Ag Policy Blog
Chris Clayton DTN Ag Policy Editor

Tuesday 01/21/14

Grassley Discusses RFS and Actively Engaged Provision

Some Tuesdays I don't know what I would do without Sen. Charles Grassley.

The Iowa Republican said Tuesday in a call with reporters that supporters of the RFS are still trying to marshal opposition to the EPA proposed reduction to the Renewable Fuels Standard. He cited Iowa Gov. Terry Branstad and the push to hold a daylong hearing Thursday in Des Moines despite no representation from the EPA.

"The Obama administration should have convened this hearing in Iowa as the congressional delegation and I think the governor as well asked them to do," he said. "But the Obama administration declined to do it, leaving it to Iowans to take matters into their own hands."

Grassley and Senate Majority Whip Dick Durbin, D-Ill., also are leading a bi-partisan Senate letter to EPA this week opposing the RFS change. Grassley said he expects a large number of senators from both parties to join the letter.

Grassley also said he doesn't think President Barack Obama will support the EPA's move. He cited the president's efforts to eliminate tax breaks for oil companies and other efforts critical of fossil fuels.

"I would think he would not want to give Big Oil a big victory, but that's what he's going to do," Grassley said.

Shoveling Off a Problem Provision

Discussing the farm bill, Grassley said the principal negotiators may take his language defining an actively engaged farmer out of the farm bill and leave it up to USDA to determine who is actively engaged. This Congress is filled with lawmakers who have criticized administrative rulemaking usurping congressional authority. Yet, farm-bill conferees now seem intent on turning over rulemaking to USDA to redefine who is actively engaged as a farmer.

"The people who want to shovel this off to the administration for rulemaking, they don't want anything," Grassley said. "They want to take it out. If they could get away with taking it out, they would just take it out ... They think they can accomplish the same thing by giving to the department and the department might not do anything very significant."

Grassley's actively engaged rule only allows one person designated as the farm manager. He noted the Government Accountability Office has cited instances of 16 people classified as "managers" for a single farm entity.

Grassley reiterated there was no need to change anything in the payment-limit provisions because they were the same in both the House and Senate bills.

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Posted at 4:09PM CST 01/21/14 by Chris Clayton
Comments (16)
RFS is great if you like more people dependent on food stamps due to higher food costs and higher propane heating costs. See http://www.csmonitor.com/Environment/Energy-Voices/2014/0121/Propane-shortage-Winter-storm-prompts-energy-emergency-in-Midwest and see http://www.nationalchickencouncil.org/how-the-ethanol-program-is-driving-up-food-prices/ RFS has been rewarding the con men as well. See http://www.governorsbiofuelscoalition.org/?p=7165
Posted by W Kuster at 6:35PM CST 01/21/14
Wes; You missed the point.The worlds biggest monopoly has your brain addled The RFS is your only hope to stop the oil monopoly from taking more food off of the of the consumers table by having to pay exorbitant prices at the pump just to get to work. Resent trip from NE.to Green Bay Wis. the best milage was a Cenex station in Windom Minn. I purchased E-30 and got 36.5 MPG.From Windom Minn. to Wausa Wis. You need some real experiance in stead of Chicken Council Lies. If the corporate chicken needs below cost of production prices to surive 'they will get no sympathy from american corn growers.
Posted by melvin meister at 8:47PM CST 01/21/14
And if corn stays below cost of production, the American Corn Growers will be whining to Uncle Sam, for price supports or some other government handout.
Posted by GWL 61 at 9:12PM CST 01/21/14
Which brings the table back to the importance of crop insurance, GWL. The way it works, is: if one does not pay the premium, one is out of luck! Supposed to eliminate the whining in order to keep the food supply flowing. I wonder if the Gov. of N.J. paid a premium to FEMA for the alledged $25 million, whined out of the Obamma Administration for his promotion attempt toward the White House.
Posted by Bonnie Dukowitz at 5:48AM CST 01/22/14
As far as the actively engaged rule, I've said it before and I'll say it again. A farmer is a farmer when 100% of income is from Ag. Otherwise it is a tax writeoff.
Posted by Raymond Simpkins at 7:08AM CST 01/22/14
Here is a novel idea, If corn is below the cost of production don't grow it.Do you think GM floods the market with cars then keeps on building more just for the hell of it. We don't need insurance we need to make the market hungry.
Posted by Raymond Simpkins at 7:19AM CST 01/22/14
Truth alert. 1) Ethanol has about 66% of the energy content per gallon of gasoline. No way mileage can be higher, must have not filled up all the way. 2) Crop insurance is heavily subsidized by the government, would producers buy it if the subsidies were taken away? 3) If the same logic corn growers are using would apply to GM, the government would force everyone to buy one of their cars. 4) When corn was above $7.00 the ethanol crowd insisted the RFS had nothing to do with high prices. Now that corn is lower they insist they will all go out of business if the RFS is not increased above last year's level to keep prices up. I happen to believe ethanol has a place in a free market but am tired of the BS coming from the mouths of the RFS crowd. Let them compete for business like every cattle, pork, poultry and sheep producer.
Posted by David Kessler at 8:45AM CST 01/22/14
Back in 1985 when "actively engaged" first appeared in law, USDA issued regulations defining it. As I remember it, Congress promptly overrode our definition, either by a provision in the appropriations bill or by a 1986 law "correcting" the 1985 act. Because FSA has to fear the appropriators, I suspect Sen. Grassley is correct.
Posted by William Harshaw at 10:10AM CST 01/22/14
Mr. Kessler, be a little more knowledgable about ethanol, yes it has 67% of the energy of gasoline, but that is not the whole story, ethanol has a blue flame (hotter and cleaner), gasoline has an orange flame, ethanol has an octane rating of 105 to 115 ( more power), gasoline 87 to 93, ethanol likes high compression engine situations, gasoline prefers low compression ( because of pinging risk), ethanol likes turbo charging Most cars are optimized for gasoline not ethanol. Mr. Kessler , go to your local drag strip and watch the gasoline cars and the ethanol cars, the ethanol cars are SO MUCH FASTER than the gasoline cars they are NOT allowed to race against each other, because it is considered an unfair advantage. Also, Saab had a car that got better mileage on E85 (85% ethanol) than it got on gasoline, so ethanol is NOT an inferior fuel, it is just not used to its full potential.
Posted by paul coco at 8:09AM CST 01/23/14
I am an economist not an engineer, so I won't argue power vs. efficiency except to say the desired fuel characteristics are much different on a drag strip vs. a passenger vehicle much as the difference between a passenger vehicle using gas or ethanol vs a high torque application like trucks, locomotives or tractors where diesel is more appropriate. As an economist however, I ask you though, if ethanol is so great, why do you need an ongoing government mandate to force people to use it? I feel that without the mandate refiners would continue to use ethanol as an octane booster because it is more cost effective than chemical alternatives, but in a free market the level of use would economically balance against the demand for feed from corn. I believe the RFS was appropriate for getting the industry going but at some point it is time for the industry to survive on it's own rather than relying on ever increasing mandates from government.
Posted by David Kessler at 9:11AM CST 01/23/14
Very well written, David. We were blending up 20% soy in Summer untill the supplier was forced to do the blending. It is now impracticle to purchase bio in smaller quantities therefore limiting us to 5% in summer and forcing 5% winter use in #2 diesel. Fuel filters are not cheap.
Posted by Bonnie Dukowitz at 5:24AM CST 01/24/14
19,000 miles on my electric Leaf, all electricity home made with solar, only maintenance in past 2 years has been to inflate the tires, keep your oil filters and CO2 producing engines guys, I prefer zero emissions and zero oil!
Posted by Jay Mcginnis at 7:40AM CST 01/24/14
The reason for the mandate is that the oil companies OWN the ENTIRE supply chain, if you want to sell to consumers you HAVE to go thru them, do you think they are willingly going to give ANY fuel access to THEIR supply chain (gas stations, supply tankers, etc.) without a MANDATE???
Posted by paul coco at 7:43AM CST 01/24/14
Jay Still waiting for you to come out and spend a winter out here in Montana driving your Leaf. Come on, city and state.
Posted by CRAIG MOORE at 9:19AM CST 01/24/14
What is the width of your no till drill, Jay?
Posted by Bonnie Dukowitz at 4:54PM CST 01/24/14
Bonnie, did you hear me say that I have an electric tractor, actually I do have an electric riding mower and they make LOTS of sense for the environment and noise levels. Fact is that there is an alternative fuel, called solar and it can be stored to run autos! So why do you resist? You like the filth of fossil fuels? Maybe ethanol and biodiesel can be used in tractors since they are right at the source but electricity can be run everywhere there are autos and YES they need more improvement but did the gasoline engine look like todays engines in 1910? Electrcicty runs trains, it can run our autos as well. Time to make some changes, oil is running out at 90 million barrels a day.
Posted by Jay Mcginnis at 4:20PM CST 01/25/14
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