The Burning Question

Dubbed ‘the unified voice of agriculture’ the independent American Farm Bureau Federation (AFBF) has been representing the interests of farmers and ranchers since it was first founded back in 1919. NGA’s Chad Wilson catches up with President Bob Stallman to get his views on the Obama administration, the impact of the financial crisis and the road ahead for the industry.

It’s a Monday afternoon in December and rice and cattle producer Bob Stallman has just ended a five-minute call on his cell phone to his home in Columbus, Texas. Although being President of the AFBF for the past nine years has been, and still is, a tremendous privilege, not being able to get his hands dirty with the day-today running of his two family-owned farms does proves a little frustrating at times. “I am more ‘cell phone on’ than hands on,” he jokes as his slips his handset back into his breast pocket. “I only manage to get back home the odd weekend but have a man who has been with us since 1974 and he takes care of things for me. In fact, we were just chatting then about dealing with the cattle this winter.”

As well as his keeping a distant watch on his own business, this no-nonsense farmer protects the interests farmers and ranchers and acts as their mouthpiece for issues affecting them. His eight years in the hot seat have coincided with George W. Bush’s presidency but with a new administration now at the White House is he optimistic about President Barak Obama’s stance on farming? “Our state affiliate, the Illinois Farm Bureau, worked with President Obama when he was an Illinois legislator and US Senator. Their take was that he was very pragmatic and likes to sits down with all the points of view and work out common sense solutions to problems, which is very positive as far as we are concerned.” Stallman says Obama’s vow to make decisions based on “sound science” was welcomed by the AFBF. “We are a little concerned about the comments that were made about trade in general on the campaign trail but our challenge and goal is to open up new markets.”

In agreement

Like Stallman, the president was a supporter of the long-awaited 2008 farm bill and the use of biofuels as the US looks to reduce it’s reliance on oil – over 60 percent of which is imported. Obama’s support for renewable energy is a great opportunity to develop home-grown fuels and create jobs to bolster the rural economy, says Stallman. He also hopes that the administration will be able further efforts with agricultural labor, transportation and change the way the industry negotiates with world trading partners.

However, Stallman does raise some concerns over some sections of the Democrat party and their differing views on farming. “There are elements of the party who are activists who think agriculture ought to look a certain way, whether or not it impacts on our ability to produce. Although some think that we need to revert to 40 acres and a mule, we feel that logic, common sense and analysis should prevail.”

He is also keen to highlight that overcoming misconceptions about 21st century farming methods is a massive obstacle. “If you have a view of agriculture that is different to the modern production machine then this lead to policies will impede our ability to produce food, fiber and fuel.” But it is not just the policy-makers who have outdated views of farming – the public too lack a real understanding, argues Stallman. “At one time people would go as kids to their grandparents’ farm and get a feel for it and how the business works but today most people, as well as those in Congress, as four or five generations removed from farming. We have to go through an educational process to talk about what modern agriculture is about as opposed to what may be portrayed on TV or in literature about some barnyard farming.”

On-going concerns

Last year saw a record net income for the agriculture industry and a debt to asset ratio an all-time low at around nine percent. However, there are serious concerns impacting the industry going forward. These are challenging times with ever-rising input costs, volatile commodity prices and the global economic meltdown lingering in the background. “There is a lot of anxiety in the countryside now about how this is all going to play out and anxiety over how to be profitable,” Stallman reveals. “This could all ultimately affect agricultural lending just at a time when producers are going to need larger loans because of the higher input costs.” He also suggests that the price of fertilizer will influence a producer as to whether they should plant corn or soybeans in the spring due to corn’s need for larger quantities of fertilizer.

And with the country in the grips of a financial meltdown and mass job losses sweeping the country, question marks remain as to how this will affect agribusinesses in 2009 and consumer spending habits. Stallman says consumers could start buying less farming products or ditch their usual choice of meats for cheaper meats or other protein sources. “All producers are impacted by this over-arching energy impact on input costs and livestock producers are no different. But at least the price of corn is coming down for now and I expect many livestock feeders will be locking some of that price and expectation that it won’t stay down that far.”

Volatile energy costs are a major concern, too. “I was in I was in Montana recently and the biggest concern out there was not the feed costs but the cost of fuel they use for transportation. But all of the energy components are going to play a big role, with diesel, gasoline and natural gas contributing to how farmers view a crop in terms of the amount of energy and fuel they have to use to produce it, harvest it and dry it.”

So all of this combined is a ‘wait and see’ situation because this could be a pretty tough year.” So with Stallman predicting difficult conditions for farmers this year, does he foresee farms being forced to shut down because of the economic climate? “I hate to predict things like that,” he remarks. “Struggling farms are generally bought out and consolidated into other operations so we haven’t lost production because of the economic downturn.”

At loggerheads

Of course, another on-going issue is the food versus fuel debate and impact on prices from turning staple foodstuffs into biofuels. Stallman, however, doesn’t believe that critics’ claims that creating ethanol from corn massively inflates prices. “We had a lot of debate about this when food prices started going up and the world was concerned about having enough supply. There were a lot of misdirected efforts to blame that on biofuels. We have an economics team here that did a pretty thorough analysis and discovered that the biofuels component of food prices was very small – maybe 15 percent.” He continues: “Now that corn and ethanol prices have come back down, food prices are projected to rise by another seven to nine percent grocery store after 2009. So that correlation that people were trying to make was by people who were anti-ethanol or anti-biofuels. They were using it as a wedge but their economics didn’t hold up for scrutiny.”

Looking ahead, Stallman predicts a bright future on the whole for his industry. “We will remain viable and agriculture will continue its trend of consolidation at the producer level, will have newer technologies that come online.” Biotechnology will play a significant role in this progress, he notes. “There are remarkable advances ahead, such as new seeds that will increase fertilizer efficiency and allow plants to be more drought tolerant, which will help buffer the shocks we feel sometime with the areas that don’t get enough rain. But most importantly, we will be successful as a national industry over the next five or so years and remain viable. The trend will also continue for consolidation as we see a transition to larger and more efficient farms.”

With the interview drawing to a close, Stallman points out that the AFBF has to represent competing interests with the organization as it has producers in every region producing every region producing by every method possible. Sp trying to come up with clear policy that is the voice of the AFBF can be difficult at times. “It is definitely a challenge balancing all of the competing interests,” Stallman confirms. The AFBF was a major player working for 18 months behind the scenes on the 2008 farm bill. Stallman says it was extremely hard trying keeping everyone happy with the bill.  “There were a lot of positives coming out of the 2008 Farm Bill, which was a massive piece of legislation. However, no piece of legislation is perfect and I don’t know anybody who thought the Farm Bill was. But there was huge coalition that said, ‘it is probably as good as it is going to get and we should support it’.” At this point, his cell phone rings; it’s the farm manager again with another update from Texas so I leave him to it.

Texan Bob Stallman is President of American Farm Bureau Federation – the nation's largest and most influential general farm organization. The 11th president in the organization's history, Stallman was first elected President in 2000 – the first from the Lone Star State. Prior to becoming AFBF President, Stallman was president of the Texas Farm Bureau, a position he held since 1993. He became a member of AFBF's board of directors in 1994. He served on various committees and boards during his tenure on the AFBF board of directors, including Chairman of the 1998 Farm Economy Committee. In 2007, President George W. Bush appointed Stallman to serve as a member of the White House Advisory Committee for Trade Policy and Negotiations (ACTPN), the committee at the top of a multi-tiered system to advise the President and Congress on proposed trade agreements.

Stallman on activists

“Animal right activists will become even bolder in 2009, on the heels of their win in California on Proposition 2 this past November. Without a doubt, the animal rights activists have no plans of letting up. It is anticipated they will push forward with more state-wide ballot initiatives and legislation. It is up to us as farmers and ranchers to become activists in our own right by engaging with consumers about modern agricultural production. We take great care of our farm animals. We need to have that conversation with consumers.”

One voice

In 1919, a small group of farmers from 30 states gathered in Chicago and founded the American Farm Bureau Federation. Their goal was to speak for themselves through their own national organization. Farm Bureau soon became the voice of agriculture at the national level. arm Bureau is local, county, state, national and international in its scope and influence and is non-partisan, non-sectarian and non-secret in character.