Congress may have to provide special incentives for growers of cellulosic-based ethanol feedstocks to help keep peace in the farm community, the ranking member of the Senate Committee on Agriculture, Nutrition and Forestry said.
Sen. Saxby Chambliss, R-Ga., said committee members are happy the current farm bill has saved taxpayers $17 billion, primarily because of the higher commodity prices associated with the skyrocketing demand for ethanol. But they’re also concerned about the downside.
“It’s great to have $4 corn,” Chambliss told reporters attending a press briefing after he gave the keynote address at the 72nd Delta Council annual meeting in Cleveland, Miss. “I’m happy for all our corn growers.
“But y’all grow a lot of chickens here in Mississippi, and we grow an awful lot of chickens in Georgia. Many of our cattlemen and other livestock folks are as unhappy as our chicken growers about the largest input cost they have, which is the high cost of feed.”
In his speech to the Delta Council, Chambliss said the budget outlook has become problematic for the House and Senate agriculture committees as they begin the arduous task of writing the new farm bill.
“I was very proud of being one of the authors of the 2002 farm bill,” said Chambliss, who was a member of the House Agriculture Committee when Congress passed the current law. He ran against incumbent Georgia Sen. Max Cleland and won in 2004.
“I sat across from Sen. Thad Cochran, and we negotiated a bill that I thought was not just good for southern agriculture, as some folks say, but one that was market-oriented and treated the commodity title, the nutrition title and the conservation, research and credit titles in a fair way.”
When Congress passed and President Bush signed the bill in May 2002, he said, it was highly criticized by a number of fiscal hawks, including conservatives and liberals, for being “irresponsible” and spending too much tax money on corporate farm subsidies, Chambliss noted.
“Today, five years later, that farm bill has cost taxpayers $17 billion less than what all those critics said it was going to cost. You haven’t seen that in the Wall Street Journal, you haven’t seen that in print anywhere.”
The reason for the savings, he said, is that “we told the American farmer from the Delta Council to northwest Minnesota and from Georgia to California that if you’re going to survive in agriculture, you have to be more efficient and you have to watch your bottom line a little bit better.
“Between the policies of the 2002 farm bill and the efficiencies you have achieved on your individual operations, we have saved $17 billion over the first five years of that farm bill.”
When it comes to investing more in agriculture, Congress is looking at a far different budget scenario than it was in 2001 and 2002. In 2002, he said, Congress was working with a balanced budget. Today, it’s trying to deal with the largest deficit in history.
The energy title is one of the few areas of the 2007 farm bill where the House and Senate ag committees appear to agree more investment is warranted. Chambliss said no specific numbers have been decided on.
“What we are thinking about is to use incentives to encourage our farmers and ranchers all across America to grow alternative crops for the production of ethanol from a cellulosic base rather than a corn base,” he said.
“If we can move toward the production of ethanol from cellulosic-based products, such as switchgrass or wood chips, we will go a long ways toward balancing out the commodity title from a price standpoint as well as making sure alternative energy is out there.”
He said the agriculture committees are considering adding incentives to the conservation title to encourage the production of more cellulosic-based feedstocks for ethanol. Congress could also move some Conservation Reserve Program acres into the production of switchgrass or other biomass products.
“There are a lot of ideas that are being thrown around on the table, and I have no idea at this point where we will wind up,” he noted. “But that’s what our thinking is. We want to give some incentives out there for that additional stream of income from a cellulosic-based ethanol and biofuels standpoint.”
The Georgia senator indicated he might be reluctant to support more funding in the conservation title beyond those incentives for cellulosic ethanol production. Senate Agriculture Committee Chairman Tom Harkin has complained about the lack of conservation dollars in the House ag committee version of the title.
“I do know Sen. Harkin wants to see more money in the conservation title,” Chambliss said. “I would like to see more money in there, but the question is who’s going to pay for it? I just don’t see any excess money in the commodity title, which is usually where the money would come from.”