The Big Economic Shift: Democratic Candidates 2020 Agriculture and Rural America Report
Democratic Candidates 2020: Agriculture and Rural America Report
Most of the 2020 Democratic candidates have put forward policies to address social and economic issues in rural America and the agricultural sector. The major components of the proposed agriculture policies are as follows:
1. Economic and competition policies
2. Trade-related policies
3. Environment and food science-related policies
4. Balancing large farms versus small farms
5. Technology and broadband
In this research, we’ll present plans on farming and rural America from the five top-polling 2020 Democratic presidential candidates. We will address trade policy in a separate article.
The US farm economy is incredibly productive in selling and feeding people in the United States, as well as globally. USDA Chief Economist Robert Johansson put this in perspective: “In 2018, the U.S. produced the most corn and soybeans in the world, more than 1/3rd of total production, and made up more than a third of total corn and soybean exports. The U.S. is the world’s number one beef producer and largest beef exporter at over $7 billion in annual sales. For other important commodities, such as pork, wheat and cotton, the American farmer is anywhere from the 3rd largest producer to the 5th largest; however, we export relatively more of what we produce — we export more cotton and corn than anyone in the world, we export the second most wheat and soybeans.”
However, US farmers face a range of challenges including volatile weather; foreign competition; low prices; a strong US dollar and uncertainty caused by both the USMCA trade agreement and the US-China trade war. Farmers in the US have also been struggling with 5 years of low commodity prices, and farm income has halved since 2013. Higher costs of seeds, equipment, and fertilizers make it harder for smaller producers to compete with larger farms.
Rural America faces a wide range of needs, including improved rural health outcomes (particularly in the area of substance abuse); rural broadband investments; community and economic development program planning, coordination, and implementation; water and waste disposal and wastewater treatment facilities; general business assistance; and rural energy, electrification, and cybersecurity.
Given the prominent role Iowa plays in the US presidential primaries, Democratic candidates have put out a relatively large number of agriculture policies relevant to this Midwest agriculture state.
Biden’s policies related to agriculture are included partly in The Biden Plan for Rural America. He notes that a “healthy, vibrant rural America is essential to the success of our country” and sets out a rural economic development strategy that is intended to invest in the unique assets of rural and agricultural communities.
First, many of Biden’s policies are targeted at new and beginning farmers, and small farms. He plans to expand a microloan program that was established under the Obama administration, by increasing the maximum loan cap under this program to $100,000.
In addition, Biden plans to increase the funding allocated to the Department of Agriculture farm ownership and operating loans. These are also typically given to new farmers. He also has a focus on supporting stronger supply chains for farmers, with the aim that farmers should be able to negotiate prices and identify markets in a way that gives them greater returns on things like specialty crops and secondary products such as ice cream produced by dairy farmers.
Biden is one of the many candidates that plans to strengthen the Sherman and Clayton Antitrust Acts and the Packers and Stockyards Act to protect small and medium-size farmers and producers.
He proposes to expand the funding that goes to the Sustainable Agriculture Research and Education Program, as well as funding for the National Institute of Food and Agriculture.
In this vein, he proposes to make the US agricultural sector the first in the world to be net-zero with regard to carbon emissions. To this end, Biden would seek full funding to “dramatically expand and fortify the pioneering Conservation Stewardship Program … to support farm income through payments based on farmers’ practices to protect the environment, including carbon sequestration.” He wants corporations, individuals, and foundations to contribute to this Conservation Stewardship Program to offset their emissions that would act as a funding mechanism for farmers who sequester carbon, such as through cover crops.
Additionally, on carbon sequestration, he wants to use soil as a carbon storage idea, proposing to make “significant investment in research to refine practices to build soil carbon while maximizing farm and ranch productivity.”
Biden also plans to promote the bioeconomy and bio-based manufacturing, with the aim of bringing modern manufacturing jobs back to rural America. This would be done by “taking every aspect of agricultural production — from corn stock to manure — to create chemicals, materials, fabrics, and fibers in a process that is good for the environment and creates new sources of revenue for farmers.” As part of this, he would connect with agriculture research institutes, and the federal government would provide these institutes with funding to help their state or region “build a competitive and low-carbon future in manufacturing that reflects climate impacts in their local communities.”
In small towns and rural areas, he plans to increase funding for Community Development Financial Institutions (CDFIs), which would have the effect of increasing access to credit for new and small businesses in those areas. To support this, he would also increase funding for the Rural Microentrepreneur Assistance Program. For rural areas that are poverty-stricken, he has also proposed a White House “StrikeForce” that would help these communities to access federal funds.
He would also follow the 10–20–30 formula to target poverty in rural areas, which would “allocate 10 percent of funding to areas “where 20 percent or more of the population has been living below the poverty line for the last 30 years,” to all federal programs.”
Like many other candidates, Biden proposes to invest funding in expanding broadband access across rural areas. He notes that “rural Americans are over 10 times more likely than urban residents to lack quality broadband access,” and suggests that expanding broadband access could be an “equalizer” for the rural economy.
Finally, he would also pursue a trade policy that more strongly supports American agriculture. Primarily, he would “stand up to China by working with our allies to negotiate from the strongest possible position,” to promote a trade policy that “works for American farmers.”
In Sanders’ view, “agriculture today is not working for the majority of Americans.”
He has put forward three policy initiatives for dealing with rural areas and agriculture:
1. Policies Leveling the Playing Field for Farmers and Farmworkers
2. Policies to Empower Farmers, Foresters & Ranchers to Address Climate Change and Protect Ecosystems
3. Policies to Foster Investment to Revitalize Rural Communities
In the first category, Sanders plans to enact trust-busting laws to stop agricultural markets from being monopolized, with the intention of breaking up existing large agribusinesses. Under a Sanders administration, future mergers of large agribusinesses would be stopped. The Grain Inspection, Packers and Stockyards Administration would be re-established and strengthened. He would also place a moratorium on the vertical integration of large agribusiness corporations.
Sanders would also create a “right to repair” rule that allows farmers to repair their own equipment instead of having to go through authorized agents.
In addition, he would reform patent law to deal with issues around patenting seeds. He notes that Monsanto owns “80% of U.S. corn and more than 90% of U.S. soybean seed patents,” which can raise prices to a point where some smaller farmers cannot afford them. He would also bring back organic farming rules and certifications, and allow meat slaughtered at state-inspected facilities to be sold across state lines to assist domestic producers to expand their markets.
Furthermore, he would introduce policies intended to support local agriculture without undercutting it in favor of export goals. He would classify food as a national security issue and develop “fair trade partnerships that do not drive down the prices paid to food producers”. Furthermore, he would enforce country-of-origin labelling requirements.
Finally, he would enact a number of proposals that are intended to support fair prices for family farmers. These proposals include things like supply management, establishing a national grain and feed reserve to protect against extreme weather events, reforming subsidies, transitioning towards a living wage for farmers, and helping socially disadvantaged farmers.
In addition, he would also support farmers of color, including a $50 million allocation to a Disadvantaged and Beginning Farm State Coordinator program, translation programs, Tribal land access and extension programs. Translation programs include providing translators for farmers of color who may not have a good command of English, but who need support when signing contracts or understanding American farming practices. Furthermore, he would create pathways to citizenship and expanded visas for undocumented farm workers and would end workplace immigration raids.
Finally, he would rebuild regional agricultural infrastructure to incentivize rural cooperatives and support local, independent processing, aggregation, and distribution facilities.
On the second initiative, he would invest in the working landscape to better combat climate change. This includes passing legislation to transition towards regenerative, independent farming practices. His administration would also provide grants and assistance for all farms to transition towards sustainable agriculture. He also notes that part of this would be to provide further financial encouragement that compensates farmers for improving ecosystems. Finally, he would “enforce the Clean Air and Water Acts for large, factory farms, and ensure all farmers have access to tools and resources to help them address pollution.”
In the third category of policies, he would also ensure high-speed broadband internet for every American, including a focus on distributing broadband more effectively in rural areas. In addition, he would enact a number of policies to support rural healthcare and education, and to bridge the gap between rural and urban areas with relation to these policies.
On the economic side, he would raise the minimum wage to at least $15 per hour, and would “remove Right to Work, pass fair labor laws, and make it easier to form a union, including agricultural and food system workers.” He also includes a number of general policies including supporting affordable housing, support for rural community banks, focusing federal resources on distressed rural communities, and enacting a federal job guarantee. These are covered also in his general economic policies but do apply to rural areas.
Under a Sanders administration, states would also have the option of requiring GMO labelling for foods, so that farmers and states could elect whether this kind of disclosure is important to their markets.
Sanders also has a proposal for a program called Rural Energy for America, which would promote clean energy options for the agriculture industry.
He also has several more clean-energy and sustainable agriculture plans, including investing $41 billion to assist large animal feeding farms with a transition towards more regenerative practices. He would also allocate $41 billion to help disadvantaged and beginning farmers who have traditionally been underserved by USDA programs.
Warren has put forward a number of policies with regard to agriculture, farming, and rural areas. Her first, My Plan to Invest in Rural America, covers Protecting Access to Health Care in Rural Communities, Building Economic Security in Rural America, A Public Option for Broadband, Creating and Defending Jobs in Rural America, Bolstering Small and Local Business, and Building a New Farm Economy.
This plan covers a number of proposed health improvements for rural communities, as well as a number of economic policies for improving the agricultural sector and rural economy.
One of the first financial policies Warren proposes is supporting childcare in rural areas. She notes that this is particularly important for rural communities, as “rural families spend more of their incomes on child care than families in urban areas.” Warren also aims to tackle some of the unique housing challenges in rural areas, including investing “$523 million to create 380,000 affordable rental homes in rural communities.”
Like Sanders, she supports better access to broadband for rural areas. This includes municipalities being able to build their own broadband networks. She sees broadband as the first step in improving economic opportunities for rural communities, and has created a “ National Jobs Strategy focused specifically on regional economies and trends that disproportionately affect rural areas and small cities.”
Part of her $400 billion commitment to clean energy development will also be specifically focused in rural areas.
Another part of her plan is to bolster and support small and local businesses. As part of trying to increase opportunities for these businesses, she would instruct the “U.S. Postal Service to partner with local community banks and credit unions to provide access to low-cost, basic banking services online and at post offices.” She would also create a $7 billion fund to address the gap in startup businesses for entrepreneurs of color, including those in rural areas.
Warren also discusses the idea of “building a new farm economy”. She addresses this in her My Plan to Invest in Rural America, and points towards a separate policy called A New Farm Economy. Like Sanders, this plan is her primary proposal to address consolidation in the agricultural sector, and the monopolies that particular large companies have over parts of the sector.
Her goal is to ensure that family farmers end up with bigger margins and more choices in how they operate. Like Sanders, she would also attempt to break up large agribusiness. Under her plan to Level the Playing Field for America’s Family Farmers, she would appoint trustbusters in the Federal Trade Commission and Department of Justice to review large mergers in the agricultural sector and prevent mergers that are anti-competitive in nature.
Warren also hopes to reduce overproduction in the sector, as this drives down prices. She notes that a large part of this is the “direct result of government policy.” She explains that the “system of subsidies is supposed to make up the difference between the low prices farmers receive on the market and what they have to pay to grow food. But instead it lets big corporations at the top of the supply chain get away with paying artificially low costs while farmers struggle and taxpayers make up the difference.”
Warren hopes to go back to an FDR-like New Deal type of program, in which the government “guaranteed farmers fair prices, tackled overproduction, and reversed environmental degradation.” She believes that the deregulation of the agricultural industry has resulted in a failed system that penalizes small farmers.
With respect to this, she has proposed a supply-management program to tackle low commodity prices and overproduction. Warren’s solution would be a guaranteed price for farmers that would match the cost of production, essentially as a non-recourse loan or offer to buy their products if the farmer cannot get a better offer from a private purchaser before the end of the loan period. Farmers could then repay the loan by selling their products or forfeit the products as collateral for the loan. She would also store more surpluses to encourage a stable supply.
Like Sanders above, Warren also supports a national right-to-repair law. She also proposes to restrict foreign ownership of American agriculture companies and farmland. Another issue that she has approached is checkoff programs. Checkoff programs collect funds (fees or taxes) from producers of a particular commodity, and then use those funds to promote and do research on that commodity. One such promotion is the “Got Milk?” campaign. Many argue that these kinds of programs support large farm corporate interests rather than actually supporting farmers (particularly smaller, family farmers).
Like Biden and Sanders, she would strengthen the Packers and Stockyards Act.
In her “Farm-to-School” program, all federally supported public institutions would also be required to provide fresh, local food that is sourced from independent farmers.
Warren has proposed to strengthen the Local Agriculture Market Program and would invest $500 million over the next decade in food hubs, distribution centers, and points of sale for rural communities. She also suggests, to support Black farmers in particular, that she would fully fund the re-lending program that was enacted in the 2018 Farm Bill. This would expand support for farmers of color. Like Sanders and Biden, she would also expand credit for new and diverse farmers.
Finally, on the environmental front Warren proposes the decarbonization of the agricultural sector, to reach net-zero emissions by 2030. Her approach would be that Conservation Stewardship Program payments for sustainable farming should be increased from $1 billion to $15 billion annually, and the types of practices eligible for compensation should be expanded. She links in her $400 billion Green Manufacturing Plan to support decarbonizing the farm economy and related innovations. She would also create a farmer-led Innovation Fund that would perform research on how to decarbonize the agricultural sector.
Harris has not released a specific policy on agriculture or farming. However, she has made a few proposals as part of her climate plan and has made statements in the past relating to agriculture and farm policy.
In 2019 Harris reintroduced the Fairness for Farm Workers Act. This would make overtime pay for farm workers mandatory. This bill was also co-sponsored by Warren.
As part of her climate proposal, Harris notes that she will empower our farming and ranching communities to be part of the climate fight. This would include partnering with farmers and ranchers to develop regenerative agricultural systems. She would also introduce public policies that reward conservation efforts as well as efficient production. Part of this would include “expanding carbon farming efforts, removing carbon from the atmosphere and storing it back in the soil.”
In addition, Harris would “support every farm in America to fully implement science-based agricultural conservation practices by 2040, establishing our agricultural sector as a global leader in climate-smart agriculture.” She would also provide “assistance and incentives for farmers to develop and integrate climate- and environmentally-smart practices.”
Finally, she would introduce measures to encourage zero-waste when it comes to food production and use.
Buttigieg has a plan titled “Unleashing the Potential of Rural America”, which includes spending over $189 billion on various programs targeted at rural America:
· $80 billion for full high-speed broadband coverage for rural areas
· $50 billion on R&D for climate change
· $50 billion on “Resilience Hubs” to provide climate resilience data, tools, and community support
In addition, he also has a policy called A Commitment to America’s Heartland, which details a number of policies to uplift rural America.
First of all, he proposes a number of policies to accelerate rural transformation by investing in businesses and expanding economic opportunities. This includes policies such as investing “$500 million in federal funds to develop and support a national network” of regional innovation clusters. He would also fund regional development strategies and expand rural entrepreneurship programs.
Buttigieg would expand the Manufacturing Extension Partnership (MEP) to “train rural workers in new business practices, from cybersecurity to supply chain management to workforce development.” He would expand apprenticeships, internships, and other earn-and-learn programs.
With regard to climate solutions for rural areas and agriculture, he would invest $50 billion to “support agriculture and significantly invest in R&D as a powerful solution to climate change, including through soil carbon sequestration.” Like Warren, he proposes to give farmers monetary incentives for moving towards land conservation and preserving biological diversity. He would also enforce the Renewable Fuels Standard and promote biofuels.
Under his Climate Change policy, Buttigieg aims to strengthen rural resilience and protect rural communities from environmental hazards.
Like the other candidates, he supports full access to high-speed broadband for rural communities. Unlike the other candidates, he dedicates a specific, large amount to accomplishing this goal.
To protect family farmers and their workers he would also double funding for antitrust enforcement, and would reinvigorate the Grain Inspection, Packers and Stockyards Administration. Like Sanders, Biden, and Warren, he would also implement further oversight for mergers to prevent anticompetitive behavior.
In relation to seeds, he would amend the Utility Patent Statute to “protect the right of farmers to replant seeds grown on their own farms.”
Overall, most of the policies proposed by the Democratic candidates are targeted at smaller farmers, alleviating environmental issues, and raising the standard of living for disadvantaged rural communities. On the flipside, some of their policies may negatively affect large agribusinesses; seed supply and innovation; and some policies (while well-intentioned) may have sizeable unintended consequences. As with all regulations, there are costs associated with increased regulations that put burdens on farmers and may increase the cost of food for consumers. This is to be balanced against the improved outcomes one seeks, whether it’s improved environmental conditions or small farm economic conditions.
What stands out is the candidates intense focus on environmental issues in the farm economy. While this is important towards solving the bigger problem of carbon emissions, the agriculture sector produces only 9% of total US carbon output according to the EPA. Therefore, this may be an effort better placed on transportation, industry or electricity sectors. However, the farm sector can be incentivized to be part of the solution via carbon sequestration and soil sequestration programs.
As well, one of the problems with many of the candidates’ proposals is the idea of “net-zero” carbon emissions for agriculture. The pitfall is that net-zero can be achieved by offsetting carbon, using carbon capture and storage, or creating biomass energy. This means the amount of carbon is still actually being produced, which will have to be dealt with at some point in the future. The issue with this idea of net-zero in the agriculture sector is that it actually doesn’t necessarily reduce carbon emissions, and simply delays a problem rather than solving it.
On the positive side, Buttigieg’s (and the other candidates’) proposals on broadband for rural America are targeted in the right place. His spending plans would super-charge what the USDA is currently providing and would greatly help the 19.2 million rural households without connectivity. As well, this would greatly help farmers as their business increasingly is run via technology like drones, self-driving tractors via GPS and hedging on trading platforms. For rural America, this broadband access would expand the ability to create businesses and expand job opportunities for remote workers.
Another positive is that Biden’s plans to promote the bioeconomy and bio-based manufacturing show merit. Creating bio-based centers of research and innovation space is a good idea, and these kinds of centers are already in place in cities like San Francisco and Boston.
Overall, Warren’s changes to farm policy and regulations would benefit small farms at the detriment of large farms. She would make the US government a large player in the grain markets at times when prices fall below the guaranteed price. This may or may not be a role the US government manages well and may encourage overproduction of products where prices have fallen significantly. This could then further exacerbate falling prices and add to the oversupply. Also, the US government will need to determine what the farmers’ cost of production is to set the price of the agriculture product. This may create unintended incentives for farmers on their inputs to production and cost structures. Lastly, the right-to-repair law to allow farmers to fix their equipment without going through an authorized agent is a potential double-edged sword. On the surface, this appears to be a commonsense idea, but may have negative impacts on the supply of leasing down the road.
Sanders’ programs to support rural community banks, CDFIs and credit unions also have merit. Access to credit is key for both rural consumers and businesses.
With regard to seed patents, proposals put forward by Sanders, Warren, and Buttigieg could assist smaller farmers by reducing the likelihood that they have to rely on seeds solely produced by large manufacturers. High seed costs can stop smaller farmers from getting established in the first place and can put them at a disadvantage against larger agriculture companies. Again, this may lead to fewer seeds produced and less innovation from the large manufacturers.
The 2020 Presidential Democratic candidates’ plans for agriculture and rural America are similar to their other programs in that they focus on social issues and leveling the playing field for disadvantaged constituents. As we have stated in previous research, the 2020 Democratic plans essentially come down to a matter of tradeoffs between increased spending and increased regulatory/funding costs. Additional tradeoffs would be strong supply with low prices benefiting consumers versus restrained supply with higher prices benefiting farmers.