Economy, increased regulations worry farmers

SAN ANTONIO -- Agriculture is a rare bright spot in the American economy, but farmers are worried problems in the world economy and the Obama administration's increased environmental regulation will end the good times, American Farm Bureau Federation President Bob Stallman said Jan. 11 in San Antonio.

"There is a lot of anxiety about this production year. But all in all, agriculture is in good shape going into the kind of crisis we're having," Stallman said at a news conference after his speech during the Farm Bureau annual convention.

In his speech, Stallman noted that the Agriculture Department has projected that farm income for 2008 will total $86.9 billion, 42 percent above the average of the last 10 years and one of the top three years in U.S. history. He also said debt-to-asset ratios were in the best shape since the government began tracking agricultural finances in 1960.

While production costs were at record highs this past year, livestock feed costs and fertilizer have retreated significantly, he noted.

'At risk'

Stallman's statements are in line with a Moody's Economy.com chart recently released at a House Democratic Steering and Policy Committee forum. That chart showed 38 states in recession and 12 states -- almost all of the farm and energy-producing states in the center of country -- "at risk" of recession. Stallman said farmers in the recession states have been doing fairly well except for cotton and dairy farmers, who have been struggling with lower prices. Farm Bureau economist Bob Young said in an interview that farming and ranching are in better shape than other economic sectors because the farm crisis of the 1980s forced farm bankers to demand strong balance sheets.

"That part of the country learned from its mistakes 20 years ago," Young said.

Stallman said the Obama administration needs to keep the 2008 farm bill in place and that the Farm Bureau would oppose opening the bill to make changes in it. Stallman said the Farm Bureau also supports proposals to include rural development programs for water and sewer systems, construction of locks and dams and renewable energy projects in the economic stimulus package, but has no position on a proposed temporary increase in food stamp benefits.

Common sense

Farm Bureau members' anxiety about increased environmental regulation arise from a Democratic administration coming to power rather than any specific positions that President-elect Obama has taken, Stallman said.

Obama, he noted, sent Farm Bureau a letter saying that all environmental regulations should undergo a cost-benefit analysis and be based on sound science and that he does not want his appointees to pursue "philosophical agendas."

Stallman also said he considers Obama's appointees to be "centrist, common sense people in general" and noted that the New Jersey Farm Bureau has said it had a "working relationship" with EPA Administrator-designate Lisa Jackson, who has been a New Jersey official. But Stallman said Farm Bureau still is worried about increased air and water quality regulations and about where climate change concerns could lead.

On the effect of carbon emissions on long-term climate change, "there's too much uncertainty to put a heavy load on producers in this country," he said.

Foreign sales remain key to U.S. agricultural prosperity, Stallman said, but he added that in the Doha Round of trade talks "a pause is not bad." The Doha Round "is stalled and rightfully so, because it was going in the wrong direction for U.S. agriculture."

Stallman said he does not know his fellow Texan, former Dallas Mayor Ron Kirk, who has been nominated to be U.S. trade representative, but that his reputation is excellent and that "it is not necessarily bad he doesn't have experience in trade."