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Emerging farmers looking to purchase their first farm will soon have another opportunity to apply for grant funding to support their efforts. The Minnesota Department of Agriculture’s (MDA) Rural Finance Authority (RFA) has announced that a second round of funding for the Down Payment Assistance Grant Program will open for applications on July 1, 2023.

The Minnesota Down Payment Assistance Grant offers up to $15,000 for qualified farmers to purchase farmland. To qualify, farmers must earn less than $250,000 per year in gross agricultural sales, and each award must be matched with at least $8,000 of other funding. Applications will remain valid for purchases closing within six months after award approval or until June 30, 2024, whichever is sooner.

The grant opened for its first round of funding this past January, almost instantly accumulating enough applications to meet the waitlist cap. Several changes have been adopted for the second round to ensure more equitable access, including:

• A doubling in grant funding as approved by the state Legislature, from $500,000 to $1 million. The RFA expects to award approximately 66 grants in this funding cycle, dependent on the size of grant requests.
• A guaranteed 30-day application window. Whereas the first round stopped accepting applications once a waitlist of 100 applications was formed, the second round will allow farmers to apply anytime from 9 a.m. on July 1, 2023, through 11:59 p.m. on July 31, 2023. All applications received within this window will be eligible for consideration.
• After the application window closes, all eligible applications will be placed in a randomized lottery to determine the order in which grants are awarded. The lottery drawing will be held in early August, and the RFA will announce award winners in early to mid-August.

Preference for this round of awards will be given to emerging farmers. A full definition of who qualifies as an emerging farmer can be found in the grant’s request for proposals (RFP).

If funding remains after the RFA has awarded grants to all eligible emerging farmer applicants, the RFA will award as many grants as funding allows for to applicants who are not emerging farmers, based on the order of their lottery placement.

The MDA will host an informational session over Zoom on June 14 to review the grant program, explain changes for the second round of funding, and hear questions and comments from the public. Information for joining this session can be found on the program webpage.

Another round of grant funding of $1 million will be available starting July 2024.

To view the full eligibility requirements and access the RFP, visit the program webpage. Questions may be directed to Jenny Heck at Jenny.Heck@state.mn.us or 651-201-6316.

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Media Contact
Logan Schumacher, MDA Communications
651-201-6193
Logan.Schumacher@state.mn.us

Owners of agricultural assets that lease or sell to beginning farmers in Minnesota may be eligible for the Beginning Farmer Tax Credit, which is open for applications through the Minnesota Department of Agriculture’s (MDA) Rural Finance Authority (RFA).

Those who have previously applied should take note of the new application deadlines for rentals (July 17) and sales (November 1). Additionally, recent legislative changes have resulted in several updates to the program to further incentivize farmland sales:

• An increase in the tax credit amount to 8% of the sale price for buyers and 12% if the buyer is an emerging farmer (previously 5% for all).
• A new maximum tax credit of $50,000 (previously $32,000).
• Direct family members such as parents, grandparents, and siblings are now eligible for farmland sales.

Qualifying applicants can include individuals, trusts, or qualified pass-through entities renting or selling land, livestock, facilities, buildings, or machinery used for farming in Minnesota to a beginning farmer.

A beginning farmer is defined as a Minnesota resident with the desire to start farming or who began farming in Minnesota within the past 10 years. They must provide positive projected earnings statements, have a net worth less than $979,000, and enroll in, or have completed, an approved farm business management (FBM) program.

Asset owners can claim credits in one of the below categories in a given tax year for each beginning farmer they lease/sell to:

To be eligible for the tax credit, both the asset owners and beginning farmers must submit applications.

Beginning farmers are also eligible for a nonrefundable Minnesota tax credit equal to the amount paid for FBM tuition, up to a maximum of $1,500. This tax credit is available for up to three years.

Full eligibility requirements and application materials can be found on the Beginning Farmer Tax Credit webpage. Questions may be directed to Jenny Heck at Jenny.Heck@state.mn.us or 651-201-6316.

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Media Contact
Logan Schumacher, MDA Communications
651-201-6193
Logan.Schumacher@state.mn.us