Farmers - not Wall Street - need to control Ethanol industry, says Congressman

Louis Hoglund

louish@eot.com

East Otter Tail County was a welcome escape from Washington D.C. for U.S. Congressman Collin Peterson.

Its a mess out there, said Peterson, the conservative Democrat serving western Minnesota. People arent getting along. And it wont get better until after the election. The Democrats think they can gain ground in the election, so theyre not going to help the Republicans with anything.

The budget is the main battleground, but there probably wont be a budget completed until next year--because of the election, and all the partisan wrangling, said Peterson.

Long-faced during a meeting at the Arvig Communication Systems, Perham headquarters, Peterson delivered a grim update from the capitol to a group of about a dozen local leaders.

Petersons forecast of the situation in Washington D.C. was cloudybut on the subject of ethanol, Peterson is optimistic. Ethanol is about to take off like a rocket, he said.

Peterson spent time at Arvig Communications, IFS, and Barrel O Fun--three of Perhams many growing companies. Petersons visit was coordinated by Dave Schornack, Arvig Communications.

Peterson wants farmers to control ethanol production--not Wall Street

Ethanol is one of the bright spots, and nobody is happier about its prospects than Peterson, who has been working on ethanol for 30 years.

Its about to take off like a rocket...Bill gates (Microsoft founder) just invested $84 million into ethanol production, said Peterson.

So far, farmers have owned the ethanol industry, said Peterson, noting that nearly all of the ethanol processing plants are farmer owned.

We have an opportunity to transform rural America...but were about to give it away to Wall Street, said Peterson, concerned that large investors will take control of the industry from the farmers.

My goal is to completely get off foreign oil, said Peterson, who favors halting all exports of corn and soybean and put it all into E-85. Another goal is to have an E85 pump at every gas station. Stations that have converted one of the premium tanks to E85 have actually experienced increased sales, noted Peterson.

Budget deficit could hit $760 billion

The war in Iraq, 9-11 and hurricane Katrina are contributing factor to a deficit of $350 to $760 billion, said Peterson. The Republicans dont want to raise taxes, and there isnt much more to cut, so deficit spending will no doubt continue.

Recalling the late 1990s, the U.S. enjoyed a multi-trillion dollar surplus--largely because of congressional rules that required all spending be offset by corresponding revenue sources. Those rules expired in 2001, and the deficits have risen ever since, said Peterson.

Its difficult to cut our way out of the deficit, because 70 percent of the federal budget is on auto pilot, said Peterson, meaning the expenses are essentially fixed--Medicare, Social Security, Veterans Administration.

Trade agreements have not improved U.S. exports of ag products

Trade deficits in the trillions of dollars are another issue, said Peterson, noting that the U.S. trade deficit is on track to be as high as our Gross National Product.

Everybody wants in our market--but nobody wants to give us access to their market, said Peterson.

The North American Free Trade Agreement (NAFTA) was sold to us as a boon to agriculture, said Peterson. Instead, weve run up a huge deficit because Mexico and Canada are importing more to us than were exporting to them.

We went from a $30 billion agriculture trade surplus to being a net importer of food. Were heading the same direction with food that we were with oil.

Medicare could be bankrupt in five years; Social Security in ten years

Social Security and Medicare are both ticking time bombs, said Peterson, and recent reforms--such as the prescription drug program--have actually made matters worse.

Medicare is the more immediate issue, because it could become bankrupt faster...in five years it will be broke, said Peterson.

If the income cap was raised for both Social Security and Medicare, the problems could be fixed for up to 35 years, said Peterson.

Fargo should find its own water, said Peterson

A local issue was also discussed with Peterson: The Red River Valley Water Supply project, which includes the prospect of exporting water from the Otter Tail and Pelican aquifers to Fargo Moorhead.

Peterson was not fully informed on the proposal, but he doubted that North Dakota and the Bureau of Reclamation had any authority to tap Minnesotas groundwater to serve the Red River Valley.

Theyll have to get water out of Garrison Diversion, or Fargo will have to go dry, said Peterson. That was the whole purpose of the Garrison Diversion project--to get water to the east side of the state.