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Vilsack: Passing US Farm Bill is Critical

6 March 2012, at 3:21am

ANALYSIS - US Agriculture Secretary Tom Vilsack made it clear in his speech to a standing-room-only crowd of US farmers and ranchers at Commodity Classic on Friday that the most important item on the US agriculture agenda is passing the Farm Bill and getting it done soon, writes Sarah Mikesell, senior editor.

"This job of writing a Farm Bill is not an easy task, but delaying is not going to make it any easier," Secretary Vilsack said on Friday during the general session at the Commodity Classic in Nashville, Tennesse, USA. "It is incumbent on all of us to make sure that we send a consistent message to our members of Congress that we expect action this year."

He said US agriculture needs the certainty of the Farm Bill to understand what the rules will be. He noted that the Farm Bill must allow the industry to build on the progress recently seen in agriculture as experienced in the record farm income last year.

Farm Bill Starts with Crop Insurance

The flagship of the Farm Bill is a safety net which starts with a solid, stable crop insurance program.

"We've worked hard to expand crop insurance the last three years and will work hard to ensure that crop insurance is available to all producers," Secretary Vilsack said. "Last year, 55 million acres were struck with natural disasters, and UDSA will pay out a record amount of indemnity this year. We've paid out the over $30 billion of indemnity payments over the last three years. And that tells you a lot about the importance of this program."

As the Farm Bill is being crafted, he hopes the members of Congress will take into consideration that there is a difference between those beginning in farming and those who have been around for a while.

"As our farm population approaches 60 years of age, all of us have a responsibility to be concerned about where the next generation of farmers is going to come from," he said. "How can we craft, within and outside the Farm Bill, our tax policy in ways which will encourage that next generation of farmers."

Commitment to Markets

Next is the need to continue forward with a strong export effort. Secretary Vilsack said everything included in the Farm Bill needs to ensure that the US will not step back in their commitment to agricultural exports.

"Last year, we enjoyed a $136 to $137 billion in agricultural exports - a trade surplus of $42 billion dollars," he said. "Every billion dollars of agricultural export sales creates 8,400 jobs. It's a success story that is underappreciated. Our ag trade surplus just five years ago was at $5 billion and now we are at $42 billion." He noted the recent announcement of a planned trade mission to China - the largest single trade mission that the USDA has every sponsored to visit their #1 customer.

Bio-based Opportunities

Secretary Vilsack noted that it's not just foreign markets to secure, but also markets within the US. Looking at the American economy, he said one of the great opportunities of our lifetimes is the bio-based economy.

"We're learning how to take every aspect of agriculture - every blade of grass, every particle of crop residue and livestock waste and we are figuring out ways that we can create chemicals, plastics, fiber and fabric," he said. "It will allow America to lead - allowing America to do something that no one else around the world is doing. It will put us in a position to continue to export and transfer our technology, knowledge, products and services to the rest of the world. That's how you strengthen our country - it starts in rural America."

Conservation Reserve Program (CRP)

The CRP program has been a popular, working program for almost 25 years.

"It's why we committed to a general sign-up early in February and why we announced a new continuous sign-up of highly erodible land of 750,000 acres just a few weeks ago," he said. "And it's why today we are announcing an additional CRP effort of 1 million of continuous sign-up opportunity."

Research & Development

Secretary Vilsack believes the US has to invest in research and development and should be increasing the budget. He said there is very good evidence showing the extent that we invest in research correlates to increased production.

"I am optimistic about the future. Why? Because the population of this world continues to grow and there's going to be increased demand," he said. "Middle classes are being formed in countries all across the world. In Asia in particular, demand for high value products that Americans can provide is going to continue to grow, but it won't work if we aren't productive and that won't happen if we don't promote research."

Credit

In order to get started and stay in the business, sometimes farmers and ranchers need help, meaning credit. Secretary Vilsack acknowledged farmers may need an additional push to get their banker to invest in their operation.

"We did 103,000 farm loans in the last three years and are poised to do another 30,000 this year. We need to find creative ways to help farmers get started and have the capacity to farm," he said. "And that requires Congress to not only look at the Farm Bill but also look at our taxing structure. The reality is that with land prices going up there's deep concern about what happens at the end of this year with the estate tax. But we ought not to stop there, we need to look for ways to transfer land while they are alive."

Regulations & Immigration

The Secretary spoke to a few other important issues that fall out of the context of the Farm Bill.

He said farmers need some degree of certainty when it comes to regulations, which is why the USDA is working to create a better relationship with EPA, encouraging EPA to go out and talk to farmer leaders to ensure there is an understanding and appreciation for what regulations mean in the real world.

In regard to immigration, Secretary Vilsack said some would like to use this issue to divide agriculture.

"There are some who would like to put us and them in different places," he said "As Congress works on this Farm Bill, the country needs them to have the political courage to work on immigration reform and to get it done now - it's important."

Renewable Fuels

"This is the greatest opportunity we've ever had to lead not just our national economy, but to lead the world. I hear some critics of the renewable fuel industry, say well we spend a lot of money on that outfit," he said. "Every time you go to fill your tank up, just add $1 per gallon to what you are currently paying. And know that if it wasn't for the biofuels industry that you all helped to create, that we'd all be paying $1 more per gallon."

In three short years, the US has gone from importing 62 per cent of their oil to 45 per cent. And President Obama believes that we can do an even better job. Secretary Vilsack said President Obama has challenged the US and farmers to reduce the US reliance of oil by another one-third in 10 years, which is 18 per cent and is just about the amount that comes from the Middle East.

Commodity Classic is the convention and trade show of the US corn, soybean, wheat and sorghum industries.