Agriculture Looks Ahead

OMAHA (DTN) -- While President Donald Trump and Republicans continue to look for legal avenues to challenge the election, more attention also turns toward what a Biden administration may mean for agriculture or other industries.

Farmers are recovering from the economic slowdown caused by the coronavirus while still dealing with rising cases of COVID-19 in rural America. President-elect Joe Biden coming to office raises a lot of uncertainty about regulations, as well as policy battles moving forward.

When Zippy Duvall became president of the American Farm Bureau Federation, he said immigration and farm labor issues were his top priorities to address on a national level. Those issues remain.

"It's been one of the most difficult issues we face and the biggest limiting factor for American agriculture, for us to continue to grow, to bring our children home from college and put them in the business, to be able to expand our businesses," Duvall said in an interview with DTN on Monday.

Beyond calculating wages under the H-2A program, Duvall said agriculture needs the opportunity to recruit year-round guest-workers, especially for areas such as animal agriculture. There also are hundreds of thousands of workers already in agriculture across the country who are undocumented or have family who are in the country illegally. Duvall said it's time to find a way to legalize these employees. Duvall sees the potential for a better environment under the Biden administration to address some of these issues.

"We have a great base of talent across America working in agriculture, and a lot of them are undocumented," he said. "We'd love to find some way to adjust their status so that they can stay here and continue to work."

TRADE DIRECTION AND DEVELOPMENT

Trade takes time for any administration to kick in, and the Trump administration saw a deal with Japan, the United States-Mexico-Canada Agreement (USMCA) and the Phase One Agreement with China all come into play right before the pandemic hit. In China, government officials are already raising the possibility that they could reopen the Phase One Agreement signed in January, according to the South China Post.

Yet, there also are doubts Biden would want to make any overtures that would appear weak on China. It's been slow to build up, but Chinese purchases of agricultural commodities are rising, hitting just under $14 billion at the end of September with higher numbers expected in October.

"I do know that the Biden group has seemed to be very favorable in continuing that development in trade that we've seen, so trying to support trade for agricultural commodities, so I think that's good," said Cortney Cowley, an economist with the Federal Reserve Bank in Kansas City.

REGULATIONS AND RENEWABLE ENERGY

Cowley, speaking on an Ohio State University policy forum Monday, added, "I think the greater unknowns, however, are on the regulatory and the renewable energy side, which could both be positive and negative for agriculture. So, I think there are still a lot of unknowns."

Regulatory issues have already been raised as a concern under a Democratic president. Certainly, the Obama-era "waters of the U.S." (WOTUS) rule became a rural rally cry against over-regulation. Under President Trump, regulations at USDA, EPA and the Department of Interior were rolled back in several ways that were positive for both farmers and livestock producers. Ideally, Biden's team will focus on using sound science as a basis for rules and regulations, Duvall said.

"We're hoping the Biden administration will see some of the progress that's been made there and consider to move in the same direction," Duvall said. "So, we are concerned, but hopefully we'll get an opportunity to be at the table and explain the good side of the progress in that area."

CLIMATE CHANGE AND RENEWABLE ENERGY

Tying into the question of regulations versus economic opportunity, Duvall said farmers nationally recognize there's going to be a debate in the country moving forward about how to address climate change. Rural America has shown it can take the lead in renewable energy, and farmers can reduce and sequester greenhouse gases.

"We're hoping we can have a market-based voluntary solution to a lot of the proposals that may come forward in the discussions around policy and climate change," Duvall said.

Biofuel groups during the weekend stressed in no uncertain terms that Biden and Vice President-elect Kamala Harris back ethanol and biofuels as solutions to help the rural economy while addressing climate change by "decarbonizing" transportation fuels. It was, after all, the Renewable Fuels Standard that spurred the last positive growth cycle in agriculture.

"Biofuels are the most affordable and effective solution available now, and the new administration must harness those environmental and economic benefits by strengthening the Renewable Fuel Standard, accelerating innovations in climate-friendly farming, and promoting low-carbon transportation strategies at home and abroad," said Emily Skor, CEO of Growth Energy.

STIMULUS BILL

Eyes are quickly turning to the lame-duck session of Congress and talk about further coronavirus relief. The last stimulus bill that failed to get finalized had $20 billion for agriculture. Ag bankers and others are worried that farmers could see a steep decline in income should the aid that has helped cash flow operations in 2020 suddenly end.

Ideally, functioning markets would maintain the higher commodity prices this fall.

"A very cynical take is that income should be much lower and the government payments are going to go away and then the bottom's going to fall out," said Todd Kuethe, a Purdue University agricultural economist, during the Ohio State event Monday. "A very optimistic take says, well, actually, the reason we have these temporary payments is because our markets are being disrupted and we're going to get back to those markets and we're going to get back to that income."

Duvall highlighted the possibility for an aid package, but also stressed the importance of Congress simply funding the federal government for the rest of the fiscal year.

"We need for them to do something around the budget, whether it's an omnibus or a continuing resolution to keep government workers at work," Duvall said. "We surely don't need to start a new administration by shutting the government down."

AG SECRETARY PROSPECTS

Looking at the prospects for Agriculture Secretary under Biden, the name that comes up most frequently is former Sen. Heidi Heitkamp of North Dakota. Heitkamp served on the Senate Agriculture Committee and also was on Trump's short list for that position. Having lost his reelection race, another possibility could be House Agriculture Committee Chairman Collin Peterson of Minnesota. Other possibilities include former USDA officials Michael Scuse (now Delaware's ag secretary) and Krysta Harden (former deputy secretary and chief of staff to former USDA Secretary Tom Vilsack). Others on the mounting chatter list include current Rep. Marcia Fudge, D-Ohio, and Land O'Lakes CEO Beth Ford.

Federal Reserve economist Cowley said it's a positive that most of the candidates for USDA Agriculture Secretary are women, "Which kind of shows the willingness of the sector and those involved to allow other minority and marginalized groups to have a seat at the table and to have a voice."

Chris Clayton can be reached at Chris.Clayton@dtn.com

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