The Minnesota Senate today passed the Agriculture, Broadband and Rural Development policy and appropriations package, SF 2458, on a vote of 43 to 23. While the legislation includes some welcome updates, particularly for Minnesota’s cottage food industry, it also imposes new fees and regulations across the food supply chain. The changes risk hurting small-scale producers and consumers by imposing new fees on grain elevators and dairy products, discouraging infrastructure development and increasing costs for farmers and consumers alike.

“While this bill brings key victories for Minnesota’s cottage food entrepreneurs, it also introduces new fees that will impact farmers and consumers alike,” Senator Torrey Westrom (R-Alexandria), Republican lead of the Senate Agriculture, Broadband and Rural Development Committee, said.“Senate Republicans will continue to advocate for policies that ensure Minnesota’s agricultural industry remains competitive and thriving.”

Victory for Minnesota cottage food entrepreneurs

Senate Republicans successfully championed long-overdue changes to Minnesota’s cottage food laws, modernizing a regulatory framework that has long hampered small food entrepreneurs. These are the rules that allow people to prepare and sell homemade, non-hazardous foods directly to consumers without a commercial kitchen license. Notably, the new language allows shipping without hand delivery of these products. This section draws from language in SF 391, legislation authored by Senator Bill Lieske (R-Lonsdale).

“Minnesota now has over 10,000 registered Cottage Food businesses—hardworking entrepreneurs, including many minority-, women-, and family-owned businesses, turning Minnesota ag products into delicious homemade treats. They took a risk, found their niche, and continue to grow. I will keep fighting for them and the unique market they have built,” Sen. Westrom said.

The reforms in the omnibus bill include:

• Expanding delivery options to include mail and commercial delivery, not just direct handoff

• Lifting the $78,000 gross annual sales cap and tying it to inflation every two years

• Clarifying who can operate as a cottage food producer, including individuals, sole proprietorships, and certain small LLCs

• Reducing the annual registration fee from $50 to $30 but expanding it to all Tier 1 licensees
• Requiring food safety training every three years for registered producers

Agriculture budget imposes new fees

Despite a negative general fund target, the Senate’s Agriculture bill includes millions in new fees. Senate Republicans raised concerns that the added costs, especially those affecting grain buyers, grain stores, and milk marketers, would ultimately fall on farmers already facing low commodity prices.

Republicans also highlighted increased grain storage fees as particularly harmful to farmer-owned cooperatives, warning they could make crop producers less competitive near state borders. The proposed milk marketer license was also criticized as unnecessary bureaucracy that adds cost without offering meaningful protections for dairy producers.

Specific fee increases outlined in the bill include:

• Increased food license fees

• Higher assessments for grain buyers and grain storers

• Expanded milk marketing fees
• New regulatory costs for meat processors and producers

In response, Senate Republicans offered a key amendment to roll back the bill’s concerning fee increases, proposing instead to reduce spending on lower-priority items such as climate coordinators and urban agriculture programs. The amendment, led by Sen. Steve Drazkowski (R-Mazeppa), was blocked on a party-line vote.

Ensuring taxpayer dollars fund nonprofit operations, not administrative salaries

During the floor debate, Senate Republicans also focused on ensuring that taxpayer dollars sent to nonprofits fund their operations, instead of administration. This is in response to reports of the Second Harvest Heartland CEO earning a $721k salary.

“Taxpayer dollars should go to helping people, not to paying high salaries to nonprofit organizations. The ongoing Feeding Our Future scandal showed how some programs need more oversight. These amendments would make sure funding goes to food assistance, not administrative costs. Nonprofits do important work, but there is no reason taxpayers should be funding salaries higher than the governor’s $120,000 salary,” Sen. Westrom said.

Senate Republicans offered additional amendments to increase accountability and transparency in how taxpayer dollars are used. Senator Bruce Anderson (R-Buffalo) successfully introduced an amendment to the local food purchasing assistance grant program, adding a reporting requirement to enhance oversight and ensure state funds are used as intended. However, Senate Democrats rejected the following proposal.

• Prohibit administrative costs at Second Harvest Heartland: Expands an existing prohibition on administrative spending to apply to the full $1.7 million annual appropriation, ensuring funds are directed entirely to food purchases (Sen. Torrey Westrom, R-Alexandria)
• Ban grants to nonprofits with excessively paid employees: Prohibits grants to any nonprofit whose employees are paid more than 125% of the governor’s salary, including salary, bonuses, and benefits (Sen. Steve Drazkowski, R-Mazeppa)

Additional Republican amendments

During the floor debate, Senate Republicans offered key amendments to improve the bill. Republicans successfully added the following amendments to the legislation.

• Support for meat and dairy processing expansion: Allocates $100,000 per year for grants to support the startup, modernization, or expansion of meat, poultry, egg, and milk processing facilities, offset by a reduction in urban agriculture funding in AGRI (Sen. Andrew Lang, R-Olivia)
• Modify procedure for a weed inspector to enter a property: Requires weed inspectors to make a dedicated effort to contact landowners before entering property, while still allowing inspections when necessary and ensuring landowners receive timely reports (Sen. Rich Draheim, R-Madison Lake)

Senate Democrats, however, refused to accept the following proposals.

• Additional funding for wolf and elk depredation (FY 2025): Provides $125,000 in FY 2025 for damages to farmers caused by wolf and elk, offset by a reduction in urban agriculture funding in AGRI (Sen. Steve Green, R-Fosston)

• Ongoing increase for wolf and elk depredation: Increases funding by $75,000 each for damages to farmers caused by wolf and elk, offset by a reduction in urban agriculture funding in AGRI (Sen. Rob Farnsworth, R-Hibbing)