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Stabilizing ethanol industry high on new USDA boss' to-do list

Agriculture.com Staff 02/11/2009 @ 3:26pm

It's hard to think of a member of President Barack Obama's cabinet whose job is more political than the secretary of agriculture. The USDA is one of the nation's largest bureaucracies. Its agencies manage vast federal forests in the West, provide food assistance to the poor, and crop subsidies to large cotton and rice farms in the South.

On top of all this, the latest holder of the job -- former Iowa Governor Tom Vilsack -- is reviewing rules for payment limits while working with his boss, Obama, to get increased food aid and biofuels support included in the final economic stimulus bill that House and Senate negotiators approved today.

In an interview with Agriculture Online, Vilsack said the USDA is looking for a variety of ways to help keep the existing biofuels industry afloat as the recession grinds on. And he's looking for ways to encourage even more growth of farms that sell locally produced food directly to consumers. Vilsack is also on a cabinet-level task force looking at ways to deal with global warming and he's determined to see that farmers will be able to participate in selling carbon credits in any cap-and-trade law Congress might pass.

The Obama administration supports biofuels and wants to encourage the development of cellulosic ethanol as part of an expansion of alternative energy. But in the current economic climate, "it's extremely important to maintain the structure we have," Vilsack says.

He has the USDA looking at options to help the industry, what he calls "an effort on the part of USDA to recognize the stress the industry is under."

Would it involve additional credit?

"It could," Vilsack says. "We haven't made a final decision. We're looking at all options and that certainly would be one of them."

Last year, then Secretary of Agriculture Ed Schafer suggested that USDA might be able to use loan programs from its Rural Development agency to help shore up the struggling industry. Rural Development loans have been used in the past to help start some biodiesel and ethanol plants. But Schafer was criticized by livestock groups and other industries hurt by high commodity prices earlier in 2008.

Vilsack won't elaborate on what programs USDA would use, but his goal is to "have facilities that are on the edge continue to operate long enough to get back into a profitable situation."

It's hard to think of a member of President Barack Obama's cabinet whose job is more political than the secretary of agriculture. The USDA is one of the nation's largest bureaucracies. Its agencies manage vast federal forests in the West, provide food assistance to the poor, and crop subsidies to large cotton and rice farms in the South.

The USDA isn't the only federal department or agency with power of biofuels. The Environmental Protection Agency is considering decisions that could have a big influence on its survival.

On the low carbon fuel standard, Vilsack says "We will continue a dialogue on precisely what the congressional intent was when that was crafted."

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