From the office of Congressman Antonio Delgado:
WASHINGTON, DC—Today, in a House Agriculture Committee Hearing on the State of the Rural Economy, Representative Antonio Delgado (NY-19) asked USDA Secretary Sonny Perdue what he is doing to help small farmers.
When Delgado first questioned Secretary Perdue in February of last year, he urged more USDA action to improve the plight of small family farms, particularly small dairy farms. During that exchange, the Secretary blamed economies of scale and stated, “I don’t think any of us would submit that we’re compelled to keep anyone in business if it’s not profitable.” In today’s exchange, Delgado juxtaposed that answer with USDA’s decision to tie billions in trade assistance payments to farm acreage, a strategy widely criticized as favoring the largest producers. In a follow up question, Delgado pointed to a correlation between trade aid and a farm’s profitability, “Would those farmers be profitable but for the trade aid in 2019?” Perdue responded flatly, “Many of them would not.”
In all, the Administration has provided $28 billion in trade aid over the last two years. The $16 billion provided in 2019 accounts for the 11 percent increase in net farm income seen that year. In his question, Delgado also highlighted the Administration’s Fiscal Year 2021 budget proposal which would cut more than $25 billion in crop insurance over ten years, and includes reduced funding for programs like the National Organic Program and the Agricultural Conservation Easement Program which helps new and beginning farmers secure land.
Congressman Delgado: Thank you, Chairwoman. Secretary Perdue, it’s good to see you. During our last Committee exchange in February of last year, you may recall that I asked you what could be done to improve the plight of small family farms, especially dairy farmers whose numbers have been in decline for many years.
In your answer you replied, and I want to quote. You said quote, “These are economy-of-scale issues that impact the entire economy, not just agriculture. And the economy of scale for a small dairy is going to be extremely difficult going forward, even with the new Farm Bill. I don’t think any of us would submit that we’re compelled to keep anyone in business if it is not profitable.”
Since that conversation the situation has become very dire, more dire, as evidenced by the trade aid. In 2019 we saw that largest decline in dairy operations in more than 15 years. I believe that priorities dictate policies, and when it comes to your agency’s priorities, I’m concerned that we’re not seeing the kind of recalibration needed to prioritize and assist our small farms. So my question is what, if any, plans is USDA considering to provide assistance to and create new market opportunities for our small family farms?
Click here for a video of the Congressman’s exchange
Secretary Perdue: “Well what we see most effective is value added grants that we see the dairies that are surviving, particularly the smaller dairies, are more successful when they add processing there and creameries. We’ve been losing dairy farms for a number of years. Sadly, the cows are, a number of cows, a number of dairies, are down but the milk production is up. That’s really the challenge. That’s why we see the continued price pressure that make it very difficult for smaller dairies. I was visiting with the organic dairy providers the other day and many of them have small producers. There’s a large organic dairy co-op that has a lot of smaller producers, a lot of cows under herd number 75, which is a very small dairy today. So, they’re taking those kind of actions to do that. The fact remains that the economy of scale with the equipment, land, cows, and others, it’s a very difficult economic challenge to do that. I thought you all did a good job in the dairy market coverage program in the Farm Bill by skewing that to smaller dairies and giving them up to 5 million pounds of milk. And aside from that it’s that other types of programs were open to those and I think we’re trying to fulfill that. But it’s a difficult life.”
Congressman Delgado: Thank you. So you mentioned your visit to an organic dairy farm. And I just want to flag for you, I’m interested to get your thoughts on this, the proposed budget by the administration reduces funding for the national organic program. It also cuts more than 25 billion from crop insurance over the next 10 years and reduces funding of the Ag Conservation Easement Program as well. Do you believe this is consistent with supporting small farms and dairy farms?
Secretary Perdue: “Well I think again, overall budget is work is proposed to you all. You know that you all are the appropriators. The President makes and presents his budget that way and you all have been kind in the past to do that. We think certainly, some of these programs that I mentioned, the organic program, has been the lifesaver for many small dairy farms. Obviously not everyone can participate in that. We are taking efforts…”
Congressman Delgado: It wouldn’t be helpful though it sounds like. If you’re saying it’s going to be a lifesaver, then it probably wouldn’t be helpful to reduce the funding around it?
Secretary Perdue: I think it would be helpful to have those programs.
Congressman Delgado: The other piece that I want to just clarify is the trade aid. You know the reports, while they might not be regionally biased from what I understand, and I appreciate the map that you’ve provided. There does seem to be a bias for large scale operations in some of the more wealthier farms and I’m curious to what extent anything is being done to offset that imbalance?
Secretary Perdue: What you all did in the Farm Bill as well as continuing that we did were price gaps. The facts of the matter is that the larger farmers, farm the probably 50 to 60% of the land and produce about 75 to 80% of the products in the United States.
Congressman Delgado: Would those farmers be profitable but for the trade aid in 2019?
Secretary Perdue: Many of them would not…
Congressman Delgado: Right, but then you said…
Secretary Perdue: The bigger you are the harder you fall. The losses would be a lot more.
Congressman Delgado: Understood. But to be clear, you’re on record saying that keeping farms in business that aren’t profitable is not really the focus. Right?
Secretary Perdue: Say again, I’m sorry.
Congressman Delgado: You’re on record. I believe you said, “You’re not compelled to keep anyone in business if it’s not profitable.”
Secretary Perdue: I think again we have to recognize that farming is a business and you have to make a profit. That’s why my answer to the question was the profitability of agriculture…
Congressman Delgado: Totally understand. I’m saying that as you make that decision, it appears you’re prioritizing the big farmers over the small farmers who aren’t making a profit.
Secretary Perdue: I would disagree with that. We’re at no bias towards large or small. It’s a matter of the fact the larger you are the more you are eligible for those payments.
Congressman Delgado: That’s my time. Thank you.
Click here for a video of the Congressman’s exchange
