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SF Special: Chuck Grassley, A Senate Force For Farmers

Iowa’s Chuck Grassley fights for trade fairness and renewable energy.

Driving down the last hill before reaching his farm, Senator Chuck Grassley turns the ignition off to save fuel. The car has just enough momentum to glide into his garage, where you might see a tall plastic bag stuffed with the beer and soda cans he collects on three-mile runs near his rural New Hartford, Iowa, home.

A few years ago, I had a chance to visit Grassley at his modest 1,200-square-foot farm house. There he recycles paper, rain and waste water and flashlight batteries. He pointed out ceiling fans that allow him to leave the thermostat high in summer and low in winter when he and his wife, Barbara come home from Washington.

This spring, we visited again, this time by phone, for short Q&A written for the June, 2019 issue of Successful Farming magazine.

At age 85, Grassley tries to bring to government his own conservative, rural aversion to waste.  And he uses a farmer’s dogged, disciplined approach to everything from fighting wasteful USDA payments to nonfarmers to confronting President Donald Trump on tariffs that hurt corn and soybean growers.

As the longest serving current member of the Senate’s Republican majority, he holds the mostly honorary title of President Pro Tempore of the Senate. That gets him a security detail from the Capitol police. It would make him president of the United States, too, in the unlikely loss of the president, vice president and speaker of the House. (Grassley is not the oldest currently serving Senator. Diane Feinstein (D-CA) is almost three months older.)

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Grassley's Power

Grassley has real power to wield right now. He chairs the Senate Finance Committee. Besides raising nearly all federal revenue, the committee oversees trade. So Grassley is a key player in getting congressional approval of the United States-Mexico-Canada Agreement (USMCA), a victory President Trump covets as the 2020 election approaches.

Tariffs that Trump imposed against steel and aluminum from Mexico and Canada have been one obstacle to approval of the new North American free trade pact, or USMCA.  And retaliatory tariffs from those two countries have already cost U.S. farmers.

For months, Grassley has been urging Trump to drop the steel and aluminum tariffs.  He talked to Trump in the White House. He wrote an op-ed column in the Wall Street Journal. He went on Fox and Friends to praise Trump’s trade negotiating prowess and urge dropping the tariffs to bring USMCA closer to a victory. Finally, on May 17, the Trump administration announced the tariffs are ending.

Grassley Supports Trump's China Trade Move

With trade battles calming on the northern and southern fronts, the U.S.-China trade war grows hotter. Existing tariffs are rising and Grassley is caught between his long-standing opposition to tariffs and his equally strong distrust of China. He recently told the National Association of Farm Broadcasting that America’s Smoot-Hawley Act tariffs of 1930 led to the Great Depression, Adolph Hitler and World War II. But for decades Grassley has also been a critic of China’s currency manipulation to export its own products cheaply. He often praises Trump for being the only president to stand up to China’s theft of American intellectual property.

“There’s no doubt Americans will be harmed, including farmers, businesses and consumers in my home state of Iowa, if the additional tariffs take effect,” Grassley recently said. “Americans understand the need to hold China accountable, but they also need to know that the Administration understands the economic pain they would feel in a prolonged trade war.”

Trade isn’t the only area where Grassley is a key player. Energy is another.

Tax Credits

Grassley has succeeded in getting tax credits to foster wind energy and the production of ethanol and biodiesel. (Ethanol tax credits are no longer in effect.)

He may be the most important defender of ethanol against constant attacks by better-financed oil industry lobbyists.

“The ethanol industry as a whole recognizes that Chuck Grassley has been and continues to be the most important advocate we have,” Monte Shaw, executive director of the Iowa Renewable Fuels Association tells Agriculture.com.

Ethanol has many advocates, especially among senators from the Midwest, he says.

“It’s not a one-man show, but who’s the band leader? I think even the other senators would agree, the band leader is Chuck Grassley,” Shaw says.

Grassley has longevity on this issue, too, fighting the use of MTBE, a petroleum-derived octane booster that competed with ethanol, and working to pass legislation that set up the Renewable Fuel Standard, first in 2005 and again in 2007. The RFS uses trading of RINs (Renewable Identification Numbers) to meet the goal of blending up to 15 billion gallons of corn ethanol into gasoline.

The EPA during the Trump administration has taken steps to weaken RIN trading, dropping domestic ethanol use far below the RFS targets.

Last year, Trump considered one scheme that would have cut ethanol demand by at least another 1 billion gallons. It involved adding RIN trading to ethanol exports, the main driver of growth in ethanol sales. That proposal had the potential to lower domestic demand even more if exports grow and other countries would have viewed it as violating trade rules.

At the last minute, Grassley and Iowa’s other U.S. Senator, Republican Joni Ernst, called Trump and convinced him not to approve export RINs.

Still, Shaw considers 2018 the worst year during his 19 years of lobbying for ethanol because the EPA weakened the RFS by granting small refinery exemptions from RIN trading. His industry, and Grassley, are watching carefully to see how the EPA rolls out one expanded market for ethanol—year-round sales of E15, or 15% ethanol and 85% ethanol. That has the potential to grow domestic use of ethanol beyond today’s widely used 10% blends. But it won’t make up for the damage to the industry from the small refinery exemptions for RIN trading.

Some have criticized Grassley for not doing more to confront Trump for EPA’s damage to ethanol. Shaw thinks Grassley’s approach of working with Trump is more effective.

Grassley
David Ekstrom

Successful Farming shooting a Q&A with Grassley.

Farm Limit Payments

One area where Grassley has worked hard with less success is to limit farm program payments to modest-sized family farms.

Currently, a farming entity can’t receive more than $125,000 a year in payments for such programs as Price Loss Coverage and Agriculture Risk Coverage. Yet, a few large farms, mainly in the South but also in California, have received payments of well over $1 million.

(You can read a Government Accountability Office report on payment limits that it made to Grassley in 2018 here: https://www.gao.gov/assets/700/691864.pdf )

Large payments usually go farms with many family members. Those who don’t provide any labor can still claim to be “actively engaged” in farming if they provide management.

According to Ferd Hoefner of the National Sustainable Agriculture Coalition, such management may amount to participating in conference telephone calls a few times a year.

Each time Congress writes a farm bill, Grassley offers an amendment to limit payments to immediate family members who are actively running the farm.

“It must be at least five farm bills now,” Hoefner says of Grassley’s efforts. His amendment passed on the floor of the Senate by a large margin in 2014, when the House approved the same measure. But when differences between the Senate and House farm bills were ironed out in a conference committee, the top four leaders of those committees “went into a room and took it out,” Hoefner recalls.

Hoefner’s group supported Grassley’s amendment but “the force you’re up against is a very small number of powerful economic and political players,” he says.

Some of those players are large farms in the South that predate the Civil War, he said.  

When asked why he thinks Grassley is among few in either party to try to close this loophole, Hoefner says, “I think there’s a small government part of it. There’s a strong good government part of it. And I think he also believes we should have a country of family farms.”

Grassley, meanwhile, pledges to keep fighting for this cause, too, as long as he can.

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