If farmers are worried about President Joe Biden having a negative impact on their business, they should take some comfort from a speech given today by the man who now resides at USDA’s top office.
In closing comments at this week’s virtual Commodity Classic, newly appointed Secretary of Agriculture Tom Vilsack made it clear he had the farmer’s back, and that their best interests, from trade to renewable fuels, would be championed by this administration’s USDA.
“We’re dedicated at USDA to try to create more, better, newer and fairer markets, which will benefit producers across the board,” said Vilsack.
Vilsack is the 32nd secretary of agriculture and is the only ag secretary to serve twice, said WYXY Farm Broadcaster Gale Cunningham in introducing Vilsack, who had previously served as President Obama’s ag secretary.
“Not many of us come out of the fire and then jump right back into it,” quipped Cunningham. But as Vilsack noted, Biden made him an offer he could not refuse.
“I’ve known the president for over 30 years,” he said. “He is a dear friend and someone I could not say no to.”
Vilsack has only been on the job eight days, and he’s “learning and re-learning a lot,” he said. “It’s a different time and to some degree, I’m a different person coming into this role.”
Here are the highlights from his speech:
COVID government assistance
USDA has been analyzing past COVID relief so it can make a better judgment of who may receive assistance going forward. “When I came into office it was clear there were a significant number of folks impacted all along the supply chain,” he said. “This industry employs more than 20% of the entire American workforce. When COVID hit, a lot of folks were negatively impacted. Some but not all have been helped by financial assistance in that supply chain.”
Vilsack says the analysis should be complete in the next few weeks and will make announcements related to COVID relief. But, any ag assistance also must make sense as it relates to the bigger relief package being debated in the U.S. Senate. “We need to see how those resources get allocated before we do what we need to do,” he said. “When history is written about COVID relief, we want to be able to say, the people who needed the help got the help, and that people were not left out or forgotten about.”
New, more, and fairer markets
In his research prior to confirmation hearings, Vilsack was disappointed to learn that nearly 9 of 10 farm families do not make a majority of income from their farm operations, and supplement income with off-farm work.
“That is a very difficult statistic for a secretary of agriculture to repeat, because it suggests we need to do a lot better job so people can make the majority of their income from what they want to do,” he said. “So, the majority of our work in the next four years is going to be on markets: new markets, more markets, fairer markets.”
Vilsack says COVID exposed how easily the ag supply chain could be disrupted, especially when it comes to meatpacking. He says USDA will address consolidation, ensure adequate price transparency, and work toward more competitive markets for farmers.
“We will highlight where competitive markets are working well,” he said. “We are going to invest in more processing facilities. We need to make sure markets are far more resilient. Additional processing will allow us to be more competitive.”
From his stint as CEO of U.S. Dairy Export Council Vilsack learned the value of having a greater presence in foreign markets. That’s why he believes USDA should invest more to promote and ensure U.S. farm products are known and accepted in other countries. He also wants to focus on enforcing current trade agreements. He has already discussed some of thorny issues over wheat and GMOs, with his Canadian and Mexican counterparts.
Vilsack sees potential in new trade deals with the UK and the EU. “There’s potential opportunity to get relaxation of various tariffs,” he said. “Maybe it starts a conversation about trade agreements with both groups, opening the door with an understanding that any agreement includes open access to our ag products.”
China and the Phase one agreement
When the China-U.S. relationship focuses on trade, it’s positive, said Vilsack, but unfortunately our relationship has other layers that must be factored in.
“It’s certainly important and necessary for us to see (Phase one) purchases continue,” he said. “I’m confident in China’s future purchases as long as the relationship focuses on trade because China needs what we have, and we can meet their needs. But the relationship is complex and not just based on trade. So, it’s complicated.”
Vilsack noted the China trade war was not without consequences. “A lot of farmers had to leave the farm and that’s always an incredibly sad circumstance,” he said. “We have to acknowledge where we are relative to trade with China. In fact our market share with china in 2017 was roughly 25% from the U.S., and today it’s 15%. So, we have to put this in perspective.
On the positive side, China did make a number of commitments, especially in phytosanitary regulations. Reducing barriers is beneficial, but the jury is still out on the impact of these changes.
“They haven’t fully engaged in the regulatory arena, so there’s still work to be done,” he added.
If China fails to meet requirements in the Phase One deal, in year two, Vilsack believes the U.S. should begin working with China to see what else can be done.
“They are about 80% of where they promised,” he said. “It’s certainly good but they are not where they need to be.”
Vilsack said the U.S. was in danger of becoming overly dependent on one market.
“On any given day something that happens in Taiwan or the South China Sea that creates friction between our countries is a threat to that trade channel,” he said. “So we need to open new opportunities in places like UK or India, over time. It means also USMCA is implemented the way it was written. And taking the long view, as Africa continues to grow, we learn the rules of the road, so that we don’t see opportunities go to our competitors. So there’s a lot of work on the trade agenda and I’m confident the U.S. trade rep is up to the task.”
Climate policies could generate new income
Vilsack says USDA and the Biden administration will focus on creating new income opportunities for farmers who use climate-smart practices. That could come in the form of a carbon bank focused and designed specifically for farmers.
“We lose four and a half tons topsoil per acre per year and are only replacing half a ton,” he said. “We need to provide incentives and encourage farmers to embrace things that will have positive impact on soil health and water quality.
“We have to create, design and implement programs in a way that benefits farmers, because it’s the farmers who are going to be sequestering carbon and providing the early wins in the effort on climate,” he added. “At USDA we’re going to figure out how best to structure that program.
“We can meet the president’s goal of zero carbon by 2050 in agriculture,” Vilsack says. “It will create more opportunities for farmers and more manufacturing jobs in rural towns across America.”
The secretary said the next few years could be spent test marketing climate concepts and use that experience to better inform a new farm bill.
“For example, if we create some kind of carbon bank that benefits farms, we can provide sufficient resources to get it started and learn what works and what doesn’t,” he said. “If we focus on climate smart agriculture, what will we learn in terms of what we need to do to beef up or figure out additional ways to incentivize those activities, and how does it all fit into a new farm bill?”
Renewable fuels, EPA, and pesticide availability
Renewable fuels play an important role in the new administration’s climate plans. And even with electric vehicles gaining market share, Vilsack believes there is still a very robust future for ethanol. He said EPA’s approach to oil refinery waivers will be significantly different than the previous administration. “It’s important that EPA sparingly use the waiver, and when the renewable standard is up again for renewal, that we work with congress to renew it,” he said. “We’ll make sure as (USDA) buys new vehicles, yes we’ll buy electric, but also renewable fuel vehicles.”
There have been changes in how endangered species are protecting, and some changes impact use of crop protection products. Vilsack believes USDA must create a line of communication with EPA to make sure that EPA, when following its mandates, understands the impact those decisions have on agriculture.
“We don’t have veto power over what EPA does; we have to respect that,” he said. “But we can have information sharing and try to analyze impact of what those decisions have on farmers and try to mitigate the impact of those decisions.”
Vilsack said he was happy with his conversations with (EPA administrator nominee) Michael Regan. “He understands that what happens at EPA has an impact on USDA and it’s important to be consistent and transparent,” he said. “He understands it’s important to have a line of conversation between our agencies.
Vilsack says there’s significant need for modernization, not just in the Mississippi River lock and dam system but other areas that impact utilities and transportation, as well as broadband across rural areas. If we’re going to be serious about precision ag and how we use our land, you have to have broadband,” he said. “And be able to get that product to market more efficiently. It’s about jobs, growing the economy and preparing for significant (foreign) competition.”
Vilsack also believes green infrastructure will see investment dollars – for example, capturing methane and converting it to fuel and energy.
“If we’re really serious about sequestering carbon, how can we redirect it and avoid waste? Can it be converted, what infrastructure do we need to store it? It’s going to require political will to do it and understand lessons learned from COVID,” he says. “We’re digging ourselves out of economic and health holes. We can accelerate that process if more of us get vaccinated and shift focus away from COVID relief and disaster assistance, to investing in our future.”