GILFILLAN, Minn. - Expect direct payments to take a hit in the next farm bill, Sen. Al Franken told a Farmfest audience Aug. 3.
The Minnesota Democrat said the super committee of 12 Congresspeople could shape the new farm bill by their recommendations for trimming the federal budget. The supercommittee was authorized by the deal crafted to raise the debt ceiling.
Franken said all farm programs are under assault, from crop insurance and conservation to the safety net. He's especially concerned about research funding, particularly for renewable energy. Franken serves on the Senate energy committee.
Cellulosic ethanol is finally here, he said, with a corn stover plant under construction in Emmetsburg, Iowa. Ethanol is good for American energy independence.
But if it's so good for energy independence, why did lawmakers vote to cut ethanol subsidies?
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Franken said he was shocked at the ignorance of other senators who voted against ethanol, telling the ag-interested audience that ethanol supporters have a lot of educating to do in Congress.
There were several votes on ethanol, he said, but none of the anti-ethanol language became law.
Sen. Amy Klobuchar, D-Minn., is working with Sen. John Thune, R-S.D., to craft language to end the Volumetric Ethanol Excise Tax Credit and the tariff while extending for three years the tax credits for cellulosic ethanol and alternative fueling infrastructure.
The debate over ethanol will likely resume in September.
At the same time lawmakers were voting against ethanol, they refused to trim the $2 billion a year in tax credits that go to the nation's top five largest oil companies, he said. Over 10 years, trimming those subsidies would net about $21 billion for deficit reduction. His friends on the other side of the aisle called it a tax increase, Franken said.
Those oil companies have reaped about $1 trillion in profits over the last 10 years, he said. The tax subsidies amount to extra profits.
"They don't need it," Franken said.
The subsidies don't impact the price of gas and it doesn't make oil companies explore for more oil. Most of the oil being used now is legacy oil, which costs a little more than $10 a barrel to get to market, Franken said. When oil sells for $100 a barrel, oil companies' profits are $90 a barrel.
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Ethanol supporters have to work with those oil companies, though, to get blender pumps installed at convenience stores, many of which are owned by oil companies. It's been difficult to get blender pumps in, Franken said. As cellulosic ethanol comes online, he said blends will likely increase.
"There's tremendous promise in renewable energy in Minnesota," Franken said.
The senator said representing the people involved in agriculture is a large part of his job and he asked for input on free trade agreements pending with South Korea, Columbia and Panama.
He said he's undecided on the agreements, but he wants producers to be able to get their products to markets.
