AgBMP Loan Program

Farmers, Rural Landowners, and Agricultural Supply Businesses

Quick Facts

Recipient: 
Farmers, Rural Landowners, and Agricultural Supply Businesses
View Project Website
Source: 
Clean Water Fund
Recipient Type: 
Individual
Status: 
In Progress
Activity Type: 
Fund Administration, Restoration/Enhancement
Counties Affected 
Blue Earth, Brown, Carver, Cottonwood, Dakota, Dodge, Douglas, Faribault, Fillmore, Freeborn, Goodhue, Grant, Houston, Kandiyohi, Le Sueur, Lincoln, Lyon, Martin, Mower, Murray, Nicollet, Olmsted, Pipestone, Pope, Rice, Rock, Scott, Sibley, Steele, Stevens, Todd, Traverse, Waseca, Watonwan, Winona, Yellow Medicine

Related Project(s)

The Agricultural BMP Handbook for Minnesota
Agricultural Best Management Practices Assessment and Tracking Tool

Media

Loan Process Diagram

The AgBMP Loan Program provides needed funding for local implementation of clean water practices at an extremely low cost, is unique in its structure and is not duplicated by any other source of funding.

The AgBMP loan program provides 3% loans through local lenders to farmers, rural landowners, and agriculture supply businesses. Funds are used for proven practices that prevent non-point source water pollution or solve existing water quality problems.

The program provides low interest financing for capital improvements that improve water quality through:

  • Feedlot Improvements
  • Conservation Tillage Equipment
  • Septic System Replacements / Upgrades
  • Erosion Control Structures
  • Shoreline Stabilization
  • Wetland Restoration

This program helps landowners purchase equipment that results in less erosion and/or runoff to rivers and streams. It helps landowners fix septic systems that are discharging to surface or groundwater. It provides funds to seal old wells and relocate new wells in areas that are less environmentally sensitive. It helps landowners fix and stabilize gullies, waterways, shorelines and riverbanks. Any practice that solves a water quality problem is eligible!

There are many great attributes of the AgBMP Loan program:

  • Loans support local implementation of conservation practices
  • Loans fund proven practices that improve water quality
  • Loans can be used with cost share programs and funds are available statewide
  • The cost to the state is very low, averaging less than $200 per loan in administrative costs
  • The AgBMP loan program is a revolving fund, money is used, repaid and used again and again to provide a perpetual funding source for continued financing of more projects to support conservation

Every loan is issued from just one of five sources of funds. This includes both federal and state sources. All loans supported by the Clean Water Fund must be used to implement recommended practices identified in a Minnesota Pollution Control Agency  (MPCA) approved Total Maximum Daily Load (TMDL) Implementation Plans. All other appropriations in the AgBMP account and their revolving revenue may be used anywhere is the state.

This program bases the eligibility of practices on recommendations of the University of Minnesota,  MPCA, Minnesota Department of Agriculture, United States Department of Agriculture-Natural Resources Conservation Service (USDA NRCS), and the knowledge and skills of local government unit staff including the county Environmental Office, county feedlot officers, local water planners, local Soil and Water Conservation Districts, and consulting engineers.

The AgBMP Loan Program is based on implementing recognized and demonstrated best management practices recommended in environmental plans such as the Local Comprehensive Water Management Plans, Total Maximum Daily Load (TMDL) Implementation Plans, and the State 319 Nonpoint Source Management Plan. These practices have been shown to be effective by researchers, University Extension, state & federal agencies, and industry Research & Development.

 

 

About the Issue

The Minnesota Department of Agriculture provides the loan funds to local lenders. The lender is the fiscal agent, they are responsible to disburse the loans, service the loans, collect repayments, and guarantee those repayments back to the program. The Soil and Water Conservation District (SWCD) or County Environmental Office is the local administering agency (see image under Media).

Since MDA provides only loans and the loans are fully guaranteed and always repaid, all funds provided by the AgBMP Loan Program are considered leverage.  Ultimately, there are no state funds in an AgBMP loan.

The AgBMP loan program does not offer grants; the assistance is in the form of a loan that must be repaid and the repayments are then reused again and again to provide a perpetual funding source for continued financing of more projects. This is referred to as a revolving loan account structure.

 

Project Details

As of May,1 2013 the AgBMP Loan Program used Clean Water Fund dollars to support 337 loans totaling an amount of $6,780,799. Sixty-four loans were for agricultural waste management projects, 258 for septic systems upgrades or relocation and 15 for conservation tillage equipment. At this time the program has leveraged 48% of the total cost of projects. Overall, Clean Water funded Ag BMP loans have leveraged $6,354,833.

Status: 
In Progress
Start Date: 
July 2009
End Date: 
June 2013

Project Details by Fiscal Year

Fiscal Year(s): 
2013
Legal Citation / Subdivision: 
M.L. 2011, Chapter 6,Article 2, Sec.3
Appropriation Language 

M.L. 2011:(c) $4,500,000 the first year and $4,500,000 the second year are for the agriculture best management practices loan program. At least $3,500,000 the first year and at least $3,900,000 the second year are for transfer to the clean water agricultural best management practices loan account and are available for pass-through to local governments and lenders for low-interest loans under Minnesota Statutes, section 17.117. Any unencumbered balance that is not used for pass-through to local governments does not cancel at the end of the first year and is available for the second year.

Fiscal Year Funding Amount: 
$4,500,000
Administration costs: 
$1,350
Number of full time equivalents funded: 
0.5 FTE
Proposed Measurable Outcome(s) 

same as FY12

Description of Funds: 
Please note there is a lag time between when the funds are appropriated and when the money is made available to the Minnesota Department of Agriculture and ultimately the local lenders.
Fiscal Year(s): 
2012
Legal Citation / Subdivision: 
M.L. 2011, Chapter 6,Article 2, Sec.3
Appropriation Language 

M.L. 2011:(c) $4,500,000 the first year and $4,500,000 the second year are for the agriculture best management practices loan program. At least $3,500,000 the first year and at least $3,900,000 the second year are for transfer to the clean water agricultural best management practices loan account and are available for pass-through to local governments and lenders for low-interest loans under Minnesota Statutes, section 17.117. Any unencumbered balance that is not used for pass-through to local governments does not cancel at the end of the first year and is available for the second year.

 

Fiscal Year Funding Amount: 
$4,500,000
Administration costs: 
$1,350
Number of full time equivalents funded: 
0.5 FTE
Proposed Measurable Outcome(s) 
  • Number of loans issued using monies from the Clean Water Fund
  • Number of counties where individuals are receiving loans
  • Number of loans issued per category (septic systems, conservation tillage, ag waste management)/ percent issued per category

  • Number of loans addressing subsurface sewage treatment

    -   Phosphorus load reduction (lbs)

    -   TSS load reduction (lbs)

    -   Number of loans issued per county

 

  • Number of loans related to conservation tillage

    -   Number of acres affected

    -   Sediment loss reductions (tons)

    -   Number of loans issued per county

 

  • Number of loans related to agricultural waste management

    -   Number of animal units managed

    -   Total phosphorus managed (tons)

    -   Total nitrogen managed (tons)

    -   Number of loans issued per county

 

Estimates of pollutant load reductions are based on tabled values reported in scientific literature. Values are determined using empirical data, however they are averages and are not site-specific. The MDA continues to gather information about the effectiveness of agricultural BMPs and support research projects that provide more comprehensive empirical data on practices that the loan program supports. 

Minnesota state agencies are working together to establish and report outcome-based performance measures that monitor progress and impact of the Clean Water Fund activities. This inter-agency group completed a report in February 2012, Clean Water Fund Performance Report. At the heart of this report is a suite of quantifiable performance measures.

MDA's AgBMP Loan Program will provide data for performance measure EDWOM9: Number of BMPs implemented with Clean Water funding and estimated pollutant load reductions, FM4: Total dollars awarded in grants and contracts to non-state agency partners and FM5: Total dollars leveraged by Clean Water Fund implementation activities.

Description of Funds: 
A total of $4,500,000 was appropriated in FY2010-2011 and $4,500,000 was appropriated in FY2012. Please note there is a lag time between when the funds are appropriated and when the money is made available to the Minnesota Department of Agriculture and ultimately the local lenders.
Source of Additional Funds: 

MDA knows the total cost of a project as reported on submitted receipts and invoices. By subtracting the amount of the AgBMP loan from the reported total cost we can estimate additional funding. MDA defines “leverage” funds as all NON-STATE funds that paid for the project.

As of May 1, 2013, the total amount of leveraged funds was $6,354,833.

Fiscal Year(s): 
2011
Legal Citation / Subdivision: 
M.L. 2009, Chapter 172, Article 2, Sec. 2
Appropriation Language 

M.L. 2009: (e) $2,000,000 the first year and $2,500,000 the second year are for the agricultural best management practices loan program. At least $1,800,000 the first year and at least $2,200,000 the second year are for transfer to a clean water agricultural best management practices loan account and are available for pass-through to local governments and lenders for low-interest loans. Any unencumbered balance that is not used for pass-through to local governments does not cancel at the end of the first year and is available for the second year.

Fiscal Year Funding Amount: 
$2,500,000
Administration costs: 
$2,700
Number of full time equivalents funded: 
1 FTE
Proposed Measurable Outcome(s) 

same as listed in FY12

Description of Funds: 
$4,500,000 was appropriated in FY2010-2011 and $4,500,000 was appropriated in FY2012. Please note there is a lag time between when the funds are appropriated and when the money is made available to the Minnesota Department of Agriculture and ultimately the local lenders. Administration costs are for FY2011 only. This will be updated one to two times per year.
Fiscal Year(s): 
2010
Legal Citation / Subdivision: 
M.L. 2009, Chapter 172, Article 2, Sec. 2
Appropriation Language 

M.L. 2009: (e) $2,000,000 the first year and $2,500,000 the second year are for the agricultural best management practices loan program. At least $1,800,000 the first year and at least $2,200,000 the second year are for transfer to a clean water agricultural best management practices loan account and are available for pass-through to local governments and lenders for low-interest loans. Any unencumbered balance that is not used for pass-through to local governments does not cancel at the end of the first year and is available for the second year.

Fiscal Year Funding Amount: 
$2,000,000
Administration costs: 
$2,025
Number of full time equivalents funded: 
0.75 FTE
Proposed Measurable Outcome(s) 

same as listed in FY12

Description of Funds: 
$4,500,000 was appropriated in FY2010-2011 and $4,500,000 was appropriated in FY2012. Please note there is a lag time between when the funds are appropriated and when the money is made available to the Minnesota Department of Agriculture and ultimately the local lenders. Administration costs are for FY2011 only. This will be updated one to two times per year.

Updates

AgBMP_CWF_Counties_8-15-12 (pdf 6.5MB)

Project Manager

Dwight
Wilcox
Minnesota Department of Agriculture
625 Robert Street N.
St. Paul
Minnesota
55155
(651) 201-6608
Email: 
Dwight.Wilcox@state.mn.us

Competitive Grant Making Body

Information on the entities that award competitive grants
Board Members and Qualifications 

Not Applicable

Advisory Group Members and Qualifications 

Not Applicable

Related Topics: 
Minnesota Department of Agriculture, Agriculture/Forestry/Mining, Water Resources, Fund Administration, Restoration/Enhancement, Clean Water Fund, Individual, Blue Earth, Brown, Carver, Cottonwood, Dakota, Dodge, Douglas, Faribault, Fillmore, Freeborn, Goodhue, Grant, Houston, Kandiyohi, Le Sueur, Lincoln, Lyon, Martin, Mower, Murray, Nicollet, Olmsted, Pipestone, Pope, Rice, Rock, Scott, Sibley, Steele, Stevens, Todd, Traverse, Waseca, Watonwan, Winona, Yellow Medicine