ALTMAN: Good afternoon everybody.
It's my pleasure to host this discussion this
afternoon.
We're quite fortunate to have Secretary Vilsak
with us.
I'm sure you're all familiar with his background
among many, many other things he was a very,
very successful governor in the heartland
of this country in Iowa.
And he has been the Secretary of Agriculture
since the beginning of the Obama Administration,
which by Washington standards makes him one
of the longest serving people in Washington.
And we're going to have a conversation -- the
two of us for a little bit.
And then we're going to open this up to questions.
I think that you're familiar with the ground
rules today.
This discussion is on the record and I'm sure
you've all already followed the wonderful
council rules about turning your cell phones
off.
And then we're ready to go.
And I'm going to start by asking Secretary
Vilsack a few questions about the recent Farm
Bill.
And I'm going to divide my questions into
two to three parts.
I'm going to -- I'd like to ask you some questions
about the -what the bill does in relation
to the production side of agriculture.
And then I want to talk a little about the
SNAP or food stamp side of it.
But let's start off by my asking you a very
basic question which is -- this Bill which
was the object in a lot of hard work I know,
including the most particularly on your part.
Ended up being a very bipartisan result.
And in Washington which these days is so devoid
of bipartisanship, let me just start by asking,
how did you achieve that in this case?
How did it come about that this ended up being
as bipartisan as it was?
VILSACK: Well, historically Farm Bills have
been bipartisan.
So it helps to have that history.
But when you realize that this is more than
a Farm Bill -- it's a food bill, it's a jobs
bill, it's an energy bill, it's a research
bill, it's a conservation bill, it's a trade
bill.
There's enough into this Bill that just about
every member of Congress has somebody back
home that has a vested interest in getting
this thing done.
And I think that we were faced with the dilemma
that if it did not get done, that we would
be reverting back to 1940 ag law which would
have resulted in chaos in the market.
So there was a history of bipartisanship -- the
comprehensive nature of this Bill lends itself
to support.
And there was the threat that dangled out
there that we could face a return to agricultural
policy that would be disruptive to the market.
I think the combination of that made a difference.
And I think we worked very hard to get the
-- a place where everyone was comfortable
enough to get it passed.
But it is -- it's a remarkable Bill.
And it's one that most Americans do not understand
or appreciate.
But every single one of us benefits from this
bill.
Because we are a food secure nation.
And by that, I mean we have the capacity and
the capability in the United States of producing
virtually everything we need to feed our own
people.
Very few countries in the world can do that.
And because of the extraordinary productivity
and efficiency of American agriculture, it
has freed the rest of us to do whatever -- everyone
in this audience has done in their life.
They don't have to worry about actually producing
food to feed their family.
They've delegated that responsibility to a
really relatively small number of people in
this country.
So it's -- I really appreciate the opportunity
to have this discussion.
Because I think it's going to give people
an understanding of the breadth of this Bill.
ALTMAN: Well, all right.
Let's talk a bit about -- what I might call
the state of American agriculture.
And I'll start by just saying I don't have
any deep history in agriculture.
I don't have any scholarly credentials.
But I don't think you need them to see that
agriculture is one of America's greatest assets
and one of its greatest international comparative
advantages.
We have the most efficient agriculture sector
by a big margin in the world.
It's a bastion of export strength.
So-but on the other hand, you know, one can
read that a lot of acreage has been taken
out of agriculture over the past 10 years,
even though I understand you might talk about
this a little bit that it's slowed down some.
And obviously, the employment, as you just
alluded to in agriculture, has fallen to very,
very low levels which at one level reflects
enormous efficiency.
But on the other hand, could be a source of
concern about, you know, are young people
entering into this sector the way they historically
have and so forth.
So let's talk-if I could just -- tell us a
bit about the outlook for the American agricultural
sector which has been such a source of strength
for so long.
VILSACK: In the lifetime of people who are
still on this Earth.
If we go back to 1935, there were 6.8 million
farms in the country.
The average sized farm was 155 acres.
And a significant number of people in the
country were directly related to agriculture.
Today, the total number of farms in America
is about 2.1 million.
But if you look at who actually produces most
of what we consume, it's less than 300,000
farming operations.
And if you look at those who produce at least
half of what we consume, it's 33,000 farming
operations; 33,000 farming operations.
So it is extraordinarily efficient.
And because of this great efficiency, and
most recently because of the productivity,
the overall health of American agriculture
from an economic standpoint is as good as
it's ever been.
We've had record farm income.
We've had record farm exports.
We've had a record enrollment in conservation
activities.
So if you look at it from that perspective,
you would say, "Things are good."
But if you go deeper into the numbers, and
you take a look at the aging nature of the
America's farming population, it is cause
for concern.
We have significantly greater numbers of people
over the age of 75 farming today than we have
under the age of 35.
And by that I mean there are several hundred
thousand over the age of 75 and tens of thousands
under the age of 35.
So there is a significant issue relative to
who's going to be farming in the future that
needs to be addressed.
And it is difficult for young people to get
in this business because the capital that
you have to have to operate a farm of any
size is rather significant.
This is not a situation where you can go out
and buy 1,000 acres easily or buy the machinery
to be able to farm 1,000 acres.
So we have attempted -- this Administration
to try to create a different strategic framework
for rural America and for agriculture by focusing
not just on production agriculture, as important
as that is, remains important, and will be
important in exports.
But also introducing an opportunity to have
small, local and regional market opportunities
that allow the opportunity for small and medium-sized
operators to come into the business and stay
in the business.
High-value added opportunities.
Organic production, for example, very small
percentage of American agriculture.
But a fast growing aspect of it and a very
high value added proposition.
And so we have invested in creating the infrastructure
that will help create these local and regional
markets.
We have more to do in that space.
We've also looked for ways in which we can
expand significantly the economic impact of
conservation.
This isn't just about better soil and better
water and cleaner water.
It's also about creating market opportunities
for regulated industries that are looking
for certain environmental benefits because
of climate change -- whatever it might be.
That instead of investing in gray infrastructure,
they can now invest in green infrastructure
by investing in conservation on the ground,
obtain the same conservation benefit, and
essentially -- landowners and small producers
can have a new income source that they haven't
had before.
And then the final piece of this is figuring
out more creative ways to use what we grow--
and every aspect of what we grow.
We obviously have been producing fuel and
energy from bio-based crops.
But now it's very easy to also produce chemicals
and polymers and other fabrics and fibers
that could create a whole new opportunity
for manufacturing in rural areas and a new
market opportunity for agricultural waste
product and crop residues.
So to me, it's an exciting future, but a challenging
one.
And our challenge is to make sure that the
next generation of young people understand
that agriculture is an option.
Whereas before, I think they were encouraged
to look elsewhere.
To move off the farm.
To go to the city.
And now we're trying to make sure that they
understand that you don't necessarily have
to do that.
Obviously, you can if you wish.
But there is real opportunity here in American
agriculture.
ALTMAN: Tell us a little bit about the export
side of the equation.
This has historically been as strong an export
sector as America has had.
And, you know, the country one would argue
has always benefited from greater exports.
Although, sometimes there's a debate about
that.
But tell us about what's going on now in terms
of exports, including where most of our exports
in the agricultural sector go.
And whether there can be further growth in
exports.
VILSACK: Well, first of all, our top five
agricultural export customers are China, Canada,
Mexico, the EU, and Japan.
And we do quite a bit of business with China
which is in part of the reason I think we
have seen rather dramatic increases in both
volume and in dollars in terms of exports.
In the time I've been Secretary, I think we
have set three or four records for agricultural
exports.
This year was not supposed to be a record
year, but in the first quarter we seen an
eight percent increase over last year which
was a record.
And we've seen a 40 percent increase in volume
in terms of some of the commodity crops-corn
and soybeans as those prices have moderated.
We set records for beef, poultry, and pork
exports.
So the export market remains strong so long
as we continue to look for market opportunities
and in so long the international community
understands that we believe and they should
believe in a rules-based, science-based system.
We have two significant negotiations taking
place today on multilateral trade agreements
that could have a profound impact on trade.
The TPP-the Trans-Pacific Partnership and
then the EU discussions.
ALTMAN: Let's come back to that in a second.
Look, let me ask you one more question or
two about the Farm Bill.
So, the good news is that the American agricultural
sector is healthy and doing well.
But most people who aren't in agriculture
hear the word -- two words, Farm Bill, they
think of farm price supports.
So tell us what the Bill did in that regard,
and most fundamentally why we still need farm
price supports.
I know that they were reduced.
But -
VILSACK: They were reduced.
The biggest concern that was expressed leading
up to the Farm Bill and during the Farm Bill
discussions was the fact that we had a direct
payment system.
And this system essentially for commodities
essentially said to producers, "We're going
to provide you support regardless of whether
you have a good year or a difficult year."
And so when crop prices were at their highest
levels in recent history, farmers were still
receiving government support.
That philosophy changes with this Farm Bill.
No long is it the case that farmers will receive
checks in good times.
They will continue to receive help and assistance
when times are tough.
And times could be tough because of natural
disasters or times could be tough in the international
community that drives prices down.
So we have a system that is primarily functioning
and based on crop insurance, a risk-management
tool that farmers and the government participate
in in providing.
And then on top of that, there is additional
coverages and additional protections that
farmers can access that provide some but not
all of the potential loss that they could
occur if they lose a crop.
Now why do we have this?
It's relatively simple, I think.
It's because we like the idea of being a food
secure nation and we like the idea that our
people are producing food.
Agriculture is a very risky business.
Mother Nature -- you could be the best farmer
in the world.
You could make every decision correct.
Mother Nature could come along and you would
lose your crop.
And so if want to keep people in that business
and we want to encourage more people and younger
people to get in the business, we have to
reduce the risk to a reasonable level.
And these crop insurance programs -- these
additional safety net programs are a way of
reducing the financial risk of farming to
the point that it's acceptable enough for
people to stay and want to get into it.
ALTMAN: OK.
One related question apropos of natural disasters.
For someone like me who's not an expert at
all, one level you read about -- the drought
conditions in the United States which are
severe in many parts of the country-some of
the worst in many decades.
On the other hand, agriculture-as you just
said a few minutes ago, it's very healthy
and food prices in general have not risen
in any unusual way.
So in some form or other, the -- there's a
lot of science involved here at some level.
Because you would have normally thought that
our agricultural sector would be taking a
beating.
How does that work?
VILSACK: Well, it works primarily because
in the commodities that would drive and increase
food prices most significantly, we had pretty
good outcomes even with the drought.
And the reason we did was because of the adoption
of science -- better farming techniques, better
seed technology allowing crops to withstand
harsher weather conditions more easily.
In that drought of 2012 -- which was the worst
drought we had seen in 80 years, we had the
eight largest corn crop in the history of
the country.
Well that's science.
And that's the productivity and ingenuity
of American producers.
Now the drought of this year, which impacts
probably more fruit and vegetable production
in California, could have a more significant
impact because it's a little bit different
than commodities.
Because farmers are making the choice not
to farm -- or not to actually plant crops
because they simply don't have the water allocations
in California to be able to do so.
So that may have some adjustment.
But even so, the reason why food prices now
go up proportionately is because farmers get
so little of the food dollar to begin with.
ALTMAN: Right.
VILSACK: About only 15 cents of every dollar
that's spent in a grocery store or a restaurant
actually goes to a farmer.
The other 85 percent goes to folks who process
it and package it and market it and sell it.
And so what really drives up food prices more
than a drought is often energy costs.
Because if you think about step in processing
and packaging food and retailing food, it's
a high-energy consumption aspect.
So if energy prices go up -- if oil costs
go up, that when you see food prices significantly
increase.
ALTMAN: One more related question before we
move on to trade.
If some of the more dire forecasts on climate
change ultimately play out, what impact do
you think that'll have on the agricultural
sector?
There are lots of, you know, unexpected potential
effects here -- some of them not all negative.
But what effect do you think that will have
on the agricultural sector?
VILSACK: Well, with changing climates and
a global economy, we're seeing more intense
weather patterns which challenges the science
to continue to be a step ahead of those more
intense weather patterns so we can continue
to grow crops in very difficult circumstances.
There is also an expansion of potential pests
and diseases that are even more difficult
sometimes to deal with.
And there is the possibility of migration
of agriculture north.
So what we grow today in some parts of the
country, may not be grown 40 years from now
or 50 years from now unless we adapt and mitigate
which is why the President, pursuant his climate
action plan instructed us at USDA to establish
climate change hubs so that we can begin the
process now of identifying the vulnerabilities
of each region of the country and then be
able to establish the technologies and steps
producers need to be able to adapt and mitigate
so that we don't have as much of a disruption
as we might have.
And we have identified seven major regional-seven
of these climate hubs and then three sub-hubs
which are really focused on every part of
this country and all the agriculture -- it's
extraordinarily diverse agriculture in this
country.
We are just so blessed.
But we are analyzing this and dealing with
it.
And we're also doing it on a global basis.
We are part of a global research alliance
we started in this administration with 30
other countries to take a look at how this
might impact global production because obviously
that would have impacts on markets.
ALTMAN: All right.
Let's talk about trade for a moment.
You mentioned that there are two very large
potential multilateral trade agreements, one
with the EU and one called the Trans-Pacific
Partnership with a series of Pacific Rim countries.
And historically, agriculture has been a very
challenging issue in multilateral trade agreements.
Both times when I served in government, I
can remember the trade agreements and the
role that agriculture played was often the
biggest single stumbling block.
VILSACK: Right.
ALTMAN: So because it would be a good thing
in the broadest sense, if these agreements
could occur, tell us the role that the agricultural
issues are playing and I know that in the
(inaudible) Pacific side-involving Japan,
they're playing a big role.
But let's just understand a little bit here.
VILSACK: Well let me start from a general
perspective and then sort of come down to
the specific agreements.
Generally speaking, when we're engaged in
trade discussions, our economy is so diverse
in this country that we have many interests
that we have to represent in trade discussions.
We have a manufacturing interest, we have
a services interest, we have, you know, technology,
we have entertainment...
(CROSSTALK)
ALTMAN: ... (Inaudible).
Right.
VILSACK: Right.
Oftentimes when we're negotiating with someone
-- another country, agriculture is the top
of their list.
So it may be one of several priorities for
us, but it is the priority for many of our
trading partners.
So it puts us in a difficult position in terms
of being able to complete an agreement.
In Korea, we had autos.
And we had pork as two issues that remained.
We were able to work the pork to a point where
Korea was able to give us greater access on
autos.
So that makes things complicated.
Specifically with reference to these agreements,
it's different with each agreement and from
our perspective in agriculture.
On the Trans-Pacific Partnership side, it
is about access -- market access.
And the Japanese have a multitude of lines
of tariffs in terms of market access to basic
commodities and then products that are made
from basic commodities.
And they have a very powerful farming and
agricultural interest in that country, which
every government needs to be concerned about
protecting.
So they've taken a very hard line on market
access.
It makes it very difficult for us to enter
into an agreement with the Japanese on all
other issues if they continue to take a hard
line on market access.
The discussion and recent decision they made
to have a separate agreement with Australia
on beef, for example, suggests how difficult
this is going to be because their tariff reduction
for Australia was not all that significant,
at least from our perspective.
And certainly isn't in the scheme of things
would be difficult for us to be able to sell
to our producers as being an opening of the
market.
That's a big issue for Japan and we have the
same issues with Canada.
Because Canada, particularly in dairy, a very
closed system, we have to have them open up
if we are going to continue to open up our
markets to the rest of the partners in the
Trans-Pacific Partnership.
So there is a possibility that we have an
agreement.
We have a possibility that there's no agreement.
There's a possibility that we have an agreement
but Japan is not part of it.
And only time will tell which of those alternatives
ultimately occur.
But I would concur with you -- bottom-line,
it would be better for us to have a good agreement
than no agreement.
But it would be better for us to have no agreement
than a bad agreement.
ALTMAN: Right.
On the EU side -- there's a side point.
The political power in Japan of the agricultural
sector and particularly rice, must not have
diminished very much.
Because Japan isn't all that unlike the United
States in the sense the percentage of Japanese
GDP, correct me, which is represented by agriculture
is not that high.
And the percentage of Japanese employment
that is represented by agriculture is not
that high either.
But on the other hand, it seems to continue
to have enormous political power.
VILSACK: It does and, of course, in the U.S.
the same thing is true.
You can get a good agreement for every other
aspect of the economy and not for agriculture.
And some would say, "That's OK."
But you might not be able to get it through
our Congress because of agriculture's interest
in making sure that it's a good agreement
for agriculture.
And that's the problem with EU, you know,
it's not so much about market access.
It's about the barriers that they create to
what they perceive to be in open market.
So, for example, they're very much focused
on this issue of geographic indicators, which
is that they would like to be able to maintain
protection against certain types of cheeses,
for example, based on the region that the
cheese was originally created.
Well these terms have been -- have become
generic, the rest of the world uses them.
And so what the EU is doing ...
(CROSSTALK)
ALTMAN: ... You mean in effect, they want
to trademark, parmesan or something like that?...
(CROSSTALK)
VILSACK: ...Right, right.
And what they're now doing in order to -- and
the United States has been very clear about
this.
We just don't think that this is right.
But now what they're doing is they're beginning
to negotiate one-offs with individual countries
where countries think, "Well what difference
does it make?
We don't produce a lot of this anyway.
So we'll agree to your geographic indicators."
So it's making it more difficult in these
negotiations.
And the second issue has to do with our willingness
to accept biotechnology after appropriate
risk assessment, the EU's belief that there
has to be adherence to the precautonary principal,
which is essentially, "If there's any potential
risk, we're not buying it."
Well that's a very difficult standard to meet.
And the result is our biotechnology products
would receive very little access to a market,
even though they would contend that it's open.
So these are very tough -- very tough issues
and issues in which the EU, at least early
in the negotiations, has taken a very bright
line approach and that's unfortunate in my
view.
I think they need to be more open, especially,
on the biotechnology side from the standpoint
of the rest of the world's capacity to meet
global food needs and from the geographic
indicator side, this is a big issue for our
dairy issue -- our dairy industry and it should
be.
And these terms have been generic for years
and years and years and I don't think you
put that genie back in the bottle.
ALTMAN: So while we're on the international
side-well, we were talking beforehand, we
touched on Ukraine and Russia.
And just educate us a little bit in terms
of is Ukraine agriculturally self-sufficient?
What is the vulnerability of that country
from that point of view?
And then we'll talk for a minute about Russia.
VILSACK: Well I think many would perceive
that Ukraine as being, in the past, when the
Soviet Union was in existence, was somewhat
of the breadbasket of the Soviet Union.
They are a significant producer of agricultural
products and they're an exporter of product.
And they are in many respects a major agricultural
producer.
We have not seen a great deal of disruption
because of the uncertainty of the political
circumstances in the Ukraine.
We've adjusted our markets a bit and our projections
a bit in terms of productivity of wheat, down
a little bit.
We need for them to import a little bit more
corn than they would normally import.
But not to the extent that you would suggest
that it's going to be a major, major, major
influence on markets at this point, now, that
obviously can change depending upon the political
circumstances.
But it is a major player and one that I think
in the past Russia has been reliant upon and
depended upon in part to ensure that their
people were well fed as well.
ALTMAN: Let's talk about Russia.
Russia, historically, has been an importer
of food.
And tell us a little bit about how much of
Russian food consumption is imported, where
Russia primarily imports from, how important
the U.S. import/export relations with Russia
is from Russia's point of view.
VILSACK: Well we have a challenging relationship
with Russia in terms of agriculture.
We could do -- and should do and ought to
do more business with Russia because of their
needs.
But they have created, in our view, artificial
barriers to our imports that are not scientifically
defensible.
I'll give you an example.
There is a process that we use in terms of
treating beef and pork using a product called
ractopamine.
The international community has taken a look
at this.
They've determined that there is not a risk
associated with the use of this ractopamine.
Russia refuses to accept beef or pork that
has been treated with ractopamine.
And so we are now establishing ractopamine
free processing facilities for pork which
Russia has at least initially indicated they
might be willing to do business with.
There is no scientific basis for that.
They ought to open that up because it would
be beneficial to their consumers.
But I think part of it is this desire to be
self-sufficient.
And the reality is it's difficult to be self-sufficient
if you don't have the extraordinary productivity
that we enjoy in the United States.
And I don't think their agricultural science
or their agricultural production systems are
as mature as ours.
And I think that's why they're continually
relying on someone else -- the EU, Ukraine
-- someone else for ...
(CROSSTALK)
ALTMAN: ... In units, has Russia agricultural
production been growing?
VILSACK: You know, Roger, I don't know the
specific-I don't know the answer to that question.
I would be confident in saying that I strongly
doubt that it's been growing at the same rate
that we have in the United States just to
give you a sense of this.
I was born in 1950 so I use that as sort of
the benchmark.
Since 1950, our corn production has increased
300 percent.
Now when I say that what this means is we've
gone from planting 10,000 seeds per acre of
corn to 30,000 seeds per acre.
Same tract of land, 20,000 more seeds on it
and some people we can get to 40,000, 50,000,
60,000 seeds per acre.
Soybean production -- 200 percent.
Wheat production -- 200 percent (ph)....
(CROSSTALK)
ALTMAN: ... At that rate, you might have corn
production in Manhattan.
VILSACK: We could.
(LAUGHTER)
VILSACK: We're all about urban farming.
We're excited about that possibility.
You know, the dairy cow, there's an extraordinary
example of efficiency.
When I was born, that average dairy cow was
producing 5,500 pounds of milk.
Today, that same cow-22,000 pounds of milk.
And one poor cow in Wisconsin is producing
72,000 pounds of milk.
So, you know, extraordinary productivity just
based on the science.
I think we're light years ahead of a lot of
folks.
And, you know, the interesting thing about
American agriculture is the willingness to
share.
Because we don't see this as necessarily putting
us at a competitive disadvantage.
If other farmers in other countries become
more productive, then I think that creates
stronger middle classes.
It creates consumers for some our high-value
added agriculture products as well.
We will benefit from that.
And the world food needs are going to continue
to grow as populations grow.
And the challenge for agriculture and I think
this is a startling statistic.
In order for us to meet the needs of 9 billion
people which we would expect to see in the
next 40 years or so in the world, we have
to increase agricultural production by about
70 percent.
To do that, I've been told that work requires
as much innovation in the next 40 years as
in the preceding 10,000 years in agriculture.
So that's why it's important when people look
at the Farm Bill -- that's why we put a premium
on establishing a strong research title because
we need to be investing significant more resources
in agricultural research than we've been in
the past.
ALTMAN: OK, one more question before I open
this up.
But one of the biggest -- maybe the biggest
programs that USDA administers, of course,
is the SNAP program, which most people refer
to as food stamps.
And the amount that the United States spends
on food stamps has gone up a tremendous amount.
And unfortunately, the number of Americans
who participate in the food stamp program,
the other side of the same coin, has risen
tremendously.
And I personally think -- and you might correct
me, or put me in my place, I think there's
a 'Tale of Two Cities' aspect of the whole
country which is reflected through the food
stamps program in the sense that a very high
percentage of Americans receive food stamps.
I read the other day, or actually thinking
about this meeting today with you, I read
that-and you may agree or may not agree with
this because it's, I guess, a judgment -- that
for young Americans entering the work stream
now -- or are reaching the working age now,
one out of two of them during their adult
lifetimes will receive food stamps at some
point in their adult lives.
So just spending a little bit about what you
think the 
distribution of food stamps or the food stamp
program itself really conveys about conditions
in the United States today.
VILSACK: Roger, I'll promise to answer that
question if you agree to ask me one more question
on foreign food aid assistance so that my
staff doesn't jump out of their shoes ...
(CROSSTALK)
ALTMAN: ... I promise.
VILSACK: I'm supposed to talk about that today
as well.
ALTMAN: That's a promise.
VILSACK: You are absolutely correct about
the 'Tale of Two Cities'.
Here's a set of statistics that I think -- which
underscores the point you just made; 1996,
hardly anybody receiving food assistance was
actually working.
They were primarily on cash welfare, they
were senior citizens, or people with disabilities.
ALTMAN: What year was that?
VILSACK: 1996.
Just before Welfare Reform.
ALTMAN: So 18 years ago?
VILSACK: Yes.
ALTMAN: Very recently.
VILSACK: Eighteen years ago.
Today, 42 percent of the households receiving
SNAP have at least one person working.
And those that aren't working could very well
be senior citizens or people with serious
disabilities or children, and therefore, not
likely to be able to work.
In fact, two-thirds of all recipients are
disabilities, senior citizens, or children.
So we've seen a significant change of who
it is who receives SNAP, so that today only
eight percent of SNAP beneficiaries are receiving
cash welfare.
On 8 percent-92 percent are not.
At the same time, the number of people in
the SNAP program today who have no gross income
and no net income has doubled.
So you've got a situation where people are
requiring SNAP because they are in the workforce
and not making a lot.
And you've got people that have been looking
for work for a long time and don't have any
income at all who require help.
And that's one of the reasons why you've seen
numbers increase.
And the other reason you've seen numbers increase
is because there's been a concerted effort
to reach out to people who have historically
qualified for SNAP, but who have never received
the benefits of the program because states
have not done as good a job of reaching out
to them and making sure that people are aware
of the program.
And I will tell you that why I'm deeply concerned
about Representative Ryan's idea of block
granting SNAP -- the SNAP program to states
because I've seen circumstances where you
have a program, but you don't really want
anyone to use it.
So you make it more difficult for people to
access the program, so they don't use it.
ALTMAN: So what percentage of Americans were
eligible to receive food stamps actually received
them?
VILSACK: Today it's roughly, almost 80 percent.
When I became Secretary, it was about 72 percent.
In 2002, it was just a shade over 50 percent.
So there has been an increase in the numbers
primarily because we've done a better job
of reaching out to people historically of
-- always been qualified for the program,
but never accessed the program because they
didn't know about it.
And three states stand out in particular -- when
I became Secretary -- Florida, Texas, and
California all were underperforming in terms
of participation in the program and we've
had major efforts in all three of those states.
And that has driven the numbers up.
So you're right about the SNAP program.
And I think that just people don't fully appreciate
the fact that how many of these people who
are getting SNAP are in the workforce and
how few of them are actually on cash welfare.
That's not what the normal perception is of
the SNAP program.
Then secondly, people do not appreciate the
poverty reduction capacity of the SNAP program.
It's probably one of the most effective anti-poverty
programs we have in terms of actually people
moving from -- moving out of poverty.
And it -- obviously in-during the recession,
it was a very quick stimulus to the economy
because 30, you know, in 30 days, 95 to 98
percent of SNAP benefits are spent.
As soon as people get them, they go to the
grocery store and they use them.
So it's an interesting program and I think
it's a program that's helped a lot of folks
get out of poverty or stay out of poverty
or help them through a tough time.
And we're also seeing, you know, quite a few
people moving out of the program fairly rapidly.
It's not like the 80 percent who are currently
receiving SNAP of the eligibles stay in SNAP
for a long period of time.
Many of them get out of the program within
six to eight months.
ALTMAN: OK, let's bring the audience in please.
Would you kindly identify yourselves -- or
yourself before you ask a question and as
my old boss Lloyd Benstsen used to say when
he would stand up to give a speech, "Remember",
he would say, "I'm the only one here today
that's supposed to be giving a speech."
So -
(LAUGHTER)
ALTMAN: So, let's be sure we ask questions.
Yes sir.
QUESTION: Mr. Secretary -- excuse me, you
commented on.
My name is Dick Huber (ph) and I actually
am a farmer in Chile and in Brazil.
But you commented upon biotechnology and that's
a nice way of saying GMO.
And most of us who are in industrial farming
today, you can't do it without GMO.
And what is the Department of Agriculture
doing about such situations as Hawaii that
has banned GMO crops with the exception of
papaya.
And this whole question of the acceptability
of GMO modified crops or soybeans or corn
in the European market.
This is very important for all of us.
VILSACK: Well that's actually two separate
questions.
What's being done here in the United States?
What's being done internationally?
In the United States, what we've attempted
to do at USDA is to create an atmosphere where
no single type of agriculture is judged to
be less effective or less beneficial or less
important than any other type of agriculture.
In other words, all types of agriculture should
be celebrated.
It shouldn't be a situation where people believe
that one type of agriculture is better than
another type of agriculture.
And we established a group called, the AC-21
group, which represented conventional farming,
organic farming, and GMO production.
We got folks together and we said, "What will
it take to create a better dialogue between
various forms of agriculture so that agriculture
can speak with a single voice about the importance
of agriculture generally."
And they came up with a series of recommendations
and we're in the process of following through
those recommendations, assuring that we continue
to have seed banks that can allow us to replace
and start crops again if something devastating
happens to a particular type of production
process.
Developing risk management tools for organic
producers so that they are not concerned about
the possible financial loss that their product
gets impacted by drift -- understanding drift
better.
Encouraging more stewardship opportunities
between neighbors when they're using different
production processes.
So we're trying to create a culture of coexistence-a
culture of acceptance, a culture of recognition.
The second thing we're trying to do is to
make sure that agriculture speaks more clearly
and more distinctly to the rest of America.
If 300,000 people are producing 85 percent
of what we grow, and 33,000 farming operations
are producing 50 percent of what we consume,
that's 1/10 of 1 percent of the population
or 1/10 of 1 percent of the population.
That means the other 99 percent have no idea
of what's going on in terms of where their
food comes from, the risks that are associated.
They may be several generations removed from
agriculture.
They may not understand the benefits that
the American agriculture provides economically,
environmentally, in terms of jobs.
One out of every twelve jobs connected in
this country, in one form or another to agriculture,
food processing.
Fourteen percent of all manufacturing jobs
-- a million jobs supported by American agricultural
exports.
They may not understand that totality of the
picture.
We need to do a better job of explaining it.
There's been a film that was recently produced
called, 'Farmland'.
It profiles a number of farming operations
and farmers -- young farmers.
It's very well done.
It's done by an academy award and Emmy award
winning producer.
Does a nice job of conveying all types of
agriculture and basically gives you a better
understanding of the challenges, the hope,
the opportunity, the dreams, the frustrations
that people in agriculture suffer and have.
So I think messaging is important in this
country.
So developing a coexistence capacity within
agriculture so that we're not judgmental,
educating people in this country about agriculture
generally so there's greater acceptance and
greater appreciation and having every American
understand that they have the freedom to be
whatever they want to be because they don't
have to -- they delegated the responsibility
of growing their food to somebody else.
And we should be appreciative of that.
On the international side, it's a different
discussion.
It really is -- it's a complex discussion
because a lot of folks are resistant to this
because they want to protect their own farming
operation, they want to not have to heavily
subsidize their own farmers, they don't want
to put their farmers at a competitive disadvantage
because American producers are so much more
efficient and productive.
So our challenge is to create, again, in essence
a single message about biotechnology.
I went to Brazil last summer.
We spoke to the Brazilians and said, "Look,
we should be talking jointly to the Chinese.
We should be saying to the Chinese, you need
to do a better job of creating a regulatory
system that recognizes the importance of this
to your producers.
Allowing this new technology to be used on
your farms."
China has 60 million farmers.
Sixty million farmers.
They can't anywhere near produce what they
need to feed their people.
They have 60 million farmers.
We have 33,000 farming families and operations
producing 50 percent of what we grow.
I mean, you know, if you want to transform
a country, which is what they're trying to
do.
You've got to improve the efficiency of your
agriculture.
But you have to have a regulatory system that
allows you to do that that appropriately analyzes
the risk of anything that you put into the
ground and that you put out into commercial
use.
But once that's done, allowing the marketplace
to make choices and make decisions.
And so we have begun a -- what we refer to
as a biotechnology strategy of making sure
that we send messages consistently.
We have farmers talking to farmers -- our
farmers talking to other farmers all over
the world.
We have our scientists talking to other scientists
all over the world.
We have our policymakers talking to other
policymakers all over the world.
We have Ag ministers talking to me -- the
same message which is that this is important.
It needs to be embraced.
It needs to be analyzed appropriately, but
once it is it needs to -- you need to allow
access to your market.
And slowly but surely that is happening.
Not as fast as some would like.
But it is happening.
And I think as we deal with changing climate,
we deal with more intense weather patterns,
we deal with less water, we deal with expanding
communities -- expanding cities and suburbs
in developing countries, and less land available
for agriculture production, and a growing
world population, we have got to embrace science.
It is the only way that we're going to be
able to feed folks.
And the only way that we're going to avoid
the strife that could come by not having enough
food or not being able to produce enough food
to feed nine billion people.
So it's a consistent message.
And it is also part of -- and this is how
I'm going to get my food assistance...
(CROSSTALK)
ALTMAN: ... Oh, you're taking me off the hook.
Good.
Yes.
VILSACK: It's also why as part of our food
assistance program, its' not just about providing
emergency food assistance when there's a disaster
that strikes Haiti or the Philippines or any
other place that's been hit by a natural disaster.
It is also about using some of our food assistance
resources as part of the feed the future initiative
to actually work with farmers, encourage farmers
in other countries to embrace these new opportunities.
So we have helped over seven million producers,
primarily in Sub-Saharan Africa to basically
be more productive on 3.7 million hectares
of land.
We think that in the long run-that's beneficial.
It's also why we have the McGovern-Dole Program
that we understand there's a link between
food and education.
So we're announcing today $185 million of
money available for 10 countries to allow
them to fund meals at their schools.
And there's -- this is a very powerful tool.
We're going to help over 2.6 million kids
-- 2.7 million kids go to school -- encourage
them to go to school because that's where
they will be fed.
It's a very powerful tool in terms of building
relationships -- and building a trusting relationship
between the next generation of kids in Kenya
for example and the people in the United States.
ALTMAN: You, Mr. Secretary, your point about
educating Americans on where their food comes
from, which I think is-you're right, it's
important other than government service, I
spent most of my career in finance and I can
assure you that most people in the financial
community -- at least here in New York do
know where their food comes from.
They know it comes from Whole Foods.
(LAUGHTER)
ALTMAN: Yes, ma'am.
QUESTION: Oh sorry.
Paula DeParner (ph), from the MTR Foundation.
We know each other from CCX days.
Thank you very much.
And I know you know everything there is to
know about carbon markets.
But going back to Roger's question and the
former comment you made about climate change,
speaking in Wall Street terms now, can you
characterize the value inherent in addressing
climate change?
And the costs and environmental risks in Wall
Street terms of not?
Because not the IPCCs that are pounding out
all the bad news.
But what are we missing as terms of opportunity
from an agricultural point of view.
Presumably biotech is one.
But what's the value to some of this -- what's
the upside economically to getting ahead of
the problem?
And also the dollar value of the risk of not?
ALTMAN: Or-if I could just add one thing to
your question.
It's a great question.
Or will agriculture be a sector which is not
harmed by climate change?
VILSACK: Well, first of all, I'm not sure
I can speak in Wall Street.
I'm more of a Main Street kind of guy.
So I'll try...
(CROSSTALK)
ALTMAN: ... That line works really well outside
of New York.
(LAUGHTER)
VILSACK: We ignore climate change at our peril.
And I will tell you that farmers because they
deal with their land every day, they understand
the personality of their farm.
They understand the intricacies, the consistencies
or inconsistencies that they see on the farm.
And they have a relationship with that land
that makes them quite sensitive to change.
And so farmers are very interested in the
capacity to have the technologies that will
allow them to continue to be productive even
if they have less water, even if they have
a storm that comes through that's extraordinarily
intense.
So they're very interested in investing in
innovation.
So the opportunity side of this is the development
of new seed technology and intellectual property
and new machinery and new farming systems
that will allow them to mitigate the impact
of climate.
They also understand that they have not fully
utilized the capacity of their land.
So you're seeing now a great interest in the
part of the farmers to look at double-cropping
or cover crops as a way of dealing with the
changes that they're seeing.
So, for example, there is an effort at Penn
State to look at the possibility of growing
corn and just as the corn is about to be harvested,
planting a cover crop.
That cover crop would allow the carbon to
continue to be sequestered.
It would allow moisture that's in the soil
to continue to remain.
It would re-energize and re-nourish the soil
so that it could continue to be productive.
And it could produce the feedstock for a new
chemical or a new energy source or a new fuel
source.
Now what that does, it creates additional
income opportunities for the land owner.
It creates new job opportunities primarily
in rural areas of manufacturing and processing
because of the bulk and nature of bio-mass
and it creates jobs.
Now the impact of that is pretty significant.
But that's only if we're in the process of
analyzing how the world of agriculture will
change as climates change, as temperatures
increase, it will become more difficult potentially
to grow certain things.
And we may have to think about adjustments.
But those adjustments can lead to extraordinary
innovation and can lead to new job opportunities.
So to me, that's what we're focused on is
trying to make sure we do the analysis, establish
the vulnerabilities, create the new technologies,
and create more market opportunities for whatever
we can produce on the ground that we have.
The other possibility -- and I know there
are other questions -- the other possibility
is this issue of environmental markets.
I mean agriculture today is a plus eight percent
on greenhouse gas emissions.
Forestry is a minus seventeen percent.
So between agriculture and forestry, we've
got a carbon sink thing going on.
We will obviously want to continue that.
That is not necessarily the case of agriculture
internationally.
Internationally, the greenhouse gas emissions
of agriculture are significantly greater especially
as people take a look at forested land and
convert into cultivated land.
So we have tremendous opportunity here to
not only do this domestically but also to
transfer this understanding of this technology
and information internationally.
And that creates other export opportunities
for us in terms of technology, in terms of
concepts and ideas.
So there's a lot of upside here.
But the downside is if we ignore this, is
we get to a day when we can't grow the crops
that we grow.
We begin becoming less secure as a country
because we have to depend on someone else
for food.
I will tell you the Chinese are not happy
about the fact that they buy as many soybeans
as they buy from us.
The Russians are not happy about the fact
that they can't produce everything they need
to feed their people.
It is a national security advantage we have.
And we ought to hang on to it.
Now I don't know if that's Wall Street or
not.
QUESTION: (Inaudible).
VILSACK: OK, OK.
ALTMAN: Yes, ma'am.
QUESTION: Thank you so much.
Lauren Shiveigh (ph).
Your comments about productivity are, of course,
hugely appreciated and fascinating.
The flip side with actually Roger sort of
pointed out is that for many Americans, especially
at the upper ends of the financial scale are
increasingly going to places like Whole Foods
because of very deep concerns about the downsides
of our productivity -- animal welfare, you
know, overproduction in certain unhealthful
food sectors.
All of the environmental cost.
Can you talk a little bit about given how
unbelievably secure our food supply is and
the proclivity of this Administration to maybe
be thinking differently, especially about
the health implications.
How are you starting to think about balancing
that incredible productivity with some of
these other issues around food safety, animal
welfare, hormones in meat, all of the stuff
that is actually corollary to this incredible
productivity?
VILSACK: Well I think that, you know, when
you think about agriculture, I think you have
to think about it in terms of thirds.
There's a third of the issues that you raised
-- some of the social issues that involve
questions about safety and nutrition.
There's the environmental piece of it.
And then there's the economic piece of it.
And I think it's really about balance.
And that's why this Administration has focused
not solely on production agriculture but has
spent a good deal of time and a good deal
of resource -- a historic amount of resource
and time on creating a more welcoming opportunity
for other kinds of production processes.
Not -- we don't see this as competing.
Now some people will see this as a competition.
I don't see it as a competition.
There's an interesting article in The Washington
Post just yesterday, that took look at organic
production -- organic foods and conventionally
produced foods with the question, "Is one
healthier for you than the other?"
And the surprising conclusion of the article
was that in every commodity-dairy, meat, vegetables,
fruit, there's virtually no difference in
terms of health, nutrition.
That's probably not what most people think.
But from my perspective, organic is a great
opportunity because it's a way in which high-value
opportunity can be created when you don't
have to buy 1,000 acres of land.
You can start with 10 acres of land.
So it's a way of get entrepreneurship, innovation,
youth, energy, new people into the agricultural
world so that this issue of aging producers
becomes not as much of a concern as it is
today.
And it's obviously a high-value added proposition
because we have 18 -- over 18,000 certified
organic producers in this country -- a relatively
small number.
They farm about one percent of America's land
and they have about five percent of the sales.
So it's pretty high-value added and in some
commodity groups, it could be as high as 10
percent of the sales.
So, you know, I think there is a balance that
can be struck.
And I think the market -- the market is going
to address some of the issues that you've
raised.
The market is going to address the issue of
animal welfare in terms of whether people
-- how people -- how strongly people feel
about it.
And major corporations and major entities
and purchasers of food begin to establish
certain criteria for the food that they purchase.
Everybody from Wal-Mart to McDonalds.
The market's obviously going to have a say
about that and obviously, folks are going
to listen to the market.
But our view at USDA is not to pick at winner
or losers.
Not to say one side is better than the other.
It's to create a situation where all types
of agriculture are welcome.
And people can make the choice for themselves
as to which is best for them.
But well here's what's interesting.
And this is really important.
You all have mentioned Whole Foods.
The -- one of the co-CEOs of Whole Foods is
Walter Robb.
And he's a terrific guy.
And I called Walter up one day and I said,
"Walter, it's great that you have a store
in Georgetown.
It's great that I can go to that store.
But what are you doing about inner city America?"
He said, "What do you mean?"
I said, "I just met with a group of African
American ministers in inner city Detroit.
They're deeply concerned about the welfare
of their congregation and they don't have
access to a decent grocery store."
And I said, "What is Whole Foods doing about
that?"
And he said, "Well, good question, I'll send
a team.
I'll meet with them."
He met with them and he sent a team to Detroit
and they came back and they said, "Our model
doesn't work real well in inner city Detroit."
And to his credit, Walter said, "You know
what?
Create a different model."
So they went back, they shrunk the size of
the store.
They didn't have 5,000 different kinds of
fruits and vegetables that quite frankly I
don't know how to prepare.
They really surveyed the community.
They said, "What do you want?"
ALTMAN: You're better than me.
I don't know how to pronounce them
VILSACK: Well, I could have gone there.
And they opened up a store in inner city Detroit.
And you know what's interesting about that
story?
ALTMAN: It's doing well.
VILSACK: It's doing really well.
And what's also interesting is that they're
-- the people with SNAP cards are using that
store.
It's also the reason why we've said to our
SNAP program-if people want to go to a farmer's
market, they should have the opportunity to
do that.
We shouldn't be segregating the SNAP beneficiaries
going over here to the discount store.
And everyone else going and having the benefit
of the community building experience of going
to a farmer's markets.
Everybody should have that opportunity.
So in 3,000 of the over 8,000 farmer's markets
now, SNAP cards can be accepted.
And foundations are coming and saying, "You
know what?
Let's give those folks a little extra break.
Double bucks."
So we're now creating programs where we're
incenting folks on SNAP to be able to have
fruits and vegetables.
So it's changing.
But it's not going to change overnight.
ALTMAN: All right.
Let's try to fit in at least a couple of more
questions.
Yes sir, on my left.
QUESTION: Thank you.
Andrew Forgas (ph) with Modern Meadow (ph)
--we're a biotech company focused on agriculture
innovation around animal products.
And first of all, I wanted to say thank you
because our -- one of our earliest sources
of support was a USDA SBIR grant.
So thank you on that.
My question for you actually builds on some
of the questions that we've had earlier which
is 2050 is the date that's put out there as
a date by which a lot of things need to happen.
Population is going to exceed nine billion.
And some project a near-doubling of animal
products that the world is going to consume
by then.
And if today already livestock is the leading
user of land, water, and by some measures
the leading contributor to greenhouse gas
emissions, how do we square this equation?
How do we actually increase animal production
to feed the growing demand around the world,
but not exacerbate the resource utilization?
VILSACK: Well, the short answer is continued
investment in agricultural research and the
focusing of the research on that very question.
I can tell you that we've started that with
the dairy industry.
The dairy industry writ large from the producer
to the retailer has agreed to reduce their
greenhouse gases voluntarily within the supply
chain by 25 percent by 2020.
And they've come to us and said, "How can
you help us do that?"
Well anaerobic digesters is one way of doing
it.
So we helped to fund on average about one
digester a week at USDA.
I think we've done 93 of them.
I think we've invested $62 million in that
effort.
And there's research going on now in terms
of how livestock is fed to determine whether
there's a capacity and capability of reducing
the emissions from either end of livestock,
right?
How that can be captured.
But here's what's really interesting about
this.
You never thought your question would go into
this issue.
You know a really big problem isn't so much
livestock production.
It's how much food we waste.
Thirty percent -- thirty percent of all the
food that is produced in this country is wasted.
Thirty percent.
So if you're really interested in reducing
greenhouse gases, then we ought to figure
out a much better way to reduce, to recycle,
and reuse.
And so we've launched a major initiative at
USDA to focus on this issue on how we can
work with restaurants to reduce portion sizes
so that they're manageable and you get a decent
meal, but you don't get a bunch of food that
isn't used.
How we can do that at schools and universities-do
a better job.
How we can better educate consumers about
best by such-and-such date.
What that actually means.
So you don't have to throw it out the next
day.
And how we ...
(CROSSTALK)
ALTMAN: ... There's a lot of misunderstanding
about it.
VILSACK: A lot of misunderstanding, OK?
Internationally, 50 percent of food that is
grown -- crops that are grown never get to
the plate because our storage facilities are
inadequate.
And so there are a multitude of things that
are important here.
The reason I bring up food waste -- it's the
single largest source of solid waste in our
landfills.
And our landfills happen to be a heavy producer
of methane.
So you want to reduce methane?
Let's do research on livestock for sure.
Let's figure out more efficient ways to feed
livestock for sure.
Let's capture when we can for sure.
But let's also not be putting a lot of food
in our landfills and creating methane.
Let's figure out a way to reduce that.
ALTMAN: OK.
I am unfortunately obliged by the venerable
council rules which we all embrace to bring
the formal part of this meeting to an end.
Now there are a series of people who had questions.
This gentleman here who were not able to ask
them.
I don't really know if Secretary Vilsak has
a few minutes when the formal part of the
meeting ends.
I hope he does.
But let's at least thank---
(APPLAUSE)
ALTMAN: Tom for being here today.
We really appreciate it, Secretary.
VILSACK: You bet.
Thanks.
