Minnesota farmers staring down financial losses from one of the driest seasons in decades could get grants or loans through a $10 million farm aid proposal Gov. Tim Walz laid out Friday.

But the timing of the relief dollars is tied to an unrelated political faceoff at the State Capitol.

"We need to keep folks on the land. We need to make sure that we have these producers that stay here," Walz said, noting that he has heard from families who sold off their herds of livestock during the summer drought. "We think this is a piece to help fill the gap."

The DFL governor said he hopes legislators can pass the plan, along with aid for pandemic front-line workers, during a legislative special session in early October. But Walz — the only person who can call a special session — remained firm that he would not bring lawmakers to the Capitol to pass those proposals unless Senate Republicans vowed not to remove Health Department Commissioner Jan Malcolm. GOP legislators, some of whom have disagreed with Walz and Malcolm's approach to COVID-19 vaccines and masks, have said they would not make such a bargain.

Walz surveyed dry corn and soybean stalks at Gene Smallidge's farm in Hastings on Friday before laying out the details of the relief plan. He said the state is in a strong financial position to devote an extra $10 million to helping farmers.

The drought's impacts have been uneven, with producers in some parts of the state looking at significant losses or even closing their business while other areas have been spared. Many farmers have crop insurance through the U.S. Department of Agriculture or have received other federal aid to help them through the difficult season, but state officials stressed that federal programs are not sufficient.

Livestock producers and people with specialty crops are among those who have been left out of the federal help, Walz said.

"There are no safety nets for people like me," said Kathy Zeman, director of the Minnesota Farmers' Market Association, who has a certified organic livestock operation. "Little ag in this state is a $1 billion industry that nobody knows about that we need to uplift. That's what this is doing. It's saying, OK — not going to make you whole — but it will help. But it recognizes your value."

The Walz administration's plan would entail $5 million in grants, giving livestock and specialty crop farmers the first shot at applying.

The dollars could be used to cover needs like water tanks, irrigation equipment and wells. Another $5 million would be distributed as zero-interest loans through the Rural Finance Authority's Disaster Recovery Loan Program to help with lost income due to the lack of rain, or with expenses that insurance did not cover.

The state is looking at providing anywhere from 500 to 1,500 grants depending on how much money people apply for, and the grants would be up to $5,000, said Department of Agriculture Commissioner Thom Petersen.

"The nice thing about this is it's scalable," Petersen said. "If the legislators want to help more farmers we can go higher, if they want to help a little less we can go less."

While the path forward on a special session is uncertain, both Republicans and Democrats on Friday expressed a desire to assist farmers.

The success of the agricultural economy is critical for the rest of Minnesota, House Speaker Melissa Hortman, DFL-Brooklyn Park, said in a statement after Walz's announcement.

"House DFLers will continue to work with Governor Walz and Senate Republicans to put together a package that will help the members of our agricultural community that have been negatively impacted by this historic drought," Hortman said.

Petersen reached out to the Legislature to put together the relief package, GOP Senate Majority Leader Jeremy Miller of Winona noted. And Sen. Torrey Westrom, R-Elbow Lake, said he is working on farm relief that could include rapid-response grants and property tax rebates.

The chair of the Senate agriculture committee, Westrom emphasized that livestock farmers are in a particularly tough situation with their lack of crop insurance and a shortage of the forage they feed their animals.

"In the meantime, their property tax bills will still become due this fall, along with other fixed expenses," Westrom said in a statement. "So any one-time assistance package would help demonstrate our appreciation for the important role the agriculture community plays in our state."

Jessie Van Berkel • 651-925-5044