Ag Policy Blog

DECATUR, Ill., (DTN) -- United States Secretary of Agriculture Tom Vilsack visited the Farm Progress Show on Wednesday, rolling out new renewable energy funding while defending his use of federal funds to help stimulate both farm income and the rural economy.

Vilsack is facing possible limits on his ability to use the $30 billion annual funds USDA receives for the Commodity Credit Corporation (CCC). The fund gives him the latitude to use CCC funds to help farmers market and sell commodities. The Secretary of Agriculture used the fund to spend $3.1 billion on 141 climate-smart grants from USDA over the past year. Now, the GOP House funding bill essentially restricts USDA's ability to use that fund except for emergencies.

"It's important for us to keep all of these tools available and flexible," Vilsack said about USDA programs.

In talking about the farm bill, he said it's important to note USDA "has a number of other tools" to help stimulate the rural economy.

Like others in the Biden administration, Vilsack keeps pointing to legislative impact over the past two-plus years, including the American Rescue Plan, the Bipartisan Infrastructure Law and the Inflation Reduction Act, all of which have boosted USDA spending in areas like renewable energy, broadband development and funding for supply chains such as processing.

Vilsack sees efforts in Congress, including the farm bill, to limit USDA's use of those funds and programs.

"I'm hopeful that there isn't any effort to restrict the ability and capacity of the department to use all of its tools, including the Commodity Credit Corporation, and we'll continue to work with members of Congress on both sides of the aisle to try to find creative ways to try to deal with the challenges of putting a farm bill together."

While the House Appropriations bill for USDA makes significant cuts and ends some programs from the American Rescue Plan and the Inflation Reduction Act, Vilsack said he hopes Congress will pass the Senate version, which doesn't make all those changes. Congress will return after Labor Day with a short window to either pass spending bills or pass a continuing resolution to keep the government operating.

"We're hopeful at the end of the day that the Senate Ag bill represents the model for our future budget, knowing full well that it's going to be a tight budget because of the debt-ceiling negotiations and legislation.

ADDING INCOME OPPORTUNITIES

Vilsack also rolled out $266 million in loans and grants under the Rural Energy for America Program (REAP) to fund 1,334 renewable energy and energy-efficiency projects in 47 states, Guam and Puerto Rico.

Speaking to the FPS crowd, Vilsack used a whiteboard to highlight his focus on broadening the revenue streams for farmers in different ways. He pointed out that while net farm income was at record levels over the past couple of years, just 11% of farmers accounted for that increase. He then criticized the "get big or get out" philosophy for farming.

"The critical question for all of us is if we are satisfied with all of that," he said. "I don't think we are, and I don't think we should be."

Vilsack added that the imbalance of farm income is "the biggest challenge today" in agriculture. Highlighting other farmer income options, Vilsack pointed to various initiatives at USDA. They include the 141 climate-smart agricultural projects, REAP funding and a separate funding pool of $9.7 billion for rural electric cooperatives to build out renewable energy projects. The agency is also working to stimulate more local and regional processing in areas like meat production and fertilizer.

The secretary also talked about tax credits for sustainable aviation fuel.

"Production agriculture is incredibly important, and we should continue to support it," Vilsack said. "But we have to make sure we also support the small- and mid-sized farmers as well… This is not just important for agriculture. This is also important for small communities. If you have fewer farmers, you have fewer farm families."

ON PROP 12

The secretary was asked about the impact of California's Proposition 12, which sets rules on pen sizes for swine related to pork sold in the state. Vilsack indicated some agreement with Republican lawmakers that a national standard on rules for food production may be needed. He noted the law reflects some of the broader divisions in the country.

"I think it is important to have a larger conversation which elevates it beyond pork and California to simply say, 'Are we OK with 50 different systems, in theory, on the following issues, on agriculture, on abortion, on guns on fill in the blank? Are we OK with that?'"

BIOFUELS AND EVS

Asked about the Biden administration's focus on electric vehicles (EVs), Vilsack took some umbrage with the question. He noted the Renewable Fuel Standard (RFS) program got to 15 billion gallons under the Biden administration.

"What administration finished the work on E15? What administration has made E15 year-round available?" Vilsack said. "What administration has put billions of dollars into the development of sustainable aviation fuel? What administration ended the rather liberal use of waivers to allow petroleum companies to basically skirt the responsibilities under the Renewable Fuel Standard, OK? The answer to every one of those questions is it's the Biden administration. So, it's not as if the Biden administration has forgotten about biofuels. It hasn't forgotten about ethanol… So, there are a lot of firsts here."

CARBON PIPELINES

With a plane buzzing the farm show site carrying a banner "No Dangerous CO2 Pipelines," Vilsack was asked about what role USDA should play on carbon pipelines.

The secretary noted "full disclosure" that his son works for a carbon pipeline, and as governor of Iowa, Vilsack vetoed a bill to further restrict eminent domain. He said people need to find more ways to get along and understand the balance and importance of certain industries, like ethanol production, for the economy.

"In addition to basically providing additional farm income and stabilizing corn prices and soybean prices, it also is a job creator and a job supporter," Vilsack said. He also pointed to the impact biofuels have had on lowering gas prices.

"So, consumers are saving money every single day. I believe it's an environmental benefit from an air quality standpoint. So, there are lots of benefits to this industry so it seems to be we should be figuring out ways in which we can help," he said.

Also see "State Ag Directors See Need to Use Farm Bill to Protect Pork Market in California," https://www.dtnpf.com/…

Chris Clayton can be reached at Chris.Clayton@dtn.com.

Follow him on X, formerly known as Twitter @ChrisClaytonDTN.

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