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Minnesota Farm Bureau President Paap defends renewable fuels

ST. PAUL -- Enacting tough clean-air standards may affect renewable fuels use, Minnesota farmers fear.

A Minnesota House panel last week approved a bill that would establish motor vehicle emission standards similar to that adopted by California.

"We've got some concerns," Minnesota Farm Bureau President Kevin Paap said in an interview. "We need to do what we can in agriculture to reduce greenhouse gases. One of the things we can do that does that is renewable fuels."

Paap testified Wednesday before the House Transportation and Transit Policy and Oversight Committee, and also followed Green Acres legislation in the Senate Environment and Natural Resources Committee.

Opponents to the Clean Car say it could compromise the state's commitment to renewable fuels, such as E85, and could limit consumer choice for flexible-fuel vehicles. Plus, adopting California standards would cede state regulation to that state, where E85 use has been slow.

"If we can find some things, some solutions, that are good for the renewable fuels industry, good for the economy in Minnesota, that's good for agriculture and it's good for the whole state," Paap said Wednesday in the State Capitol between committee hearings.

"But if there's going to be anything that's going to be detrimental not only to the renewable fuels industry or to the economy, we in ag have got to show our concerns," he said.

The bill, authored by Rep. Melissa Hortman, DFL-Brooklyn Park, would establish emission standards for passenger vehicles, light duty trucks and SUVs beginning with the 2013 model year. The standards would help Minnesota reach its greenhouse gas emissions goal of at least 15 percent below 2005 emission levels by 2015, 30 percent by 2025 and 80 percent by 2050.

"The good news is, as we've been dealing with bill authors, they've been more than open to sit down and hear our concerns," Paap said. "Our biggest thing is that there is too much uncertainty ... We know some things are certain but for Farm Bureau, there's too much uncertainty yet for us to be comfortable."

In written testimony to the committee, Paap wrote that "we are uncertain how Minnesota's voices will be heard when the California legislature or the California Air Resources Board considers changes to their vehicle emission regulations."

Some say it's better to wait and see what the Obama administration will do. It announced in January that it was considered more flexible standards, making it easier for states to adopt the stricter California laws. Currently, states must be granted waivers to do so.

Agriculture's boom time is turning to bust, along with the national economy as commodity prices slip while input costs still remain high, Paap said. It also has affected the ethanol industry as gasoline prices fell while corn costs were high.

"Whether it's the dairy industry, all the livestock -- we've got crop prices that are half of what they were not too long ago -- but inputs aren't going down to match that, so there's some struggles really in all of agriculture," Paap said.

"But we need to keep that renewable fuels," he added. "That adds value to the economy, that adds value to the communities, it's good for the environment. We've got to continue to have a robust renewable fuels industry. Not only the corn ethanol but the second generation, the next generation

America needs the first generation corn ethanol "to help build us onto the future, not in place of corn ethanol, but to supplement it so we become less dependent on foreign oil," he said.

Paap also attended the Senate hearing on two bills to correct changes made last session to Green Acres, the law intended to allow farmers to continue to produce on agricultural land that is being encroached by developments that threaten to raise property taxes higher that it's profitable to farm.

The committee approved both bills and sent them to other committees.

The bill by Sen. Rod Skoe, DFL-Clearbrook, would modify the Green Acres program to reinstate previous law provisions relating to green acres treatment and agricultural property classification. It would then allow unproductive rural land to be eligible for Green Acres and removes an elimination of lands in the Reinvest in Minnesota conservation reserve or the federal conservation program.

Testimony at the hearing showed that farmers may farm on 60 percent of their land and hold 40 percent for runoff, shelterbelts or erosion prevention. The changes in the law would have taken away Green Acres classification and resulting property tax savings from those unproductive lands.

A bill by Sen. James Metzen, DFL-South St. Paul, creates the Minnesota Conservation Property Tax Act which would give reduced property taxes on conservation land.

"Our No. 1 issue right now, aside from the budget, is Green Acres and the changes to the Green Acres law," said Paap. "We've got to come to some solution with Green Acres so we can make sure we can transfer it (the farm) from one generation to the other through family transfers."

Farm Bureau is also concerned over land already enrolled in a conservation program. "Can that land still be preserved?" Paap asks. "We need to preserve ag land and Green Acres does a good job, but we do have to make some changes to the bill."

It's good that there has been a lot of hearings on the issue and the bills continue to move, he said. "We're going to continue to fight for that ag land preservation."

Farmers are now waiting for spring to start planting, but have concerns over getting operating money, Paap said.

"Where's the break-even?" he said farmers are asking. "Farm prices have gone down. The inputs that went up with the prices are not going down at that same percentage."

Many costs were incurred last fall as inputs were stocked up, he said. "There are concerns over whether we'll have a break-even market price this year."