ALEXANDRIA, Minn. - If the bearish numbers in the March 29 U.S. Department of Agriculture’s Prospective Plantings Report get you down, Alan Roebke says he has a plan to perk things up - the Roebke Plan.
Roebke, 69, in the 1980s was a sizeable Minnesota farmer and sugar co-op mover and shaker. He says his plan can do for corn, wheat and soybeans what the sugar program does for the region’s sugar beets. He says he thinks farmers need the government to raise commodity loan rates significantly and increased ethanol content in gasoline mixes.
Whether the program would be affordable or politically feasible is debatable, but it has another problem: the author is a convicted felon.
More on that later.
Consider the Roebke Plan:
70% loan increase. Increase Commodity Credit Corp. loans by about 70%, to $3.50 per bushel for corn; $5.00 for wheat and $8.50 for soybeans.
Recourse loans. Make the commodity loans “recourse” loans - not the “non-recourse” loans typically used in farm policy. Under recourse loans, farmers cannot forfeit collateral loans, but would have to pay the loan off.
25% loan retention option. Require that 75% of the loan must be repaid at the end of nine months. Farmers could choose to “roll” or re-enroll up to 25% of their “historic production level” of a particular crop for up to an additional nine months.
1% higher interest. Set interest rates at 1% higher than traditional CCC loans.
E11, now! Instead of fighting petroleum to increase ethanol blends from 10% (E10) to an optional or mandatory 15% (E15), Roebke would move all of the pumps in the country to increase to E11. A 1 percentage point increase in ethanol consumption would increase corn use by 550 million bushels per year.
Roebke has a forceful personality that isn’t always well-received by agricultural policy influencers. He’s tried unsuccessfully to push the plan to journalists, Secretary of Agriculture Sonny Perdue and members of Congress.
Frayne Olson, a North Dakota State University Extension Service commodity marketing specialist, agrees the ethanol concept would boost corn use. Congress would have to act on such a loan rate change, either as an amendment to the 2018 multi-year farm bill or a separate bill. That’s unlikely, he says.
Scott Stofferahn, executive vice president of Golden Growers Cooperative, was a key player in farm bills while working for former U.S. Sen. Kent Conrad, D-N.D.
He says the Congressional Budget Office would see the Roebke Plan loan increase and score it as a cost, even if it is a recourse loan, he says.
“If I’m the government and I’m lending money to you, and the only collateral (you) have is insufficient to cover the loan,” Stofferahn says, in that case, the federal government will become an unsecured creditor rather quickly. “The government wouldn’t own all the grain, but they’d own all of the debt.”
Plus, any new program would have to start with an endorsement by farm organizations or commodity groups, he says. That’s a problem for a plan championed by a felon.
Starting in 1982, Roebke served nine years on the Southern Minnesota Beet Sugar Cooperative’s board of directors including as its secretary. He was instrumental in setting up a 6 cent per ton assessment for lobbying that was instrumental in setting up sugar import and loan programs that are still in place today.
After a crash in the soybean market, Roebke in 1999 and 2000 sold 150,000 bushels of grain in his bins that were under CCC at a “ridiculously low loan rate” to an elevator in Buffalo Lake, Minn. “I blatantly lied to them,” he now admits. “I said, ‘There’s no loan on them. Send me a check.’”
Roebke explains he was angry and deliberately broke the law to make a political point.
Instead, he was convicted in 2002 and served time in a federal prison.
He was out of custody in 2005 and in 2008, he moved to Alexandria and tried in vain to get the Republican nomination to run for Congress in Minnesota’s Seventh District.
Now divorced, he says he lives on Social Security and works at a local building retailer. “I regret (the conviction) cost my family, and what I went through for the past 20 years,” he says. But that’s past, he says.
Just focus on the Roebke Plan, he says.