Iowa Public Television

 

Outlook for Rural America in 2003

posted on January 3, 2003


From agribusiness and farm policy to new technologies and entrepreneurial ventures, 2002 marked the continuing transition in many areas critical to Rural America.

And the momentum gathered by those emerging trends is sure to carry through in the coming year. Indeed the issues that will confront Rural America in 2003 will be much like those of a century ago. Controversies will rage over the deployment of new technologies, the structure and ownership of the nation's food supply, and the broad effect these issues will have on Rural America from farm gate to Main Street.

As Sid Sprecher explains in this outlook report,

Many of the economic trends and public policies that will shape Rural America are already in motion.

 

Outlook for Rural America in 2003

The federal government fostered one of the biggest changes in 2002 when Congress scrapped the widely criticized Freedom To Farm law of six years earlier in favor of legislation that's heavy on the subsidies for standard commodities.In addition to increased payments for growers of corn, soybeans, rice and cotton, the new policy also includes subsidies for fruit and vegetable, as well as livestock, producers. Critics of the new law claim the majority of government subsidies will continue to go to a minority of farmers and ranchers ,,, and that the increased payments only heightens the dependency of producers on the feds to cash flow their operations.

Supporters of the policy claim the larger subsidies will negate the need for costly supplemental aid packages when natural disasters and low commodity prices strike.

While Washington policy makers focus on subsidies to produce more raw commodities, farmers in the southern hemisphere have been responding to a market that rewards the lowest cost producer.

For the first time ever more soybeans will be produced in South America than in the northern hemisphere. It is a trend that is redefining global agriculture and is not likely to soon ebb.

Doug Jackson: "This is a major long-term problem that really will probably set the stage for the U.S. to continue to be marginalized. We'll continue to lose export share on beans and wheat and perhaps ultimately feed grains and if we don't replace that demand with something artificially supported and subsidized like ethanol we'll continue to just see U.S. demand slip away. Now world demand is growing, we need more production worldwide but everything will take place, production expansion and demand expansion overseas, not in the U.S."

While Congress increased and directed the flow of subsidies toward a relative handful of commodity producers, others in Rural America have been constructing the foundation of an alternate farm economy. Increasingly ventures are being launched that are more reliant on entrepreneurial spirit and, market development, and less on government largesse.

For example, in North Dakota, ranchers developed their own niche beef label targeted at Islamic consumers ...in rural Illinois, a third generation farmer turned to direct marketing of his heavily muscled Belgian Blue crossbreds to increase sales ... and in Minnesota, a farm family plies the lucrative organic food trade by offering its vegetables on the organic frozen food market.

To be sure, direct marketing ventures continue to swell in number. From goat cheese to wine-making to beef sold under grocery store labels, farmers and ranchers are implementing strategies to extract greater value from the commodities they produce.

Ron Mark, Summerset Winery: "If I take 12 ½ acres of grapes, I can sell those on the market and it equates out to about 1,500 acres of corn. But, if you have the wherewithal to have a winery, that 12 ½ acres of grapes equates out to 40,000 bottles of wine. You can get to where you can do a half million dollars off a small farm and a half million dollars in sales might equate out to $250,000.00 in your back pocket if you're a good business person."

And some grocery store chains, conscious of increasing consumer demand for safe and healthy food, are strengthening the ties between farmers and food consumers. Many have initiated "buy local" campaigns, which feature in-store displays of locally grown produce. Restaurants and institutions also are being introduced to local farmers who contract to grow commodities to specific demands.

Brian Gardiner, America Fresh: "...and I found most of my time was spent on distribution, not growing. So, I decided that what I needed to do was to get the distribution going and I thought, well, you know, instead of having a farmers market why don't we put up a virtual farmers market?"

New technologies also are playing a role in the farm-to-market process. For instance, a Northern California food distributor is connecting area farmers with big city chefs through use of the World Wide Web. The intent here, as well, is to shorten the distance from field to fork.

George Parris, JEO Consulting Group, Inc.: "In my own mind there isn't anything we can't do out of this office that another community or another business would be able to do in a larger metropolitan community. Even a smaller community could be competitive as long as they have the high speed, the bandwidth that you need."

No one knows better the importance of web connection than rural communities, who have had to fight to forge the link with the rest of the world. The effort has included the development and application of new wireless technologies that promise to make Rural America a player in an increasingly globalized economy.

Indeed, agriculture often is on the cutting edge of employing new technologies to increase efficiencies and profit. But their application will not come without controversy. Witness the continuing squabble over rules to govern where genetically modified seeds may be planted, how their progeny must be handled, and who may own their pedigree. For all practical purposes the G-M-O debate is the debate over globalization.

But rancorous debate is not exclusive to international issues. At home the heat of domestic debate will emanate from the livestock industry. New rules governing the effuse generated from large scale livestock feeding operations will only dampen debate. There are still the questions in much of Rural America about the threat such operations may pose to air quality and the broader issue of whether they help or hurt rural economies.

Farther down the supply chain concerns that will be raised in the New Year will question the government's ability, some say willingness, to ensure consumers of a safe meat supply.

Donna Rosenbaum, S.T.O.P.: "President Bush, your administration has now presided over two of the largest three contaminated meat recalls in history. Surely this is not what you meant by "homeland security."

Homeland security will be an issue at another lower reach of the supply chain. Increasingly those who are paid the least are campaigning for a bigger share of the food dollar, and they are finding allies on the other side of the counter. Consumers are questioning corporate employment practices, asking how secure can the nation's food system be, when it is so dependent upon a labor sub-caste.

Indeed from field to line to board room from Main Street to consumer plate, the coming year promises a blend of questions, opportunities, and considerable unrest for Rural America.

For Market To Market I'm Sid Sprecher

 


Tags: agriculture Congress genetic engineering marketing news policy politics rural South America