By Lori Ehde
and Jolene Farley
A bus load of Rock County farmers and ethanol investors left Luverne at 5:30 a.m. Thursday, Jan. 16, to see lawmakers in St. Paul about proposed cuts to ethanol subsidies.
The group wanted to let lawmakers know that rural Minnesota is taking a disproportional hit in the budget cuts, according to 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.
Cornerstone Cooperative shareholder Dave Willers, Beaver Creek, said he thought the meeting went well.
"I felt it was very good," Willers said. "We told them it’s not good for us to take 100 percent cuts but if it’s equal, it should be fair."
He said there will be funding cuts upfront, but the decrease in funding will be made up in later years.
"That wouldn’t be the worst thing," he said. "Then the bankers would still know what’s coming is still coming."
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.
"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."