Energy, Trade Big for Agriculture in State of Union Address

President Obama’s State of the Union address touches on need for improved energy policy and improvements in trade and infrastructure.

President George. W. Bush created the first huge surge in biofuel markets with his mention in his 2006 State of the Union Address of the nation being “addicted to oil.” Last week in his yearly address to Congress and the nation, President Barack Obama’s mention of building a new energy future continued the White House support for clean energy as well as added the need to invest more in infrastructure and trade.

Obama touted his goal he made two years ago of doubling U.S. exports over 5 years. He said with the agreements signed into law with Panama, Colombia and South Korea, the nation is “on track to meet that goal – ahead of schedule.”

The American Soybean Association encouraged the administration and Congress to redouble its efforts to ensure the long-term success and sustainability of export markets for American agricultural products. According to USDA, every billion dollars in agricultural exports creates an additional 8,000 domestic jobs.

“ASA hopes that the administration will help continue this progress with the expedited conclusion of negotiations on the Trans Pacific Partnership, and the prompt inclusion of Japan in the TPP, which will expand opportunities for increased U.S. meat, dairy, and exports to this affluent market,” said ASA president Steve Wellman.

Obama also announced the creation of a Trade Enforcement Unit that will be charged with investigating unfair trade practices in countries such as China. National Farmers Union president Roger Johnson praised the move. “Trade is a necessity for U.S. agriculture, but we must all play by the same rules. This group will be critical to farmers and ranchers, ensuring that they have a level playing field in marketing their products,” he said.

Energy

National Corn Growers Association chairman Bart Schott, responded, “The corn ethanol industry has proven that good government policy sends signals to the market place for producers to increase production and efficiencies. As family corn farmers have risen to the challenge to meet our nation’s energy needs, we are hopeful the direction the President outlined offers similar opportunities for others to expand our energy independence.”

Although not specifying support specifically for biofuels, Obama did state that oil companies have been subsidized for a century and “that’s long enough.” In his speech he said, “It’s time to end the taxpayer giveaways to an industry that’s rarely been more profitable, and double-down on a clean energy industry that’s never been more promising.”

Ethanol groups have long advocated that Congress eliminate oil tax subsidies and level the playing field for biofuels.

Adam Monroe, president of Novozymes North America, an enzyme maker for cellulosic companies, said. “Innovations like advanced biofuels can play a major role in the President’s vision but we need steady policies like the Renewable Fuel Standard – and we look forward to working Congress to preserve them.”

Infrastructure

Obama also added that, “Building this new energy future should be just one part of a broader agenda to repair America’s infrastructure. So much of America needs to be rebuilt. We’ve got crumbling roads and bridges. A power grid that wastes too much energy. An incomplete high-speed broadband network that prevents a small business owner in rural America from selling her products all over the world.”

Wellman welcomed the president’s acknowledgement of the need for repairs on America’s interstates and highways, stating it “is both necessary and admirable,” but urged the administration not to forget the nation’s waterways.

“An investment in increased dredging and updates to the locks and dams along the Mississippi River is a critical down payment on the agriculture industry’s ability to move its product to market more economically and efficiently,” Wellman said. A recent study found that reducing drafts to 38’ along the Lower Mississippi River could reduce exports by 12.4% and estimated the total loss to the U.S. economy of the reduced dredging to $859.25 million in lost production.

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