With many commodity prices soaring, the last few years have been good to American agriculture. High prices have translated into record profits and allowed many farmers to invest in new equipment and in turn, improve productivity. In fact, in Iowa alone, the value of agricultural sales has climbed from approximately $12 billion in 2002, to a projection of nearly $30 billion in 2012. However, while there may be more new pickups on Main Street, potential challenges for the agricultural sector remain, many of which were discussed this past weekend at the State Agriculture and Rural Leaders (SARL) Summit in Washington, D.C.
SARL brings together the state legislators that chair the country’s state agriculture committees to discuss the most pressing issues facing American Agriculture. While most reports at this year’s meeting were positive—largely echoing commodity prices, I noticed three primary issues that commanded the most discussion: ongoing regulatory concerns and their economic impact on American farmers; the need for increased economic and technological infrastructure for rural economies; and the continued importance of consumer demands on food product labeling.
Regulatory Concerns Remain at the Forefront
The key theme of this year’s meeting could be summed up in one word—regulation. Discussion about new state environmental, food labeling, and broadband connectivity regulatory issues, as a group, were the focus of prolonged discussion. On the environmental regulation front, discussion focused on two main themes—agricultural runoff and invasive plant and animal threats. It is clear that questions remain as to the appropriate division of responsibility between urban and rural pollution sources.
However, it was also clear that states are coming up with low-cost and effective strategies to do their part, like a new Michigan program to incentivize farmers to minimize pollution discharges or a coalition of states working to secure dedicated funds for state invasive species management programs. From the sounds of these discussions, and as is the case in many other industries, legislation impacting the agricultural sector will be centered on the “low-hanging fruit,” meaning efforts will be primarily focused on voluntary, low cost, measurable and easily implementable strategies will be the foundation of successful policy proposals.
Supporting the Rural Economy
Keeping the economic engine alive in rural areas was another key theme for meeting participants, especially those from the Midwest. Legislators discussed the challenges facing the small population of Americans engaged in agriculture, which today stands at 2%. In particular, the conversation focused on increased broadband connectivity and tax incentives for small businesses as tools to bolster and grow rural communities. Participants noted the challenge of securing infrastructure investment in rural areas for broadband. To this end, one proposal on the table was to require cable companies to install rural infrastructure in return for the deregulation of urban markets, while another was to use existing state-owned bandwidth as an alternative to private lines.
Tax credits were also a big chunk of the conversation. One presenter highlighted the impact small, state-led programs can have in rural areas. Citing an example from his community, he highlighted a small home-based business making wooden handicrafts that was able to grow into a seller with nationwide distribution and multiple employees thanks to state legislation that provided a small business tax credit. As well, non-tax legislation including proposals to allow the sale of additional value-added products such as beer and wine at farmers markets highlighted some of the additional ideas states are considering to provide economic opportunities in rural areas. Based on the strength of discussion around these topics, it appears likely that going forward, initiatives to expand rural economic opportunities are likely to garner the attention of lawmakers from rural districts.
Another hot topic dealt with food labeling issues, specifically with the interest in some states for mandatory labeling of products containing genetically modified (GM) crops. Legislators discussed the merits of mandatory versus voluntary labeling as well as recent local government efforts to prohibit the planting of GM crops on public lands.
From the mood in the room, legislators appeared most interested in seeing voluntary labeling requirements remain the norm. Some present indicated voluntary labeling is already available for certain products and mandatory requirements that increase food product prices further are unlikely to gain momentum in these challenging economic times. Moving forward, this issue is likely to gain greater legislative attention as a wider and wider variety of GM products receive federal approval for use.
The above items represent some of the key themes that appear poised for discussion this legislative session as indicated by the conversations at the State Agriculture and Rural Leaders Summit this past week. As the legislative session unfolds, it’s likely one or more of these may be coming to a State House near you.
We’d like to hear your reactions. If you attended SARL, were there other topics you discussed? Is the agricultural sector in your state seeing different trends? What legislative or regulatory issues are you focusing on?