American consumer: New partner in agriculture energy coalition

For the first time in decades, the American farmer has a new partner to champion effective agriculture programs — the American consumer.

“We have a new coalition,” says Collin Peterson, a U.S. Representative from Minnesota and chairman of the House Agriculture Committee. Peterson was keynote speaker at the annual Texas Ag forum recently in Austin.

Renewable energy, Peterson said, appeals to both farmers and “people in the city. More than 80 percent of (U.S. citizens) want us to move in this direction. They are for anything that gets us out of the Middle East and off foreign oil.”

He said renewable energy is a “good news story for agriculture. It's the most exciting thing to happen in agriculture in my lifetime. It has kept a lot of money on farms in Minnesota. That may not be the case in other states.” He said many of the ethanol plants in his sate are developed as farmer cooperatives.

Peterson expressed concern with the number of bills being offered in Congress to address renewable fuels issues and said legislators must be careful as they devise national policies to increase biofuel production. “A lot of bills will do more harm than good,” he said.

He cited research into the feed value of distillers grain from ethanol plants. “We don't want to harm our No. 1 value-added industry, livestock,” he said.

Peterson said studies under way seek to extract some feed value from corn before turning it into ethanol. “We can break out oil, protein and fiber from corn before it goes into ethanol production,” he said. “We should get better feed value for chicken and hogs that way and it will also benefit livestock.”

He said the primary renewable fuel focus will be cullulosic ethanol. “But we need to get the policy right for cellulosic ethanol production. We need to build three or four plants to demonstrate that we can make cellulosic ethanol. We need some more work on enzymes but we know we can do it.”

Peterson said the effort should be under USDA instead of the Department of Energy. “The DOE is moving slowly,” he said. “We want to get the first plant off the ground this year. If we can do that, we can have it on line in two years.”

Wheat, rice straw

Peterson said wheat and rice straw will provide the first raw materials for cellulosic ethanol. “Then we'll move to biomass crops,” he said. “Things such as switchgrass may provide more fuel per acre than corn. We need to set up a pilot program with farmers near a plant and pay a per acre fee for them to grow biomass crops.”

He said sweet sorghum may offer a good option for Texas growers.

“We need to figure out a way to stand up this industry,” Peterson said. “Farmers will figure out the production. We can get to 40 percent of our fuel from agriculture.”

He said other materials may offer promise. Timber waste, mesquite and other cellulose materials may prove good options in some areas. “We want the effort to be nationwide, not just a program for the Midwest,” he said.

He said the United States should “maintain the tariff on ethanol. We can't become dependent on Brazil. We have no tariff on biodiesel and it's not likely that we'll get one.”

Peterson also discussed progress with the farm bill debate.

“We have a big job ahead of us,” he said. “Charlie Stenholm and Larry Combest wrote one of the best farm bills in history in 2002. In hearings the past few years, farmers say we should just keep that law. I introduced a bill to extend it but it would be tied into the WTO talks.”

The WTO, he said, continues to influence the farm bill debate. “They're still working on WTO but I'm not certain current efforts will work anytime soon.”

In the meantime, he said Congress must press on with a farm bill. “It makes the most sense now to rewrite the bill, but no so much in the commodity title. It works and provides a good safety net. Also, prices are up so spending is down.”

Freedom to Farm

He said better commodity prices do not always auger well for a good farm bill. “We had good prices in 1996 and we then passed the Freedom to Farm Act.” He said the assumption was that prices would stay up forever and that subsidies should be phased out. “That was a disaster.”

Peterson said his committee and the Senate Ag Committee face the daunting task of developing a strong farm program with less money. “The current program has spent 42 percent less money (in commodity titles) than projected. That's a good thing. Other titles have spent more so it should be hard to take money out of commodities when other titles had increases.”

He said several programs, including the milk program and peanut storage, lost funds. “We want to hear ideas about how to restore some of those funds,” he said. He also said small grains programs should be improved.

Peterson said a new farm program should be in place by next fall to give Southern farmers an opportunity to make cropping decisions for 2008.

“We need to get a budget number for the bill,” he said. “We hope to conference by early September and have a bill on the president's desk by late September. We need to get it done before the current law expires.”

He said Congress is examining the secretary of Agriculture's farm bill recommendations. “On the surface it sounds reasonable, but we see a lot of problems.” He said payment limits and eligibility will be key issues. “A farmer could hit the $205,000 adjusted gross income limit and end up with a loss. The next year he would qualify again.”

He said most Midwest farmers support payment limitations. “But Southern agriculture is different. If we're not careful, we can cause significant damage to Southern farmers and we could lose their support.”

Peterson said farm programs represent security issues and criticized Homeland Security as a waste. “I should have voted against it,” he said. “It's a disaster; we see a lot of wasted money.”

He said country of origin labeling (COOL) is currently under Homeland Security. “It should be in the ag committee. The rules are currently unworkable.”

Programs to join

Peterson said at some point, given the U.S. involvement in international markets, COOL and animal identification will be important. “The two (programs) will come together. With animal ID, COOL will not be hard to implement.”

Peterson said a disaster bill might come soon. “We're on track to get it done along with the Iraq supplement. We hope to develop something that will not require the Farm Service Agency to write new rules.”

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