U. S. farm sector cautiously welcomes Obama win

America’s farm sector has cautiously welcomed Democrat Barack Obama’s historic White House win as good news for a raft of industry priorities like crop subsidies, ethanol expansion and agricultural trade.

“He knows agriculture and he has been a real supporter of agriculture,” said Rick Tolman, CEO of the National Corn Growers Association, a powerful lobbying organization representing more than 30,000 U. S. farmers.

Obama, an Illinois senator whose election Nov. 4 will make him the first black U. S. president, built his campaign around a promise of bringing change to Washington.

His defeat of Republican John McCain came amid widespread dismay over President George W. Bush’s handling of the economy and hopes that Obama would be able to bring stability as the nation slides into a recession.

Such economic woes, including tight credit, sliding crop prices and high costs for fertilizer, fuel and other production inputs, are key concerns of U. S. crop and livestock producers. Related industries such as food manufacturers, seed and equipment dealers, ethanol producers and others are similarly effected.


“We’ve got a number of challenges confronting us,” said National Farmers Union president Tom Buis. “We are going to have a president who does want to work with rural America and address these issues.”

Farm policy did not get much attention in the lead-up to Tuesday’s election as both tickets focused on finding a fix for the U. S. economy.

But farm industry leaders said Obama’s positions were much more friendly to their needs than McCain’s.

Obama has made it clear that he believes U. S. farms need a safety net. He supported the 2008 Farm Bill, which continues direct federal payments to farmers that totalled about $5 billion in 2007, though he has said he wants a subsidy ceiling of $250,000 a year per farm.

Ethanol support

And Obama favours federal support for ethanol, which U. S. biofuel producers make mostly from corn, another issue near and dear to many farm families.

“We’re happy with Obama’s stance on biofuels,” said Michael Ott, executive director of BIOWA, a trade association for bio-based products. “He has supported corn ethanol as a base to grow from. We like that position.”

Economic problems have hit the ethanol industry hard this year, with a string of companies sliding into bankruptcy.

Tolman said his industry wants the Obama administration to encourage ethanol use through more concentrated blends with gasoline and incentives for more flex-fuel vehicles.

Both ways

The ethanol mandate plays both ways in rural America, however. Some livestock producers blame ethanol production for jacking up the price of the corn they feed to their animals, which in turn erodes their profit margins.

Still, the National Cattlemen’s Beef Association said Wednesday it had been assured “a seat at the table” for discussions on food and fuel policy-making.

One of the farm sector’s biggest fears is that Obama may not be friendly to trade policies it favours. Obama has stated he is for open markets but believes trade agreements should include certain requirements for labour and environmental standards.

“Obama is talking about environmental and labour standards, which will probably bring the bilateral talks to a halt,” said National Chicken Council spokesman Richard Lobb. “He is also talking about reopening NAFTA. It took a long time to negotiate. We wish he would just leave it alone.”

Farm sector leaders said they were also on edge over how tightly an Obama administration may seek to regulate animal-feeding operations. Obama has significant backing from environmental groups and has expressed a desire to see a tighter crackdown on pollution from large animal-feeding operations.

“We are a little concerned about what some of the regulatory approaches to agriculture may look like,” said American Farm Bureau president Bob Stallman. “But we’ve been through changes before and we hear he is pragmatic. That is really all good as far as we’re concerned.”

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