooperative purchasing funds may be used to administer state programs; unused federal funds may be exhausted before using state funds.
- Urban agriculture development:
- Up to $1,750,000 per year (first and second year) for urban agriculture development, including youth education, community/economic development, value-added processing, and vocational training.
- Food retail improvement and development:
- $1,000,000 per year for the food retail program (17.1017).
- Cooperative development grants:
- Up to $200,000 per year for cooperative development grants (17.1016).
- Avian influenza protection grants:
- $250,000 (first year) and $200,000 (second year) for measures to prevent transmission; requires a 20% cost share (can be reduced to as little as $2,000 for time and labor), one-time appropriation.
- AGRI Works regional/state services:
- Up to $525,000 per year (first and second year) to provide regional and statewide services, with preference to legislatively created entities and organizations that enhance agricultural, horticultural, or rural development, marketing, promotion, and education; grants capped at $200,000. Onetime appropriation under this clause; subject to statutory compliance (16B.98, 16B.981).
Program duration and carryover
- The AGRI appropriation does not cancel at the end of the second year and remains available until June 30, 2029.
- Encumbered appropriations under contract remain available until June 30, 2032.
- After FY2027, money from canceled contracts may be prioritized for AGRI Works grants (paragraph g(10)).
Administrative considerations
- Beginning in FY2026, the commissioner may allocate the AGRI appropriation across the listed priorities and administers the program with the option to transfer funds to various subprograms.
- The bill includes reporting requirements to legislators and opportunities for stakeholder consultation.
Market and policy impact (highlights)
- Expands eligibility and funding breadth of AGRI across many sectors: livestock modernization (including robotics), value-added processing, urban agriculture, school meals, and biofuels infrastructure.
- Adds targeted grants for meat/poultry/milk processing facilities and avian influenza prevention.
- Establishes significant emphasis on farm-to-institution purchasing, producer education, and regional service delivery (AGRI Works).
- Creates ongoing oversight via annual reporting on project metrics, leverage, geography, demographics, and minority/female-owned grant recipients.
- Maintains program longevity beyond two-year windows to support long-term agricultural innovation and infrastructure.
Who is affected
- Minnesota farms (conventional, transitioning, and value-added producers) and agricultural businesses.
- Beginning, transitioning, and expanding livestock operations.
- Urban farms, food hubs, and community-based food distribution programs.
- Food processing facilities (meat, poultry, dairy, eggs, etc.).
- Schools, early childhood programs, and child care providers receiving farm-to-school support.
- County fairs, biofuel infrastructure operators, and meat/poultry processing facilities.
- Cooperatives, retailers, and cooperative development initiatives.
- Organizations receiving AGRI Works funding and related regional service providers.
Note: This summary highlights the substantive provisions as introduced; the bill may be amended during the legislative process.
