U.S. Ag Secretary Schafer discusses farm bill politics

By Kris Bevill | March 10, 2008
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Web exclusive posted March 31, 2008 at 2:34 p.m. CST

U.S. Secretary of Agriculture Ed Schafer is optimistic the farm bill will pass – and provide needed support for the biofuels industries. Ethanol Producer Magazine sat down with U.S. Secretary of Agriculture Ed Schafer on March 29, while he was in Fargo, N. Dak., speaking at the state's Republican convention. He spoke with us about his role as Secretary of Agriculture, his professional and political experience as a Midwesterner in relation to his new position in the Bush Administration and the progress of the new farm bill. Here is an excerpt from an interview, which will be published in its entirety in June's issue of EPM.

Q: What have been some of the major difficulties in reaching a final version of the farm bill?
A: I was just talking to Earl Pomeroy (D-N. D.) and I told him, "I got parachuted down into seemingly one of the most contentious negotiations ever." He said that's because the administration's been involved. Before, Congress just went off and wrote the farm bill and this time the president said "no, we're going to generate the farm bill and put it on the table and let them debate it." That's caused some turf issues and some directional issues and some of those anxieties about who's running the show.

There remain between the U.S. House and Senate jurisdictional issues. The U.S. House Ways and Means Committee has no interest in running the farm bill. In the U.S. Senate, the Finance Committee wants to run the farm bill. So you've got those kinds of things going on. They need to solve that.

I think the biggest difficulty that we have are the differences between the U.S. House and U.S. Senate. In their initial passed versions, there were big differences in spending levels, there were big differences in some of the programmable areas, language-wise and there were big differences in funding sources. We've been able to narrow that down quite a bit.

But today the administration has moved toward the Hill on the level of funding over baseline. We started out at $4.5 billion; we pretty quickly went up to $6 billion over baseline. Now the U.S. House and Senate are kind of narrowing in on $10 billion and we've built a pathway to show them how to get to ten. If they get there, I think we can come together reasonably easy. We've moved on some of the reforms of the adjusted gross income. We started with $200,000 now we're looking at $500,000.

The U.S. Senate has different ideas than the U.S. House on how to fund the $10 billion. They need to solve that. And that's the big hang-up right now. If the U.S. House and U.S. Senate can come together and say "this is our package" I think we're close enough to where we could figure out how to get this done. I'm an eternal optimist, (laughs) but I am optimistic. When we signed this last extension the president made it clear that he wouldn't sign extension after extension. The leaders in both parties in both houses pledged to come together to get it done over the interim period, so I think if they could come to work on Monday [March 31] with good framework…we've got a couple of weeks to get it done and we could get it done or come close in that amount of time.

Q: Do you get a sense that there's still bi-partisan support for increased funding for biofuels?
A: Very much so. I think we're looking at it as a pathway. We understand the feed versus fuel issue and the ethanol capacity restrictions right now. There's a huge effort in the new farm bill for money for research for pilot projects for cellulosic stuff. If we're going to meet the goals set forth, our researchers and economists are saying we're at maybe 25 percent of the corn crop today going into ethanol; by 2012, we'll see that up at maybe 33 or 34 percent and then it will level off at that area because then you'll start to get the biomass stuff coming in.

Here's why I think it's hugely important – on a national security basis it's very important and secondly on an economic basis. In my talks I've been saying that we import 4 billion barrels of oil annually in this country, often from countries we're not particularly friendly with, and if we could in 10 or 12 years convert one quarter of that to renewable fuels it would double the farm income in this country. If you double the farm income in this country you revitalize rural America. It's hugely important not only from a national security standpoint but from the economic value that could be created in this country. Lights were invented in the cities and trickled out to the rural areas; telephones were invented in the cities and trickled out to the rural areas. Now you'd be seeing power generated in rural areas and being sent into the cities. It reverses everything that goes on here and I think you'd change the face of agriculture and the economy in this country through renewable fuels.

The entire interview with U.S. Agriculture Secretary Schafer will be published in the June issue of EPM.