Sen. Tom Harkin, D-Iowa, got to roll out his version of the farm bill Wednesday morning to the press and overall he seemed pretty pleased with what was accomplished.

While it is too early to gauge reaction, it would seem key groups in nutrition and conservation would generally back the plan, given that it boosts spending more than $4 billion in each of those titles. Though the devil may be in the details and groups also will have to decide if they back the House version over the Senate, or vice versa.

The proposal also effectively creates two commodity titles. Farmers will have to decide if they want the current commodity programs or choose the "Average Crop Revenue Program." According to the plan, farmers would have to give up their current direct payments if they enroll in the ACRP for a smaller $15 an acre fixed payment. In return, those revenue-assurance farmers are expected to have better protection in a market collapse though the final details have to be developed here.

It's going to be interesting to see initially how many farmers opt to change programs. Leaders of commodity groups and general farm organizations are going to have to brief their members and lay out the dollar-figure differences for farmers. Some may even hinge their credibility to backing one particular payment structure over the other. What we will all have to note is what happens two or three years down the line when either the 2002 programs or the ACRP begin paying out farmers at a higher level than the other program structure. Will farmers cry foul when their neighbor collects $150 more per acre than they do, growing the same crops, producing the same volume? Uh, yes they will. And how will policymakers respond when a whole big share of farmers claim they didn't understand the consequences, or were not properly informed, when they were asked to choose option A or B?

If you want to create massive policy headache, give people an option and wait until they figure out they chose the wrong one.

Ethanol Beat Down

The Wall Street Journal hits hard on ethanol in Wednesday morning's editorial page. The editorial asks Congress to stick with the House energy plan and not to give a higher renewable fuels mandate to "Big Ethanol."

The editorial ends: Slowly but surely, these problems are beginning to alert public opinion to the huge costs of force-feeding corn ethanol as an energy savior. The ethanol lobby is still hoping it can keep all of this under wraps long enough to shove one more big mandate through Congress, but the Members need to know the problems they'll be creating. We hope that House conferees, who did not include a new mandate in their energy bill, insist that any final bill is ethanol-free."

Picking up on one aspect of the editorial, the WSJ explains that ethanol plants consume about "four gallons of water for each gallon of fuel, but that's only a fraction of ethanol's total water habit. Cornell ecology professor David Pimentel says that when you count the water needed to grow the corn, one gallon of ethanol requires a staggering 1,700 gallons of H2O. Backers of the Senate bill say that less-thirsty technologies are just around the corner, which is what we've been hearing for years."

I like that 1,700 gallon figure. Given that we are at 7 billion gallons of ethanol now, this amounts to 11.9 trillion gallons of water. Indeed, corn does take a great deal of water to grow. But this analogy suggests that this corn would not be grown if it were not for alcohol fuel. That corn would still be grown across the vast amount of acres. It would just as easily be exported water, or water used for livestock feed, but it would still be used. Further, it just seems amazing that every time someone wants scientific data bashing ethanol, they have to go to the David Pimentel well.

http://online.wsj.com/…

Sticking with the anti-ethanol theme, DTN's Washington Insider states a number of environmental groups have written to House Speaker Nancy Pelosi, D-Calif., to oppose any move to greatly increase the national mandate for ethanol use. The groups claim increased mandates will result in increased corn production on environmentally sensitive land and cause "substantial environmental damage."

Earlier this year, the Senate approved an energy bill that would set a mandated 36-billion-gallon national standard by 2022. The House also approved an energy bill, but that legislation does not address the issue of an ethanol mandate. The environmental groups hope to convince Pelosi to instruct conferees to an eventual House-Senate energy conference to stick by the House version and refuse to include the mandate in the conference report.

The letter is not expected to have much of an effect on the overall progress of the energy bill, largely because there has been so little progress to date. Still, the longer the measure languishes, the more of a target it becomes for all types of interest groups that want to influence its final shape.

It is becoming increasingly likely that Congress will not get around to an energy bill conference until next year, by which time a 36-billion-gallon corn-based ethanol mandate may appear less appealing than now. This is especially true if the environmental groups' letter to Pelosi is just the beginning of a concerted lobbying campaign that would continue through the holidays, according to Washington Insider.