Trade, Local Foods Promoted

National Governors' Conference Holds Forum on Importance of Food to Rural Economies

Chris Clayton , DTN Ag Policy Editor
From left to right, Iowa Gov. Terry Branstad, Kentucky chef Edward Lee, Iowa Lt. Gov. Kim Reynolds and U.S. Agriculture Secretary Tom Vilsack discuss local food opportunities at a forum Saturday during the National Governors' Association annual meeting. (DTN photo by Chris Clayton)

DES MOINES (DTN) -- Agriculture Secretary Tom Vilsack declined to discuss presidential politicsat the National Governors' Association annual meeting in Des Moines Saturday, July 16, but sought to tout to the nation's governors the importance of both expanded trade and local foods to boosting farm incomes and rural economic development.

Duringthe panel discussion, Utah Gov. Gary Herbert told the secretary that more people are concerned about the influx of foreign food. Herbert said the imports of food are hurting local economies. "What is the future for agriculture when we are importing more products from other countries?" Herbert asked.

The secretary noted the trade balance in agriculture and food remains a positive one and production agriculture still relies heavily on exports to boost farm income. That's particularly true given increased efficiency of U.S. farmers, Vilsack said. But the secretary added that trade flow both ways is a positive for American consumers.

"The amazing array of what we have in this country is part of our ability to trade with the world," Vilsack said.

The secretary also indicated in a press conference that he expects there will be a vote in the Senate before the end of the year on the Trans-Pacific Partnership, despite the teeth-gnashing going on politically over trade.

"Every trade agreement is tough and they are always close votes," Vilsack said. "The Trade Promotion Authority vote was close, so I would anticipate it would be close. Certainly in agriculture we have been educating members of Congress and the Senate about the opportunities that are there for agriculture."

Vilsack is drawing a lot of attention right now because of speculation that he is on the short list for Hillary Clinton's potential running mate. Vilsack declined to talk Saturday about the presidential campaign by citing the 1939 Hatch Act, which prohibits federal employees from engaging in political activity on official business.

"All of those questions need to be directed to the campaign," Vilsack said. "This is an official event for me, and under the Hatch Act, I need to stick to official event questions."

The secretary did note that the Obama administration is already working on the transition to the next president. USDA is drafting documents to turn over to the next administration on the work that is in progress and challenges facing USDA.

"At the president's instructions, he wants this to be the best transition ever, so we're in the process of putting together a set of transition memos," Vilsack said. "It's really designed to make sure that when that person starts the job, they understand the significant reach of the department."

At the NGA meeting, Vilsack and Louisville, Kentucky, chef Edward Lee were on a panel discussion with Iowa Gov. Terry Branstad and Lt. Gov. Kim Reynolds. Governors from 10 states took the time to watch a lengthy panel discussion mainly focusing on the value-added opportunities for farmers and economic development in rural America by focusing on high-quality food production.

Vilsack sought to make the case that governors around the country should be investing in local and regional food production as one of the strategies to develop the rural economy. Historically, Vilsack said, agriculture has been "an extraction economy" that grew food on the land, but shipped it out and processed the products elsewhere.

"We're changing the dynamic in rural America from an extraction economy to a sustainable one," Vilsack said.

Vilsack tied local food production to institutional sales, such as the school-foods program. Local foods account for about $790 million sold to schools, but Vilsack said it's potentially a $3 billion market. "Do you know what's grown and raised around your schools?" Vilsack asked.

Vilsack added that a farmer who negotiates with a local school is able to set the price for the product. "You don't have to worry about the Chicago Board of Trade to set the price. You negotiate it," he said.

The secretary also cited that USDA now has $50,000 microloans for small producers, as well as whole-farm insurance policies that can cover those farmers as well. Further, USDA is promoting the use of hoop or tunnel houses to help farmers grow produce year-round in some climates. Vilsack specifically told the governors that there are a variety of USDA programs to help spur local agriculture.

"So we're looking at an extraordinary number of ways that USDA can help," Vilsack said.

Lee pointed to the national tobacco settlement in the late 1990s as one of the reasons he saw a transformation in Kentucky farmers. Funds from the settlement went to small farm groups that developed more direct marketing efforts for farmers. Lee then saw Southern food as a new opportunity and moved from New York to Louisville, where he now owns multiple restaurants.

"I saw all of these farmers in Kentucky that went from growing tobacco to growing produce" and proteins such as poultry, he said. "For a chef like me who was disillusioned with city life, I hit the jackpot."

As a chef, Lee said he realized he can't do his job without small family farmers. What Lee has seen since then is growing influence of Southern food around the country to the point that restaurants and the farms are becoming draws for tourism. "It's an incredibly new phenomenon we are seeing," he said.

Lee said farmers find themselves spending more time dealing with marketing, but he said farmers need better outlets to reach buyers that would provide the farmers more time to do what they do best, which is grow the products.

"I think the most pressing thing for us is giving small farmers access to different retail outlets, whether it's schools or farmer markets, prisons, wherever they can sell their food," Lee said.

Vilsack chimed in that USDA has created a program called "Food LINC" to connect local growers and buyers in at least 10 urban areas around the country, including one in Louisville. Food LINC is part of the Know Your Farmer, Know Your Food program. More information about the program can be found here: http://www.usda.gov/…

The agriculture secretary then put in a plug for the farm bill, arguing that when debate began for the 2014 farm bill, it began with looking at how much could be saved in budget cuts. The problem with that is you can't deal with all of the problems out there in rural America, he said. Starting with the premise of needing to save money leads to groups pitting themselves against each other over program funds.

"It pits those interests against one another," Vilsack said. "I think we can do a better job supporting rural America."

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

Follow him on Twitter @ChrisClaytonDTN

(AG/BAS)

Chris Clayton