When Agriculture Secretary Sonny Perdue arrived on the 2018 Commodity Classic stage Wednesday, Feb. 28, he was raring to take on the 'news' regarding the appointment of Bill Northey and concerns that he was not in full support of the Renewable Fuel Standard.
Perdue opened with the news that Bill Northey, former Iowa agriculture secretary, has finally been confirmed into a new post at USDA – Undersecretary for Farm and Foreign Agriculture Service - but will run a newly organized area called Farm Production and Conservation. The role is part of a comprehensive reorganization at the agency, but Perdue had another topic he needed to cover.
"Clearly the press has written several things, and I want you to hear me clearly, I have not and will not support any policies that diminish demand or undermine the RFS, or are harmful for our producers," he said, and was answered with wide applause by event attendees.
He added that "anything you hear contrary to that is not true, and I welcome you to call me about these meetings."
What started the conversation was a meeting this week with senators on both sides of the RFS issue – Sen. Ted Cruz, R-Texas, Sen. Pat Toomey, R-Penn., Sen. Joni Ernst, R-Iowa and Sen. Charles Grassley, R-Iowa. There was talk about renewable identification numbers – or RINs – which are a key tool for complying with the RFS. However, Perdue was adamant that no decisions were made on any topic in the meeting with President Trump.
Perdue said the president wanted to hear both sides of the issue and that "President Trump said he would be strong for farmers [on the issue]."
Perdue also added that he is a farmer first and an agribusiness man second and "I know the importance of demand, I know RFS is increasing demand for a variety of crops and with where commodity prices are today RFS is more important."
During a post speech media conference, Perdue noted that stories about the RIN issue were inaccurate and that his support of the RFS has been unequivocal. "I will not support any policies that reduce the demand for ethanol or biofuel less than where we have currently," he told media.
He explained that the goal is to eliminate the Reid Vapor Pressure waiver to get to the 15% ethanol level for the future. The aim would be to boost demand for renewable fuel to raise it above the current mandate before the RFS mandate expires in 2022. "We would be smart in ag to figure out how to build for the future rather than depending on a law that will expire," he said.
As for the RIN, Perdue wants more information noting that he is trying to "understand why corn farmers would think they would benefit from high RIN prices in a way, based on where that RIN dollar is going, we're looking at things to build demand. We're confusing the RIN price with demand."
Perdue noted he was an "open book" on the issue and would be meeting with commodity group leadership during Commodity Classic to be educated on the issue. "I fail to understand how collaboration between RIN prices and demand and [Renewable Volume Obligation] volume work together." He's working to clear up confusion.
Other topics discussed
Beyond talk of the RFS, RINs and the RVO, Perdue delved into his vision for USDA, and made a parallel with a business that's next door to this year's Commodity Classic – Disneyland. He talked about the icon of Disney and customer service noting that major companies pattern their programs on the Disney model.
He also brought up Chik Fil-A and it's "how can I serve you today" attitude. It's a culture he's aiming to create at USDA. "We want to ask what we can do for you today to serve you, our customers. It's your money, not ours. We're stewards of that money."
One way he sees serving farmers better is the creation of the office that Northey will be taking on – the Farm and Foreign Agriculture Service, which will roll the Farm Service Agency, the Risk Management Agency and the Natural Resources Conservation Service into a single agency.
Perdue explained that the long-term goal would be that a farmer would be able to file information electronically from the comfort of the combine cab, using a single form and eliminating the current issue of duplication across different agencies. That streamlining effort is a priority, he said.
In another area, he talked about ending the need for farmers to have what are now known as SAM and DUNS numbers. "These were originally designed for defense contractors, and not necessary for farmers," Perdue said.
SAM stands for System for Award Management, while DUNS stands for Data Universal Numbering System. A farmer currently needs both if they plan to work with an agency or receive any funding for programs. Perdue wants to end that for farmers noting he has to work with the Office of Management and Budget to get approval.
"We want to convince them that the SAMS and DUNS are not meant for Fred Farmer in the field, it's an accountability tool for major contractors with the U.S. government, it does not need to be used in agriculture," he noted.
NAFTA was another key topic, and during his speech Perdue joked that he has a persistent cough and during a meeting on the topic of trade with the Trump administration, the president made a comment about pulling out of NAFTA. At that moment Perdue had a coughing fit and when asked if he was okay he replied: "Well sir, I get choked up whenever you talk about pulling out of NAFTA."
Perdue continued his strong support for NAFTA and noted that while Trump is playing the tough negotiator there's solid support for the agreement in the administration. "Many in the administration continue to work on NAFTA and we're going to get a good deal while we maintain the agreement."
On section 199A in the new tax bill: "There were unintended consequences in the bill, but I do believe the Congress will correct that and it will be retroactive to the first of the year."
On labor: Work will focus on ways to get a stable workforce for agriculture including a review of the H2-A program which Perdue noted is "cumbersome and convoluted." He also added that "President Trump has told me personally that he understands [the farmers' need for labor]."
On the farm bill: Perdue noted while Congress writes the bill he's working with the House and Senate on the program aiming for three main areas – a basic safety net, a variety of innovative crop insurance products and ways to promote the next generation into agriculture.
Perdue's speech covered a lot of territory, and he acknowledges the range of work he has ahead. He's visited 33 states and continues to reach out to farmers to better understand key issues the agency must address.