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Secretary of Agriculture Tom Vilsack

posted on December 23, 2010

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Food and fiber for the world. Former Iowa Governor Tom Vilsack's responsibilities now in a global perspective. A conversation with United States Secretary of Agriculture Tom Vilsack on this edition of Iowa Press.

Borg: As U.S. Secretary of Agriculture, Tom Vilsack is dealing with issues as diverse as the nation itself.Shaping new farm legislation, balancing the nation's thirst for ethanol and biofuels energy against world hunger, revitalizing rural America.Those are evident.But he's also overseeing food and nutrition delivery initiatives, food stamps, school lunches, the Women, Infants and Children, it's called WIC Nutrition Program, to name a few.Add to that soil and water conservation, the U.S. Forest Service and then the USDA's diverse magnitude becomes really clear.During his eight years as Iowa's governor Tom Vilsack joined us frequently here at the Iowa Press table and after two years as Agriculture Secretary we're pleased to have him back for a visit.Secretary Vilsack, welcome back to Iowa Press and to Iowa.

Vilsack: It's nice to be here.Thanks.

Borg: And across the table two journalists that you know well from your years in Iowa, Associated Press Senior Political Writer Mike Glover and Radio Iowa News Director Kay Henderson.

Glover: Mr. Secretary, one of the things you have been intimately involved in recently is this agreement that was reached to keep the tax cuts extended.Agricultural programs were heavily involved in that, you were heavily involved in that.Tell us what's in that package.

Vilsack: A couple of things, Mike, for farmers and ranchers and growers.First and foremost, for Iowa, the extension of the ethanol tax credits and a resumption of the biodiesel tax credit.This is a maturing industry, it needed that additional help and assistance.We've got a one year extension that allows us an opportunity to talk about what the future of those incentives will be.There's also significant estate tax relief, increasing the exemption levels to a point where about 99% of farms and ranches in this country won't have to worry about estate tax consequences.So, two major pieces and then, of course, the middle class tax cut was continued.The payroll reduction was also included.But at the end of the day we were very pleased to see the ethanol and biodiesel tax credit as well as the estate tax.One other issue, also additional estate tax relief for conservation practices which is also very important to us.

Glover: And defend that package.There are those who say that by raising the estate tax exemptions you're simply giving fairly well off people a new tax break and by continuing the alternative fuel subsidies you're continuing to subsidize and industry that ought to be standing on its own.

Vilsack: Well, the reality is when we allowed the biodiesel tax credit to lapse we lost 12,000 jobs and 50% of our production capacity.At a time when we're looking for jobs, at a time when we're trying to rebuild the rural economy it's the worst time not to allow that tax to have continued.So, now we can see those jobs resume, that production resume, it is an opportunity for us to continue to expand this effort.We have a goal of reaching 36 billion gallons of renewable fuel by 2022.When we reach that goal there will be a million new jobs in rural America.We're not going to be able to reach that goal unless this industry has additional incentives that will allow us to expand production beyond the Midwest into all parts of the country.We're going to do that.The resumption of these tax credits will make it a little bit easier.

Vilsack: On the estate tax, it's just a recognition of what is happening to land prices.It doesn’t take much land today at $8,000 an acre or $13,000 an acre, which some of the land that has sold in Iowa recently has sold for that, to get to a $5 million number.So, people can be very land rich and cash poor and we want the capacity of families to be able to pass that farm on or that ranch on to the next generation so we can keep people living and working and raising their families in rural America.

Henderson: Mr. Secretary, I'd like to have a discussion with you about farm subsidies, the future of them.This past week the U.S. Census came out and the result of that will be fewer rural representatives in Congress.How do you build support in Congress for the continuation of farm subsidies if there are fewer rural members in Congress?

Vilsack: Well, I think there's a couple of things.First of all, let's take a look at how important rural America is to the rest of us.It is the source of our food, our fiber and an ever-increasing amount of our fuel.85% of the surface drinking water is impacted by what happens in rural America.It is the place where it's 16% of the population but 44% of the people serving in the military come from rural America.It is the heart and soul of this country.Because we have agricultural production that is the best in the world consumers have a tremendous advantage in America.We only spend about 10% to 15% of our paycheck for groceries.Part of the reason we do that is because we have a strong safety net for those producers who are faced with bad weather or bad markets.That allows them to stay in business.If we want to continue to repopulate the rural communities, if we want to return political strength to the rural parts of this country we're going to have to revitalize the rural economy.Part of that is a strong safety net for agriculture, for farmers, for farm families.Part of it is strategies to allow small farm producers to migrate into mid-sized operations.

Vilsack: We saw from the last ag census that we added about 100,000 new farmers to the 2.2 million who farm in this country, very small operations, we need strategies to allow them to migrate into larger scale facilities.

Henderson: The Iowa Farm Bureau has made a proposal in regards to farm subsidies moving away from tying them directly to commodity prices and doing something different.Do you anticipate that the republican led house will embrace significant changes in the way farm subsidies are structured?

Vilsack: I've had a chance to visit with Chairman Lucas, the incoming chairman of the house ag committee and I think he's going to take some time to establish his chairmanship, establish his staff and he sees the debate and discussion about the farm bill not taking place until probably 2012.So, we have probably a year or so to talk about this.I think there's no question that we have a number of competing interests.First of all, we have to have a strong safety net.Second, we've got to structure it in a way that doesn't get us in trouble with the WTO and our global trade responsibilities.And finally, it has to be done in a way that, as you pointed out, gets the support of people who may not be fully understanding of what happens on the farm, those rural and suburban legislators who are now coming into Congress in increasing numbers.that is one of the reasons why you see a farm bill discussion linked to nutrition, food safety and the SNAP program, the Supplemental Nutrition Assistance Program and the school lunch program is a way of gathering enough support for farmers and for the safety net.So, it's an extraordinary balance.We're going to have a debate and conversation about this, there's no question about it.The Deficit Reduction Commission has proposed reductions.We have already taken steps, and this is I think a very important thing to emphasize, we have already reduced the deficit by $4 billion with steps we took at USDA in reforming our crop insurance program which is part of the safety net.So, we've already started that process.

Borg: A moment ago you mentioned rising land prices in response to the high, strong grain prices, soybeans and corn.But that affects USDA too as I judge it because USDA actually rents in the CRP program, the Conservation Reserve Program, rents land that is highly erodible from farmers.That means that you're going to have to pay increasing rents in order to persuade farmers to keep that in conservation reserve rather than cropping it.

Vilsack: Right.And we have actually increased the rental rate recently.We took some of the savings from the Crop Insurance Reform and used that to increase the number of acres and to take a look at the rental values paid for those acres.So, we did this in a relatively budget neutral way.With the pay go responsibilities we now have any time we increase spending we have to figure out some place where we're reducing spending.And so that is going to continue.We are committed to CRP, we are committed to conservation and we see the evolving of an ecosystem market opportunity basically paying farmers for the proper use of their land relative to conservation that also impacts positively climate change issues.And so there are tremendous opportunities here if we can create a system that is verifiable and credible.

Glover: We have talked a lot about farm subsidy programs here but the largest thing that you run are nutrition programs.I'm thinking of food stamps, school lunch programs, things like that.There seems to be increasing resistance in an increasingly republican Congress to those types of nutrition programs.How do you make the case?And can you keep them at their current levels or higher?

Vilsack: Well, first of all, I'm very proud of the job that we have done in terms of the -- we refer to it as the Supplemental Nutrition Assistance Program.We're trying to get away from that food stamp designation.We've seen an increase in the number of participants in the SNAP program, a little over 43 million, increased by 8 million, not just the recession but we've done a much better job of going out into states like Texas and California and Florida that were underperformers in terms of the people qualified in the program but who weren't participating in the program and getting them involved in the program.Here is what is important to know about this.I don't think people know who receives these benefits.

Vilsack: First of all, there's a significant number of senior citizens who receive SNAP benefits who are living on fixed incomes.There are a substantial number of working poor, people who actually have jobs who are working a part-time job or a full-time that simply doesn't pay them enough to take care of their family.In fact, 90% of the people receiving SNAP benefits are non-cash welfare folks, in other words, people who aren't receiving cash welfare.Only 10% of the SNAP beneficiaries are people who are receiving cash welfare.

Glover: Do you need to do a better job of selling that program, of marketing what you're doing?

Vilsack: We do and we also need to continue to point out things that I've pointed out recently and that is that this is the number one stimulus.In the recent ranking of things that the government could do to stimulate the economy, at the top of the list was the SNAP program.Why?Because if you allow people to purchase more at the grocery store, what are they going to do?Within 30 days 97% of that money is actually in the economy.People purchase more, that means some folks have to stock more, some folks have to process more they have to truck more, they have to package more.Those are all jobs, those are all jobs.So, every dollar that we invest in the SNAP program generates about $1.80 return of investment in terms of economic activity, immediate stimulus.So, it's a simulative effect and when you look at the character of the people receiving the SNAP program you realize this is not your old-time welfare queen kind of thing, this is working poor who need a little assistance and help.

Glover: Stereotypical thinking.

Vilsack: It is absolutely.

Borg: Do you worry about the funding, continued funding of those in a very budget austere time?

Vilsack: Well, you have to worry about all parts of your budget.I think it's fair to say we're going to be serious about the deficit.We at USDA have already been serious reducing $4 billion through the Crop Insurance Reform.We're going to be expected to do more, every department of government is going to be expected to do more and I think that is appropriate.We see this as our patriotic responsibility to step up to the plate and figure out how to do a better job with less resources and hope that the economy, the private economy and the marketplace takes over and stimulates enough job growth that we get back on track.

Henderson: The USDA is considering some restrictions on alfalfa that is biotech in nature.Should Iowa farmers who are planting high tech seeds in their fields be concerned?

Vilsack: Not at all.What we're having is a discussion and a conversation to try to take the courts out of determining who gets to farm and who doesn't get to farm.This is a very complicated discussion and one that probably should have taken place a long time ago.We've seen a rapid adoption of biotechnology in alfalfa and many other areas of agriculture.At the same time we've seen a substantial expansion and growth in organic production.We want both of them to survive and we want both of them to be profitable and we want both of them to be able to sort of co-exist in the same neighborhood.There hasn't been a conversation -- we are encouraging that kind of conversation -- how can we get to a point where I get to farm and you get to farm and a judge can't say to you, you can't farm the way you want to farm, Kay, or the judge says to me, you have to stop doing what you're doing, that's not good for agriculture.So, we're engaged in a conversation, we're going to use science, we're going to take a look at our regulatory authorities and powers and try to figure out if there is a way to encourage coexistence and I think this is a very important conversation because we need the biotechnology, we need the capacity to produce more on less, the capacity to use less pesticides and chemicals and water in an ever increasing demand globally for food.At the same time this organic operation is very profitable, it can help small farmers stay on the farm, it can help repopulate rural communities and there's a greater consumer demand for it.So, we need to figure out how to do both.

Glover: Food quality has been much of the news lately.Are you satisfied that the food inspection programs your department is running are adequate to assure that there is a safe food supply out there?And if not, what can be done about it?

Vilsack: Mike, I took this job over -- the food safety folks came in and they said, we've got good news, we're seeing reduced numbers of people who are being sick as a result of what his happening in agriculture.I said, have we reduced the sicknesses to zero and the deaths to zero?And they said, well, of course not.And I said, well, until we do we still have work to do.The reality is we are strengthening our capacities.We're taking a look at science and we're figuring out more about what we need to be preventing, what we need to be looking for, what we need to be reacting to.E-coli, salmonella, we've established performance standards for the first time in poultry, we're expanding our reach in terms of E-coli to look 0157 and non-0157, that has never been done before.And so we are stepping up our game, we will always have work to do.The food safety bill that passed Congress and the President will sign will allow us to partner with the FDA so that our processes and their processes will be parallel.In the past we had the capacity to shut operations down, to compel change.FDA had to basically rely on a voluntary recall process.Today we now are in the same kind of situation.We're speaking to each other, we're communicating better with each other as a result of the Food Safety Working Group that I co-chair with Kathleen Sibelius.

Glover: How much did you have to make up -- how bad was our food inspection system?

Vilsack: Well, there was a lot of work that had to be done and the reality was that the FDA didn't necessarily talk to the USDA or vice versa.It's sort of hard to believe that that didn't happen but it didn't happen, it's happening now and we're going to look for -- the egg situation basically put a spotlight on the need for the FDA to have stronger capacities for recalls and the capacity of the USDA to help them, cross-training our people to look for the same kinds of things that the FDA officials would be looking for so if we see a problem in a facility we're inspecting for some other purpose, some other reason we can let FDA know there's a problem in this facility.

Borg: At the same time, isn't the challenge growing, though, with the increasing direct marketing from farmers' markets and so on to consumers?You can't possibly ensure food safety in that sort of a situation.

Vilsack: Well, I think we can and I think we're working with farmers' markets.We've seen a 30% increase in the number of farmers' markets in part because of our program called Know Your Farmer, Know Your Food.We're really encouraging that local connection between producers and consumers.At the same time I think we can do a better job of providing information to people in terms of how to safely handle food and to use the social marketing techniques that are so prevalent today, Facebook, Twitter, to give people instant information about items and problems that we are learning about.So, a better job of communicating.We're also working on a public health information system that will allow us to see trends and basically give us a heads up sooner than we've had in the past.So, there's a substantial amount of work being done in this space and in the first part of next year you're going to see a number of announcements in terms of food safety of things that we are now in the process of being able to work with the industry to improve.

Henderson: I'm wondering what is next in regards to the second phase of the legal settlement with black farmers who alleged they were discriminated against by USDA officials.Is the legal settlement that was approved by Congress this fall the end?Or is there another phase?

Vilsack: Kay, when I came into this job I had a chance to visit with former secretaries and I said, what should I focus on?I was very surprised the first thing that both Ann Veneman and Dan Glickman said to me was, focus on civil rights.I said, civil rights?They said, yeah, you've got a department that has a very sad history in civil rights.So, we've made a major effort to resolve not only the cases involving black farmers but Native American farmers, Hispanic farmers and women farmers.We have literally tens of thousands of claims against the department.The settlement with Pigford too will be the end of that litigation.We'll set up a process in which people can come to us, show us their proof of discrimination and then they will receive payment under the terms and conditions of the settlement approved by the court.The same thing will happen with the Native Americans.After the first of the year our hope is to be able to offer something similar to that to women and Hispanic farmers.Their cases are a little different because they weren't certified as class actions so there are actually literally thousands of individual cases that we have to deal with.So, we're working with the Justice Department, working with the White House to make sure that we move on these fronts.And we're also engaging a consultant to look at our current programs to make sure we're not continuing the same patterns and practices that gave rise to these claims to begin with.

Glover: One of the things that will shape the direction you take farm policy is your view of farm commodity prices.They are pretty high right now.In your short and long-term planning are you assuming those commodity prices are going to stay at a relatively high level?

Vilsack: Mike, it is very hard to determine what the long-term capacities, price capacities will be.The reason it is difficult is because it is no longer dependent on our weather patterns or on our productivity.It somewhat depends on what is happening in other countries and so it's hard to determine.That is why it is important for us to have a safety net that makes sense.It is important for us to be able to stabilize those prices.One of the areas that we have the biggest problem in today is dairy.Our dairy prices fluctuate so rapidly and so deeply that it's very hard for producers to know what to do and when they get into one of those very difficult periods they don't have much time to enjoy good prices to recover.So, we have a dairy council taking a look at how we might be able to better stabilize our pricing in dairy.So, I'm confident we're going to have good prices this year, I'm confident we're going to have good prices next year.One of the reasons we have good prices is because we are very aggressive in exports.This will be a record year for ag exports.It's a great story that is untold.We'll have a $41 billion surplus projected in ag products, $115 to $117 billion dollars -- every billion dollars of ag trade generates 8,000 to 9,000 jobs.

Glover: Is that another place we need to do a better job of telling your story?

Vilsack: Well, here's the thing -- we tell the story all the time.

Glover: And we don't listen?

Vilsack: Well, it's difficult to get people's attention on this issue.You're looking at, you know, Don't Ask, Don't Tell, for example or you're looking at the START Treaty.But meanwhile, every day something is happening at USDA that impacts the food supply or the water supply or the environment or our trade situation.We have a very positive trade story to tell and we're getting folks in Washington, D.C. to understand that now and now we have to do a better job of getting that word out.But my portfolio is so diverse that if I talk about trade then the folks on food safety wonder why I'm not talking about their situation.If I talk about food safety the folks in the Forest Service say, hey, what about us?If I talk about the Forest Service then the broadband people in rural development want to know, hey, what about us?It's a broad -- it is an extraordinary department.It is a wonderful job.

Borg: That's why I talked about -- I'll give you a chance to take some water there while I ask a question -- I'm interested in how you're interacting with the Iowa National Guard in Afghanistan.

Vilsack: Yes, that's another thing.We have roughly 75 people from the USDA that are stationed over in Afghanistan -- I went over there the beginning of this year.And our job is to work with the National Guard to provide agricultural development resources -- and the Afghan Agricultural Minister, Minister Rahimi.And our job is to try to build and help them build a stable and secure agriculture that is producing not poppy but pomegranates and almonds and sapphron.If you look at the income capacity for those products, those legitimate products, they far outweigh the value of growing poppy.But poppy is risk free for farmers in Afghanistan so they're doing really what is a rational thing.If you don't have to pay to put the crop in the ground and you don't have to pay for transporting it away from your field and you don't have to worry about the market it's pretty risk free.So, we have to create a credit system, we have to create a market, we have to create safe roots.

Borg: How is that going?

Vilsack: It's going well.

Borg: Are you going to go over and inspect it?

Vilsack: Well, I was over there in January and Minister Rahimi was here actually in Iowa in October and we talked about this and he is very optimistic about what is taking place.We saw in some of the key areas, the Kandahar area, a 30% reduction in poppy production last year because of what we're doing.We're going to continue to see this, it's very critical to the success in Afghanistan that we get agriculture on the right track.80% of Afghans make their living in one form or another as a result of agriculture.

Glover: Mr. Secretary, you've been on this program a number of times, you know it wouldn't be an official Iowa Press program if we didn't talk a little bit about politics.Let's talk about President Barack Obama's re-election chances.He is on the ballot the next time around.What are his re-election chances?

Vilsack: Well, I think the President is going to be re-elected.If he chooses to run for a second term I think he will be re-elected.

Glover: We're making that assumption.

Vilsack: All right, I think he will be re-elected.I have no doubt about that.I think when people take a step back and recognize the leadership he has provided in so many different areas and very difficult political circumstances -- this last Congress passing historic legislation in a variety of areas, in health care -- here is what President Obama can say to the country -- we are in a very fierce economic competition with the rest of the world and America is going to win that competition because we're going to do three things.One, we're going to have a government that spends less but spends it wisely.Two, we're going to have an economy that makes, creates and innovates.And three, we're going to be a nation that exports.And the President will be able to point to programs, policies, executive decisions he has made that have furthered all three of those efforts.We're going to have budgets that are less, we're going to continue to focus on manufacturing and expanding broadband and clean energy which is innovation and we are exporting more, we're getting free trade agreements done, we're seeing agricultural exports increase.So, he has the capacity to show this.Now, the interesting thing about agriculture is in agriculture he can show the success of that strategy.Farmers have less debt than any other segment of the economy.There's nobody more productive in terms of innovation, we talked about technologies and we got an export surplus.And what does that translate?It translates into a 31% increase in farm income this year, a 31% increase in farm income.It works.

Henderson: Mr. Secretary, at the Iowa State Fair I had a chance to talk with your wife about her own political aspirations and the prospect of running perhaps for Congress in 2012.What sort of advice have you given her particularly since the census was released this past week and it is clear that Iowa legislative districts for Congress will be re-written?

Vilsack: Husband and wife conversations are confidential under Iowa law if I remember correctly.I would just say this -- Christie has extraordinary options.She is well respected and she has devoted most of her life to public service in one form or another and I think she has many options ahead of her.These are decisions that she has to make and I will support her whatever her decisions are.

Henderson: Can you be Secretary if she runs?

Vilsack: Well, I don't think there's any legal prohibition.I remember Secretary Chow and Senator McConnell were married during the Bush administration so I don't think there's any legal prohibition against it.

Glover: Have you talked to the President about the role you might play in the upcoming campaign?Do you anticipate being actively involved?

Vilsack: Well, I think -- I have talked to the President about -- we went to India together and spent some time just the two of us talking about next steps and I think there is a role for me to play in terms of rural America which I'm happy to play.

Glover: And how will that work?

Vilsack: Well, I think there's a great story to tell.I mean, when you look at incomes going up 31%, you look at exports at a record level, you look at the fact that we provided disaster relief to 250,000 farmers and we did it in a very quick way and you look at the work that is being done in supporting commodity prices, the work that we did in the dairy industry to save that industry the first year of the administration, the work we're doing in food safety to be able to preserve markets, the work we're doing in local market development so that you not only have opportunities in foreign, the work we're doing in biofuels, it was a lot to talk about and we're happy to talk about it.

Henderson: We haven't much time left.Mr. Secretary, you are a lawyer and you were involved in the closing weeks of the election in the judicial retention election here in Iowa.What is your view about what has happened to the Iowa Supreme Court and what would your advice be to legislators as they consider articles of impeachment of the four remaining justices?

Vilsack: You know, it's very, very strange.When I travel around the country there's nothing but admiration for two things about Iowa, the way we select our judges and the way we create legislative and congressional districts.We really need to understand what we've got.It's something the rest of the country is envious of and we ought to be doing everything we can to keep what we've got.

Glover: Why aren't we?

Borg: Secretary Vilsack -- I'm sorry, Mike, we're out of time.Secretary Vilsack, thanks for spending time with us today.

Vilsack: Thank you.

Borg: On our next edition of Iowa Press we'll be updating one of the major political and social policy events of this past year, the one we've just been talking about, questioning Bob Vander Plaats who headed the campaign resulting in three Iowa Supreme Court justices leaving the court next week.The usual Iowa Press times, 7:30 Friday night, 11:30 Sunday morning.I'm Dean Borg and speaking for all of us here at Iowa Public Television wishing you a Merry Christmas and Happy Holidays.

Tags: agriculture biofuels business civil rights Democrats Energy/Environment ethanol farm policy farm subsidies food safety governors Iowa renewable fuels rural salmonella Supplemental Nutrition Assistance Program taxes Tom Vilsack U.S. Secretary of Agriculture USDA