”We’ve got too many countries that are not interested in increasing trade flows.”
U. S. farmers and ranchers are anxious about the economic outlook for the farm sector and need access to credit and ways to hedge their risks, the head of the largest farm group said on Nov. 4.
Bob Stallman, president of the six-million-member American Farm Bureau Federation, said crop and livestock prices were falling but production costs were rising.
“I can safely say net farm income next year will not approach this year’s level,” said Stallman during a news conference.
The farm sector is in generally strong financial shape but is not immune from overall economic trends.
“The overarching issue and the first one this administration will have to tackle is the economy,” said Stallman in discussing election of Democrat Senator Barack Obama as U. S. president.
For agriculture, he said, it is important to assure credit is available and for producers to have ways to hedge their risks. Some growers have complained that high and volatile prices make futures markets too expensive to use and discourage processors from offering guaranteed-price contracts.
Stallman also said the ideal nominee for agriculture secretary would be someone with “experience in governing” who can balance competing interests. That profile could include a wide array of professions, he said, from elected officials to university presidents.
Asked if the secretary should be a farmer, he said, “That’s a desirable trait,” but not mandatory.
He said an overhaul of the framework for negotiating trade agreements could end stalemates on pacts. The World Trade Organization operates by consensus in trade talks.
“We’ve got too many countries that are not interested in increasing trade flows. That’s the problem,” he said. A two-tier
system would allow motivated nations to write agreements on topics of interest.
The $5.2 billion a year in guaranteed “direct” payments to grain, cotton and soybean growers helps them cope with rising input costs and Stallman said fiscal hawks might eye the payments if federal budget cuts become necessary in 2009.
“The issue will come up again in debate, no doubt about it,” he said.
Meanwhile, Senate Agriculture Committee chairman Tom Harkin asked for periodic reports from the Federal Agricultural Mortgage Corp. on its financial status. Farmer Mac raised $65 million a month ago by selling senior preferred shares, which offset losses on its Fannie Mae and Lehman Brothers holdings.
“While Farmer Mac has managed to this point to obtain capital to meet minimum statutory requirements, its situation is very serious,” wrote Harkin, Iowa Democrat, in asking for the reports.
Farmer Mac is federally chartered to create a secondary market for rural real estate and rural housing mortgages and rural utilities loans.