On May 17, newly installed Agriculture Secretary Sonny Perdue reassured lawmakers on the House Agriculture Committee that changes planned for the USDA – including the consolidation of some NRCS offices and creating a new undersecretary of trade position -- would not hurt the nation’s agriculture sector. Displaying an affable manner, Perdue handled wide-ranging questions from immigration to broadband access to food programs to regulations for Tennessee Walking Horses.
A topic hit on repeatedly was crop insurance, which Perdue backed vigorously. The program “is a much more palatable safety net program from the public shareholder than direct payments were.”
Ohio Rep. Bob Gibbs asked if Perdue had “any thoughts on how to make crop insurance better?”
“I thought (lawmakers) made a lot of progress in 2014 in transitioning to the ARC/PLC backed up with crop insurance, which puts some responsibility on the producers themselves,” said Perdue.
“The insurance program isn’t perfect and there are things we need to readjust. With cotton, for instance, there is a quality issue – the quality degradation isn’t right and we hope to adjust that.
“The other thing is your producers, if they’re on ARC, may … farm in (two) counties and they’re different. They don’t quite understand those differences.
“Overall, I think the insurance has been a great addition. We need to look at how to cover more specialty crops. We don’t want to create a program where the producers are farming for the program. That’s happened in the past and created some unnatural market forces. We want a true safety net for those doing right. We don’t people farming for insurance payments. Insurance ought to be utilized when there is a true revenue loss to a producer, whether it’s price or production.
“The STAX program wasn’t as helpful to cotton producers as you’d hoped.”
Mid-South floods, Cuba
Perdue had recently flown over flooded areas of the upper Mid-South. Arkansas Rep. Rick Crawford thanked him “for your responsiveness and personal attention (to the flooding in northeast Arkansas). I think our 100-year floods are happening more frequently than that. This is our third in six years.”
Crawford also turned to crop insurance. It’s “an important component, no question. But as it applies to rice the ‘practical to replant’ provision has added more confusion than clarity. I hope you’ll work with us on actually trying to provide some flexibility on that. After May 15, it’s strictly not practical to replant rice so having some alternative would be much appreciated.”
Perdue agreed with Crawford but offered no lifeline for rice producers currently flooded out. “Those contracts are set and can’t be changed for this incident, this tragedy that just happened. But the RMA has learned from that and some of these dates for practical replant makes a huge difference regarding yield, production, the quality of seed, hybrid seed and chemical linked to that.
“I commit to you that you’ll see some changes in the RMA’s practical replant dates going forward for the 2018 contract.”
The White House, Crawford said, is currently undergoing a Cuba policy review and is “considering whether to reverse course of our recent expansion (of trade) relations. I hope you’ll be a vocal advocate so when they do develop that policy it’ll be inclusive on the ag front.”
Perdue: “If our folks grow it, I want to sell it. They eat in Cuba, as well.”
Trade, NAFTA renegotiation
What about Perdue’s views on trade? “Do you believe some of the elements contained in the TPP could be the basis for moving forward … to renegotiate NAFTA?” queried California Rep. Jim Costa.
“Absolutely,” said Perdue. “I think with many of the principles included in (the TPP), in tandem with renegotiation of NAFTA, you might could see a sort of trilateral TPP. Many of the principles you had in the (TPP) negotiations are still viable and it’s a matter of fine-tuning those in a way that makes sense.
“(The Trump administration) isn’t opposed to free trade, at all. It’s more concerned with fair trade.”
To that point, replied Costa, “it works both ways. In 2010, we dealt with a Mexican trucking issue and last year with a country of origin labeling. If we play that game, they can play that game with reciprocity and then it becomes a real problem.”
“I want to define my definition of ‘fair trade,’” said Perdue. “You don’t have fair trade unless it’s fair for all involved. That’s the essence, actually. And they have pretty good negotiators on the other side, as well. So, I don’t think you have to worry about us taking advantage of anyone.”
More crop insurance, young farmers
Iowa Rep. Steve King came at crop insurance from a different angle. “Would it be your belief the unsubsidized premium for crop insurance reflect the risk?”
Perdue: “I think any valid insurance program – crop insurance or any other program – has to reflect the reality of risk. That’s what insurance is all about as we continue to perfect (crop insurance). Credit in these economic times is getting more tight, lenders are requiring an insurance product and maybe forward contracting as well so the producers can demonstrate repayment ability.
“As we go through, yes, I agree it ought to be commensurate with risk. It’s tough. How do we do that – individually, by county, by region? That’s why reporting is so important for our farmers, why the census is so important so we have accurate data to make good, wise actuarial decisions.”
What about support for land grant institutions and young farmers?
“We understand the power of land grant university system across the country,” said Perdue. “Our Extension Service is directly responsible for the productive capacity of that. We can use some scholarship dollars to bring young people in who have a desire.
“Many times, they haven’t had the advantage of growing up on a farm. We’re seeing that in 4-H and FFA. The young people understand the science, the technology, the big business. The problem is the high capital barrier to enter agriculture.
“But if we can train more people with a passion for agriculture in these institutions – and you’ve heard (Trump) affirm his commitment to that with funding – I’d welcome the opportunity to utilize those funds across the (historic black college) community and land grant facilities.”