Foundation stress. High expenses, weak markets, disease epidemics, water quality disputes, testing Iowa's agriculture industry resilience. We're questioning Iowa's Ag Secretary Bill Northey on this edition of Iowa Press.

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For decades Iowa Press has brought you politicians and newsmakers from across Iowa and beyond. Now celebrating more than 40 years of broadcast excellence on statewide Iowa Public Television, this is the Friday, April 22 edition of Iowa Press. Here is Dean Borg.

Borg: Agriculture underpins Iowa's economy. Cornerstone might be a better way to describe it. And that's why when corn and soybean market prices fall to about what it costs to grow them most of Iowa shares the economic pain. And it isn't only grain prices that's troubling rural Iowa right now. Some international grain buyers are resisting, or maybe even outright rejecting corn and soybeans grown from genetically modified seed. And there's uncertainty too about who is responsible for nitrates in river water that is used for drinking, and who picks up the bill for mitigating it. And then add highly contagious animal diseases to the worry list. As Iowa's Secretary of Agriculture, Bill Northey doesn't have remedies for all of those concerns, but they are on his worry list. Mr. Northey is a northwest Iowa corn farmer as well as the state's republican Secretary of Agriculture for the past nine years. Secretary Northey, welcome back to Iowa Press.

Northey: Good to be with you, Dean.

Borg: Got the corn in?

Northey: I have half of my corn in, so got a start.

Borg: Good start. Okay. We're going to be talking maybe not about corn planting but a lot of other things politically related. Des Moines Register Political Columnist Kathie Obradovich is with us and Radio Iowa's News Director Kay Henderson.

Henderson: Mr. Northey, water quality has become a key issue in the statehouse this year. Is that because of the Des Moines Water Works lawsuit or because of the threat of federal intervention?

Northey: I suppose lots of reasons. We three years ago came with a Nutrient Reduction Strategy, well before the lawsuit was there and got some funding from the legislature. They have been very supportive. I'm sure the fact that there is a lawsuit gets people's attention as well, the concern about potential regulation. And I would argue part of the interest right now is we've seen so much engagement by farmers and groups and cities and other organizations out there that are engaging in water quality since there is a momentum to making these kinds of improvements, that the legislature is sensing that some dollars could do some good to be able to keep that momentum going.

Obradovich: The Water Quality Initiative in Iowa is part of your department and millions of dollars go through that program. Why hasn't it been more effective do you think so far?

Northey: Well, we've just gotten started. As you look at what it's going to take to make a difference you see all the things in place to build towards that. So we have more crop production in this state than most countries have in crop production. It doesn't change overnight. We certainly have urban areas that have some contribution and they're increasingly engaging. And so we see the momentum that builds us towards this place where we can see some real changes.

Obradovich: But do you need significant more resources to make this program as effective as it could be?

Northey: I think we do. And we do for several reasons. One is engagement of producers and working at different practices that can do a better job. But when we talk about the things that can make a difference, we both talk about in field and that would be in urban areas as well as rural areas, but the things that can be done on the ground, but then it's edge of field as well, so wetlands on the edge of fields and bioreactors capturing water in a tile line --

Obradovich: These are all voluntary things that farmers can do and you're giving them incentives or extra help to actually accomplish those.

Northey: On the practices we provide a cost share, so like we have with conservation cost share before. If it costs you $10,000 to build a terrace we may provide $3,000 or $4,000 or $5,000 to do that.

Obradovich: There are several plans in the legislature about where that money should come from. Do you have a preference on one of those plans?

Northey: I think the most live plan and the plan with the best chance is what has come out of the Iowa House. That is a bipartisan plan, it doesn't raise taxes, it doesn't compete with education. It's still a significant increase in dollars. The Governor has stated support. My concern is I don't see the Senate really taking it up and so right now we struggle to see how that's going to happen. The Senate has talked about a plan but they haven't been able to get anything out, they haven't taken this up as trying to adjust it. So I'm nervous about whether we see something coming out of the legislature or not. But I like that House plan.

Borg: Well, is what you're possibly seeing there that nothing will happen and then if that does, what happens?

Northey: I think we could end up coming out of this session without some additional funding. Now, we'd still have the back-up funding that we're in. We have $9.6 million a year right now that goes towards water quality. I think it's a lost opportunity. I think we'll start off next session talking about another way of being able to fund, maybe there will be some conversations in the interim that will lead to that longer term funding that happens in the future. So I think it's a lost opportunity, but I still see the momentum, we're still seeing people do more and I think this will, it will be a lost opportunity in not being able to have additional funding.

Henderson: Do you support the idea of raising the sales tax by a fraction to provide a steady stream, if you will, of money for water quality projects, which some people are keen advocates of?

Northey: There are some folks that are advocating that. Obviously the Governor advocated supporting a fund that was also the education infrastructure fund. I think there's lots of ways to look at it. I really think in a budget of $7.3 billion when we're talking about $30 million a year, I prefer the idea of being able to take it out of existing funding without new taxes. And that has really been part of the confrontation between the House and the Senate right now. It appears like the Senate would like to raise taxes. They'd like to fund water quality but they'd like to raise taxes to do it. The House is not a proponent of that.

Henderson: Is $30 million enough?

Northey: I think the way both of these have been structured, including the Governor's plan, was to start smaller and have it grow over time. So the House plan of $464 million over $13 years, start smaller, grows, it certainly grows to more than $30 million a year by the end and I think really sets you up for opportunities to be able to grow more in the future.

Borg: What funding, if the legislature does do something, would that sort of lower the heat and the political divide right now between metropolitan Des Moines and rural Iowa? Would it take the intensity of that heat down a little bit or not?

Northey: You know, it might. I guess I don't focus a lot on that. I focus on what can get done. How many wetlands can we build? How much can go on out there? And, in fact, actually a lot of our work is with other cities, like Cedar Rapids or Davenport or other cities, Storm Lake, that are working with their farmers to do positive things together. And we don't see that coming out of the Des Moines Water Works here but we see that in most of the other areas of the state. And so we don't have that same kind of heat. I think we want to feed the momentum and that would be a reason to come up with funding as opposed to a negative reason to avoid the heat.

Henderson: A couple of weeks ago this program focused exclusively on this issue and after that this network got email from people saying, why don't farmers pay, why isn't this a cost of doing business, why should everyone pay, why isn't it the farmers' responsibility?

Northey: Just when we look at nutrient losses, so we're talking nitrogen and phosphorous losses, we see everybody contributing and everybody paying. Obviously in a sewage treatment plant we see costs back to the folks that are part of that sewage treatment system. Farmers are paying now for large amounts, tens of millions of dollars a year for conservation practices. None of these programs are programs that make a profit for producers. They are cost-share programs. We'll pay part of the additional costs and the farmers bring dollars to that. And so this is something that we all have, we all should be engaged in. I certainly believe that especially these edge of field opportunities, be able to look at wetlands and bioreactors, look at tile lines, these are very appropriate places for some state money to be a part of that effort.

Henderson: The other question, and it's at the heart of the lawsuit that was mentioned earlier, why should Des Moines ratepayers pay to clean up their water with stuff that is getting in it from farm fields?

Northey: Well, first of all, the premise here is it's from farm fields. It's from everything that is out there. It is from urban areas, it's from rural areas and we're just --

Obradovich: Percentage wise though isn't it really mostly from farm fields?

Northey: Well, when you're talking about cleaning up water we're talking about all the different things that happen with water. And absolutely nitrate is certainly some of the contribution of a nitrate comes from farm fields and that is why we're doing the things that we're doing, trying to make improvements. But that is also why we're engaging the urban areas and the point sources to be able to engage because we see nutrients coming from those areas. And so as you look at a lawsuit, a lawsuit is trying to address that, trying to say that's what we should require these drainage districts to do. I'm sure storm sewers would be impacted potentially by that lawsuit. Other things besides nitrates are things that cost the Des Moines Water Works to clean up the water that come naturally down the system and certainly those drainage districts that are being sued in northwest Iowa are a microscopic contributor to the water quality in Des Moines.

Henderson: The other part of this debate is when legislators set aside money for economic development grants to businesses, the businesses sign a contract and say we'll create X number of jobs. If they fail to meet that job creation goal, the business has to give the money back. Once the legislature spends let's say $30 million a year on water quality, how do you measure if the water is being cleaned up? How do you measure if the investment that is being made actually worked?

Northey: We have lots of measuring tools. We have over 800 monitoring sites around Iowa. We have a third of all the real-time nitrate testers in the country are in the state of Iowa. So lots of ways to be able to measure water quality. And, of course, when we measure nitrates in water that can be nitrates from any place, an urban area, a rural area, other places. It is also hugely impacted by rainfall and other things. So not only should we be measuring water, and we are, and we need to continue to do that. But we should be measuring the kinds of things that have less of an impact on water or have less of a loss of nitrate onto our water as well. So if we're improving, we have more acres of cover crops, if we have more wetlands, we need to measure those as part of the tools as well in whether we're making progress towards that improvement.

Obradovich: Dean mentioned a bunch of things that he said were worries for you and the farm economy. Do you think overall, as you look back, is the farm economy worse than it was when you took office overall?

Northey: 2006 is a long time ago. When you look at it, our prices are actually similar, maybe even a little bit better than 2006. But we are struggling right now in the farm economy. We went through a higher price time, which means the cost of production goes up as there's higher land rents and higher input costs. We're now coming off of that in a way that we're seeing layoffs at some of our good machinery businesses across Iowa or other input businesses. So we're trying to resettle where that new normal might be. And so it's struggling.

Obradovich: Where do you put most of the blame for that? We did have really great farm economy just not too many years ago, now things are on the down cycle again. What do you think is the primary culprit for that?

Northey: Farm economies, like all economies, go through cycles. And we went through a great cycle there. If we hadn't gone through that great cycle this wouldn't seem so bad. But we went through this great cycle where we saw growth in ethanol production, especially here in Iowa. We saw the Chinese demand that created demand for soybeans and other meat products as well. And those allowed us to have some of the most profitable times we ever had. Now, in comparison, our times right now are tough. And so we have folks that are living off of some of those profits at that time, trying to conserve the dollars that they have. So what we need to do is we need to be able to grow those markets again and we need to be able to have a strong ethanol policy that allows us to be able to expand. We need to be able to have more exports into China and other areas and grow our livestock production so we use up more of that wonderful corn and soybeans that we produce here in such a bumper way.

Borg: Speaking of growing markets, there is a market that may be constricting because of genetically modified crops. Is there anything that -- is Iowa at all able to do anything to mitigate that? Or is it more of a national problem?

Northey: Most of the regulations around those activities are federal. And certainly as you talk about the conversation right now in Congress about labeling genetically modified crops, that's a federal issue.

Borg: Well what I'm talking about is the limitation on exports, nations rejecting crops that have been genetically modified.

Northey: The only significant place that that's happened, that has had a big impact on markets, is China. And they restricted some genetically modified, some of the genetically modified events that were going into China. Now, most of us would argue that they used that as a way to embargo our corn and they would have found another way if they needed to make that happen. It still is mostly a federal issue on trying to get them to go ahead and accept those events.

Henderson: Speaking of federal issues, President Obama has sought to normalize relations with the nation of Cuba. Do you support that effort?

Northey: I do. I think it is important for us to be able to have trade with Cuba. We've had some trade, we've sent some DDG's and some meat to Cuba. Again, they're just 11 million people. They don't have huge amounts of income to be able to buy products. They'll never be a China or Japan. So we've got to manage our expectations that they're somehow going to save us from an oversupply situation. But, they're only 90 miles off our coast. We should dominate that market. They're buying nearly $2 billion worth of food products a year, they ought to be buying it from the U.S. rather than Europe or other places.

Henderson: Speaking of buying food products, there is a new facility going into Mason City, Iowa. Do you think the construction of that facility and the production there will reopen the debate about regulation of livestock confinements?

Northey: We'll have to wait and see. I don't think so. I think most folks as they look around, they recognize that's not an easy question and it has not always been a politically popular conversation to be able to have. But I think we recognize that what we have is working. We're siting facilities in places generally that are not bothering neighbors. We need modern packing plants. We produce more pork than all but a handful of countries in the world. We ship $2 billion of that overseas every year. And we need to continue to modernize our hog processing as well as our hog production here in Iowa.

Obradovich: There are, though, facilities going in under the animal limits that are set in place who don't have to abide by some of those same permits and restrictions that are going into places that people are concerned about, like around Iowa's great lakes. Are there conversations yet to be held about whether the regulations are correct with regard to how many animals you can have in some of those confinement units?

Northey: I'm sure there will always be tensions around that. Whatever that number is I'm sure folks will say somebody just under that number -- I really do believe that it's working now and I believe that it's a responsible way to address livestock facilities. I'm sure that there's others that disagree with that. I respect that. But I think that we have a way of organizing where those sites are that allows us to stay modern, to grow but also do it in a responsible way.

Obradovich: You mentioned ethanol. Has the change in the Renewable Fuel Standard, the EPA did not give Iowa as much as it had wanted out of that standard, how many gallons of ethanol have to be blended into fuel, but it's not as bad as it could have been. Do you expect the ethanol industry to pick up now that you have some certainty with the RFS?

Northey: I think we can expect it to stay steady and that's all we've been able to see in the last handful of years.

Obradovich: Steady at a lower level?

Northey: No, steady, we've actually seen a little more production than what we've had recently. So this 14.5, 15 billion gallon production is flat. But what we need when we produce more corn is we need a growing industry and there are things the EPA could do for that, like a one pound waiver for E15, like promoting E85 to a greater degree. And we, if we could grow those we could have an opportunity to be able to expand existing --

Borg: I promised that we were going to talk politics and I think Kay --

Henderson: Ethanol was an issue in the Iowa Caucuses. Donald Trump finished second. It seems as if he may be on a path, may be on a path to be your party's nominee. Does he have your support if he is the nominee?

Northey: Well, we'll see how that plays out. I certainly have always supported the nominee and would expect to but there's a little bit of water to go under the bridge yet before we find out who that nominee is. And then I think we'll get a chance to have that nominee come back to Iowa and talk about ag issues a little bit more. I'm concerned about the trade issue with Donald Trump and yet I think there's opportunities to be able to have those conversations.

Borg: What concerns you about trade issues with Donald Trump?

Northey: Well, he has been concerned about trade in certainly China, we talked about China, the opportunity to be able to export soybeans to China is a big deal. I think once he gets in there and once we have the conversation people would respect that we need trade and we need trade to be able to work.

Henderson: Well, he says he would reopen trade deals, specifically CAFTA, which is the trade deal with Canada, and NAFTA.

Northey: And potentially CAFTA, that's Central America as well. And so I think whoever the candidates are, every Iowan will have some issue with one or more of those candidates. And that is what campaigns are about.

Obradovich: You endorsed Steve King, and of course Governor Branstad had an issue with the person Steve King endorsed for president, Ted Cruz. Does your enthusiasm for Steve King extend to Ted Cruz? Or do you have some of the same concerns that the Governor has about his position on renewable fuel standards?

Northey: I'm very supportive of the Renewable Fuel Standard and Steve King is as well and has had arguments with his candidate over that. I think there's some other things as we talked about, the one pound waiver and other kinds of things, that can be positive ethanol policies, that could come out of any administration. So I would want this to play out and be able to have those conversations. I'm very supportive of Steve King.

Borg: What are you saying? Are you saying it's too soon to tell? You're kind of wavering here.

Northey: I caucused. I did not announce who I was supporting. My candidate is now gone. And like a lot of other Iowa republicans and maybe some democrats they're looking at their candidates and trying to figure out exactly how this is going to play out. We'll make those decisions as we get closer to election night.

Obradovich: Are you expecting Steve King to endorse you if you decide to run for Governor?

Northey: Well, there's a couple of ifs there. First of all, I don't know if I'm going to run for governor yet. We are very strongly considering that. And I certainly wouldn't support him in any expectation in that way. I support him because I believe he's the best candidate, he has carried that conservative point of view to Washington. He can deliver a strong ethanol message to the conservative wing or the Republican Party. And I think that's very important for him to be re-elected as our Congressman.

Henderson: What is your relationship with Terry Branstad? When Terry Branstad rolled out his water quality plan, Tom Vilsack, the former Governor who is the current Ag Secretary, was sitting beside him. You weren't there. Were you not invited? Did you not support the plan at the beginning? What is your relationship? Do you have a chilly relationship?

Northey: Not at all. Not at all. He has been hugely supportive. We announced the original Nutrient Reduction Strategy at one of his press conferences on a Monday morning three and a half years ago and he has been very supportive and certainly instrumental in bringing the conversation about water quality to the table. That actually got called very quickly as Secretary Vilsack was in town. I was in northwest Iowa and couldn't leave that event to be able to get to this event. So supportive of the way that he has done this and certainly we agree very much on that republican plan being the best way to get something done this session.

Henderson: Well, let's go back to your aspirations. Under what conditions do you see yourself running? What is your checklist of yes, these are the pros and I must run?

Northey: We're still working through all those things. We've got an election, actually a couple of elections obviously, a primary and a general, between now and I think decision time for everybody in those kinds of races. These races get long enough as they are. But we're talking with folks and trying to understand what pros and cons and who else, we don't know who else would be running. So it depends on lots of things to make that decision.

Borg: What is the timeline for doing that?

Northey: I think it's certainly after this election, I would assume sometime in '17. I don't know whether that's early or late or middle of '17 but it's after this election.

Borg: Give us a time when you will have a decision.

Northey: I'm just going to say sometime in '17. It's going to be after this election, Dean. There's a lot of things to look at and, frankly, everybody is going to look at what happens in '16 and what are some of the signals that we get from this election.

Obradovich: Are there some other names out there that you could see supporting? Lieutenant Governor Kim Reynolds' name has been out there. There may be other candidates that you're looking at. Could you support Kim Reynolds if she ran?

Northey: I could support -- I'm sure in that case I can't imagine not supporting the republican nominee, whoever that is, whether I run or I don't run. I would plan to be able to do that.

Henderson: But would you run against her?

Northey: I don't know. We'll see. That's the conversation we're having. I think primaries are a good thing and certainly for open seats like that.  So that doesn't stop me from considering it. But I recognize we've got to look at everybody who is in the race before we make those decisions.

Henderson: Why should Iowans choose you to be Governor? What attributes would you offer to Iowan voters to make that decision?

Northey: Well, I think I'll let you folks decide that and talk about that and Iowans decide that. I'll have enough in trying to figure out whether it makes sense for me to run or not. We'll have plenty of time for that race. We've got some races between now and then and that is what my concentration is. We don't even know who else is going to be a part of that race. We could have a republican caucus type event. Maybe there will be 17 people running for governor.

Borg: Thank you, Secretary Northey.

Northey: Thank you, Dean.

Borg: And thanks for bringing us up to date on the plans for possibly running for Governor.

Northey: Thank you, Dean.

Borg: We'll be back next week with another edition of Iowa Press and of course it's at 7:30 Friday night and noon on Sunday. I'm Dean Borg. Thanks for joining us today.

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Funding for Iowa Press was provided by Friends, the Iowa Public Television Foundation. I'm a veteran. I am a builder. I'm a volunteer. I am a teacher. I'm a banker. I'm an Iowa banker. No matter who you are there is an Iowa banker who is ready to help you get where you want to go. Iowa Bankers, allowing you to discover the genuine difference of Iowa banks. Iowa Communications Network. ICN's Broadband Matters campaign advocates for access to high speed broadband in all corners of Iowa for education, public safety, health care, government and economic development. Information is available at broadbandmatters.com. Iowa Community Foundations, an initiative of the Iowa Council of Foundations, connecting donors to the causes and communities they care about for good, for Iowa, for ever. Details at iowacommunityfoundations.org. The Associated General Contractors of Iowa, the public's partner in building Iowa's highway, bridge and municipal utility infrastructure. The Arlene McKeever Endowment Fund at the Iowa Public Television Foundation, a fund established to support local programming on Iowa Public Television.