Obama's centrist course seen as encouraging for agriculture

by Mark Parker

Although a wide swath of American agriculture feared the impact of a Barack Obama administration, the president-elect’s actions since being elected have led to increased optimism throughout much of the industry.

Encouraged by primarily centrist cabinet picks and a farm state governor for the agriculture secretary post, most agricultural groups have been at least cautiously optimistic about what an Obama presidency means for agriculture.

Some consumer and environmental groups, on the other hand, have been openly critical, particularly in regard to Obama’s apparent support for biotechnology and a new ag secretary they say represents “business as usual.”

Kansas State University agricultural economist and veteran ag policy expert Barry Flinchbaugh believes farmers have good reason to be optimistic about the incoming administration and he asserts that state of the economy should be agriculture’s biggest concern.

“I am very pleasantly surprised,” Flinchbaugh says. “The economic team he’s put together is second to none. He’s listening to Paul Volcker, who is certainly the best Fed chairman in my lifetime, and the new treasury secretary (Timothy Geithner) is as good an economist as there is out there.

“We’ve got to get this economy back on line—that’s the most important consideration for agriculture right now.”

Flinchbaugh, who has spoken with the transition team, says that people who know Obama consider him to be a pragmatist and adds that the president-elect’s cabinet appointments support that assessment. “Every one of Obama’s appointments have been right down the middle,” Flinchbaugh notes. “He has a very tough job ahead of him but, so far, he’s making all the right moves. He may have had a very liberal voting record in the Senate but he’s operating from the middle now and he’s smart enough to surround himself with the best people he can find.”

As secretary of agriculture, former Iowa Governor Tom Vilsack, a one-time Obama adversary in the race for the Democratic nomination, is another centrist choice, according to Iowa State University Agricultural Economist Mark Edelman.

“(The appointment of Vilsack) is a good signal for the traditional ag sector,” Edelman says. “He’s well thought of by mainstream agriculture in Iowa. As governor, he was very innovative in his support of biotechnology and ethanol in terms of creating an new engine to drive economic growth in rural Iowa.”

Edelman, who is a native Kansan, characterizes Vilsack as someone who won’t abandon traditional agriculture but as someone who has been willing to listen to all facets of the industry.

“He goes along with centrist ideas but he did enough in new areas that some of his initiatives could be exciting,” Edelman notes. “There probably isn’t a bigger alternative energy advocate around and he won’t be anti-farm program, although he will likely have some concerns about payments to the wealthiest producers.”

Edelman says that Vilsack is seen as smart, well-read and the kind of person who likes to surround himself with “people who know their way around and know how to get things done.”

“You have to remember, though,” the ISU economist adds, “the secretary of agriculture is the president’s person. His job is to carry out what the president wants done.”

Just exactly what the president wants to get done in terms of agriculture remains to be seen. Barack Obama repeatedly expressed his support for agri-based energy while he was campaigning so most insiders believe that effort will continue although the focus may shift from corn to non-food crops.

And while Obama has been critical of large payments going to mega-farms, he will likely be a steadfast supporter of farm programs in general and those that are conservation-oriented in particular.

Flinchbaugh, who points out that Obama’s GOP opponent, John McCain, was less supportive of farm programs, believes that environmental concerns would have been a driving force in Washington, D.C. regardless of who was elected president:

“I’ve been telling farmers there’s no point in debating global warming any more. The body politic has decided to go green and agriculture needs to figure out how it can be a beneficiary of that.”

Ironically, the candidate who was characterized as being far too liberal for the job, may find some of his biggest challenges coming from the left, rather than from the right, the public policy expert noted.

Down the road, Flinchbaugh suggests, there will be budget cuts and agriculture will likely take some hits. Right now, though, the general economy will take precedence over wholesale changes in agricultural policy.

“Actually, agriculture is going into this in pretty good shape, all things considered,” Flinchbaugh says. “We have one of the lowest debt-to-asset ratios we’ve ever had. Fuel and fertilizer prices have dropped and interest rates are low. There are definitely some rough spots out there for agriculture but we’ll come through it.”

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