AgWired

The financial crisis that has gripped many of the urban areas of the country is now spreading out to the rural parts of America. And that is bad news (obviously)… and actually some good news.

Attendees of the Farm Foundation’s Food and Agriculture Policy Summit in Washington, D.C. heard from a panel looking at the risks and challenges facing American agriculture… and the state of rural finances was on that list.

While most of the traditional rural banks have stayed out of much of the mess their urban cousins got into when financing homes that lost their values, Paul Ellinger, an extension specialist in agricultural finance with the University of Illinois, told the group that the impact is starting to be felt in rural America because more rural financing was starting to come from the large institutions and insurance companies that have been hit by the crisis. He says commodities are taking the first hit.

“We’re now seeing the indirect effects of the financial crisis now that it is affecting commodity prices. Now, land prices are starting to soften a little in various areas.”

Ellinger says there are funds available for agriculture right now, but bankers might get a bit more choosy if margins get too tight.

So what’s the good news in all this? Well, Ellinger says the softening of land prices might slow the trend of prime farmland being turned into housing tracks… an issue we discussed in one of my earlier posts.

That’s another one of the great things about a conference like this, where lots of different viewpoints are brought to the table. You see how interconnected everything really is.

If you want to hear my conversation with Paul just before he took the stage at the Farm Foundation meeting, click here: ellinger1.mp3

Download the audio here. (mp3)

Rural America’s infrastructure challenges cut to the heart of the six challenges outlined during this morning’s session of the Farm Foundation’s Food and Agriculture Policy Summit being held in Washington, D.C.

As you might remember from my earlier post, this morning, Farm Foundation Pres. Neil Conklin outlined the six major areas of challenges facing agriculture over the next 30 years: 1. Global financial markets and recession, 2. Global food security, 3. Global energy security, 4. Climate change, 5. Competition for natural resources, and 6. Global economic development. Gene Griffin with the Upper Great Plains Transportation Institute at North Dakota State University told the group attending today’s Farm Foundation session that a crumbling rural infrastructure, in particular, the roads, touches each one of these six challenges and threatens to make them even worse.

“The engineers will tell you [the pavements] look OK on the surface, but underneath it is starting to crumble.” Griffin says by the time the damage is clearly noticeable, it costs two to three times as opposed to normal maintenance and repair.

“Just getting the political will of people to pay for systems they want to use… but they’ve gotten used to the idea they don’t necessarily have to pay for it. And I think those are two huge problems.”

Griffin says in his home state, where rural roads are seeing a huge amount of big trucks working the biodiesel and ethanol industries and North Dakota’s burgeoning petroleum industry is also taking a toll, that infrastructure needs the funding… although it might not see the same amount of traffic a higher-density population area would see. He says if the cities want the fuels that are produced in rural areas, we need to develop a system that links the high-density traffic areas with the low-density ones.

He says it comes down to deciding if we’re going to pay for the infrastructure that will help us be more energy independent now at a lower price or at a much higher price… down the road.

Listen to my entire conversation with Gene here: Griffin1.mp3

Download the audio here.

One of the really great things about Farm Foundation events is how the group brings together people from divergent backgrounds and points-of-view to freely discuss the issues affecting American Agriculture today. The latest session at the Foundation’s Food and Agriculture Policy Summit it is hosting here in Washington, D.C. is another great example of that.

Just a few minutes ago, Dr. Jonathan Bryant with BASF North America and Dr. Gale Buchanan, Under Secretary for Research, Education and Economics at USDA finished their presentations bringing private and public sector viewpoints to the research and development session of the conference.

I caught up with the two of them right after their talk and asked how the private and public sectors can better work together to make sure the research dollars and knowledge flow back and forth between the two.

“Obviously, we need to keep supporting research and education programs at both the state and federal level,” said Buchanan.

Bryant echoed Buchanan’s sentiments about the need for public funding for research and development. “I think there are some very similar priorities. We obviously depend on the public sector to give us a good educated workforce.” He added that the private sector also depends on the regulatory function of the government.

Both men agree that they need each other for a dependable research and development function in the ag community.

“There’s much to be gained from the collaborative relationship that the private sector has with the public sector, because in the end, we all are trying to get to the same goal: provide for the needs of the American people and people all over the world,” Buchanan said.

During his talk, Buchanan pointed out that research and development pays back a return of 53 percent annually… better than any stock.

Bryant said that taking a long-term view is key for private companies and public institutions to make sure Americans are truly being served in this collaborative relationship.

You can listen to my conversation with Drs. Buchanan and Bryant by clicking here: Bryant-Buchanan1.mp3

Download the audio here. (mp3)

The world’s population will grow by 33 percent by the year 2040, but the amount of farmland to feed and fuel that growing demand won’t have to grow by that same one-third… that’s what attendees at the Farm Foundation’s Food and Agriculture Policy Summit in Washington, D.C. heard this morning.

Greg Webb from Archer Daniels Midland gave that optimistic assessment as he told the group increasing efficiencies in production agriculture would help meet the growing demands while adding only a disproportional smaller amount of land to the production mix.

“Agriculture’s role is not one of conflict between food or fuel. It is one that is quite compatible. Producing more food results in more fuel being produced as well.”

Webb says more efficient practices will give farmers, who are already are being pretty efficient compared to just recent history, an even greater opportunity to produce both the food and fuel the world demands, as long policies don’t get in the way.

“We need to have policies that allow those innovations and investments express themselves.”

Webb adds Pres.-elect Obama’s new Cabinet will have a great impact on how those policies play out.

You can hear my conversation with Greg by clicking here: GregWebb1.mp3

Download the audio here.