T H E I L L I N O I S S TA T E Board of Education last week agreed to cut about $300 million from its budget, including the entire ag education line item. ........3
THE AMERICAN COALITION for Ethanol is challenging a tentative Environmental Protection Agency delay in approval for the 15 percent ethanol blends. ..................4
JIM DEAL, a retired McLean County far mer from Danvers, recreates old-time farm machinery and wagons, barns, and corn cribs from wood. ....................................12
Monday, June 28, 2010
Two sections Volume 38, No. 26
Ag budget integrity crucial
Nelson: Ag groups seeking varied policy goals BY MARTIN ROSS FarmWeek
A House Ag Committee panel last Thursday puzzled over “how we can write a farm bill for less money that’s focused on programs that will
benefit producers,” Illinois Farm Bureau President Philip Nelson reported. According to Nelson, who testified before the Subcommittee on General Farm Commodities and Risk Manage-
Illinois Farm Bureau President Philip Nelson represented Farm Bureau last week at a U.S. House Ag subcommittee hearing on the farm bill. Committee Chairman Collin Peterson (D-Minn.) said the next farm bill may include reduced payments in order to meet deficit targets, but Nelson held the basic structure of the 2008 bill should be maintained even if overall funding is cut. (Photo courtesy American Farm Bureau Federation)
ment, ag interests presented a broad diversity of potential pieces for lawmakers to assemble into a 2012 farm bill. At the Capitol Hill hearing, Nelson promoted the American Farm Bureau Federation’s five “farm bill principles” — fiscally responsible” policy options; adherence to the 2008 farm bill’s basic funding structure; farm bill benefits for all ag sectors; consideration of global trade rules in developing new policy; and respect for “the stable business environment that is critical to success in agriculture.” “Ultimately, subcommittee members expressed a lot of concerns as to how current risk management products are working from the perspective of a farmer,” Nelson told FarmWeek. “That dealt with everything from direct payments to the ACRE (average crop revenue election) program to the SURE (supplemental revenue) disaster program. “Opinions were all over the board: There were philosophi-
cal differences between the (House) panel members, Farm Bureau, Farmers Union, barley producers, corn and soybean producers. It’s going to be a challenge to get all this into one package.” For example, Nelson urged simplification of ACRE in the next farm bill: “It’s very complicated; it’s very onerous to get through the paperwork.” But while IFB favors moving toward a county rather than the current state ACRE yield trigger, he noted many Mississippi producers with no major crop production history must use default “plug yields” that fall below actual county yields. The American Soybean Association’s Rob Joslin sug gested ACRE “may be a better choice for producers in the largest soybeangrowing states than the traditional far m program.” Joslin argued revenue guarantees provided under ACRE “can be strengthened and modified to make it more attractive in regions of the country where par-
ticipation is low.” At the same time, Nelson noted concerns voiced before the subcommittee that poten-
FarmWeekNow.com See video of President Nelson’s testimony on the 2012 farm bill at FarmWeekNow.com.
tially higher payouts resulting from use of county triggers could raise World Trade Organization (WTO) domestic subsidy compliance issues. Nelson and others were emphatic about the pitfalls of borrowing from one ag program to fund another. USDA’s Risk Management Agency (RMA) already plans to transfer crop insurance funding to conservation or other USDA-administered programs under its new standard reinsurance agreement (SRA). Nelson noted federal budget baselines for many programs have decreased since passage of the last farm bill, while more See Nelson, page 4
Periodicals: Time Valued
Tax credit delay threatens ‘new’ biodiesel It’s touted as the answer to a variety of economic and environmental challenges, offering farmers a winter cover crop with high oil content, and a new crop that doesn’t compete for corn or soybean acres. But pennycress’ potential as a biodiesel feedstock rides largely on extension of the federal biodiesel blenders tax credit. Senate Majority Leader Harry Reid (D-Nev.) Thursday fell three votes short of approval for a measure that would have expedited a vote on the credit and other tax extenders. National Biodiesel Board officials thus met with Senate Ag Chairman Blanche Lincoln (D-Ark.) in hopes of finding a way to renew the $1-per-gallon
blender’s credit, which expired Dec. 31. Lincoln supports a measure that would extend the incentive for five years, possibly as an element of forthcoming energy legislation. Credit expiration has hurt both existing biodiesel plants and prospective new producers such as Peoria-based Biofuels Manufacturers of Illinois (BMI). BMI’s planned 45-million-gallon-per-year biodiesel production facility has been sited and permitted, but BMI’s Peter Johnsen reported plant financing as well as long-term pennycress production plans effectively are in limbo until Congress acts. Johnsen told FarmWeek biodiesel credit extension poses “larger implications for next
FarmWeek on the web: FarmWeekNow.com
generation/advanced generation fuels” needed to fulfill long-range biofuels requirements under the federal renewable fuels standard (RFS2). “We need this if we’re going to try to develop a policy to move to renewables, with a 2010 (RFS2) requirement of 1.12 billion gallons of biodiesel,” he said. “It’s just not congruent if (Congress) won’t build a tax policy around an energy policy. It’s not going to happen. “Capital investment and the current price of petroleum diesel are such that these projects just don’t get off the ground. This is just as much a lender issue for us as it is a practical operational aspect —
they (lenders) really want to see where the (profit) margins are going to come from.” According to BMI, pennycress could generate 115 gallons of biodiesel per acre plus “bio-oils” that could be used for heating, power, or motor fuels. BMI is continuing a regional pennycress production program while selling oil to a few fuel/industrial manufacturers. However, amid a “soft to non-existent” biodiesel sector, “we only plant as many acres as we can sell,” Johnsen said. “We have growers who really want to expand, and we’re telling them, ‘We’re not sure we can commit to that, because where are we going to put it?’,” he related. — Martin Ross
Illinois Farm Bureau®on the web: www.ilfb.org