CONTACT: Paul Sobocinski, LSP, 507-430-1509

3/31/06
SAINT PAUL, Minn.—A legislative proposal to provide tax credits to Minnesota landowners who help beginning farmers could be an important tool for getting more people on the land, said Dan French, a Dodge County dairy farmer and member of the Land Stewardship Project. French testified in favor of the proposal earlier this week in front of the House Agriculture and Rural Development Committee as well as the Senate Agriculture, Veterans and Gaming Committee. Both committees passed the proposal, which is House File 3843 and Senate File 3437.

“One of the problems for these young farmers is getting access to land,” said French, who has helped three young farmers get started in their own operations. “These bills would really help.”

The bills provide a landowner who sells land to a beginning farmer a tax credit equal to 5 percent of the sale price. A landowner who cash rents land to a beginning farmer receives a state tax credit equal to 10 percent of the gross rental income. In a share rental agreement, the landowner would get 15 percent of the cash equivalent of the gross rental income. In addition, beginning farmers enrolled in the program are eligible for a state tax credit of $500, which can be applied to the cost of participating in the Minnesota Farm Business Management program, or an approved equivalent. The concept for the legislation originated from a similar law in Nebraska.

French has served during the past decade as a mentor and instructor for the Land Stewardship Project’s Farm Beginnings course. The farmer said Farm Beginnings provides students with excellent grounding for launching low-cost, profitable agricultural enterprises. However, renting and purchasing affordable land is still a major barrier, he said.

“Any tool that will help them when they go to talk to a landowner is very helpful to getting them started,” French said.

Senate File 3437 is authored by Sen. Gary Kubly and co-authored by Sen. Jim Vickerman, Sen. David Senjem and Sen. Dean Johnson. House File 3843 is authored by Rep. Lyle Koenen and co-authored by Rep. Greg Davids, Rep. Aaron Peterson, Rep. Bud Heidgerken, Rep. Mary Ellen Otremba and Rep. Frank Moe.

The House and Senate Taxes Committees will now consider SF 3437 and HF 3843.

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