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Political Mercury

Where will President Trump fall on defining issue for Iowa economy?

4/4/2018

Political fight will have implications for two of the more vital figures in Iowa’s economy — the price of corn and soybeans.

Some of the nation’s top renewable-fuels and corn and soybean advocates, backed by hundreds of farmers and ag businesspeople, rallied outside of Nevada, Iowa, one recent Saturday afternoon to protect the Renewable Fuel Standard from what crucial players in the Hawkeye State’s key commodity markets see as a mortal threat from Republican U.S. Sen. Ted Cruz of oil-rich Texas.

The pitched political fight, which is spilling from the corridors of power in Washington, D.C., to Iowa farms and small towns as tens of thousands of jobs hang in the balance, will have implications for two of the more vital figures in Iowa’s economy — the price of corn and soybeans.

The Renewable Fuel Standard, by requiring refiners to blend growing amounts of biofuels into the nation’s fuel supply, has allowed Iowa’s ethanol and biodiesel industries to mature, boosting farmers and small towns.

Now, though, Cruz, who won the 2016 GOP presidential caucuses in Iowa with the support of U.S. Rep. Steve King, R-Iowa, wants to cap waiver credits — which are traded in the fuels industry among those who hit, surpass and fall short of federally mandated renewable-fuels levels. Cruz wants to top out the renewable-fuels credits at 10 cents.

They had been trading at 90 cents each, or per gallon, as recently as November.

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Renewable Identification Numbers (RINs), attached to each gallon of ethanol, are used to manage the trading.
The cap would allow for paper trades, meaning less ethanol manufacturing, in addition to the effects on the markets, according to biofuels leaders.

Bottom line: The Cruz proposal would cut corn prices by as much as 25 cents per bushel and reduce soybean prices by 16 cents per bushel, according to the Iowa Renewable Fuels Association.

The potential for that catastrophic hit to already-beleaguered corn and soybean markets drew 200 people to a quickly called rally at the cattle and diversified crop farm of Bill Couser north of Nevada.

“We need to remind Washington about the homegrown fuel that we make here in Iowa,” said William Howell of Coon Rapids, general manager of the POET biorefinery in that southern Carroll County city and the vice president of the Iowa Renewable Fuels Association. “Over the last four years, farmers have seen the sharpest decline in income since the Great Depression. Land values have dropped at a rate we haven’t seen since the 1980s. Farm debt is rising rapidly, even as commodity prices continue to hover below break-even prices.”

Howell said Cruz’s plan to gut the Renewable Fuel Standard amounts to a naked-in-the-light-of-day “oil refinery bailout.”

“Senator Ted Cruz has carried this false narrative to Washington and straight to the White House, where it has landed on the plate of President Trump,” Howell said. “Right now, a plan is on the table that would not only break the president’s promise to support the Renewable Fuel Standard, it would crush the growth of biofuels and cut the lifeline to America’s farmers.”

Howell added, “We can’t stand by and let rural America be sacrificed to the oil industry.”

Mark Recker, president of the Iowa Corn Growers Association and a northeast Iowa farmer, said Cruz’s plan represents “maybe the largest threat we’ve seen” to the Renewable Fuel Standard.

Grant Menke, policy director of the Iowa Renewable Fuels Association, said Cruz is on a “crusade” to destroy the Renewable Fuel Standard and operates in a “disingenuous” manner where Iowa farmers are concerned.

Menke’s message to President Trump: “Keep your promise to the rural Americans in Iowa and around the country who put you in office.”

“The word is intense,” he said.

Iowa Biodiesel Board Executive Director Grant Kimberley said it cannot be stated strongly enough that Cruz’s plan for RFS waiver credits would decimate current demand for biofuels.

“We hope President Trump sees through this bad deal and rejects a cap on RIN prices,” Kimberley said. “I urge him not to cave in to the interests of certain oil companies and refiners, and stay true to rural America.” ♦

Hubbell: Move many state jobs out of Des Moines to rural Iowa

Fred Hubbell says he’s serious about rural Iowa economic development.

And it could start with state government — literally.

If elected governor, Hubbell, a Des Moines businessman, would strongly advocate decentralizing state government, moving jobs from the capital city — in any number of departments — to cities and counties around Iowa. He mentioned Carroll, in west-central Iowa, and Shenandoah, in southwest Iowa, as good candidates for the jobs transfers.

The goal, Hubbell says in an interview with this magazine, is more direct and accountable service from the state as well as a boost to local economies.

“If we had high-speed internet all across the state, then why can’t we look at what we’ve got? Let’s say we want to grow a department in the state government and we have to add 30 or 50 employees — why couldn’t we hire them right here in Carroll?” Hubbell said.

More state employees could live and work outside of Des Moines, he said.

“State government doesn’t have to all be right in one location,” Hubbell said. “I mean, businesses are working remotely all over the world these days. Why does state government have to avoid that approach? I think if we start spreading state government out a little bit — and if we had high-speed internet, we’d be more able to do it — then all of a sudden government is part of our state. It’s not just Des Moines. And we’re helping grow all of our communities.”

Hubbell said the Department of Human Services, Workforce Development, the state Agriculture Department and the Department of Natural Resources are examples of agencies from which jobs could be decentralized and moved to other parts of Iowa.

As a concrete example, Hubbell said the Wallace Building in Des Moines, built in 1977 for state government and rife with maintenance issues, should be torn down, with many of the jobs potentially relocated outside of Des Moines, possibly to a building Hubbell thinks could accommodate the positions in Shenandoah.

The decentralization could break down the rural-urban divide in Iowa as more rural residents would be directly involved in state decisions, “which would be good,” Hubbell said.

“It would create more balance in our thought processes,” he said. “We could create more jobs in rural Iowa and put more kids in the schools, and it’s a win-win for the state.” ♦

Douglas Burns is a fourth-generation Iowa newspaperman. He and his family own and publish newspapers in Carroll, Jefferson and other neighboring communities.

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