| September 4, 2008 Senator Tom Harkin's Agriculture Newsletter Dear Friend, Gas and diesel prices may be coming down slowly, but that does not signify that our country is any less dependent on foreign oil. In fact, these continuing high costs are related to questions that have been raised about the increasing renewable fuels use and high food costs – are these factors related? This month, as I toured Iowa, I talked to farmers and consumers about these issues. On August 18th, I also conducted a field hearing of the Senate Agriculture Committee in Omaha, Nebraska with committee member Ben Nelson (D-NE) to explore questions about the food, feed and fuel. Please keep reading to learn more. Yours, Tom In This Edition: - Iowa Journal: Agriculture and Rural Communities Producing to Meet America's Energy Needs
- Harkin: Texas RFS Waiver Denial Shows We Will Pursue Further Advancement of Domestic, Renewable Biofuels
- Conservation Works During Disaster, Says Harkin
- Harkin, Grassley Lead Effort to Maintain Farm Program Payments for Smaller Farm Base Acreages
- ACRE Alert: Harkin Urges USDA to Implement New Revenue Protection Program as Written in New Farm Bill
- USDA Reports Expected Rise in Farm Income; Harkin Notes Large Rise in Production Costs
- USDA Prohibition on "Downer" Cattle Adds New Food Safeguard, Says Harkin
Iowa Journal: Agriculture and Rural Communities Producing to Meet America's Energy Needs Senator Harkin traveled Iowa extensively throughout the month of August to discuss how the new farm bill, The Food, Conservation and Energy Act of 2008, will work for Iowa and to see how Iowa agriculture and local communities are meeting our nation's food, energy and environmental quality needs. A few of the events he attended are chronicled below, but for a full account of his trip check out Tom's daily travel log. Monday, August 18, 2008 –Field Hearing in Omaha
Food, Feed, and Fuel Production: Today and Tomorrow Senator Harkin traveled to Omaha, Nebraska on Monday, August 18th to conduct a field hearing of the Senate Committee on Agriculture, Nutrition and Forestry with Senator Ben Nelson (D-NE), a member of the Committee. The hearing, Food, Feed, and Fuel Production: Today and Tomorrow, gave the Committee an opportunity to explore recent economic shifts - including rising energy prices, rising commodity prices and related changes in acres planted, and the increasing production of biofuels, which have led some to question over renewable fuel incentives and standards. Witnesses included: Dr. Bruce Babcock, Professor of Economics and Director at the Center for Agricultural and Rural Development at Iowa State University; Dave Moody, President of the Iowa Pork Producers Association; Jim Jenkins, Chairman of the Nebraska Ethanol Board; Bill Lapp, Principal of Advanced Economic Solutions; Tim Recker, President of the Iowa Corn Growers Association; Dean Oestreich, Chairman, Pioneer Hi-Bred, and Vice-President, DuPont Agriculture and Nutrition; Dr. Thomas Foust, Biofuels Technology Manger of the National Renewable Energy Laboratory; Dr. Bruce Dale, Associate Director: Office of Biobased Technologies and Distinguished University Professor at Michigan State University's Department of Chemical Engineering & Materials Science; and Jeff Lautt, Executive Vice President of Corporate Relations at POET. Witnesses offered a wide range of views from the many sectors involved in food and fuel production. The lawmakers learned that rising energy costs are an underlying driver for higher commodity prices, both directly through increasing demand for biofuels, and indirectly due to increasing crop production costs. But it is clear that in our present energy situation, our country faces both huge challenges and potentially huge opportunities for domestically produced renewable energy to reduce our heavy dependence on fossil fuels while providing a shot in the arm to rural economic growth and farm income. 
Senators Harkin and Nelson chair a hearing at the University of Nebraska-Omaha Strauss Performing Arts Center Wednesday, August 13, 2008
Iowa State Fair Each year, as Senator Harkin travels through Iowa, he always looks forward to visiting the Iowa State Fair. This year's clear skies and warm temperatures made the day even more enjoyable. During his annual visit to the pork producers tent, Senator Harkin talked with Rich Degner, the Executive Director of the Iowa Pork Producers Association and a few local producers before making his way over to the grill. There, he and Gregg Hora flipped some pork chops and pork burgers. Gregg is a pork producer near Webster City. After his turn at the grill, Senator Harkin and Iowa Secretary of State Mike Mauro served water and tea to the tables of fairgoers enjoying their lunch. Next up was a stop at the WHO studio to talk with Ken Root about a host of recent agriculture news including USDA's implementation of the new farm bill, the announcement about emergency haying and grazing of Conservation Reserve land in Iowa and the recent decision that denied the State of Texas's request for a Renewable Fuels Standard (RFS) waiver. As Chairman of the Senate Agriculture Committee, Senator Harkin is using his oversight responsibilities to ensure USDA is implementing the farm bill as Congress intended. Earlier this month, he and Senator Grassley led 23 senators in a letter to Secretary Schafer asking USDA to continue farm program payments to smaller farms as written into the farm bill. This letter came on the heels of complaints about USDA's interpretation of a provision that would eliminate direct, counter cyclical, or ACRE payments, to farms having 10 acres or less of base programs. During the WHO interview, Senator Harkin told Ken how pleased he was with the decision to open up Conservation Reserve Program lands for haying and grazing in Iowa counties impacted by disaster. This move will help livestock producers by providing them with access to more forage. They also talked about renewable energy and the recent decision to deny a waiver of the RFS. The new farm bill aims to add new feedstocks and capacity for ethanol production by increasing incentives for research, development and production of ethanol from cellulosic biomass. Senator Harkin is also working in Congress to remove a tax barrier that has prevented liquid biofuels like ethanol from being transported across the country by pipeline. Senator Harkin ended his fair day at the cattle barn seeing this year's "Big Bull" and meeting with Bruce Berven, the Executive Director of the Iowa Cattlemen's Association. The 3,000 pound bull was housed right next to the building where the Cattlemen have their booth set up. He and Bruce had a chance to talk about the recently passed farm bill that Harkin ushered through the Senate. 
At the grills in front of the Pork Producer's tent, Sen. Harkin, Iowa Sec. of State Mike Mauro and Gregg Hora from Webster City flip Iowa chops. Friday, August 8, 2008
Pocahontas – MidAmerican Wind Farm As Senator Harkin traveled through Northwest Iowa, he had the opportunity to tour the MidAmerican Wind Farm in Pocahontas. Their wind energy program helps place wind turbines on individual farms across Iowa. Currently they have 136 wind turbines installed and have plans to install an additional 35 before winter. He met Brian Wells and his family, who will have four wind turbines installed on their farm as part of this project. Matt Bartlett of the MidAmerican Pomeroy Wind Farm project provided a detailed briefing on how these wind farms are helping move Iowa forward. Senator Harkin was happy to meet the team of maintenance professionals from Enxco who joined them at the briefing. Pocahontas County is fortunate to have a team of County Supervisors who had the vision to encourage the development of these wind farms with MidAmerican Energy. Jack Dewolf, Paul Beneke and Ralph Christiansen all were there to show their support for a project that is great for the region's economy. Iowa has made great strides increasing the amount of wind power that is created across the state, from 2,000 megawatts in 1997 to over 16,000 megawatts today, and the output is still continuing to grow. Senator Harkin believes that we should increase our wind production by 20 to 30 times in Iowa and he knows that Iowa will be able to meet this goal. He also welcomes other states' efforts to follow Iowa's lead in expanding the contribution of clean windpower to our nation's energy economy. Wednesday, August 6, 2008
Ashton – POET Biorefining In June of this year, POET Biorefining received the Energy Star Award from the Environmental Protection Agency (EPA) for emission reductions resulting from their use of a combined heat and power system. This plant generates electricity on-site with a natural gas turbine and uses the residual heat to provide the thermal energy needed to operate the biorefinery. The Energy Star award recognizes projects that reduce emissions and use at least five percent less fuel. The EPA estimates that the carbon dioxide emissions savings from this system is equivalent to removing the annual emissions from 3,100 cars or planting 3,900 acres of forest. Senator Harkin was very excited to learn about all the great things this locally owned company was doing and how they were helping to clean up the environment and lessen their impact. As the Chairman of the Senate Agriculture Committee, he worked for many months to pass a new farm bill – The Food, Conservation and Energy Act of 2008 – which invests over $1 billion to promote renewable and alternative energy around the country, including support for developing advanced bio-refineries such as those being advanced by POET.
Harkin: Texas RFS Waiver Denial Shows We Will Pursue Further Advancement of Domestic, Renewable Biofuels On Thursday, August 7th, the Environmental Protection Agency (EPA) denied a request made by the State of Texas to cut the Renewable Fuel Standard (RFS) in half. Texas claimed that the increase in corn-based ethanol production was causing economic harm to the state's livestock industry and raising food prices. The RFS requires nine billion gallons of biofuels be used this year, with the target set to reach 11 billion gallons in 2009 and 36 billion gallons by 2022. Senator Harkin hailed the EPA decision. "Renewable biofuels are one of the most important tools we have to reduce our dependence on foreign oil. EPA's decision to deny this waiver indicates that we are going to stay the course in pursuing a national strategy of increasing production and use of domestic, renewable biofuels," said Harkin. "It also sends a strong signal to encourage investment in renewable sources of energy. I commend EPA for denying this waiver and indicating that our country will continue to maintain a strong commitment to renewable energy. American agriculture, associated industries and rural communities in Iowa and around the country stand ready to meet the challenges to produce the biofuels, food, feed and fiber that are needed."
Conservation Works During Disaster, Says Harkin Flying over Iowa in a small plane to assess the flood damage of recent months, Senator Harkin could see and photograph the dramatic benefits of sound agricultural conservation practices. Buffer strips, grassed waterways, no-till or minimum-till farming, and wetlands helped to keep topsoil in place, filter sediment and hold back water. By contrast, many bare black fields with little or no conservation measures in place had obvious erosion of topsoil from the rains and flooding, with water pouring off fields and taking our precious Iowa topsoil with it. Iowa's experience over the past couple of months is a strong endorsement for the future conservation investments in the new farm bill – The Food, Conservation, and Energy Act of 2008. As former Des Moines Register cartoonist Ding Darling, a renowned conservationist, would say: "Hold the raindrop where it falls." Senator Harkin believes that we must do more in every state to accomplish that, so he is working to increase farmer access to incentives and assistance that will help them achieve and maintain high standards of conservation. Incentive payments and cost-share help through programs such as the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP), both of which received added funding in the new farm bill, provide much-needed help toward reaching those higher goals and standards for agricultural conservation. Senator Harkin is also working to increase the resources available for two federal programs available to assist farmers in flood and disaster recovery– the Emergency Watershed Protection Program, and the Emergency Conservation Program. The Emergency Conservation Program is administered by the Farm Service Agency (FSA). The program provides emergency funding and technical assistance for farmers and ranchers to rehabilitate farmland damaged by natural disasters. For land to be eligible, the flooding must create new conservation problems that, if untreated, would impair or endanger the land, materially affect the land's productive capacity, represent unusual damage which is not the type likely to recur frequently in the same area, and be so costly to repair that federal assistance is necessary to return the land to productive agricultural use. Participants may receive cost-share assistance of up to 75 percent of the cost to implement approved practices. While ECP is administered by FSA, technical assistance may be provided by the Natural Resources Conservation Service (NRCS). The Emergency Watershed Protection Program (EWP) is administered by the NRCS. This program generally helps groups of people with a common imminent hazard to life and property caused by floods and other natural occurrences; it is typically not an individual assistance program. All projects must be sponsored by a political subdivision of the State (city, county, conservation district). NRCS may pay up to 75 percent of the construction cost of emergency measures or up to 90 percent in limited resource areas. Typical work done under this program includes: removing debris from stream channels, road culverts, and bridges; reshaping and protecting eroded banks; correcting damaged drainage facilities; repairing levees and structures; reseeding damaged areas; and purchasing floodplain easements. A case by case investigation of the needed work is made by NRCS. Working in his capacity as a senior member of the Senate Appropriations Committee, Senator Harkin was able to obtain $479 million for emergency conservation efforts in the supplemental spending bill that passed Congress on June 26. Of that, $89 million will go toward the Emergency Conservation Program, which provides emergency assistance to producers to respond to conservation damage such as debris or damage to conservation structures. In the remaining days of this Congress, Harkin is working to secure additional needed funds for emergency conservation assistance. "This year's disaster proves that conservation applied today will help farmers maintain the productivity of their land and reduce the harmful effects of future disastrous weather tomorrow and long into the future," said Harkin. "Ensuring farmers have the resources to participate in these programs will help us achieve this goal." 
In this photo, captured by Harkin staff, terraces and grassed waterways effectively helped to hold topsoil in place during heavy rainfall in Pottawattamie County
Harkin, Grassley Lead Effort to Maintain Farm Program Payments for Smaller Farm Base Acreages After complaints surfaced about the U.S. Department of Agriculture's interpretation of a farm bill provision that would eliminate direct, counter cyclical, or ACRE payments, if the farm has base acres of 10 acres or less, Senators Tom Harkin and Chuck Grassley led 23 of their Senate colleagues in an effort to ensure the provision is implemented as written in The Food, Conservation and Energy Act. On Tuesday, August 12, the lawmakers sent a letter to Agriculture Secretary Ed Schafer urging USDA to maintain these payments for smaller farms. The manager's report of the farm bill specifically included language to ensure that small farm acreages could be combined with those of other farms to allow for farm program payments if the sum of the acres is over 10. "Congress acted and streamlined USDA's process in administering payments to small farms. Now USDA is disallowing consolidation that simplifies its administrative task and instead is focused on a punitive policy approach," said Harkin. "It does not make sense from a policy or practical perspective." The letter was co-signed by Senators Mike Crapo and Larry Craig of Idaho, Blanche Lincoln of Arkansas, Thad Cochran of Mississippi, Patrick Leahy of Vermont, Saxby Chambliss and Johnny Isakson of Georgia, Sherrod Brown and George Voinovich of Ohio, John Thune of South Dakota, Bob Casey and Arlen Specter of Pennsylvania, Ben Nelson of Nebraska, Max Baucus of Montana, Russ Feingold and Herb Kohl of Wisconsin, Norm Coleman of Minnesota, Kent Conrad of North Dakota, Pat Roberts of Kansas, Bob Corker of Tennessee, Debbie Stabenow of Michigan, Susan Collins of Maine, and Hillary Clinton of New York.
ACRE Alert: Harkin Urges USDA to Implement New Revenue Protection Program as Written in New Farm Bill Farm bill writers were proud to include the Average Crop Revenue Election program (ACRE) in The Food, Conservation and Energy Act of 2008. This program is designed to provide a new revenue protection program option for producers, beginning in the 2009 crop year. Yet in recent public comments, Agriculture Secretary Schafer has hinted that computer problems at USDA offices may prevent its implementation. "USDA's antiquated computer system is not a problem that developed overnight," said Harkin. "The agency has been aware of this for some time, but had not requested sufficient funding through the annual appropriations process even though a new farm bill was being crafted on Capitol Hill. Still, this problem should not interfere with ACRE being available in the 2009 crop year, so we urge USDA to seek emergency appropriations for computers if necessary." Further, the Department is apparently considering that it does not have to implement the program as written. Secretary Schafer has alluded that the department may use the 2006 and 2007 crop year prices to set ACRE's benchmark, which runs contrary to the farm bill. When the nonpartisan Congressional Budget Office (CBO) scored the bill, the agency did not use 2006 and 2007 prices to calculate the initial ACRE guaranteed price. CBO used baseline prices for 2007 and 2008 because the two most recent crop years means the average of 2007 and 2008 prices to calculate the guarantee price for 2009. In using the 2006 and 2007 crop years, USDA would be essentially setting a lower benchmark. "One of the key distinctions of the ACRE program is that it uses recent commodity prices to calculate the program benefits," said Harkin. "This distinction was critical for ACRE supporters to ensure that program benefits would be relevant to the producers who use the program. It was very important to ACRE proponents to have a strong correlation with real revenue experience. The closer the price data is to the current year the better. For that reason, USDA should use 2007 and 2008 prices to implement this program."
USDA Reports Expected Rise in Farm Income; Harkin Notes Large Rise in Production Costs On August 28th, the Economic Research Service of the U.S. Department of Agriculture released a new report showing that net farm income is forecast to be $95.7 billion in 2008, 10 percent above the $86.8 billion farmers earned in 2007 and 57 percent above its 10-year average of $61.1 billion. In Iowa, net farm income rose from $2.95 million in 2006 to $5.28 million in 2007. Total production costs are also expected to rise by more than $40 billion to a record $295 billion, the increase occurring chiefly due to higher energy-related costs such as fertilizer and fuels and oils and higher feed costs for livestock producers. The value of crop production ($188.8 billion) is forecast to exceed the 2007 record by $38 billion, a 25-percent increase. Prices of major crops (corn, soybeans, wheat) have been rising for the past few years, and have sustained that momentum in 2008. "Better farm income, shown by these USDA figures, is of course a positive trend for farmers and rural economies–and an improvement over fairly recent years of much lower returns," said Harkin. "We should all be aware, though, that the combination of higher production costs, stronger commodity prices and volatile markets has significantly heightened the overall level of risk for agricultural producers and for the farm and rural economy." For a full copy of the ERS report
USDA Prohibition on "Downer" Cattle Adds New Food Safeguard, Says Harkin On August 27th, the U.S. Department of Agriculture announced a proposed rule, which will amend the federal meat inspection regulations to initiate a complete ban on the slaughter of cattle that become non-ambulatory (that is, cannot move on their own power) at any point before slaughter. The present rule gives inspectors the discretion to allow cattle to be slaughtered if they become non-ambulatory at some point after entering the plant and being checked at the first live-animal inspection point. This existing discretion to allow slaughter of "downer" cattle has amounted to a loophole when coupled with shortcomings in USDA enforcement and evasion of the rules by some processors. Since these "downer" cattle have a significantly higher risk of being diseased, and thus not fit for human consumption, Senator Harkin has argued their slaughter should not be allowed regardless of the point in the process at which they become non-ambulatory. He called the USDA rule an important step toward increasing food safety. "We know from the Hallmark/Westland case earlier this year involving slaughter of downer cattle that a federal loophole can be exploited, leading to the slaughter of sick cattle and unnecessarily risking food safety and consumer confidence in our food supply," said Harkin. "USDA's rule will prohibit all downer cattle - regardless of when the animals became nonambulatory - from being slaughtered for human consumption. This is a step in the right direction." Comments on this proposed rule must be received on or before September 29th, 2008. Comments can be sent to Docket Clerk, U.S. Department of Agriculture, Food Safety and Inspection Service, Room 2534 South Agriculture Building, 1400 Independence Avenue, SW., Washington, D.C. 20250; e-mailed to fsis.regulationscomments@fsis.usda.gov or submitted through the Federal Rulemaking Portal at www.regulations.gov. All submissions received by mail or electronic mail must reference the Food Safety and Inspection Service and include the docket number FSIS-2008-0022.
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