The Hagstrom Report

Agriculture News As It Happens


Vilsack on farm bill, sugar, RFS, Smithfield, chicken in China, trade promotion, FSA offices

Agriculture Secretary Tom Vilsack today once again urged Congress to pass the farm bill and not change the Renewable Fuel Standard, while also making comments to reporters on a wide range of subjects including crop insurance, sugar and the future of the Farm Service Agency offices.

If Congress does change the RFS and doesn’t pass the farm bill, it will have its priorities reversed, Vilsack told the Growth Energy Advocacy Conference.

“We believe (the RFS) is working,” Vilsack told the organization of ethanol plant builders and managers, and he noted that the Environmental Protection Agency has used its authority to make adjustments to the program.

The secretary also said it is his personal opinion that “Big Oil” has been attacking the ethanol industry and the RFS because oil companies would like to buy ethanol production facilities “for 10 cents on the dollar.”

Oil companies would continue to need ethanol for octane content even if the RFS were repealed.

Vilsack also prompted Growth Energy members to urge Congress to pass the farm bill, and repeated recent statements that another extension of the 2008 farm bill is not a good alternative.

“The biggest risk” in not acting, he said, is that members of Congress might be tempted to take the $4.9 billion in annual budget authority for direct payments and use it for deficit reduction or some other purpose outside the farm bill rather than for revamping the farm program.

Vilsack comments on other issues:

Crop insurance “has come under unfair criticism. Those who report on it don’t understand it and its importance to the food supply.” He said it’s expensive to put a crop in the ground, and that a farmer could easily have half a million dollars at risk when “Mother Nature says you’re not going to have rain for the next 90 days.”
A farmer who gets a crop insurance doesn’t get paid for 100 percent of his loss, he noted.

The general public doesn’t approve of direct payments that crop farmers get whether prices are high or low, he said, but “I think we can make a strong case for crop insurance … and some program to supplement it.”

USDA is still “learning” how to use the Feedstock Flexibility Program to help manage the sugar supply. The reaction to a recent USDA offer to ethanol companies to buy sugar as a raw ingredient was “disappointing,” Vilsack said, but “the next effort will be more robust.”

The USDA focus on the sale of Smithfield Foods to a Chinese company has been on food safety and he has “no worries in that respect.” Not responding directly to a question about whether the Treasury-led Committee on Foreign Investment in the United States consulted him on the decision to approve the sale of the world’s largest pork producer, Vilsack said “statutorily there is a defined role, which we played.”
The situation “underscores we’re dealing with globalized agriculture,” he noted. Science-based food safety rules should be international so “it wouldn’t make any differences about who owns what,” he said.

The recent USDA decision to allow importation of poultry processed in China applies only to poultry raised in the United States and sent to China for processing “in specific facilities,” he said, adding that it will be “quite some time” before the United States consider allowing chicken raised in China to enter the United States and that this “wouldn’t occur until we don’t see a threat.”

Trade promotion programs will become more difficult to manage if Congress does not pass the farm bill by September 30 and USDA trade promotion programs lose their authority to operate, although he noted that USDA may have some funds left over that can be used.

Farm Service Agency local offices will be the logical place to manage the immigration issues for foreign farm workers because those offices throughout the country have “the confidence” of farmers.

As FSA offices are modernized, Vilsack said, they should become “one-stop shopping and information centers” where farmers can also find out about how to embrace renewable energy, how to form co-ops and how to find their place in local and regional food production.