Speaking with AgriTalk Radio’s Mike Adams this week, U.S. Secretary of Agriculture Tom Vilsack discussed the Obama Administration’s record on trade, estate taxes and other issues of interest to farmers and ranchers. We also have summarized a similar interview with Bill Northey, Iowa’s Secretary of Agriculture and co-chair of Farmers for Romney, making his case for the election of Republican challenger Mitt Romney on the same issues.
Regarding trade, Vilsack says the United States has had four years of our best ag exports in history, setting a record last year. He expects another record this year and a good year in 2013. The administration is working on additional free-trade agreements, on agreements with Russia through the World Trade Organization and to remove trade barriers for U.S. products in countries including China, Mexico and Japan. The Administration also is pushing for ratification of the Trans Pacific Partnership (TPP) which would open markets in Southeast Asia. In a second Obama term, Vilsack expects a continuation of these efforts to promote trade for U.S. food and agricultural products. He notes, though, that the Administration needs cooperation from the House of Representatives, particularly in passing a new farm bill, to provide the tools for expanded agricultural trade.
In response to a question about the TPP, Vilsack says the President demonstrated toughness in negotiating free trade agreements with South Korea, Panama and Columbia to secure stronger deals. The administration is not going to enter any agreement that puts the United States at a disadvantage, he adds. As far as countries entering the TPP, he says the agreement will include threshold requirements to abide by science-based, rules-based standards. Vilsack says he strongly believes the United States can compete with any country in the world in the production and export of agricultural products. He stressed the need for enforcement of trade agreements, saying the administration has introduced new enforcement tools and has stood up to China on trade issues more than past administrations.
Regarding young and beginning farmers, Vilsack says the administration strongly encouraged the Senate to include mechanisms and resources for beginning-farmer programs in their version of the farm bill, providing technical assistance in developing business and risk-management plans. The administration also has made credit more available, with the majority of Farm Service Agency loans going to beginning farmers and ranchers. They also introduced a new micro-loan program providing $35,000 for seven years at low interest to help beginning farmers get started with capital investments. He also says the administration is encouraging congress to fix the estate tax and provide tax-code incentives to help young people get into farming and ranching, and he touted the administration’s efforts in building local and regional food systems, largely to the benefit of smaller producers.
Adams asked specifically about the estate tax, and Vilsack says the exemption needs to be raised to a point where family farms and small businesses are not threatened with sale or disrupted when ownership passes to the next generation. He says the President does not believe Bill Gates or Warren Buffet deserve tax breaks, but understands and appreciates that family farmers of this country do. The administration is encouraging congress to raise the exemption level significantly so that family farms and small businesses do not need to worry.
Adams asked the Secretary if the administration favors eliminating the estate tax altogether, and he answered no, the President does not intend to provide tax breaks to billionaires, but does want to protect family farms and small-business owners.Adams pointed out that farmers and ranchers have become increasingly concerned about over-regulation, particularly by other government agencies such as the EPA and the Labor Department. Vilsack says the administration has worked hard to ensure the USDA’s sister agencies understand and appreciate the impact new rules will have on family farms and ranches. He has scheduled meetings between cabinet secretaries and commodity groups, and arranged for the EPA Administrator to visit farms, see how they work and how regulations could affect them.
Communication is critical between agencies, he says, and USDA’s efforts have helped resolve some issues and prevent new regulations from other agencies. For example, he says, EPA recently issued a guidance on water issues instead of actual rules, in part because USDA convinced them farmers and ranchers are responsible stewards of the land and water. The President is very clear in that he wants agencies to work together, Vilsack says. He initiated the Rural Council, which Vilsack chairs, to coordinate and integrate efforts between agencies involved in rural issues. He expects those abilities to be enhanced in a second Obama term.
Adams noted that eventual passage of a farm bill likely will include significant budget cuts, requiring the USDA to do more with less. Vilsack responded by returning to the tax issue, saying that if the government cuts taxes for billionaires, they then need to either cut the budget or add to the deficit. The administration would rather tax the richest Americans than deal with “draconian cuts to farm programs.” The Ryan budget, he notes, calls for $50 billion in cuts to crop insurance, conservation and commodities programs, which he says, seems a bit steep.
He says he realizes USDA will have to accept budget cuts, which he hopes will be proportional to those from other departments. The agency meanwhile is working to become more efficient and leverage resources with the private sector.
In the agricultural sector, Vilsack says, we currently are seeing record farm income, record participation in conservation, record growth in bio-based products, record agricultural exports and record expansion of local and regional food systems. “We want to see that progress continue,” he adds.
The President favors continuation of the renewable fuel standard (RFS), and Vilsack notes the renewable fuels industry currently employs 400,000 people. Once the RFS reaches its goal of 36 billion gallons of renewable fuels annually, the industry will employ close to a million workers. Renewable fuels, and other forms of renewable energy such as wind provide great income opportunities farm families, he says, adding the administration favors additional research effort to develop new feedstock sources for biofuels. Vilsack noted that while Governor Romney favors continuation of the RFA, he wants to discontinue the wind-energy tax credit, which would cost a lot of jobs in rural America.
Adams asked Vilsack whether he would stay on as Agriculture Secretary in a second Obama Administration. He refused to speculate, but said the President deserves another opportunity to continue his work, “and if I can be of help to him I will in any capacity.”
Later today, we’ll summarize a similar interview with Bill Northey, Iowa’s Secretary of Agriculture and co-chair of Farmers for Romney, making his case for the election of Republican challenger Mitt Romney on the same issues.