A Moment with... U.S. Secretary of Agriculture Tom Vilsack

As the 30th Secretary of the U.S. Department of Agriculture (USDA), Tom Vilsack is facing the worst crisis the dairy industry has experienced since the Great Depression. The former two-term governor of Iowa has talked candidly about the challenges and opportunities facing USDA, and the importance of the department serving as a champion of rural America, a steward of the environment and a protector of our food supply.
Secretary Vilsack recently answered questions about the state of the dairy industry and announced some of his goals for his tenure, which started earlier this year. Here are two of the secretary’s answers; the rest can be found at our Web site, www.dfamilk.com.

Q: The dairy industry has been struggling through an incredibly low cycle. What do you think would help decrease volatility in the industry?

A: There is no doubt that dairy farmers are facing especially tough challenges. As I traveled the country this year on President Obama’s Rural Tour, I heard at nearly every stop from both large and small dairy producers who were struggling to keep their farms. They are being forced to make the most difficult choices about how to maintain their businesses and provide for their families.

In the short term, USDA has taken action to provide immediate relief and keep producers on the farm. We have provided Milk Income Loss Contract (MILC) payments, donated surplus products to food banks and other feeding programs, extended Farm Service Agency farm loans to assist as many dairy farmers as possible, and utilized the Dairy Export Incentive Program (DEIP) to promote dairy exports.

Since April 2009, USDA has made $772 million in payments to producers through the MILC program. And the increase in the amount paid for dairy products through the Dairy Product Price Support Program (DPPSP) is estimated to have increased dairy farmer revenue by $300 million since August of this year.

We reactivated DEIP to help U.S. dairy exporters meet prevailing world prices and to encourage the development of international export markets in areas where U.S. dairy products are less competitive due to foreign subsidies. Since then, as of this interview, we have announced awards for 68,201 metric tons of nonfat dry milk, 21,097 metric tons of butterfat, and 1,226 metric tons of cheese.

We also are working with the Department of State to identify foreign assistance programs such as U.S. Agency for International Development (USAID) and McGovern-Dole International Food for Education and Child Nutrition Program to open up new opportunities for U.S. dairy products.

In the longer term, we are searching for answers for how the dairy industry can end the boom and bust cycle that has characterized the business in recent decades and build a more stable market for dairy producers for years to come. I don’t pretend to know exactly what this will look like – which is why I need input from producers of all types and sizes from across the country to try and build consensus around a long-term plan.

To assist in this effort, in August we announced the establishment of a Dairy Advisory Committee and issued a solicitation for nominations to begin the process. The committee will review the issues of farm milk price volatility and dairy farmer profitability and will provide a voice on how USDA can address issues affecting the
dairy industry.

Q: What is your biggest challenge?

A: We face a great challenge in helping lead the Obama Administration’s efforts to rebuild and revitalize rural America. But even as we work to turn the economy around following the worst economic crisis since the Great Depression, I see more opportunities today to strengthen communities across rural America than at any other time in decades. This economic revitalization will be built on four pillars: energy, climate change, broadband and the broad set of changes to help develop local food systems we call “Know Your Farmer, Know Your Food.”

The development of renewable energy will be a critical component of our efforts to rebuild and revitalize rural America. This nation needs an energy supply, and if we can produce it right here at home, the jobs and industries of the 21st century will be centered around clean, renewable energy.

Confronting the challenge of global climate change presents rural America with the opportunity to once again embrace science and lead efforts to create clean energy jobs, achieve energy independence, mitigate climate change, and transition to a clean energy economy. Climate change and the carbon offsets market will create new income opportunities for America’s farmers, ranchers and forest owners and will be one of the keys to revitalizing rural America. By implementing more efficient production practices, farmers will help their bottom line. Using conservative estimates of the benefits and high-end predications for potential increases in energy costs, USDA’s economists found that the economic benefits to agriculture from pending energy legislation will likely outweigh the costs. Analysis indicates that annual net returns to farmers range from about $1 billion per year in 2015-20 to almost $15-20 billion in 2040-50, not accounting for the costs of implementing offset practices.

The Recovery Act signed by Obama in February gave USDA $2.5 billion to provide grants and loans worth up to $9 billion for high speed internet service in rural communities across the country. These investments will provide citizens with job opportunities and help create wealth by driving economic growth, advancing education, fostering innovation, enhancing health care and giving first responders the tools they need to do their jobs. Broadband will mean that small businesses have access to a global marketplace, and it will give farmers and producers up-to-the-minute commodity and weather information so they can make the best decisions for their operations.

USDA’s “Know Your Farmer, Know Your Food” is a USDA-wide effort to create new economic opportunities by better connecting consumers with local producers. The truth is that not every family needs a lawyer or an accountant – but every family needs a farmer. By successfully restoring the link between consumers and local producers, we can create new income opportunities for farmers and generate wealth that will stay in rural communities. We can promote sustainable agricultural practices and provide our families and children with a healthier food supply.