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April 3, 2024

Reviving Rural Resilience Through Agricultural Policy  

Over the years, the number of farms and agricultural land in the U.S. has steadily been in decline. Is agricultural policy the answer?

 The 2022 Census of Agriculture reported that the number of American farms fell below two million for the first time in almost a century. Kids are leaving the family farm to pursue careers outside of agriculture, and they’re not coming back.  But why? Is agricultural policy to blame? And what does this mean for the future of our food supply?  

Today, agriculture accounts for nearly 24 million jobs and twenty percent of total U.S. economic output. Unless we can find a way to preserve Rural America and revitalize this essential industry, the stability of the economy and our food security remains in question. 

On March 18, 2024, Agri-Pulse hosted the Ag & Food Policy Summit, where community leaders and policymakers gathered to discuss what can be done to revitalize the Rural America economy. During these discussions, some key topics were brought up. 

  • What challenges are driving the loss of America’s most precious asset?  
  • In what ways are farmers overcoming them?  
  • What are legislators doing to address them and support our nation’s farmers?  

In this article, we summarize key points from the discussion and unpack how agricultural policy can better support farmers in creating a more resilient rural economy for future generations.  

1. The Farmer Pipeline Problem  

It wasn’t so long ago that Earl Butz, former Secretary of Agriculture, was telling farmers to “get big or get out.”

“Agriculture in the last twenty years, the way forward has been consolidation. Getting bigger and bigger operations, keeping food prices down and feeding the world,” said Darin Riggs, Co-Founder of Riggs Beer Company and barley farmer.  “During that consolidation, we’ve hollowed out a lot of Rural America.” 

Since then, we’ve lost a lot of agricultural land, and although Butz hasn’t been in office since 1957, many are still following his advice. The barriers to enter a less competitive market are too high for young farmers and, as a result, the people who stay in are aging out. The average age of the farmer is now just over 58 years old, according to the 2022 ag census. Many of these farmers do not have a succession plan in place, leaving the future ownership of trillions of acres of farmland in question.  

“It’s been a transition challenge,” Riggs said of his own experience inheriting the family farm. “Like, hey dad, I’m forty. When am I going to start running the farm?” 

A lack of childcare, medical care, financial opportunities, and even broadband internet has driven many people out. But there is hope. Despite entry barriers, the number of young people joining the U.S. ag sector is still on the rise. In fact, there were nearly four percent more people under the age of 35 farming in 2022 than in 2017. 

At AgAmerica, we’re on a mission to build on this momentum through advocacy, education, and financial counsel. As more opportunities are created and the rural economy brightens, more people will be attracted back to the heart of America.  

2. Farm Income 

Farm income is predicted to see a $39.8 billion decline in 2024, due to a combination of lower government payments, higher production expenses, and lower total farm cash receipts. Although this drop sounds alarming initially, Secretary of Agriculture Tom Vilsack cautions against reading too much into the number alone.  

“Some people would think that what keeps me up at night is the notion that farm income has come down a little bit, and that’s certainly a concern, but it’s a little bit less of a concern in the context of three years of historic growth in farm income which has created strong liquidity in farm country, both in the ability to meet short-term and long-term responsibilities and financial requirements. I still believe we will see a better income than is projected. Oftentimes, that first projection is quite pessimistic. I’m hopeful we can see some uptick over the course of the year,” Vilsack explained.  

An important point to remember is that American trade is currently impeded by the strong performance of the dollar and the comparatively low inflation rate in the United States. Paradoxically, weaker farm income and tougher trade conditions could partially be a result of a strong U.S. economy. 

3. Agricultural Trade 

In 2024, the United States is predicted to see a $30.5 billion agricultural trade deficit.  

“I know people are concerned about exports. They’re concerned that imports are now in excess of our exports. There’s a reason for that. [But] I’m not sure we’d want to substitute what’s going on in our country with what’s going on in any other country. Our economy is a lot stronger than any other developed country in the world. Inflation is down at a lower rate than any place in the developed world. Wages are up, employment is at historic levels, unemployment at historic lows. So it stands to reason that a strong economy will result in the rest of the world wanting to do business with the United States,” Vilsack said. 

Because the U.S. dollar is strong, it’s more expensive for foreign countries to purchase U.S. goods and makes it more difficult for American farmers to compete in the global market. Likewise, it’s cheaper for Americans to buy goods from abroad. On the bright side, recent agricultural policies and initiatives have been prioritized to expand and diversify our agricultural trade partnerships and create a more resilient global trade market for the American farmer. 

4. Climate-Smart Agriculture 

Many legislators believe climate-smart agriculture is one way to inject income into Rural America and make our existing farmland more productive.  

“When we think of leveraging added value, all those things, the biobased economy is really important,” Ag Committee Chairwoman Debbie Stabenow explained. “The most important thing I think about what we’re doing is that it’s all voluntary. It’s all popular programs that farmers have been doing and want more of.”  

Secretary Vilsack explained that legislators have begun work to make climate-smart programs more available to farmers. “We have signed 136 agreements with organizations and entities across all 50 states and five territories impacting and affecting 102 of our major commodities grown and raised in the United States involving reimbursement and payment for 203 practices which we believe have potential climate benefit.” 

5. The Farm Bill 

During the 2024 Agri-Pulse Ag & Food Policy Summit, attendees were surveyed, and 81 percent agreed that the farm bill would not be passed in 2024. The sentiment is widespread among many members of the agriculture community, with some suggesting that we will see more progress on the farm bill after the presidential election takes place.  

Despite public skepticism, Boozman, Stabenow, and Vilsack all expressed hope that 2024 will see a new farm bill. 

Senate Ag Ranking Member John Boozman said, “I believe it will be as easy to do it this year as it is next year.” 

Stabenow mirrored this thought, emphasizing the need for bipartisanship.  

“We can’t put forward something that loses all the Republicans or loses all the Democrats and there are things being talked about right now that would do that, and they won’t get us anywhere. The farm bill is the art of the possible. The doable.” 

6. Foreign Land Ownership  

Another growing concern in the agriculture community is foreign land ownership, particularly farmland owned by China. With the United States losing so much farmland every year, it strikes a chord with many in the agriculture community that farmland is being sold to foreign hands.  

Boozman urges us to take note of how little land is owned by foreign countries, compared to the total sum of all of America’s agricultural land. 

“The Chinese don’t own much land in comparison to the rest of the countries. Canada owns a whole bunch, there’s several countries that own a bunch, but it’s still a very, very small percentage of land ownership.” 

Despite this, many in the agriculture community are still worried. Just over three percent of America’s privately held land is held by foreign nations. To Boozman’s point, that number is relatively small. But it’s rising. Just ten years ago, only 1.8 percent of land was held by foreign nations, meaning the percentage has nearly doubled within the last decade.

Because of these concerns, there’s been an increasing number of legislative proposals to address these concerns and limit future expansion of foreign ownership in the U.S. farmland market.

The Fight for Rural Revitalization Begins on the Balance Sheet 

The uniting factor for many major agricultural policy issues right now is profitability. Without revenue, farmers are limited in their ability to improve technology, invest in operational enhancements, or improve their land.  

AgAmerica specializes in agricultural finance, meaning we have focused expertise and firsthand insight into what it takes for an agribusiness to optimize its financial health. Our holistic approach to agricultural finance brings a level of sophistication to finance that farmers have historically lacked. If you’re looking for a trusted partner, contact us today to see how we can help. 

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