American farmers need to diversify their income sources in order to survive in an era of growing consolidation, Ag Secretary Tom Vilsack said Thursday, emphasizing adoption of climate-smart practices and expansion of local and regional food systems. 

“We can be innovative and creative enough to create additional profit opportunities from farms small, mid-sized and large,” Vilsack said in his keynote address at USDA’s Agricultural Outlook Forum Thursday.

“So instead of two or three ways to generate profit and income on a farm, we have five or six or seven different ways each farm becomes a center of entrepreneurship.” Those potential income sources include methane digesters and ecosystem markets. 

Although the ag sector is coming off a record year for net income, 90% of farmers either are not making money or not making the majority of their income for their family from farming, Vilsack said.

With Congress due to write a new farm bill this year, Vilsack said lawmakers should "focus on making sure that this is a farm bill not for the few, but for the many."

Vilsack both defended and pushed back against remarks once made by former Ag Secretary Sonny Perdue, who he said had been “very honest” in answering a question about the dairy business.

Perdue's response was this: “In America the big get bigger and the small go out. I don’t think in America we, for any small business, have a guaranteed income or guaranteed profitability.”

Vilsack said Perdue had been “criticized unfairly” for the comment, but added, “I think there's a different way. I think we create a different, innovative and creative way to approach the future. And that key strategy focuses on understanding that it's not just growing crops and selling them, or raising livestock and selling them or the product from them, or government payments. We can be innovative and creative enough to create additional profit opportunities from farms small, mid-sized and large.”

USDA continues to push out funding to address supply chains issues and increase processing capacity. 

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Vilsack said the agency plans to publicize a series of announcements over the course of the next couple of months in connection with setting up regional food business centers to help establish local regional food systems and continuing to make grants regarding processing facilities that are either expanding operations or building new operations.

When asked during a press conference about how much in COVID-related resources are left unspent, he said the “substantial percentage of those resources have been obligated and are out the door helping farmers.”

Jenny Lester Moffitt, USDA undersecretary for marketing and regulatory programs, said USDA is looking to offer COVID funding for additional food processing facilities, including specialty crops and other non-meat and poultry processing.

Lester Moffitt said USDA’s investment in more meat processing capacity aligns with President Biden’s competition agenda.

“We’re investing in a diverse processing capacity and that’s meeting the needs of the producers, but at the same time also really driving the competition agenda addressing anti-competitive practices in the marketplaces, as well as many different things,” she said.

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