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Vilsack: Priorities for 2012 Farm Bill - Do More with Less

Vilsack: Priorities for 2012 Farm Bill - Do More with Less

28 October 2011

US - On Wednesday, US Agriculture Secretary Tom Vilsack spoke at the John Deere Des Moines Works on USDA priorities for the 2012 Farm Bill, noting the new Farm Bill will need to do more with less, writes Sarah Mikesell, TheCropSite senior editor.

For decades this bill has been more than just farming - it's been about energy, nutrition and jobs. Vilsack said the next US Farm Bill will determine where our energy supply comes from and if we can all eat, so we have to think bigger than the words "Farm Bill" suggest.

"It's about providing an adequate food supply for our nation and the world. And the choices that these lawmakers will make will help shape agricultural, food, and rural development policy and will help determine what our farms and our rural communities look like," Vilsack said. "I want to acknowledge that there are considerable external pressures that will affect this effort. Fiscal and political realities about the size of our debt and the deficit have inspired a very tight budget environment."

Last week a leadership group in Congress submitted a proposal to the Joint Select Committee on Deficit Reduction, also known as the Supercommittee, to cut $23 billion out of the bill over the next 10 years. And though these numbers are not final, there will be considerably less funding in which to do it. He said our priorities must be clear - simply do more with less.

"We have to simplify existing programs; we need to reduce redundant provisions; and we need to put a premium on creating innovative solutions to address our current and future problems, also recognizing the importance of making targeted investments to keep agricultural productivity high and our rural communities vibrant," he said.

Strengthen American Agriculture

"American farmers and our agricultural industries contribute in no small way to the economic health and strength of our great country," he said. "Agriculture is responsible for one out of every 12 jobs in our economy," he said. "What we do on the farm ripples through the economy and helps to create jobs, particularly when agriculture is thriving. The productivity of American farmers and ranchers helps American families stretch their paychecks."

Americans spend, on average, about 6 to 7 cents out of every dollar they earn on food, which is far less than families around the world, he said. This gives us the freedom and flexibility to spend or invest in other parts of the economy.

"After adjusting for inflation, farming income today is at its highest level in nearly 40 years, farm debt is falling, and farm equity is growing. But we didn't get here by accident," he said. "We're here because we've focused on three core principles that have helped to shape the success of American agriculture, and those principles need to be protected and advanced as Congress works on legislation."

Three core guiding principles:
  • Maintain a strong safety net
  • Support sustainable productivity
  • Promote vibrant markets

"As they work on this bill, Congress must agree on the right mix of policies to provide an adequate safety net for those who need it. High input costs mean agriculture will always remain a high risk," Vilsack noted. "A bad crop, ruined by a natural disaster or an unpredictable price collapse, can put a hard-working farm family out of business quickly. These families rely on a strong safety net."

Vilsack visited many farms across the country devastated by natural disasters this year. From flooded land that kept farmers from planting in the spring to fires and droughts in the southwest to fruits and vegetable fields ruined by Hurricane Irene, it was a visceral reminder to Vilsack of how important the safety net is for US farmers, ranchers and producers.

"In my conversations with these producers, I heard about parts of the safety net that are working pretty well. I also heard about parts that weren't. The SURE program isn't sure enough or swift enough, ACRE is not simple enough, and crop insurance may not cover enough," he said. "Farmers recognize that the safety net makeup will likely change, but the production and protection it affords ought not to be compromised. And here are several keys to make sure that the protection and production are protected."

  1. Producers need assistance quickly after they lose their crops to a natural disaster.
  2. The safety net needs to reflect the diversity of American agriculture, working for all kinds of farms and ranches, not favoring one crop over another.
  3. The programs that comprise the safety net have got to be simple and understandable. Programs shouldn't discourage farmers from applying. They shouldn't be too costly to attain, or too slow to matter.
  4. The safety net has got to be accountable and justifiable to the 98 per cent who do not farm. We have a responsibility to the American people to use their resources wisely and to provide assistance only when it's needed.

Sustaining Agricultural Productivity

Farmers, ranchers and growers must be able to produce an affordable and appealing product each and every year, he said.

"Our farmers are the most productive in the world, and that leadership position must be maintained," he said. "Today there's no question that American farmers can produce enough to feed our nation. Over the past 60 years, yields per acre of major crops - corn, soy, wheat and cotton - have doubled, tripled, and in some cases even quadrupled. Livestock production and specialty crop production have become far more efficient."

He said this evolution was not pre-ordained, but has resulted in producers embracing new science, technologies and production techniques, and Congress must find ways to support research that is focused on crop and livestock production and protection.

"Studies have shown that public investments in agricultural research earn a $20-to-$1 return of investment in the US economy," he said. "These benefits extend beyond just economic returns. Research also leads to improved soil, water and air quality, and they help us to design strategies to deal with the impacts of the changing climate."

Public funding for agricultural research has remained basically flat-lined since the 1990s, clearly not keeping pace with other federally-supported research. A recent USDA study sounded a warning signal of the direct link between increases in agricultural investment on research and agricultural productivity.

"If we continue to flat-line our commitment to research, our productivity will likely suffer; this at a time when our productivity will have to continue to increase to meet the global demand for food," Vilsack said.

Conservation is also an equally important component and strategy for sustainable productivity, he said.

"In the last 30 years producers have reduced soil erosion by more than 40 per cent, and agriculture has now become the leading cause of restoring wetlands, whereas before, it was the leading cause of wetland loss," he said. "All of this is providing cleaner and better water. Farmers understand the need for healthy and productive soil and the need for a plentiful water supply, and they appreciate that voluntary conservation programs support both needs."

USDA has been looking for better ways to target conservation investments, resulting in a record number of acres enrolled in conservation programs.

"I want to encourage Congress to continue their commitment to improve conservation programs, to maintain a robust investment in voluntary conservation assistance and to encourage our efforts towards regulatory certainty tied to conservation," he said. "Fewer programs, more flexibility, simpler applications, and a streamlined process for applying will help target our resources effectively and efficiently."

Promoting Strong Markets

As Congress defines the Farm Bill, they should recognize we need vibrant, fair, and diverse markets at home and abroad for our farmers, ranchers, and producers of all types and all sizes, he said.

"Over the past five years, US agricultural producers have doubled the total value of their exports; this year will be the best year we've ever had for American exports," Vilsack noted. "They'll top $137 billion, $20 billion more than last year. This will allow us to have a record trade surplus in agricultural production and products of $42 billion, supporting nearly a million jobs."

Vilsack reminded the group that last week, President Obama signed trade deals with Colombia, Panama, and South Korea, which is expected to add an additional $2.3 billion of agricultural exports for a range of products, noting every additional billion dollars of agricultural sales helps generate 8,400 jobs in the US. Congress can build on this with continued investments in USDA's trade promotion programs, which studies have shown a return of $31 for every $1 invested.

Local food is one of the fastest growing segments of agriculture, with direct consumer sales doubling in the last 10 years, he said. Making connections so that a farmer can sell locally, creates good-paying jobs in our rural communities and keeps the wealth created from the ground close to home.

The Farm Bill also deals with nutrition, which is why farmers aren't the only ones that need a safety net, he said.

"In a tough economy, families that struggle through tough times and seniors living on fixed income may also need help," he said. "That's why we have the Supplemental Nutrition Assistance Program, which we commonly refer to as SNAP."

Through SNAP, 44 million low-income Americans can put healthy, nutritious food on the table. For many families SNAP is a bridge to self-sufficiency, with half of all new SNAP participants leaving the program within eight months.

Production Agriculture is Bright Spot

Production agriculture has had significant success along with emerging renewable energy strategies and consumer interest in locally-grown food.

"We've helped to create or save nearly 250,000 jobs in rural America by partnering with local financial institutions to lend over $5.5 billion to several thousand rural businesses that were locating or expanding into America. These resources leveraged another $15 to $20 billion of private investment," he said. "We've helped to finance over 435,000 home loans in over 20,000 rural communities; 5,100 rural water and wastewater projects have been funded by USDA, putting people to work and providing clean water for nearly 17 million rural Americans; and we continue to invest in rural electrification, nearly $18 billion in the last two and a half years, to modernize that system."

By structuring our fees and interest rates properly, these programs cost little to the federal taxpayers, but all of them help to create jobs and improve quality of life. Congress should seize the opportunity to improve rural development programs in this next Farm Bill to make sure that the federal government is a partner to rural businesses and communities.

He said better access to USDA-supported programs, fewer programs, and a simplier process to apply is needed, while focusing efforts on firms that wish and need capital to invest in rural America.

Renewable Energy & Biofuel

Vilsack said farmers efforts developing domestically-produced renewable energy and fuel has helped create jobs, reduces American reliance on foreign energy sources and enhances national security.

USDA must continue to support the biobased, biofuel and renewable energy economy in all regions of the country, he said. In the last few years as a result of the expansion of the biofuel industry, the US has gone from importing 60 per cent of our oil to 52 per cent.

"The President has challenged us to reduce our dependence on foreign oil by one-third in a decade - that's roughly 18 per cent," he said. "That 18 per cent is roughly equivalent to that which we currently import from the Middle East, a fairly unstable part of the world. That instability reflects itself in the prices we pay at the pump. As a result of our biofuel industries, consumers across America are paying about $0.90, on average, less for gas than they would otherwise pay."

Assistance to this industry will be more targeted and limited in the future. However, Vilsack believes we have momentum in many areas of the country to focus on nonfood feed stocks which will expand the production of advanced biofuels.

In 2009 and 2010, USDA invested in more than 22,000 renewable energy projects. By supporting farmers, ranchers and businesses taking risks to pursue those new opportunities, it will help establish the infrastructure to put renewable fuel in all of America's gas tanks. Congress's effort must continue to offer strategic support to these important industries, he said.

"I believe very, very strongly in a bright future for American agriculture. In fact, it's as bright as it can be. That's why this farm, food, jobs bill - whatever you'd like to call it - has got to build on the agricultural economy that we have today," Vilsack concluded. "We have to improve that economy with a strong safety net, a commitment to conservation, and a focus on market development; and this bill must also continue to provide for food assistance for families that are playing by the rules, working hard to provide for their families."

Sarah Mikesell, Senior Editor

Sarah Mikesell, Senior Editor

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