USDA Secretary Tom Vilsack tried to put the best face on the U.S. credit downgrade's impact on farmers after Standard and Poor's lowered its rating for U.S. debt and the farm credit system. Standard and Poor's may be talking negative about the U.S. economy, but Vilsack won't join in.
"I think it may be a bit premature to assume that there's going to be higher service," Vilsack said. "A number of the other major rating agencies did not downgrade the U.S. and so I think we need to wait and see precisely what that's going to do."
S and P reduced by a notch its bond rating for Farm Credit, which lends money through the farm credit system for farm operating loans, land loans and other uses. The rating agency dropped the U.S. triple-A rating Friday, while Moody's and Fitch agreed to leave the top rating alone for now.
Vilsack says USDA's focus is now on how Congress moves in September to start to pare federal spending.
"Our concern right now obviously is as Congress reconvenes are conversations and discussions about the next step of getting our fiscal house in order," Vilsack said. "What impact will that have, specifically on discretionary spending? Also, what specific effect, if any, will it have on some of the mandatory programs USDA has, and how does that basically begin to frame the conversation about the Farm Bill."
Vilsack insists key principles must be reflected in the next farm bill regardless of the fiscal constraints, among them an adequate safety net, risk management tools and jobs spurred through rural development. But Vilsack complained about all the negative media spin on the U.S. debt downgrade, a first-ever in U.S. history, arguing it's time to stress the positive in rural America, not the negative.
"One of the things that I think all of us in America need to do more of is eliminate the negative and accentuate the positive," Vilsack said. "And one positive story in this economy continues to be the extraordinary role that agriculture and agricultural producers are playing."
Vilsack says one of every 12 jobs in America is in some way linked to production agriculture. He calls it a success story, something America does better than any other country in the world, and that the rest of the world depends on.