Voices 07/01/2013

Rural America: new markets, new understandings and unlimited opportunity

We had basically a two-dimensional agriculture. Particularly in the Midwest, it was crop production and livestock, and that was basically it. Unfortunately because of inflation and inflated land prices, our farmers got overextended, the faced serious foreclosures and they had extraordinary high debt to equity. Over the course of the last 30 years, there has been nothing short of a miracle occurring in rural American that I think, with the help of today and the session today, we might be able to put a spotlight on.

Agriculture decided to change, decided to transform, decided to embrace innovation, decided to become multidimensional instead of two dimensional, to extend beyond crop production and livestock and begin a process of focusing on specialty crops and niche market opportunities, developing fuel and energy crops and committing itself in a very significant way to conservation and the outdoor recreational opportunities that that creates.

There have been extraordinary, and I want to emphasize, extraordinary productivity gains in agriculture. In my lifetime, corn has increased in this country by 300 percent in terms of productivity – Soybeans and wheat, 200 percent. We're creating more milk and our livestock is being raised more efficiently. In fact, according to recent studies, agriculture has been the second most productive aspect of the American economy since 1980.

We just suffered through the most serious drought that this country has faced since the 1930s. Had we faced this drought without the seed genetics, we would have seen some serious crop losses. Indeed, it was a tough year for many producers. But notwithstanding the most difficult drought we've seen in the lifetime of everyone in this audience, we still had a corn crop that ranked in the top 10 in productivity in the United States' history. And it's a result of seed genetics and innovation. And it's a result of farmers embracing new planting technologies that allow us to preserve and conserve water resources and still maintain and provide a crop.

At the same time that seed genetics have allowed us to expand dramatically our productivity, our farm machinery industry has also kept pace, recognizing that you need different equipment as farms get larger and productivity increases. Just to give you a sense of this, when I started practicing law again in the '70s and '80s, our farmers were planting in Iowa somewhere between 15(,000) and maybe as many as 20,000 seeds per acre. Today, farmers in Iowa are routinely planting 30(,000) to 40,000 seeds per acre, and many seed companies are working on the possibility of planting 60,000 seeds per acre.

That requires different farm equipment to combine and harvest a crop of that nature. And companies like John Deere, that you'll hear from, will tell you that they have kept pace with agricultural innovation. I will tell you that it was a great opportunity to see Lisa Jackson, the EPA administrator, come to a farm in Iowa, have her climb into one of these large tractors, be amazed at the sophistication of the equipment in that tractor.

She pointed to a small box in the cab of the tractor and said, what is that? And the farmer said, well, that's a GPS system. And she scratched her head and said, well, what do you need GPS for? And he then explained that with GPS – if you were to simply get into a tractor and manually drive that tractor, you might start at one end of the field and by the time you got to the end of the field, you might be off maybe as much as 30 feet from where you started in terms of a straight line.

The result of that is, of course, you use a lot more chemicals, a lot more pesticide and a lot greater waste. With GPS that differential's about six inches. So you save seed, you save pesticides, you save herbicides, you save money and you obviously are protecting the environment. That's the kind of innovation which may be one of the reasons why the equipment today can require as many as 10 million lines of computer code in order to construct and make this extraordinary equipment.

And at the same time that we've kept pace with seed genetics and farm equipment, we've also seen our land grant universities, which are celebrating their 150th anniversary this year, increase the education and training of our farmers. It's a very sophisticated business. And I would argue that I think it's perhaps the most sophisticated and most complex business in America. Not only do you have to know how to farm, you have to also know how to market. And those are skills that are not easily obtained and if mistakes are made, it can cost significant income.

So what is the future? This great efficiency, this great productivity has allowed us, obviously, to do more farming with fewer farmers, which isn't necessarily a good-news story for rural America. So it was necessary for agriculture to begin the process of thinking about how we might be able to continue to support rural America, while at the same time maintaining the efficiencies of this new agriculture.

Well, today we're launching, at USDA, a new website – www.usda.gov/opportunity. We want the rest of the country to know what we know at USDA about the amazing transformation of the rural economy and what's taking place as a result of agriculture. We want folks to know that indeed we are committed to trade and committed to exports.

We have had record export activity. And there are many reasons for that. And as Tom suggested, it does indeed support not just agriculture but nearly a million good-paying jobs in this country. We adopted a strategic framework at USDA for agricultural exports. We took a look at the countries that we felt we had the greatest opportunity of moving it out quickly. We focused our time and attention and resources on making sure we maximized trade opportunities in those countries.

We're excited about the prospects of the free trade agreements that have been finalized and have now been implemented , particularly the South Korean agreement. We think that there is an opportunity between South Korea, Panama and Colombia to expand agricultural exports by several billion dollars. We also are looking forward to Russia's full integration into the WTO. The recent action by Congress to remove the Jackson-Vanik Amendment will give us the opportunity to fully utilize the WTO in our relationships with Russia, also at times somewhat of a difficult trading partner.

We look forward now to the Trans-Pacific Partnership discussion and hope that those get culminated soon, because it will indeed open up extraordinary export opportunities for the United States in agriculture. We also look forward to the conversations about the EU – but I will tell you that when we talk about the EU and agriculture, you have to talk about those non-tariff trade barriers and they have to be addressed in any discussion of any potential free trade agreement with the EU.

We're excited about the organic opportunity that has been presented in our agriculture. It's an expanding aspect of agriculture, and the equivalency agreements with Canada and the EU in organic will create trade opportunities in organic as well as commodity production agriculture.

We also need to address changing climates. Now, we can have a discussion and an argument about what causes the climate changes, but we can't deny the fact that there are more intense weather patterns that we're seeing in the United States, and the impact that that will have on crop production – on livestock production is real. We see this not just as a challenge but as a tremendous opportunity for us to continue to invest in the genetics and in the science that will allow us to adapt and mitigate to whatever mother nature has for us.

There is an immigration challenge in rural America. We need immigration policy in this country, not just because it provides an extraordinary number of people who work in large agricultural production activities in California and across the United States, but because it brings diversity into rural America and it is diversity that helps to create an environment of innovation and creativity. If you think about it, every person in this room probably has an immigration story. I happen to have started out life in a Catholic orphanage, and I don't know what my nationality is or what my background is, but I'm fairly certain that at some point in time, someone from my background came to this country with a dream and a hope – sacrificed, saved, worked hard, did jobs that maybe no one else wanted to do and helped to create this great country of ours.

We want to invest in research and new technologies; we want to create the solutions to adaptation and mitigation of climate change. We want to be the driver of the bio-based economy; we are excited about the opportunity for entrepreneurship in local and regional food systems. We respect the significant role that exports and production agriculture play, and we are ready to tackle the big challenges and make a big difference, but we need partners.

Source: Remarks by Secretary of Agriculture Tom Vilsack at U.S. Chamber of Commerce Forum on Innovation in Agriculture

di Tom Vilsack