Pushing Industrial Ag with a Biased Grants Program

Posted by .

You can pass into law the greatest policy in the world, but in the end its success depends on good implementation. Exhibit A: When the “Livestock Investment Grants Program” was passed during the last legislative session, it showed that at least on paper Minnesota was serious about helping farmers of all types who need a little help tweaking their operations here and there in order to increase efficiency, profitability and environmental sustainability. LSP and other groups were even successful in making sure that farmers making improvements to grazing operations could obtain funds, and that low cost projects could qualify. But on July 1, when the Minnesota Department of Agriculture announced it was accepting applications, it became clear that this wasn’t your Legislature’s Livestock Investment Grants Program anymore. The MDA has developed qualification criteria that skew the program towards larger operators that may have existing environmental problems. As the criteria read now, a small- or medium-sized family farm using sustainable production systems to maintain current environmental excellence is less likely to qualify. This was not the intention of the original legislation.

Here’s what happened: At the end of the session the House and Senate Conference Committee for Agriculture inserted a provision into the Livestock Investment Grants Program that gives the state Commissioner of Agriculture authority to develop “competitive eligibility criteria” for the applications received. Using this authority, the MDA has developed an “evaluation profile” that uses a points system for rating grant applications.

When looking at the evaluation profile chart, what’s striking is that the first criteria addressed is livestock numbers. And the MDA wastes no time making it clear what it values: a lot more animals concentrated on each farm. For example, if an operation’s livestock numbers are to be increased by 20 percent, they are given five points or an “outstanding” rating. A grant application that shows no change in livestock numbers is given one point and considered “unsatisfactory,” according to the MDA’s evaluation profile.

I got a few “unsatisfactory” marks during my less than stellar academic career, and I know what it means: you’re not doing what needs to be done to be considered a viable participant. In a sense, the MDA’s size-based criteria is trying to drive the type of livestock agriculture that succeeds in Minnesota. It also sends a negative message to farmers who aren’t undertaking significant expansions: you don’t count in the state’s ag economy.

Frankly, a grants criteria that sees livestock production in such black and white terms—more animals are “outstanding,” fewer are “unsatisfactory”—is steeped in some pretty archaic ideas about profitability and efficiency. Rural economic development studies (and real-world experience) are increasingly showing that more livestock farmers are the key. Simply raising more hogs and cattle on a few concentrated operations may make for some nice gross-number statistics when we compare ourselves to factory farm hotbeds like North Carolina, California and Texas, but they do little to help Main Street economies. More farm families on the land mean more shoppers, as well as more thriving schools and churches.

Such a bias towards increasing livestock numbers puts at a disadvantage any farmer using strategies other than expansion to improve an operation. Many farmers who graze livestock, for example, work to increase profitability by lowering inputs and increasing efficiency, not by expanding. Instead of playing the gross numbers game, they focus on profitability per animal.

Farmers throughout the Midwest are showing that concentrating on profitability, rather than massive production at all costs, is a viable way to make a good living while protecting the environment. University economic studies of, for example, dairy grazing operations, are starting to back up what these farmers have already proven.

The MDA’s evaluation profile is biased in other ways. For instance, the more employees an operation adds, the more points it scores on the MDA’s evaluation profile. Again, an operation that intends to add six or more employees receives five points and an “outstanding” rating. This also puts small- and medium-sized farmers at a disadvantage. There are other ways of increasing efficiencies and profitability without hiring more employees, but the MDA’s evaluation profile does not seem to recognize that.

Five points (again, an “outstanding” rating) are awarded by the MDA for proposed projects that will produce “substantial positive environmental impact.” That’s sounds great. But what about producers who are already farming in ways that enhance and protect the environment? Shouldn’t they receive an outstanding rating for improvements necessary to maintain that excellence?

At best, this aspect of the evaluation criteria suffers from muddled wording. Read one way, it would seem that a large-scale dairy operation with a chronically leaky manure lagoon would rate quite high if it uses the money to fix that leak. There’s no doubt an immediate “substantial positive environmental impact” would be seen in that case.

But if a farmer who is using managed rotational grazing to produce milk—a system that does not require an inherently dangerous large-scale manure lagoon, by the way—applies for money to maintain its fencing system, there may not be a significant environmental impact seen.

Yet that grass farmer would be using the grant to maintain a level of environmental sustainability that was there all along. How will the MDA’s criteria as they are written now treat that farmer? I’m guessing not very well. In this case, doing the right thing is not considered “outstanding.”

The bottom line is, according to the MDA’s evaluation profile, operations which expand dramatically are more likely to receive help through the Livestock Investment Grants program. These proposals will likely be the largest grant requests, thus quickly draining the program’s budget. This makes second class citizens of family farmers using innovative, low cost, low-input systems.

LSP and other groups have worked hard to make sure any livestock improvement grant program launched in this state would not discriminate against small- and moderate-sized family farms, including those that are using sustainable and organic systems. That is why LSP pushed for language in the bill that includes the low minimum investment amount of $4,000. It was a tough battle: one proposal before the Legislature would have required farmers to spend $40,000 before they could qualify for the program. Such a high qualification level would have quickly drained the program’s $1 million budget, and would have made it truly biased towards large operations using expensive technologies right out of the gate.

As farmer and dairy scientist testimony made clear to legislators during the session, a family-sized livestock operation can do a lot with $4,000—renovate several acres of pasture or upgrade some fencing, for example. Such projects may not bring the Governor and Commissioner of Ag out to your farm for a ribbon-cutting ceremony, but they can have impacts where it counts: in the bank account, and eventually, on Main Street in the form of more farm families shopping.

The potential for this grants program to serve farmers of all types makes what the MDA has done with the criteria rankings all the more frustrating. So what’s to be done?

Contact the lawmakers who represent you in Saint Paul and let them know that what the MDA has done to the Livestock Investment Grants program is not a good use of tax money. If you are a livestock farmer who is interested in improving your operation, apply for a grant through the program. And then report your experience with the application process to LSP. It is important to track how this grants program is being implemented in the field and whether it is truly benefiting all types of livestock operations.

The grants deadline is Sept. 15, 2008. Any Minnesota livestock producer can apply for money to offset the costs of improving a livestock operation. Producers will be reimbursed 10 percent of the cost of a project, with a minimum expense of $4,000 and a maximum expense of $500,000.

Qualifying projects include:

• The acquisition, construction or improvement of buildings
or facilities for the production of livestock or livestock products.
• The acquisition of equipment for livestock housing, confinement, feeding and waste management.
• The development of pasture for use by livestock including, but not limited to, the acquisition, development or improvement of:
– Lanes used by livestock that connect pasture to a central location.
– Watering systems for livestock on pasture, including water l lines and booster pump well installations.
– Livestock stream crossing stabilization.
– Fences.

Further Details regarding the Livestock Investment Grants Program can be found at the MDA’s website.

After you apply for the grant, you can report your experience with the process by e-mailing LSP’s Bobby King at bking@landstewardshipproject.org, or calling 612-722-6377. You can also contact LSP’s Paul Sobocinski at 507-342-2323 or sobopaul@redred.com.

Perhaps the toughest lesson for the average concerned citizen to learn is the importance of keeping tabs on the dirty details of legislation long after the final gavel has fallen at the Capitol. It’s easy to forget that these laws are not implemented by magic. Ultimately the success of any tax-funded initiative relies on an agency dotting the i’s and cross the t’s on a daily basis. Monitoring the “routine” implementation of the Livestock Investment Grants Program could play a key role in making this initiative a good use of tax money.

Leave a Reply

  • (will not be published)