Schafer becomes agriculture sec'y amid farm bill fight

WASHINGTON (Reuters) - The Senate confirmed millionaire businessman Ed Schafer as U.S. agriculture secretary on Monday amid White House threats to veto a $286 billion farm policy bill.

Schafer, 61, is a former two-term Republican governor of North Dakota, where farming and ranching are important. He succeeds Mike Johanns, who resigned last September to run for the Senate.

As secretary, Schafer will be in charge of deadlocked negotiations with Congress over the five-year farm bill. The administration says the bill must deny crop subsidies to the wealthiest Americans and not raise taxes. Lawmakers say without new revenue, they cannot pay for expansions of food stamp, land stewardship and biofuel programs.

President George W. Bush said in a statement that Schafer "will work with Congress to pass a responsible farm bill that will provide a safety net for farmers and protect our lands and the environment, while at the same time ensuring federal tax dollars are spent wisely."

Schafer is the first agriculture secretary from the Upper Midwest since Bob Bergland in the Carter era. At the Agriculture Department, he will oversee 100,000 workers and have jurisdiction over public nutrition, crop subsidy and rural development programs as well as run the national forests.

"I hope Secretary Schafer will now be able to help us convince the White House to sign the new farm bill into law," said Sen. Kent Conrad, a North Dakota Democrat and a leader in writing the Senate farm bill.

With no fanfare, Schafer was sworn into office by Vice President Dick Cheney shortly after the vote. He planned to speak to USDA employees on Tuesday afternoon.

Congress and the White House agree the new farm law should protect farmer revenue from crop failures as well as poor prices, despite disagreement on how to structure "revenue protection." Traditional subsidies respond only to low prices and may offer little help to a grower with no crop.

Farm-state lawmakers say the White House has been inflexible in farm-bill discussions when compromise is needed. As an example, they say the House and Senate support major reforms in crop subsidy rules although they have not embraced all of the White House's objectives.

Born into a successful business family, Schafer gained knowledge of agricultural issues as governor when he supported biofuels and promoted farm exports, said backers. He sold the family's Gold Seal Co in 1986, a few years before becoming governor. He has been active in real estate and wireless telephone ventures in recent years.

He listed assets of nearly $3 million on a financial disclosure report, including at least $1 million in bank stock yielding more than $100,000 a year in dividends.

During a hearing on his nomination Schafer said he would work to "enhance our country's vibrant agricultural economy (and) advance renewable energy."

"I will devote myself to improving nutrition and health, enhancing rural infrastructure, promoting good stewardship of our national forests and conserving our natural resources," he said.

(Editing by Christian Wiessner)