You’d think the game would be up by now for ethanol subsidies. As the latest issue of Bloomberg Businessweek documents, you’d be wrong.
Support for ethanol, a political darling of the past decade, has withered as domestic production of oil and gas has boomed. Critics cite not only government subsidies for the industry but also studies showing that converting corn into ethanol is environmentally harmful. “The worm has turned,” says C. Ford Runge, an agricultural economist at the University of Minnesota at St. Paul. “There’s a certain amount of embarrassment among politicians that they went down this road so far.”
To Bruce Rastetter, an Iowa pork and ethanol mogul, the solution is obvious: Focus on the White House. Rastetter founded Heartland Pork, one of the country’s biggest pork processors, in 1994, before moving into ethanol in 2003. He was a donor to Mitt Romney’s 2012 super PAC, Restore Our Future; now the newest crop of presidential hopefuls is courting him. That’s helped Rastetter sign up about a dozen prospective 2016 candidates to an agriculture summit planned for March 7 at the Iowa State Fairgrounds in Des Moines. Expected attendees include former Florida Governor Jeb Bush, Wisconsin Governor Scott Walker, New Jersey Governor Chris Christie, and former Texas Governor Rick Perry. Texas Senator Ted Cruz, who has sponsored legislation rolling back ethanol mandates in the past, also RSVP’d.
Rastetter says he hopes the public event will serve as a counterpoint to “the malaise that’s been going on in Congress for a while now.” Participants will be allowed to give prepared speeches, but they’ll also spend 20 minutes apiece being grilled by Rastetter onstage. “They know me, and they know they will get direct questions and that there’s an expectation that there will be direct answers given,” Rastetter says. “There’s an expectation that these potential candidates will take positions on a variety of agricultural issues, including ethanol.” The list of topics includes food safety, immigration, conservation, and trade agreements.
The summit dovetails with efforts by Iowa Governor Terry Branstad, a Republican who is close to Rastetter, to start a grass-roots effort to make ethanol a central issue in the Iowa caucuses next January, traditionally the first vote of the presidential primary season. Earlier this year, Branstad announced the formation of a new group, America’s Renewable Future, which intends to mobilize a pro-ethanol army of 25,000 people from each party to participate in the caucuses.
