The ‘back to the Future’ Secretary of Agriculture

Tom Vilsack’s reappointment as Secretary of Agriculture should not be a surprise. The former governor of Iowa and his wife supported President-elect Biden in his first run for president in 1988. They have been friends of the Bidens and their political allies for more than thirty years, and Vilsack himself helped craft the Democratic campaign platform on agricultural and rural policy. Among the leading candidates for the job, Mr. Vilsack was perhaps the most palatable choice for many farm interest groups. As Secretary of Agriculture for President Obama, like his predecessors in the Bush and Clinton administrations, the Governor’s record shows him supporting many of the policies pushed by farm lobbies. The question is whether his current farm policy positions have evolved with a new administration, or simply become another case of “back to the future.”

As Agriculture Secretary, Vilsack consistently supported federal farm price and income support programs and the $8 billion a year federal crop insurance program, regardless of how inefficient or poorly targeted they were. Under his tenure, the US Department of Agriculture implemented two new price and revenue support programs, the Price Loss and Agricultural Risk Coverage initiatives, together generously providing farmers an average of about $5 billion a year between 2015 and 2020.

Despite the fact that ethanol is of questionable value from a carbon footprint perspective, Vilsack has been and remains a strong advocate for the rigorous implementation of the Renewable Fuels Standard (RFS) — an extremely popular position among farmers in Corn Belt states. He has also been a vocal and strident critic of the Trump administration’s RFS waivers for small refineries. All of this suggests that as a member of the Biden administration, he would vigorously enforce RFS mandates.

In the context of climate change policy, Vilsack is in favor of carbon sequestration and has argued for initiatives that pay farmers to adopt such practices. The proposal was included in President-elect Biden’s agricultural policy platform. Vilsack has also discussed increasing the funding and scope of the Conservation Reserve Program (CRP) which pays farmers to take land out of production and the Conservation Stewardship Program (CSP) which pays farmers to adopt farming methods that conserve soil and reduce pollution.

Should there be congressional opposition, Vilsack may be open to using unallocated funds available through the USDA Commodity Credit Corporation (CCC) to further support these initiatives and establish a carbon bank to buy and resell carbon credits. Since 2017, CCC funds have been available for use on a discretionary basis by the Secretary of Agriculture. The Trump administration used them to pay farmers for trade dispute losses. In a typical year, between $10 and $15 billion in unspent CCC funds are potentially available for such uses, more than enough to double the federal resources available for the CRP and CSP initiatives which jointly cost about $4 billion.

On the international trade front, Mr. Vilsack has been a vigorous critic of the Trump administration’s trade war and subsequent 2019 trade deal with China. He argues that in 2017 China levied countervailing tariffs on targeted US exports of agricultural commodities (e.g., soybeans) that were readily available from other suppliers (e.g., Brazil). Once U.S. commodities accumulated at home, Vilsack claims, China reentered the US market to obtain those commodities at fire sale prices, taking the Trump administration and US farmers to the cleaners.

Whether or not Mr. Vilsack’s assessment is correct, during his eight-year tenure, the former Secretary of Agriculture acted to improve access to overseas markets, using the trade negotiation mechanisms built into multilateral trade agreements such as the WTO to resolve disputes. He also strongly supported American participation in the Trans Pacific Partnership trade agreement.

His international trade record is not without blemish. As Secretary, Vilsack supported Country of Origin Labeling for livestock commodities. The policy increased the costs of imports and processing for both domestic and imported animals by reducing the efficiency of packing plant operations. Ironically the program had little effect on prices received by US farmers for their cattle and hogs. Overall, though, Secretary Vilsack was supportive of expanded international trade, a position popular with major farm groups such as the National Corn and Wheat Growers Associations and the American Farm Bureau.

Many of Secretary Vilsack’s current positions on farm subsidies and the regulation of agricultural lands and production practices are remarkably similar to those held when he last served in government. But his position has changed on some USDA programs. He now favors allocating tens of billion dollars for the expansion and improvement of broad band access in rural areas, and a substantial increase in public funding for agricultural research and development. In inflation adjusted terms, public funding for American agricultural R&D shrank quite substantially during his previous tenure as Secretary. In many respects, however, picking Mr. Vilsack for Secretary of Agriculture seems to be a “back to the future” move by President-elect Biden and a play for farm votes in 2022 and beyond.