The Hagstrom Report

Agriculture News As It Happens

Tonsager: Funding programs for ethanol pumps on the way


SAN ANTONIO ­— Within a month, the Agriculture Department will announce a funding program to build ethanol pumps at gas stations around the country, Agriculture Undersecretary for Rural Development Dallas Tonsager said here today at the National Farmers Union convention.

USDA's program to help gas stations build blender pumps “won't be on a scale needed, but it will be a start,” said Tonsager. He added that he would put pressure on corn groups, and on Growth Energy, a group whose members build and manage ethanol plants, "to step up at the same time" with their efforts.

Tonsager said he could not provide details of this program, but that it would be a combination of grants and loans and that "there are 10 states that are pretty logical places to go." Tonsager said he will adapt another rural development program to create the grant and loan program for the blender pumps.

Ethanol industry officials say more gas stations must offer ethanol if the fuel is to gain wide consumer acceptance.

Maintaining support for biofuels is not going to be easy, Tonsager said. “The Volumetric Ethanol Excise Tax Credit (VEETC) goes away after this year. There are challenges ahead with renewable energy, but it can be done. It’s going to take everybody coming together,” he said.

Most of the programs in Tonsager's USDA division -- broadband, housing, water and sewer, business loans -- are not focused directly on agriculture, and he acknowledged that the constituents for these programs -- county commissioners, rural development and electric co-op executives -- sometimes see the farm program and rural development programs in competition for federal dollars.

But Tonsager said he sees biofuels development as the "intersecting point" between agriculture and other rural development programs. "It helps producers with markets and rural development with jobs," he said, adding, "I will continue to be a significant advocate for biofuels."

There continue to be arguments about whether biofuels are taking food away from people, Tonsager said, but noted that he and Agriculture Secretary Tom Vilsack believe farms needs to provide local foods, commercial-scale agriculture and biofuels for rural America to be "vigorous."

Responding to a question about help for towns with populations under 1,000, Tonsager noted that there are debates about how to define "rural," and that more urban states would like access to USDA rural development funds. He urged the Farmers Union members to be involved in the definition of "rural" when the farm bill comes up.

Tonsager said he considers it part of his role to bring agricultural and non-agricultural rural America together.

"By and large, most of agriculture is doing well," he said, although acknowledging that there have been some problems in the livestock sector. "But I'll be the first to suggest -- being a farmer all my life -- that the cycle changes," he said.