Vilsack comments on key farm bill issues and updates on climate smart programs for ag
We interviewed USDA Secretary Tom Vilsack on AgriTalk on Thursday. We asked him to start with Title I regarding the differences between the Republicans and Democrats relative to the farm bill negotiations. Are those differences negotiable? Vilsack’s response:
“I don’t think we’re close to getting a farm bill done until the folks who are negotiating the farm bill are realistic about what’s doable within a constrained resource environment. The Republican proposal, whether it’s the House version or the Senate version, essentially requires a significant amount of additional [funding] coming into the farm bill, in order to pay for all of the various promises that have been made from reference prices to crop insurance premium assistance to all the other proposals that are contained in those bills. It can amount to over $50 billion of additional resources that CBO identified within the existing farm bill or new money coming in.”
“The reality is they just don’t have it [the funding]. First of all, they’re taking resources from nutrition assistance which is a red line for Democrats. They’re also essentially playing fairly fast and loose with the amount of savings from reducing liability and future secretary’s ability to use the CCC. The Congressional Budget Office we believe is probably going to score that about $8 billion in savings. They need $53 billion to be able to make it work. So at the end of the day, if we’re really serious about getting a farm bill done, I think we have to lower people’s expectations and we have to really take a look at what is absolutely necessary in order to provide help and assistance to the farm to farm country. We’re not there yet. I think Senator Debbie Stabenow’s (D-Mich.) approach is more realistic, and more reasonable. [Stabenow] has identified additional resources outside of the farm bill that Senator Chuck Schumer (D-N.Y.) has promised would be available, so she’s identified some real money to put into the farm bill. I think there’s some serious concerns on the House side and I think that’s a problem.”
Asked if there was any give in some contentious areas, Vilsack said: “There’s going to have to be give. I think that there is a genuine desire on the part of perhaps both Republicans and Democrats to see the potential for the conservation resources that are in the inflation Reduction Act (IRA) moved into the farm bill, but with the guardrails intact in terms of the directing it for climate smart agricultural purposes. If you take the guardrails out, I think then you lose Democratic support for moving that into the baseline. So, I think there’s an opportunity there for conversation.”
“I think there’s an opportunity to creatively use the CCC in a way that actually does provide some additional resources or capacity. But I don’t think it’s anywhere near $53 billion. And as a result, that means that you have to lower expectations. Look, you know, the reality is when you talk about reference prices, you’re talking about roughly 22 commodities out of 130 commodities we have that are covered by crop insurance. We’re talking about the fact that over 50% or so of those benefits go to the top 10% of agricultural sale farms in the country in terms of sales. There’s a real serious question here, especially given the fact that we’re seeing so many farms that we’ve lost over the course of the last 30 or 40 years. Can we continue to sustain the number of farms we’ve lost? Its 544,970 farms since 1981. I mean, are we okay with that? Are we okay with losing 151 million acres of land in 1981 that’s not in farming today. Are we okay with the impact on rural communities. This is one aspect of this. When you look at the fact that a disproportionate share of the military comes from rural communities and now you see the military having concerns about whether or not they have adequate resources and people to draw from in terms of an all-volunteer military and they’re thinking about, you know, expanding who could qualify and so forth. My gosh, you know, these are serious issues.
“So that’s a long way of saying I think there’s a way to get to yes, but people have to lower the expectations. They have to really look at what’s going on in the countryside, and tailor a farm bill in a way that responds to the challenges of more farmers, many farmers, not just a few.”
SNAP overpayments? We noted that Sen. John Boozman (R-Ark.), ranking member on the Senate Ag Committee, put out an interesting graphic on the overpayments, etc., in the SNAP program and it was a rather large figure. We asked if there was wiggle room on looking into that as far as better enforcement and moving some of that potential funding or not into the farm bill. Vilsack’s response:
“Let’s be clear about that number. First of all, it isn’t necessarily overpayments. It’s also under payments. That is a function of state government. And we are working with the state governments because they’re the ones who administer the SNAP program. And there’s an opportunity for us to work collaboratively with them to shore up and to begin returning back to where things were before Covid, where there were ongoing interviews and things of that nature, and that’s going to happen, but that’s not necessarily going to be the resources sufficient to pay for $53 billion of increases in reference prices.”
Conservation. Noting if there is any area where there is some agreement, it’s on conservation. We asked Vilsack if the Democrats and Republicans in Congress can find common. His response:
“I think we could get to yes easily if the understanding was we’ll move the balance of the IRA conservation resources into the farm bill with the understanding that the climate guardrails remain. I don’t think there’d be any disagreement on the part of folks to do that.
“There’s roughly somewhere in the neighborhood of $14 billion to $15 billion left of what was allocated in the IRA that’s available. There’s tremendous demand and interest as we had 45,000 contracts last year, a record number of contracts in the various programs, and we’ve got waiting lists. We’re hiring more people for NRCS (Natural Resource Conservation Service). So, there’s a real interest there. I think we can get to yes. “
Regarding the CCC program, Vilsack said: “There’s probably a way that you can put some restraints or utilize the CCC in a way that generates some savings, but it’s just not $53 billion. Let’s get real about it.”
We then turned our focus on past remarks Vilsack has made that climate smart programs could be the next revenue stream for farmers. We told him farmers are in the prove-it stage and asked him for an update. His response:
“We’re beginning to see products that are actually generating value added. I use the rice product that was produced by Louisiana and Arkansas rice producers, getting a premium for producing climate smart. I’m told that there are dairies that are now lined up to get a value- added premium for potential export opportunities. I’m told that there are also a number of producers that are also now seeing increases as a result of climate smart practices. We’re seeing interest in sustainable aviation fuel. That’s a new market opportunity and we are in the process of working with Treasury and with the Department Transportation and EPA to craft guidance for the 45Z tax credit, which is really the significant tax credit for individual and bundled activities on the climate smart side that will allow us to qualify ethanol that’s produced from those crops to benefit from sustainable aviation fuel. That’s a new opportunity. We’re spending resources from the IRA to better align our tools to measure, monitor and verify the results of climate smart practices which are going to allow folks to qualify and participate in ecosystem markets. That’s a new revenue source. We’re seeing interest in renewable energy in terms of trying to do it in a way that doesn’t reduce productive agriculture, but it actually adds to productive agriculture. I was out in Colorado recently, hearing from folks who are now seeing solar panels being raised instead of three feet now 10 feet off the ground so that you can actually have dairy cows grazing underneath the solar panels. So, the innovation and creativity are there to increase the level of income that small and midsize producing farms can produce. At the end of the day, they’re going to have to figure this out because we can’t continue to lose farms.”