Secretary Wolff

At his budget hearing this week, Agriculture Secretary Dennis Wolff told members of the Senate Appropriations Committee that dramatic increases in corn and soybean prices driven up by the demand for turning them into ethanol and bio fuels are increasing costs for Pennsylvania livestock and dairy farmers.

And in response to a statement by Sen. Brubaker (R-Lancaster), the new Chair of the Senate Agriculture and Rural Affairs Committee, Secretary Wolff said that Pennsylvania would probably not meet the 2010 milestone for reducing nutrients and sediment to the Chesapeake Bay, inspite of the best efforts of the farm community.

“While higher corn and soybean prices are benefiting some farmers, the higher prices are putting pressure on our livestock farmers raising the price of eggs, milk and meat,” Secretary Wolff said.

Cellulosic ethanol is more in line with Pennsylvania’s agriculture industry Secretary Wolff said, but added there is only one cellulosic ethanol plant in the United States (California) and one in Canada because the cost of producing cellulosic ethanol is about four times more expensive than making it out of corn.

Gov. Rendell has proposed an $850 million Energy Independence Program to promote the use of ethanol and biodiesel made from soybeans and other renewable oil. Gov. Rendell has also proposed to mandate that all gasoline sold in Pennsylvania be made from 10 percent ethanol.

The Department of Environmental Protection has estimated there are 340 million gallons of corn-based ethanol production capacity planned in Pennsylvania and 60 million gallons of biodiesel production proposed.

Senators expressed concerns about several other cuts proposed by the Governor:

· Senators from both sides the the aisle expressed concern about the Governor’s proposed $1.1 million cut in funding for county conservation districts which both the Senators and Secretary Wolff called critical to delivering services to farmers;

· Also of concern to Senators was a proposed cut in the Penn State Extension Service which Penn State officials said would result in layoffs in all 67 counties; and

· Secretary Wolff confirmed a reduction in funding for farmland preservation from $105 million for the current year to $77 million. The Secretary did agree to work with Sen. Brubaker to find ways of improving the farmland preservation program, including through the use of transferable development rights.

Sen. Brubaker said it was his understanding that Pennsylvania would be unable to meet the court-imposed 2010 milestone for reducing nutrients and sediment to the Chesapeake Bay and expressed concern that the media and others would criticize Pennsylvania family farmers for not meeting the deadline.

Secretary Wolff said Pennsylvania farmers have a great record of taking steps to reduce nutrients, including being the first state to require nutrient management plans, that have resulted in a reduction of over 23 million pounds of nitrogen and 906,000 tons of sediment.

He said he hoped the U.S. Environmental Protection Agency would take that into account and focus on the fact that Pennsylvania is making progress in reducing nutrients.

Sen. Brubaker said he personally supports the Resource Enhancement and Protection Act (REAP) to give tax credits to farmers who install best management practices to help give farmers another tool to reduce nutrients and sediment runoff by attracting private investment to conservation practices.

Secretary Wolff’s opening statement is available online.

NewsClip: With Price of Feed Corn Rising, Meat Prices to Spike

3/9/2007