Vilsack fears farm aid will be ‘embroiled’ in tax, sequester fight

Agriculture Secretary Tom VilsackThomas J. VilsackUSDA: Farm-to-school programs help schools serve healthier meals OVERNIGHT MONEY: House poised to pass debt-ceiling bill MORE is warning that political hurdles to passing the stalled farm bill will only grow if lawmakers don’t act before the end of September.

“The risks become much greater after September 30 that the whole discussion gets embroiled in conversations of sequester and tax policy, which makes a process which ought to be simple far more complex,” Vilsack said in an interview airing this weekend on C-SPAN's "Newsmakers" program.

His comments are part of a wider Obama administration push to put political heat on Congress to pass the farm bill amid extreme drought gripping the heartland.

President Obama, in his weekly address, listed steps the administration is using under its existing powers to provide relief to the agriculture industry. But he said legislation is needed too.

“They need to pass a farm bill that not only helps farmers and ranchers respond to these kinds of disasters, but also makes necessary reforms and gives them some certainty year-round,” Obama said.

The administration is touting an array of steps such as opening up more federal lands for grazing; another $30 million for uses including getting water to livestock and land rehabilitation; lowering interest rates on emergency loans for farmers, and other actions.

Vilsack acknowledged, however, that the number of federal tools is “limited” absent legislation.

The Senate has passed a five-year farm bill, but a reauthorization has faced several hurdles in the House. The full House has not taken up a five-year farm bill, and GOP leaders recently abandoned an effort to pass a one-year extension of the existing farm bill.

The House instead approved a $383 million drought aid bill in early August before the summer recess, but the Senate did not take up the measure.

Livestock disaster provisions from the 2008 farm bill expired last year, leaving ranchers vulnerable during this year's record drought.

In other comments on C-SPAN, Vilsack remained cool to calls for federal officials to waive national ethanol mandate requirements amid drought that’s battering the corn crop and raising corn prices.

The Environmental Protection Agency is facing increasing calls to lower the federal Renewable Fuel Standard (RFS), which requires 13.2 billion gallons of ethanol to be blended into the nation’s motor fuel supply this year, rising to 13.8 billion next year.

But Vilsack said the ethanol industry – which uses a substantial amount of the U.S. corn crop – is a job-creator that brings a number of benefits, warning against a “rush to judgement” that could “negatively impact the biofuels industry in the long-term.”

He said that the market is already responding on its own, noting that livestock producers are reducing their use of corn, exports of the crop may be less than projected, and that some ethanol producers are suspending or limiting production.

Visack said the RFS has “built-in” flexibility, even absent a waiver of the requirements, noting refiners’ have the ability to use so-called Renewable Identification Number credits to meet their compliance obligations.

“There is flexibility built into the system, the market is already responding, and there are significant benefits that have to be considered in making any adjustments or changes in the RFS,” said Vilsack, who noted his agency has input into EPA decisions on the matter.

The Agriculture Department estimated Friday that national corn production will be 10.8 billion bushels in 2012, a 13 percent drop from 2011 and the lowest output since 2006.

As drought harms the crop and raises prices, EPA is coming under pressure to waive the RFS requirements from a number of lawmakers, food and livestock industry groups, and even a top United Nations official.

“As American consumers continue to cope with a period of pro-longed economic turmoil, and U.S. food, beverage and consumer products makers from farm to fork struggle with record high commodity prices, we believe it is EPA’s duty to grant a waiver for the applicable volume of corn ethanol required by the RFS,” states a letter to EPA Friday from over two-dozen food industry groups.

Groups signing the letter include the American Bakers Association, the American Beverage Association, the American Dairy Products Institute, the American Feed Industry Association, the American Frozen Food Institute, the Grocery Manufacturers Association, and the National Restaurant Association.