Ag Policy Blog

Vilsack on Agriculture and the Role of Government

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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On Wednesday I trekked to Ames, Iowa, to hear a panel of young farmers meet with Agriculture Secretary Tom Vilsack to discuss how USDA programs are working for young and beginning farmers and ranchers.

I mentioned Thursday I had a phone call from the Republican nominee's ag committee chairman. He highlighted the GOP answer to policy in rural America is less regulation, ending the estate tax and expanding production of all energy options.

Making the Democratic argument, Vilsack counters in defense of government and he keeps making that case. A young farmer in the forum on Wednesday expressed a little frustration about the lag time in getting technical assistance from USDA Natural Resources Conservation Service staff. The farmer said more NRCS staff or contractors are needed in the field. Vilsack chimed in.

"The next time you are in a coffee shop and people start talking about less government -- here's the deal, my budget is less than when I began as Agriculture Secretary," Vilsack said.

USDA's discretionary budget has actually grown since Vilsack became agriculture secretary, but the rate of growth was curbed and projected budget for USDA affected by cuts in the sequestration deal, the 2014 farm bill and annual appropriation cuts that have gone on as part of the tortured budget battles between Congress and the Obama administration over the last seven-plus years.

He told the farmers their lives are impacted by the USDA Forest Service budget for fire suppression. Wild fire management takes up roughly 48% of the Forest Service budget and frequently demands shifting funds from elsewhere to pay for the costs. USDA has proposed setting aside a fund of up to $855 million to deal with fire suppression, but Congress has not acted on that.

"At the end of the day, it's not realistic for me to tell you we will add more people until people understand that this department has as much significant around the country as other people," Vilsack said.

In a podcast interview with Democratic consultant David Axelrod, who once worked on Vilsack's first gubernatorial campaign in Iowa, Vilsack also talked about the importance of rebuilding public health, which he said will be an emerging issue for the next administration to deal with opioid use, mental health and other rural health-care challenges. The problem with public health, as in other sectors, is the anti-government mindset.

"We have sort of demonized all things public," Vilsack said in the podcast. "Public schools, public education, public safety. It has been a concerted effort over a long period of time." He added, "Public is not a four-letter word. It is an important concept."

The secretary also talked with Axelrod about his own efforts to get through college and become a lawyer. To get through law school, Vilsack relied on student loans, veteran and Social Security benefits from his deceased adopted father, and the public teaching salary from his wife, Christie.

"So when people say less government, I say without government I would not have anywhere near the life I've had."

Axelrod podcast, episode 73: http://politics.uchicago.edu/…

At the forum on Wednesday, water-quality issues were also raised as one farmer expressed concern about the regulatory pressures from the Clean Water Act rule redefining waters of the U.S., or WOTUS. Vilsack noted he had encouraged top officials at the Environmental Protection Agency to get out into states and talk more about the specifics of the WOTUS rule, which is currently tied up in federal court.

"What I often times is that farmers aren't fully aware of exactly what this rule provides. They are unclear and uncertain about how it may impact their specific farm and it creates anxiety and concern," Vilsack said.

The secretary said farmer concerns about the WOTUS rule -- which has yet to be implemented -- could be eased if the need for the rule were better explained by EPA. "There needs to be a more concerted effort in making sure there is an understanding of the problem we are trying to solve and how we are actually going about trying to solve it."

On taxes, the secretary criticizes farm groups for focusing on repeal of the estate tax, or "death tax" as often used by its opponents. The secretary noted the estate tax is paid by very few people, and an even smaller number of farmers. "Frankly, it is an incredible waste of time to talk about it because hardly anybody ever pays it," Vilsack said.

Vilsack points out he has no incentive to sale his Iowa farm ground because the capital-gain taxes would be high. His children can inherit the land, receive the stepped-up basis on the value and sell the ground while paying little capital gains on it. The secretary said tax policy should be changed to encourage tax breaks for selling that ground to a younger farmer or rancher. "We should be thinking about a way that I can sell to a farmer that doesn't kill me from an income-tax perspective," Vilsack said. "We should be having a different conversation about taxes."

Regarding another hot topic in the campaign -- trade -- the same young farmer who brought up the WOTUS rule also said the Trans-Pacific Partnership needs to pass. This is where President Barack Obama and Vilsack go against not only Donald Trump, but also Hillary Clinton as both campaigns have bashed the trade deal. "President Obama is a big supporter (of TPP) and has encouraged Congress to do its job," Vilsack said. Vilsack pointed out the U.S. only accounts for 5% of the population so 95% of the potential market for ag goods is outside the country. Walking away from TPP, "doesn't make much sense to me and it doesn't make much sense to President Obama."

Additionally, Vilsack said, the middle class is growing in the Asian TPP countries and there will be "more people to buy the stuff that you folks grow." He also pointed out that every major study shows farm exports and farm income will increase. Still, the secretary said he recognized the complications with TPP. The secretary said when a factory closes, everyone points to trade, but few people point to the jobs created and higher incomes associated with trade.

"We just have to do a better job telling people the story about trade," he said.

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