Agriculture Secretary Vilsack defends ethanol policy at World Dairy Expo

U.S. Secretary of Agriculture Tom Vilsack expressed his frustration with the stalled farm bill and defended his ethanol policy at the World Dairy Expo.

U.S. Secretary of Agriculture Tom Vilsack stressed the need for congressional action on the farm bill and defended the nation's ethanol policy at a forum held at the World Dairy Expo in Madison, Wis., on October 2.

Vilsack was critical of the House of Representatives for not passing the farm bill in August, saying that the votes were available to pass it, but House leadership chose not to bring it to a vote prior to the election. "Unfortunately, the farm bill is no longer its own issue, but it is tied into the threat of sequester," said Vilsack. "The need for action is immediate. We are going to continue to encourage the House to pass the farm bill and come to agreement with the Senate."

Vilsack said an extension of the current farm bill is not a good solution as it would not continue the disaster programs that saved many people in 2012. "An extension is more expensive than the Senate version or the House version of the bill," said Vilsack. "If they extend the current bill, there will be problems and uncertainty." He said American agriculture, and the entire economy, needs the certainty of a five-year bill.

"What has happened in rural America is a great story," said Vilsack. "We have record exports, record expansion of food systems, record expansion of farmers markets, record production of bio-based fuel, and momentum building for a revitalized and growing rural economy."

The impact of that record production of bio-based fuel was a hot topic among the dairy producers in the audience. When questioned about ethanol and its impact on corn prices and the resultant pressure the dairy and other livestock industries, Vilsack said ethanol gets a bad rap. He said ethanol is good for all of American agriculture, and people should look at the entire picture. "For far too long our crop producers were getting less than they needed to get a decent living, so we needed to boost agriculture production and help with reducing dependency on foreign oil," said Vilsack. "Corn was the simplest, quickest way to start that conversion from ag products to fuel, so we started the ethanol industry."

He credited ethanol for keeping corn prices at economically sustainable levels and giving producers the chance to profit from processing, as many ethanol plants are co-op owned, and creating jobs in depressed rural areas. He said estimates of ethanol's impact on reducing gasoline prices range from 25 cents to $1.30 per gallon. He said foreign oil exports have dropped from 65 percent to 45 percent.

Vilsack said the biggest misperception is that ethanol production is reducing the amount of corn available for animal feed. "We have increased corn production and are using that excess production to produce fuel," he said. "The same amount of corn is going into feed and food as before we started producing ethanol."

Meanwhile, the biofuel industry is intent on developing fuels that will not rely on corn. He said the U.S. Department of Agriculture has financed nine separate biofuel facilities using other raw material such as algae and crop waste. "The biofuel and biomass industries are creating innovative new products," said Vilsack.

As for the hotly debated issue of dropping the renewable fuel standard to increase supplies of corn and take pressure off of corn prices, Vilsack said easing the standard would not have that big of an impact on corn prices. "The problem with corn is a global issue, and dropping the renewable fuel standard might bring corn prices down by a quarter, according to some economists," said Vilsack. "What I can do to help all of agriculture is everything in my power to get the farm bill passed."