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Ag aiding economy

WASHINGTON -- Agriculture Secretary Tom Vilsack, in a Dec. 1 news conference, highlighted recently released trade and income statistics showing agriculture leading the country out of the recession.

WASHINGTON -- Agriculture Secretary Tom Vilsack, in a Dec. 1 news conference, highlighted recently released trade and income statistics showing agriculture leading the country out of the recession.

Vilsack said USDA forecasts that U.S. farm exports in fiscal year 2011 will set a record high $126.5 billion, exceeding the fiscal year 2008, formerly the highest level on record at $114.9 billion.

Agriculture continues to be one of the only major sectors of the American economy with a trade surplus -- which is expected to be $41 billion in this fiscal year, Vilsack noted. He said the forecast "demonstrates that the demand for U.S. food and agriculture around the world is stronger than ever," with sales surging in China, Southeast Asia, North America and the Middle East.

He noted that the forecast released Nov. 30 sees China pulling within $500 million of Canada, the United States' top export market in fiscal year 2011. Vilsack also noted that dairy, which has been troubled by export losses and higher input costs, is improving.

Vilsack added that the report "is particularly encouraging news for all Americans during trying economic times, especially those who live in rural America or earn a living in farming, ranching and agriculture-related industries such as transportation. Each $1 billion in exports supports 8,000 jobs, meaning that agricultural exports alone in fiscal 2011 are expected to support more than 1 million U.S. jobs."

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USDA's Economics Research Service also reported Nov. 30 that net farm income is forecast at $81.6 billion in 2010, up 31 percent from 2009 and 26 percent higher than the 10-year average of $64.8 billion for 2000 to 2009. But ERS also noted that both farm and input prices are volatile.

Increase in government aid

ERS also said government payments to producers are expected to total $12.4 billion in 2010, a 1.5 percent increase from the $12.3 billion in 2009, but 19 percent below the five-year average for 2005 to 2009.

The direct payments that are not affected by prices are forecast at $4.81 billion; countercyclical payments at $210 million, down 82 percent from $1.17 billion in 2009; and marketing loan benefits $120 million, down 89 percent from 2009.

While the price-triggered payments fell, the slight increase in farm payments in 2010 came from ad hoc and emergency disaster program payments, which are forecast to be $2.82 billion in 2010, an increase of 335 percent over the $648 million paid out in 2009.

Vilsack declined to comment on debt commission proposals to cut farm programs, but he noted that USDA had cut $4 billion over 10 years in crop insurance costs through negotiations with the companies and said he did not think members of the commission were aware that those savings had been contributed toward deficit reduction.

Vilsack also said any comments on the 2012 farm bill would be "premature." He said he had spoken with incoming House Agriculture Committee Chairman Frank Lucas, R-Okla., and incoming Senate Agriculture Committee Chairman Debbie Stabenow, D-Mich., and that they and their staffs "have a lot of work to do." Vilsack described a recent proposal by the Iowa Farm Bureau to cut direct payments in favor of a new disaster program as "a provocative and thoughtful proposal . . . that is the kind of thing that should be happening with farm groups."

A bipartisan group of House members led by Rep. Ron Kind, D-Wis., recently sent House Agriculture Chairman Collin Peterson, D-Minn., and Lucas a letter saying that the farm bill should be in written in 2011 so farm programs quickly can be reformed.

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Biotech beets

Regarding the recent decision by a federal judge to destroy genetically engineered beets planted in September, Vilsack said it is important to recognize that the court had not ordered the destructions of the sugar beeti stecklings, only their removal from the ground.

"We are currently engaged in discussions with the Justice Department about next steps," Vilsack said. "We recognize the significance of this to growers. It raises a larger set of questions generally for us to have a much better system than a single judge deciding if a farmer gets to farm or not to farm."

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