Vilsack thanks industry, outlines challenge for energy title

By Susanne Retka Schill | February 25, 2012

Secretary of Agriculture Tom Vilsack thanked the ethanol industry for its contribution to the American economy in his keynote address Feb. 24 at the National Ethanol conference in Orlando, Fla. “I thank the industry on behalf of consumers because we’re playing less at the pump because of what you do,” he said.

Vilsack, a former governor of Iowa and longtime ethanol advocate, also thanked the industry for providing jobs, contributing to record farm income and a trade surplus in the past year. He encouraged the ethanol industry to work at educating the American public about the contribution of renewable fuels to the nation’s economy, as well as the importance of agriculture’s contribution overall. “It is important for us to market this,” he said. “98 percent of America does not farm and are generations removed from the farm.”

The nation’s food security is among the underappreciated contributions of American agriculture, he said. “We may be the only country in the world that can say this. We have the capacity to feed ourselves. We don’t have to import anything to survive. That’s an enormous thing we take for granted.” U.S. consumers also spend less for food than other nations—less than 10 percent of our incomes compared to 20 to 30 percent in other developed nations and 50 to 75 percent in developing nations.

Ethanol’s contribution to the nation’s energy security in unappreciated as well, he said. “We have moved from importing 62 percent of our fuel to 50 percent and we need to continue to move in that direction.” He outlined the programs in place within the USDA to support the continued growth of renewable energy, including five virtual research centers connecting USDA research capability with universities and the private sector on production systems and feedstock development. The USDA has issued five loan guarantees for advanced biofuel projects, and expects that between eight and nine will be approved by the end of the process. Working in cooperation with U.S. DOE and the Navy and the USDA a program is in place to advance drop-in aviation fuels. The program includes a Navy precontract for supplies from the biorefinery, meeting one the requirements to get private investment and lenders involved.

Among the work to be done is to implement E15 and ensuring the renewable fuel standard stays in place. “Make no mistake,” Vilsack cautioned. “Just because it’s in the law, it doesn’t mean it will stay in the law.”

Maintaining the energy programs within the Farm Bill will also be a challenge, with the expectation that there will be deep budgets cuts from the baseline. Vilsack explained that with the energy programs being new in the last Farm Bill, it took time to get the rules in place and begin implementation. Only those programs that were funded throughout the life of the current farm bill, however, are part of the baseline. Thus, none of the energy programs are in the baseline budget, and continued funding will require reducing funds for programs covering crop insurance, conservation and nutrition. Vilsack said one solution is to give the USDA flexibility to use existing program funds for energy program funding, such as the ability to tap into USDA business development funds that generally total between $700 million and $1 billion. He also said the USDA will be asking for continued funding for research, saying such research is responsible for the gains that have made agriculture the second most productive sector in the American economy and crucial for continued future.

When asked about the chances for the Farm Bill in such a partisan environment in Washington, Vilsack said the agriculture committees in both the Senate and House were relatively bipartisan. He elicited laughter, though, when he quipped, “I can be optimistic about the future of agriculture, but don’t ask me to be overly optimistic about the prospects of bipartisanship in Congress.”