ANALYSIS - US Department of Agriculture Secretary Tom Vilsack spoke to a packed room of farmers and industry at the 2014 Commodity Classic about the recently passed Farm Bill and more importantly - how USDA plans to implement it, reports Sarah Mikesell, live from the show in San Antonio, Texas.
Commodity Classic attendees saw a much more relaxed USDA Secretary this year versus last year when he was quite riled up about Congress not being able to get a Farm Bill passed. Now that Secretary Vilsack has a shiny, new Farm Bill, he's got his team figuring out the details and preparing to share what it means to farmers.
Secretary Vilsack said USDA has three basic responsibilities:
- Continue the profitability of large-scale commercial sized operations by promoting programs and policies that will ensure that profitability will remain. Commercial size operations are important to the US and our ability to continue to feed Americans and the world's people.
- Responsibility to preserve and expand mid-sized operations coming up with new ways to create income opportunities so folks don't necessarily have to give up the farm.
- Assist smaller-sized operations - beginning farmers and ranchers, women, minorities, social disadvantaged, our returning Veterans - and enable them to start and stay in this business.
Secretary Vilsack had two messages to convey.
“One is that there are some programs that continue from previous farm bills in which you will expect as operators payments,” he said. “There are other new programs that as operators you need knowledge and information so that you can make the right and proper choice for your operations in the future.”
He started by ensuring farmers that payments due will be paid.
“For those of you who also have livestock operations, we saw the need to send a clear message to our livestock operators that we were with them as they went through two and a half difficult years of facing disaster without assistance because our assistance programs had expired under the previous farm bill,” he said.
Those programs were restored by the Farm Bill, and USDA is committed to make sure that those who suffered losses due to disasters will be able and empowered by April 15th to make application for those losses.
“At the same time the disaster assistance programs are restored, so too are our export promotion programs,” he said. “Those are the monies that we use to fund trade shows, reverse trade shows, exchange ways in which we market American agriculture products overseas.”
USDA plans a slight twist for those programs, adding an opportunity for promotion of biofuel production.
“We think it is not just an opportunity here domestically to use biofuel, we think the world is ready for American biofuel,” Secretary Vilsack said. “It will start with a trade mission to China this spring where we will invite folks from the biofuel industry to participate for the first time in a trade mission.”
Efforts will be targeted in India, Japan and China where there are opportunities to discuss the octane and environmental benefits of biofuel, he said.
USDA plans in the spring and early summer to implement the Market Assistance Loan Programs, MILC, dairy program, crop insurance and the sugar program.
“We will make sure that that Market Assistance Loan Program is clarified for all, so that it can continue for the subsequent years in the farm bill,” he said.
As for credit programs, he noted there is a reduced interest at any rate that can be forthcoming and some farm ownership loans reducing that interest rate from around five per cent to about two-and-a-half per cent.
“We also will eliminate the guaranteed loan term limits which Congress instructed us to eliminate that too will likely be done in 2014, hopefully in the spring and summer of this year,” he said.
By the end of the year, USDA will institute the beginning farm provisions of greater credit opportunities to make credit more easily available for beginning farmers, and by the end of the year improve and upgrade their microloan program.
“We are already taking applications under EQIP and the Management Assistance Program,” Secretary Vilsack said. “We expect and anticipate that by May 17 or thereabouts, we will notify folks of whether or not their application has been accepted and those obligations beginning June 1. Our CSP applications are also being accepted and we expect notification around June 1, with obligations beginning sometime in late July or early August.”
He said for US organic producers, the organic cost share payments will begin allocating until they are expended.
New Farm Bill Programs
“We will be soon be dispersing the $3 million that Congress has provided for the tab of those training materials and the web-based tools that you all will use and study over the course of the next several months to make determinations and decisions about your operation,” he said.
USDA hopes to publicize the final program and regulations for both ARC and PLC in fall 2014.
Regarding supplement and coverage option and stats, Secretary Vilsack said USDA has to have enough data from an actuarial standpoint to price these options.
“We expect and anticipate that for most counties, for corn, soybeans, grain, sorghum, cotton and rice, we will be able to publish maps sometime in the summer and fall of 2015 that will give a sense of precisely where this coverage will be made available. And we recognize that this creates a dilemma, particularly for wheat producers,” he said. “We know that you may have to make elections and options before you have all the information. You may have to make a decision about coverage before you really know for sure what you are doing relative to the various programs.”
He assured farmers that USDA will offer the ability prior to the coverage recording deadline to opt out of the decision as they may on the Supplemental Coverage Option without incurring any responsibility for the payment of premiums.
“You can't have both ARC coverage and supplemental coverage option. You will have to choose,” he said. “So we want to make sure that you at least have some time to re-evaluate the decision you may have made.”
On stats, he said almost all US cotton production will be covered in the 2015 crop year. This summer, RMA will provide information about counties that will be covered. He assured farmers that the cotton transition payments will be made this year to allow for the opportunity to transition to the new program.
Secretary Vilsack said he finds the innovation section of the farm bill very exciting.
This year his team will begin the process of establishing the Research Foundationthat will allow the leveraging of an additional $400 million investment in agricultural research.
“At the same time, we understand that the necessity of continuing to open up market opportunities for all forms of agricultural production, including agricultural crop residue and livestock waste,” he said.
Congress has expanded the energy title of the Farm Bill to make available over $880 million of mandatory money to be used to focus not just on biorefineries, but also on biobased product manufacturing.
“We think we can begin aggressively in 2015 with investments in chemical production, in fact, we think we can do that sooner and then, in 2015, expand that to other biobased manufacturing products so that we can create additional markets opportunities as a result of this farm bill,” he said.
Commodity Classic is the convention and trade show of the US corn, soybean, wheat and sorghum associations. This year attendance increased by 1,000 to reach 7,200 attendees. The show was held in San Antonio, Texas.