In the November reading of its Ag Economy Barometer, Purdue University highlighted potential threats to ethanol and farm income programs alongside fears of increased taxes and regulation as the key factors driving a 16 percent decline in farmer sentiment following recent US elections.
Though it remains too early to know how specific policies might change under the Biden administration, debates that will shape its approach to key issues impacting agriculture are already well underway.
Early focus on Biden confidants’ connections to Pine Island Capital, as reported by sister title Buyouts, and reflective criticism of in-coming National Economic Council director Brian Deese’s stint with BlackRock, hint at tensions driving debates between progressives and centrists around monetary, trade, climate and anti-trust policies that will shape the environment facing investors.
The nomination of Obama Administration ag secretary Tom Vilsack to serve a third term as USDA chief, already stands out as a key data point in an emerging debate about the Biden administration’s need for balance between trusted experience and fresh thinking.
It also came after speculation the position might be offered to Representative Marcia Fudge, as a signal to African American and progressive supporters that concerns surrounding food insecurity and farmland access for excluded groups would get adequate attention from a department naturally focused on rural affairs.
Vilsack’s confirmation would comfort some in the agriculture industry at a time when many fear losing the sector’s perceived gains of the past four years. Regardless, Biden will remain under pressure to engage a set of structural debates related to access and redistribution that, ultimately, involve agriculture’s interaction with his urban supporters.
Optimists highlight the potential for an infrastructure initiative that could plausibly include controlled environment production and solar projects offering support for farmland sales and fallowing programs. Many are focused on the role ag might play in a re-invigorated approach to climate change, which is sure to be among Biden’s key first-term priorities.
Truly supportive policies will require consensus within Biden’s coalition that will take time to develop, to say nothing of the challenges of reaching across the aisle. The rural/urban divide driving dysfunction between political parties in the US has by no means been resolved by the election and may even have been exacerbated by it.
The year ahead will likely see US agricultural policy debate be subject to continued lack of consensus within and between political parties attempting to navigate a new political environment. Investors can expect ag markets will continue to prove their resilience against such near-term turbulence, which will nonetheless sharpen focus on vexing medium and long-term issues that have emerged in recent years.