Focus on productivity has high cost, says Vilsack

Glacier FarmMedia – The pendulum has swung too far in favour of production agriculture, says the U.S. agriculture secretary.

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Tom Vilsack said the landscape of U.S. agriculture forever changed in the 1970s when the federal government decided it no longer wanted to manage supply and instead let the market dictate what would happen.

The government told farmers to “simply produce” and they responded with a massive increase in productivity.

“In my lifetime, we’ve seen a tripling of productivity without really any significant increase in inputs,” he told delegates attending the United States Department of Agriculture’s 100th annual Agricultural Outlook Forum. “It’s truly a remarkable story.”

But he thinks the focus on productivity has come at a big societal cost. The number of farms has been vastly reduced, there is a void of young people attending schools in rural communities and a lack of customers to support small businesses.

The United States has lost 536,543 farms since 1981, according to the 2022 Census of Agriculture released on Feb. 13. It has also lost 165 million acres of farmland.

That would be the equivalent of losing every modern-day farm in South Dakota, North Dakota, Minnesota, Wisconsin, Illinois, Iowa, Nebraska, Oklahoma, Mississippi and Colorado.

The land mass now out of production amounts to an area the size of Florida, Georgia, South Carolina, North Carolina, Maryland and 90 per cent of Virginia.

“Some people have suggested, ‘well, that’s just the way it is,’” said Vilsack.

They say that economies of scale are needed to cope with thin margins in farming.

But he thinks the situation has become too lopsided. Over the past five years, 85 per cent of U.S. farm income has ended up in the pockets of farmers with sales over $500,000. Those 250,000 producers represent seven per cent of all farmers in the country.

Vilsack said the USDA cares about production agriculture, but it also wants to create opportunities for the remaining 93 per cent.

Those small- and medium-sized operations are being forced to rely on off-farm income to make a go of it, and 88 per cent of the nation’s farmers work two jobs.

That is why the USDA is investing in new income streams for farmers, such as spending US$1 billion to expand exports into areas of the world the U.S. hasn’t paid much attention to in the past, Vilsack said.

Another $3.1 billion has been dedicated to the Partnerships for Climate-Smart Commodities program. It is investing in 141 projects covering 92 climate-smart commodities, tying market incentives and premiums to the products being produced.

“It’s another source of income,” said Vilsack. “We’re not just selling a commodity; we’re selling an environmental result.”

The USDA is promoting projects that convert agricultural waste into a wide variety of products, such as sustainable aviation fuel.

It has also entered into local purchasing agreements with farmers aimed to eliminate the middleman and ensure producers get more out of every food dollar.

Vilsack ended his speech with a challenge to the growers in attendance.

“Ask yourself whether you’re OK with losing half a million farmers in a lifetime,” he said.

“Ask yourself if you’re OK with America losing 165 million acres that was in farming that is no longer in farming.”

He said the USDA will aim to stem that tide through tools such as the farm bill, its annual budget, the Commodity Credit Corporation and the Inflation Reduction Act.

“I’m committed to it. I hope you are too,” said Vilsack.

– Sean Pratt is a reporter with the Western Producer.