WASHINGTON — US Agriculture Secretary Tom Vilsack, speaking to a Washington crowd and a livestreamed global audience this month, said there is a larger consideration beyond prices and production of agricultural commodities: the fate of America’s rural areas.
The hope that US citizens would think more seriously about that societal issue was the backbone of the Secretary’s keynote speech in the opening session of the 100th annual Agricultural Outlook Forum. Vilsack opened his big picture look at the state of American agriculture with a throwback to the 1970s and the transition of US agriculture from government supply regulation to free markets and encouraging production. The ensuing “fencerow to fencerow” response of the American farmer led to a tripling of production in his lifetime with no significant increase in input, he said, a testimony to the hard work of farmers, ranchers, producers, and the important work of researchers and companies that created farm technology,
But the agricultural success story of the past 50 years carries alongside a societal story as well, Vilsack said.
“Think about the importance of rural America and its value system to this country and whether or not as we focus almost principally and primarily on productivity, did we forget about the price we need to pay,” he said.
Vilsack reminded his audience of the prescient words of former Agriculture Secretary Bob Berglund, who in 1981 warned the narrow production focus could severely impact the number of farms and rural population. That came to pass, Vilsack said, the evidence plain in data this month noting a reduction 536,543 farms over the past four decades.
“Over a half a million farms gone,” Vilsack said. “At the same time, we’ve lost 165 million acres of farmland. Land that was once farmed that is no longer being farmed. Just to give you a sense of how many farmers and how much land that is, you could take every farmer today in South Dakota and North Dakota, add them to every farmer in Minnesota and Wisconsin, every farmer in Illinois and Iowa, every farmer in Nebraska and Oklahoma, every farmer in Missouri and Colorado, and you’d have 536,000. The land, that’s the land mass of Florida, Georgia, South Carolina, North Carolina, Maryland and 90% of Virginia.
“So, I think it’s important at a forum where we talk about specifics of agriculture to ask the question ‘are we in agriculture, in rural America, in this country OK with that. And if not, what do we do about it?’”
Some are OK with it, Vilsack said, viewing it as a natural consequence of expanding food production to feed more people. He then broke down the “get big or get out” theory, saying that operations with $500,000 in annual sales got 89% of farm income in recent record commodity price years while 1.6 million farms shared 11% of that income. Vilsack questioned the ability to “get big” with the largest part of farm income going to the $500,000-plus income group, which numbers about 250,000, about 7% of US farmers.
“Some suggest by talking about this we don’t care about production agriculture,” he said. “We do, we need it. The world needs it. The question is, can we do better. Can we aim higher. Can we not only have production agriculture that’s the best and greatest in the world, and at the same time create an opportunity for small- and mid-size producers of having a way of being prosperous, a way of not doing what 88% of our farm families have to do, which is to have off-farm income to be able to survive. Can we figure out in this country, as creative and innovative as we are, a better system that allows us to continue to support production agriculture and at the same time create an opportunity for those small- and mid-size folks.”
Developing multiple farm income streams could encourage subsequent generations to take up farming. That’s the goal behind the USDA’s multi-billion-dollar investment in cultivating new and better markets to expand export opportunities and decrease reliance on some volatile top markets, he said. Vilsack detailed the Partnerships for Climate-Smart Commodities, an effort comprising 141 projects involving 92 commodities incentivizing farmers to voluntarily embrace 205 sustainable climate practices and then tie in market incentives and premiums to products being produced for the subset of consumers seeking sustainable production and willing to pay for it.
“The way you measure and quantify and verify as we will the results of these practices, you get a commodity opportunity that doesn’t really exist today,” Vilsack said. “For every one of those producers. You get the opportunity for them to say to the ecosystem service market world, the market that’s got industry and foundations investing in climate results, we can prove to you American agriculture is making a difference. It’s reducing greenhouse gases, it’s sequestering more carbon. And in doing so, many of those operations could operate at a negative greenhouse gas footprint. A negative carbon footprint. And get paid for it. We’re not just selling a commodity, we’re selling a result.”
Beyond the push for new and better markets, the USDA is helping create new industries, he said, citing sustainable aviation fuel as an example.
“The airline industry is desperate for fuel because we’re not going to have battery powered planes, we’re not going to have hybrid powered planes,” Vilsack said. “But it’s important for all the airlines to use a low-carbon fuel, which can be produced from a wide variety of agricultural waste products. And you’re going to see, I think, a commitment to a broad array of feedstocks qualifying for this. And getting the benefit of the Inflation Reduction Act tax credits that will spur this industry and accelerate it, and American agriculture will be at the front and center of providing it.”
Also on the home front, Vilsack said the USDA had invested in more than 400 projects to expand processing capabilities to shorten the path from producer to consumer, allowing the former to keep more of each food dollar. The current average take home income is 15¢ for every food dollar, or about 7¢ accounting for production costs, he said.
He elaborated on the topic in a later press conference, noting the concentration of farm income during instances of limited disaster assistance increases the importance for of looking for ways to help small- and mid-size businesses, especially specialty crop producers.
“People need to think about this not just on what the market is today, but to focus on who benefits from the market today and who benefits from the programs at USDA,” he said, but rejected the suggestion of means testing for relief money.
“It means continued investment in local and regional food purchasing opportunities, support for the local agricultural marketing program, support for farm-to-school, support for farm-to-market promotion, support for the purchasing of food and creation of markets,” he said. “The whole notion of how we focus on agriculture is about creating support and we need to be thinking about creating additional markets, better markets, new markets. That needs to be the focus.
“And when you look at the local regional food system, there are multiple market opportunities in that. Opportunities in hospitals, colleges and universities, opportunities in any institutional purchaser, but we need to create the structure and the system that makes it easy to enter into the system. That’s why we established regional food business centers, to make it easier for communities and farmers that are interested in this. It’s important we focus on sustainability for a multitude of reasons. Important for the future of agriculture that ag is a leader in this effort. If not, there are some folks who want to radically change the way in which agriculture is approached. Farmers are interested, they’re on the front lines here, embracing this notion, taking advantage of it.”
Vilsack touched on several other subjects raised by members of the agricultural press corps in Washington:
On non-rural Americans’ incentive to buy in: “First, they want a more resilient food system. I hope to God it’s the last pandemic we ever have to experience, but folks will tell you that’s not necessarily the case, so we need a more resilient food system so we don’t have empty shelves. No. 2, they need to ask themselves ‘where do all those people who serve us in the military come from?’ And what they’re going to find is a disproportionate number come from those small towns. The reason I think they do is in part because of the value system they grow up with. Farmers understand you can’t keep taking from the land, you’ve got to give something back to it. You grow up around that kind of value system, you realize ‘This is a pretty special country, I’m fortunate to be here, what do I need to do to make sure that I recognize that?’ Oftentimes that’s service.
“If you want the service effort to continue to grow and expand, it you want to make sure that you’re not stuck in traffic jams, that you have a population that doesn’t continue to move to larger and larger and larger cities, then you’ve got to have economic opportunities that let people live and raise their families in the small communities they came from or would like to go back to. For the first time in 10 years, we’ve reversed the out-migration from rural areas. More people came to rural America last year than left. That’s a big deal and it’s a reflection that things are happening, there is opportunity being created, there’s entrepreneurship, people are anxious to take advantage of that, and we want to build on it. “
On meeting with the House agriculture committee and farm bill optimism: “I think these hearings are a wasted opportunity. It is unfortunate that there weren’t questions to explore about how we could be creative about the farm bill. How could we use the Commodity Credit Corporation in a way that could potentially open up revenue to do a lot of good things. Instead, some folks had a point to make, and I’m not sure beyond the press release what’s accomplished by that.
“In this country, we have to get beyond that. It was an opportunity to explain the importance of a farm bill to everybody, not just a handful of farmers. An opportunity to talk about what rural America contributes to the rest of the country. It was an opportunity that was taken to explain the importance of the nutrition systems program and maybe even extend beyond the obvious, which is that you’ve got a lot of families that struggle, and these nutrition programs help.
“We sometimes take the stability of our situation here in America for granted. If you look at all the troubled areas of the world, you’re going to find a lot of unemployed people and a lot of hungry people. We basically have an unemployment system that helps people through tough times. We have a series of food assistance programs that ensure people are fed. That helps create a more stable country. And that’s certainly worthy of investment. There’s an opportunity there to communicate to a broader audience and explore a creative process that will encourage folks to think differently about things. My comments here today were designed to say ‘Hey, can we do better, can we think bigger, can we aim higher.’ We can have production, we need production. But does it need to be at the exclusion of an opportunity for small- and mid-size companies. I don’t think so.”
On whether proposed rule requiring public companies to report climate impacts would be helpful for government-company partnerships: “The depth of their proposed rule becomes important. It becomes problematic if it gets to the point where we have individual farms reporting this. It gets backs to this notion of voluntary incentive-based and market-based.
“That is why I was frustrated with the representative from Illinois. She didn’t understand the farmers in Europe are upset because they have a regulated, mandated system. She hasn’t been in the room as I have with European farmers saying how is the US doing this, how can we do this? It’s because our system is not forcing farmers, it’s creating an economic incentive for them. So, from an agriculture standpoint, I don’t know if it’s necessarily helpful to have mandates. Much more effective to utilize incentives, reward farmers, give them the tools to create new streams of income so they don’t feel like they need to go off-farm and work 40 hours a week to keep doing what they love to do, which is farm.”
On the decrease in Black farmers amid the administration’s equity focus: “I believe a lot of those losses may very well come during the pandemic. As you can tell, it was a lot more than just Black farmers. We had a significant reduction. Having said that I think we are taking steps. Making sure programs are readily available and folks know how to enter them. We’re entering into more than 100 cooperative agreements with organizations that have a trusted relationship with growers. Secondly, we are creating a process using resources from the American Rescue Plan to assist distressed farmers and service their loan in a way that allows them to remain on the farm.”
On whether recent corn-volumes into Mexico are moves toward resolving the GMO corn issue: “It’s not surprising that those shipments have continued because there was a recognition that 60% to 70% of what Mexico needs to feed its livestock comes from the US. The president of Mexico has a different attitude about this. I have had two meetings in which we tried to explain the science behind this, and as a result they modified the rule so that yellow corn can come in to feed livestock. But there’s still a big issue here, that the science indicates that there’s no safety concern and that we have an agreement in the US-Mexico-Canada Agreement to recognize science. And to the extent that the agreement is not being followed, the reason why the USMCA was passed was it has a method for dealing with disputes, which we’re utilizing. I’m hopeful the panel comes out with the right decision and that’s what we’re pursuing.”