UPDATE 3-Obama announces measures to soothe drought pain, attacks Ryan

Mon Aug 13, 2012 4:34pm EDT

* Farmers watching crops wither in the fields

* Farm bill mired in Congress, battle over cuts

* Obama seeks to blame Republicans for inaction

* President inspects drought-hit corn field

By Jeff Mason

COUNCIL BLUFFS, Iowa, Aug 13 (Reuters) - U.S. President Barack Obama announced an emergency purchase of up to $170 million of meat and fish on Monday on a campaign trip to drought-hit Iowa, and accused Republican vice presidential candidate Paul Ryan of blocking disaster aid to farmers.

Obama named the Wisconsin congressman, the presumptive Republican nominee for vice president, as "one of the leaders of Congress standing in the way" of a farm bill that includes the aid.

"So if you happen to see Congressman Ryan, tell him how important this farm bill is to Iowa and our rural communities," Obama told a political rally in Council Bluffs, on the western edge of Iowa.

Swing states, including Iowa, Ohio, Florida, and Colorado, could hold the key to Obama's White House re-election bid.

As the House Budget Committee chairman, Ryan has demanded large cuts in farm bill spending, including food stamps for the poor. He also campaigned in Iowa on Monday, two days after being chosen to be Republican presidential candidate Mitt Romney's running mate for the Nov. 6 election.

The farm bill is mired in the House of Representatives, where Tea Party-influenced Republicans seek deeper cuts and Democrats balk at the biggest food stamp cuts since the 1990s.

Ryan voted for a separate livestock disaster aid bill that passed the House this month. But the Senate failed to take it up before Congress left on a five-week recess.

A Romney campaign spokesman said "no one will work harder to defend farmers and ranchers than the Romney-Ryan ticket."

Obama has focused on the farm bill three times in the past week as a way to blame Republicans for inaction in Washington.

U.S. farmers are watching crops wither in the fields under searing heat as concern mounts that livestock producers cannot afford the soaring cost of corn, a staple for feed.

Corn prices briefly hit a record on Friday when the Agriculture Department estimated the corn crop will be down 13 percent from last year, with the lowest yields since 1995.

AID: DROP IN THE BUCKET?

Under the emergency plan announced by Obama, USDA will buy pork, lamb, chicken and catfish, and the food will be sent to assistance programs, such as food banks.

USDA said it aimed to bolster livestock prices to buffer higher feed costs, the latest in a series of drought-relief steps which also includes low-interest disaster loans.

But analysts said the package will do little to help with soaring feed prices as farmers battle the worst drought in half a century.

"We do appreciate it but it's a drop in the bucket," said Steve Meyer at Paragon Economics, a consultancy.

Bill Rishel, a cattle rancher in North Platte, Nebraska, said the program was misdirected. "The fact is, I don't think we're over-run with product, the problem is the cost of input."

In a related matter, federal officials had no immediate response to a request by governors of Maryland and Delaware for relief from a requirement to use corn-based ethanol in gasoline so more grain will be available for livestock feed.

The two states are part of a poultry-growing belt centered in the U.S. Southeast.

Ethanol's stronghold is the U.S. Midwest, where it is a political favorite as a home-grown fuel and an economic powerhouse that creates rural jobs, boosts demand for corn and helps farmer income. Forty percent of the corn crop is used in making ethanol.

Like his Republican predecessor, Obama has stood with the Renewable Fuels Standard that guarantees ethanol a share of the gasoline market - 13.2 billion gallons this year and rising to 15 billion gallons in 2015. As recently as Friday, a farm group said it got signals of administration backing for the ethanol mandate.

To justify a waiver, the Environmental Protection Agency must rule the mandate creates severe economic harm.

Obama scheduled a three-day swing through Iowa, a battleground state the Democrat hopes to win in November.

At Missouri Valley, Iowa, 25 miles (40 km) north of Council Bluffs, the McIntosh brothers, Dean, Don, Richard and Roger, showed Obama a parched cornfield whose stalks were green and dried brown.

Yields on the farm are down by one-third because of drought, said the White House.

The White House also is directing the Department of Defense to encourage its vendors to speed up purchases of lamb, pork and beef and freeze the food for later use.

Analyst Mark McMinimy of Guggenheim Partners noted the "incredibly fortuitous timing" of the announcement, which he said demonstrated the advantages that Obama has as an incumbent running for re-election.

So far this fiscal year, the Agriculture Department has spent $941 million to buy more than 1 billion pounds (453.6 million kg) of food for the school lunch and food donation programs.

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