USDA nominee backs biofuels, healthier food

WASHINGTON (Reuters) - Former Gov. Tom Vilsack of Iowa told senators on Wednesday he will promote renewable energy like biofuels and work for "more nutritious food produced in a sustainable way," if confirmed as U.S. agriculture secretary.

During a confirmation hearing, Vilsack said the Agriculture Department's child nutrition programs, which spend $15 billion a year, could be a tool for ending childhood hunger by 2015, a goal set by President-elect Barack Obama.

"It's a challenge we should take seriously," Vilsack said, adding, "We are a powerful and rich country and none of us should be satisfied there are children going to bed hungry."

Vilsack was on track for Senate confirmation on Tuesday, the same day Obama takes office, Senate Agriculture Committee Chairman Tom Harkin, an Iowa Democrat, said as the hearing ended.

At several points, Vilsack said he would use Agriculture Department programs to encourage production of biofuels and to bring to market new feedstocks. Corn-based ethanol is currently the dominant biofuel in the United States. Cellulose, found in grasses and wood, is being developed as the next major alternative fuel source.

"This is an industry that is in some difficulty," Vilsack said, referring to hard times for ethanol distillers due to the U.S. recession and less demand for fuel. "Margins are quite small, even for the best producers."

Under a 2008 law, USDA can offer loan guarantees for plants producing new-generation fuels, help plants expand output and share the cost with farmers who experiment with biomass crops. USDA also can support research on biofuels.

"It's important for us to realize it's not just corn, and not just the Midwest, that can benefit," he said. Ethanol production is centered in the Corn Belt. Besides biofuels, Vilsack supported wind, solar and geothermal energy.

Iowa Republican Charles Grassley and North Dakota Democrat Byron Dorgan said they wanted USDA to set stricter eligibility rules for farm subsidies than proposed in a pending USDA regulation.

"Payment limits are going to be at the top of my agricultural agenda," Grassley told Vilsack,

Obama backed a $250,000-a-year "hard" cap on subsidies during the presidential campaign "so we help family farmers" and closing loopholes that allow "megafarms to get around payment limits."

Georgia Republican Saxby Chambliss and Arkansas Democrat Blanch Lincoln warned Vilsack against writing unfair regulations. They cited how Congress overrode USDA on the "10-acre rule" that would have barred supports to small farmers.

The Southerners also have complained USDA was over-zealous on crop subsidy restrictions.

Also during the hearing, Vilsack said:

-- he would "leverage the financial commitment of the stimulus bill" being developed by the Obama administration to boost economic growth in rural America.

-- supported a "robust farm safety net."

-- would "help families that struggle to make ends meet put food on the table."

-- would "work with those who seek programs and practices that lead to more nutritious food produced in a sustainable way." He said: "The health care crisis aligns squarely with the need to promote better nutrition in our diets."

The nominee also said food safety programs should be modernized to focus on prevention and mitigation, USDA needs a 21st Century computer system and he wanted to prevent discrimination in USDA operations.

(Editing by Walter Bagley)