By Lori Ehde
A bus load of Rock County farmers and ethanol investors left Luverne at 5:30 this morning to see lawmakers in St. Paul about proposed cuts to ethanol subsidies.
"We want to make our presence known that rural Minnesota is taking a disproportional hit in the budget cuts," said David Kolsrud, manager of CornerStone Cooperative.
CornerStone is the 200-plus member co-op that owns the majority of the Agri-Energy Ethanol Plant in Luverne.
"We borrowed money and made the investments all with the understanding that the money would be there. … There are those who have loans out there, and you don’t just pull the rug out on those deals," Kolsrud said.
"When a new administration decides to pull the funding, it’s reneging on a contract, as far as I’m concerned."
In what is by far the biggest line item in Gov. Tim Pawlenty’s proposed budget cuts, the plan would eliminate $26.8 million in payments to 13 plants.
This represents three-quarters of what the state was set to pay out in subsidies this year.
"If they get by with this — getting our farmers and investors to put money in the plant and then reneging on the deal — farmers aren’t going to be interested in doing other programs with the state," Kolsrud.
Current subsidies provide 20 cents per gallon of ethanol produced — up to $3 million to each plant, including Luverne’s, annually.
Producers and investors in Luverne’s Agri-Energy Ethanol plant say the proposed cuts are unfair to rural Minnesota and would set back the value-added and renewable energies movement.
"It would put a severe crimp in the value-added market," Kolsrud said.
He and local producers were prepared to share some of these thoughts with Minnesota Public Radio in a 5 a.m. interview scheduled before they left town today.
"There’s a lot of money that has circulated throughout the community by farmers who have added value to their grain prices," Kolsrud said.
"It’s just an unfortunate situation when years worth of work can be undone by a new governor."