Choppy waters ahead for new administration
The political winds are changing and that means substantial adjustments are ahead for growers.
Social justice, minorities in agriculture, farm program payment limits and greater attention to climate change issues are expected with a Joe Biden administration, according to Todd Van Hoose, president and CEO of the Farm Credit Council. He spoke Jan. 5 at the virtual Potato Expo.
Van Hoose said president-elect Joe Biden faces a bumpy transition and a cloudy outlook, starting with the “house guest” that won’t leave. But that is just the start of issues for Biden, he said.
“We’ve never had a transition look like this,” Van Hoose said. “He’ll take office in January 20, in the midst of a global pandemic, the likes of which none of us have really seen, with economic chaos as a result. We had a summer of civil unrest. There’s deep divisions in our country. And not to mention outside interference from China, Russia, Iran and others.”
With slim majorities in the House and control of the Senate undecided as of Jan. 6, Van Hoose said Biden will have a difficult time enacting new legislation.
Progressives have high expectations for Biden’s presidency, while Republicans will be hungry to win back Congress in mid-term elections two years from now.
The erosion of the public’s trust in the political process has been one casualty of the past four years, he said.
“That’s going to make it very difficult for him to govern,” he said, noting that Democrats and Republicans are “fired up” about their convictions.
The 66.4% turnout for the election was the biggest since 1900.
“If you spend billions telling people in America that the other side is awful — and that’s what both sides did — some of them are going to believe it,” he said.
While Biden, Nancy Pelosi and Mitch McConnell know how to cut deals, a divided Congress may not let them do that. If happens, Biden could face “gridlock” that could make it impossible for him to get anything done.
“I tend to be a little on the negative side, I think the overwhelming emphasis here is going to be to fight, to not cooperate,” he said. “And and so I foresee a pretty difficult legislative road for any issue.”
In addition, President Trump may want to stay engaged in politics and could have an influence in Washington, D.C.
Van Hoose said Democrats may be tempted to remove the filibuster from the Senate.
“As somebody who’s been involved in legislation for 30 some years in Washington, the filibuster to me is always a comfort, because it stops that massive legislative snowball from running downhill so fast, it gets out of control,” he said. Ag challenges
Tom Vilsack, Biden’s choice for Secretary of Agriculture, is a trusted choice and proven leader at USDA, Van Hoose said. Vilsack served in the same post for eight years during the two terms of the Obama administration.
House and Senate Agriculture Committee leadership should be in good shape, he said.
“I think the bigger issue, even though we’ve got great confidence in all four of those leaders, the thing I’m probably most concerned about is who’s not there — Collin Peterson,” he said.
The former House Agriculture Committee chairman, a Minnesota Democrat, was defeated in November’s election.
“Particularly on the Democratic side of the House Agriculture Committee, (Peterson) drove policy for the last several years; he will be deeply missed.”
With the supply chain disruptions caused by the COVID-19 pandemic, Van Hoose said some members of Congress may be looking to look at price transparency, particularly for livestock.
Other issues important to some Democrats, he said, include payment limitations, conservation practices, concentration of ownership of agricultural assets, and how to get more new people involved in agriculture.
“All of those are going to be very big issues to be debated as we come toward the 2023 Farm Bill,” he said, noting that farm bill discussions will start late this year. Social justice and minorities in agriculture also will demand more attention, he said.
“The evolution of diversity within the Congress is creating new and different priorities for Congress, and that will include agriculture,” eh said.
“Minority issues are going to be a big priority for (Democrats),” he said, noting that leading Democratic lawmakers have introduced a bill that is focused on giving incentives for minorities to become involved in agriculture.
The bill would put aside $8 billion to purchase agricultural land, and grant the land to minority farmers, he said,
Climate change also is drawing attention, as the cost of weather disasters is creating a political consensus to take action on climate change, he said.
With the actual debt of the U.S. exceeding the economy this year, federal deficits are a long-term issue that could limit aid to agriculture, he said.
“We committed trillions to save the economy, and the deficit now is slated to quadruple as a result of the money we spent on COVID,” he said.
Farmers have received almost $91 billion across the last four years. Those kinds of spending levels will likely come down.
“I’m not saying it’s going to end next week, but I am saying that the expectation around something like $37 billion next year just probably isn’t very realistic.”
While most farmers don’t have big debt, Farmers who are highly leveraged could be vulnerable, he said
“As farmers working capital ratio starts to erode, that means they cannot sustain another major disruption without having a pretty severe economic impact,” he said. That is especially true, he said, if government direct payments are reduced in the years ahead.
