Winds of Change
People who fear change may want to close their shades and open them when the calendar turns to 2011. A massive federal deficit, an administration that appears hell-bent-for-leather on change and a host of other issues in Washington could transform the face of agriculture.
Currently, everyone is understandably focused on the economy and the longevity of the apparent economic resurgence. If it is deemed sustainable, the chips could fall into place in a way that makes agriculture policy and the role it plays in the industry virtually unrecognizable a year from now.
In January, President Obama will deliver his State of the Union address. In that speech, he will outline his agenda for the coming year and set the tone for the next several years. Every indication to this point is that the administration will push its aggressive, change-focused agenda.
The 800-lb. gorilla in Washington is the deficit. Today, our total accumulated debt is nearly $12 trillion. At current spending levels, we'll add another $1 trillion each year. At some point, something has to give. Will the President acknowledge it, and if so, how?
Fed funds are currently at 0%, meaning interest can't go much lower. Fed Chairman Ben Bernanke retained his job this past summer, but it was widely reported that it was on the condition that he keep interest rates low. How low can he keep rates and sustain the value of the dollar?
Regardless of the country's monetary policy, something must change in Washington when it comes to spending. What will this mean for farm policy and traditional farm programs?
In the summer, USDA held a retreat with the Secretary and several top officials from the department. On the agenda, according to Jim Wiesemeyer of Informa Economics, were sustainability, local food and organic agriculture. Not exactly the stuff of traditional agriculture—as we know it, anyway.
USDA is now a food and nutrition department, as indicated by the 2008 farm bill. Of the department's $86 billion budget, 70% of it is for food and nutrition programs. Wiesemeyer believes the Office of Management and Budget will show a resurgence of power over USDA that it has not had in decades. What does that spell for farm policy?
With food safety on the agenda for the Senate next year and USDA and the Department of Justice having announced they will hold hearings on antitrust in agriculture, there is no shortage of questions for next year. It will certainly be interesting to watch. —Greg Vincent
Top Producer, December 2009