Congress should build into the new farm bill pathways that will allow small and midsized producers to make a living from the land rather than having to rely on off-farm income, as is common now, said Agriculture Secretary Tom Vilsack on Monday. In a speech to the National Farmers Union convention, Vilsack used the administration’s initiatives to develop markets for climate-smart products, expand local meat processing and encourage local marketing of farm goods as examples of ways to create or increase farmers’ revenue streams.
“As we begin this process of discussing a farm bill, it’s pretty simple,” Vilsack said at the NFU meeting in San Francisco. “We have to ask ourselves, do we want a system that helps a few — good people; don’t begrudge them their profit — or do we want a system that helps many and most? That, to me, is the fundamental question.”
Vilsack drew one large stick figure and nine smaller stick figures on a white board to illustrate the division of farm income under the “get big or get out” philosophy of commercial agriculture. “Ten percent” — the big stick figure — “made a lot of money” during the past two years of record net farm income, he said. But most farmers lost money or saw nominal income from their agricultural work.
“I think we have to develop a new game,” said Vilsack, one that would allow smaller farms to generate more income by creating “additional opportunities that have not existed or expand ones that do. So I think one way to do that is climate.”
The administration has selected 141 pilot projects that will receive $3.1 billion in federal funds to develop climate-smart commodities and markets for them. “That’s a new revenue stream,” said Vilsack. “In addition, as you’re doing climate-smart agriculture, you can qualify for ecosystem service markets,” such as contracts for sequestering carbon in the soil or preserving wildlife habitat.
Sustainable aviation fuel, potentially a 36 billion-gallon-a-year market, could be produced from agricultural waste, said Vilsack, who labeled squares and circles on the white board to represent new markets for American agriculture. Eventually, he counted “10 ways for that same farm operated by these folks to create profit centers.”
Republican lawmakers are cool to the administration’s climate agenda, however. They fret it will complicate crop and livestock production although USDA officials say land stewardship programs will remain voluntary and incentive-based. In farm country, there are calls to expand the farm safety net and the crop insurance system.
As part of his speech, Vilsack announced $89 million in grants to nonprofit lenders in seven states to assist small, independent meat and poultry processors start or expand operations. The money will be put into revolving funds so the lenders can help a series of borrowers.
In addition, USDA said it was taking three steps to assure fair competition in the seed market, including the appointment of a “farmer seed liaison” in the Agricultural Marketing Service and creation of a working group with the U.S. Patent and Trademark Office, the Justice Department and the Federal Trade Commission. The seed liaison will facilitate communication between farmers and plant breeders and the patent office. The steps were recommended by a new USDA report, “More and better choices for farmers.”
The largest 10 percent of farmers received 80 percent of commodity subsidies from 1995-2021 and almost 60 percent of premium subsidies on crop insurance from 2021-20, according to the Environmental Working Group, which tracks farm payments. “Put simply, the largest and most successful farmers, who receive the lion’s share of farm subsidies, are already doing great,” said Scott Faber of EWG.
A week ago, analysts at a think tank seminar said farm subsidies increasingly are paid to the wealthiest producers who have household incomes that are double or triple the U.S. average. Only a fraction of farmers receive subsidies because the farm program is aimed at a limited number of field crops, with payments based on volume of production. Livestock and specialty crop growers generally do not receive direct payments.
To watch a video of Vilsack’s speech, click here.