S1E7: SC Ag Tech & Business Forum 2025 - Agricultural Policy
Today, we're talking about how South Carolina's ag industry is adapting to the winds of change. With recent policy shifts and updates to the farm bill, there's a lot on the table here. From regulatory changes to new financial support opportunities, our expert panel will walk us through how these shifts are affecting farmers and what strategies can help us not just survive, but thrive in this changing landscape.
Date of Event: March 26, 2025
Location: Phillips Market Center, West Columbia, SC
Production Credits:
Introduction: Hannah Mikell
Producer: Kevin Royal
Editor: Kayla Peters
Technical: Trey McAlhany
Music Composer: R.M Davis
Special Thanks:
Transcript:
Cultivate Ag, where ideas take root and innovation grows. Hi, I'm Hannah Michael, your host of Cultivate Ag podcast, brought to you by Clemson University's Cooperative Extension Service and CU CAP. Each episode, we dig into what's shaping the future of farming in South Carolina and beyond. Let's get into it. Today, we're talking about how South Carolina's ag industry is adapting to the winds of change. With recent policy shifts and updates to the farm bill, there's a lot on the table here. From regulatory changes to new financial support opportunities, our expert panel will walk us through how these shifts are affecting farmers and what strategies can help us not just survive, but thrive in this changing landscape.
So agriculture policy is the first panel, first topic we wanted to issue, to address today. We're in very interesting times in agriculture, particularly from a policy standpoint, both nationally and locally. There's a lot of uncertainty in the market and in the policy arena.
Talking to Gary before we started here a little bit ago, he said something, he said it feels like a rollercoaster ride every day, which I thought that was an appropriate analogy, especially from a policy perspective. Especially looking at the changes and uncertainty out there. So this morning, of course we hear it from our farmers and from agribusinesses and lenders and all, just a lot of questions and policy.
In my mind, in my career, I didn't start out starting policy, but I did my work in ag policy, particularly crop insurance, and I feel like that drives agriculture. I do believe policy decisions determine what our agriculture is going to look like. So this morning we're really pleased to have three distinguished panelists, four people up here, they're experts.
I reached out to folks that I look to for expertise, and Dr. Adam Kantrovich, who's leadership for the agribusiness team now, he's the leader. Who can we get on this panel that can address these issues and trends in ag policy?
So I'm going to quickly introduce our panel and then ask Dr. Kantrovich to come up and set the stage for the policy discussion. First, so I'll go left to right.
I'm going to skip Adam first. Dr. Joe Outlaw, he's a Regents fellow with Texas A&M and professor and extension economist.
He serves as the co-director for the Agriculture and Food Policy Center at Texas A&M where he says he frequently interacts with Congress and key agricultural committee staff. He's basically, if y'all don't know what the Ag Food Policy Center is, they're a center that basically does policy research for agriculture and the House Ag Committee. It uses the Ag Food Policy Center to do analyses on different policy proposals and particularly the farm bill.
And so he's joining us from Texas A&M, but he's got a broad, broad background and a lot of, I guess, experience in these areas that you can see in your program. Next, going right, Joe from y'all. Look at y'all's Kyle Conkler with American Soybean Association, Senior Director of Governmental Affairs.
And I want to thank American Soybean Association and South Carolina Soybean Board, Mary C. Crumley for making it possible for Kyle to be here today and join us. Kyle was here in December talking to the farmers and I was just, I knew some of the regulation issues, but what he shared really hit home with me as to some of the risk and issues out there that we're facing, particularly from the farmers and the industry standpoint.
So Kyle, he oversees biotechnology crop protection and leads the Innovation Task Force and the Biotech Working Group Policy Initiatives. Prior to joining the American Soybean Association, he managed federal government affairs in food, ag, and energy environmental policy with the Biotechnology Innovation Organization. And he's got experience working in these, with the legislative teams for Congressman Dan Newhouse and Congresswoman Kathy McMorris-Rogers.
He's a native of the state of Washington, eastern Washington, and has a degree in political economy from College of Idaho. Then to the right of Kyle, we've got Michael Lawley. He's one of our local homegrown experts with Low Country Labor Association.
He's the president and founder. He specializes in securing guest workers through H-2A, H-2B visa programs. Basically, a lot of farmers in our state use Michael and Low Country to get labor, H-2A labor, for the farms.
And he founded his company in 2004, bringing workers in from Mexico, Central America with a 92% return rate. He chairs the National Council of Agricultural Employers, works with Adam a lot now, and with that association. And he studied language and international trade at Clemson University.
So, that's our panel. Looking forward to hearing from them. But first, Dr. Adam Kantrovich with Clemson University. He's an extension specialist. He's the program team director for extension agribusiness team.
And he's also the director for Clemson tax schools and manages that program. He's got over 25 years experience in academia and working particularly in agriculture. And his, I say main areas, he's a little bit, he knows a lot, works in a lot of different areas.
But financial farm management, agribusiness, and labor and tax policies are some of the main things he does. So, Adam, I'm going to turn it over to you to kind of set the stage here for the panel. Good morning, everyone.
Y'all seem dead this morning. Let's try this one more time. Good morning, y'all.
Good morning. All right, that sounds better. Now, I don't think I'm going to have to do too much with what Gary has already said.
If you take a look at my image versus his image, what he's wearing versus what I'm wearing, you will notice the same, he just had the same tie. I got the same shirt, the same coat. Don't have the tie.
I even still have the same paw. I also have the beard, which the girls in my house don't prefer. However, I'm, we got a lot smarter people here on this panel than I, so I don't want to say too much.
I will talk about a couple of things real briefly to be able to set the stage. There was a gentleman by the name of Dr. Rossman who was a faculty member, I believe, at the University of Virginia, he and his wife, and specialized in psychology.
However, he came from a farm in western Iowa and noticed certain signals within or certain characteristics of farmers and those in agriculture and developed a term known as the agrarian imperative. Some of y'all may also have seen me in the past possibly talking about farm stress and mental health type issues, and I sometimes refer to this agrarian imperative. And the agrarian imperative begins to attempt to define a mindset of a farmer.
Farmers and those of us in ag have a tendency to be eternal optimists. Why do I say we have a tendency to be eternal optimists? Now that does not mean we don't complain and complain often about everything, but we have to be eternal optimists.
Why is that? Next year's gotta be? Alright, come on, let's try it again.
Next year's gotta be? Right? Because if we weren't, how many years would it take before we decide I'm done with this?
Right? Gary already mentioned some of 2024's major events. I am presently waiting for boils, grasshoppers, and any other of the, we're right around Passover time too, so what other plagues are we about to be hit with?
Snow in the low country and hurricanes in the upstate, who would have ever thought? But given that, that also helped begin to develop what we were getting ready to begin to see from a policy standpoint. And there are many things that sometimes we see and we say, and we go, we don't like that, but please don't make any changes just because I want some consistency so I can actually plan.
But we have seen over time, the consistency happens to be change itself. For many years, and some put various time spans on things, I'm gonna use labor because I'm relatively familiar with labor and hopefully Mr. Wallach will be touching on some of this.
But over time, ag has been kind of on the forefront with regards to seeing our potential issues with our labor. We have seen changing demographics. We always have wanted in the past, the next generation to have better than what we have had.
Not to have to do or go through what we have had. And that is no different on anywhere on the spectrum of labor, including those for ag. And so we have had major issues with labor.
And sometimes we go, well, we need to begin to build and do this and expand. And we go back to a couple of questions. Who are you going to get to do that when we are already having issues with labor?
When was the farm bill supposed to be completed? Dr. Outlaw is gonna touch on that.
And I know one of the big questions are, are we gonna get one? Right? We've also seen a lot of issues coming up and challenges being developed.
Current administration, I'm not gonna get political. We're gonna stay completely objective with regards to this. However, even though there are things that are taking place, sometimes things are changing.
And we go, good, we like that. But then we have court cases that begin to come in. And we again end up in flux.
Presently, our farming community is having significant challenges being able to make anything financially. And in a few years over the last, over the last 10, there have been a number of years that farmers were gonna be in the red if it wasn't for some of our federal programs. Whether we talk about our PLC or we're talking about disaster related programs.
And so again, this is kind of that setup. Where are we? We're kind of in this mix right now.
What is gonna happen politically? What's gonna happen with policies? So that we know how to react, how to work, and how to begin to develop and continue to grow.
Our agriculture from a production standpoint and hopefully those next chain links in the entire chain from farm to table. And with that, I'm gonna hand it back to Nathan and start the process. Thank you, Adam.
Appreciate that. And what we're gonna do now is we're gonna go to each panelist and they're gonna talk about five minutes on issues and trends that they see. And as y'all probably picked up, we're looking at farm bill and ag policy, regulations and legal issues and labor.
Those are our three main topic areas. So, Joe, I'm gonna start with you. You got the microphone.
Y'all stay seated and just talk from up there. We're gonna be informal in this environment. So, Joe's watched two or three things that you see in policy.
Great. Thanks, Nathan. Thanks for the opportunity to come back.
Y'all have a great facility here. One of the first thing I would say, let's just start with the work we do for Congress. We work with something called Representative Farms.
We actually have some in South Carolina as well. And that's about 94 sets of farms around the country that represent different areas, different crops. And the first thing is, I'll just say that of all the years we've been doing this, our center's been around 42 years and this is the worst outlook we've ever had for the next five years.
And that's saying something because there's been lots of, we call red on our graphs, red's not good. So, that's the first thing is that outlook for agriculture is not positive. Now, the good news is economists are wrong a lot and something usually happens around the world to make the outcomes better.
Whether it's a war in Ukraine or whatever. And if we could, we could keep the major grouts out of the Continental 48 here, it would be great. But using drought around the world will start firing some, the prices are gonna rise.
So, that's the first thing. It's a bad outlook. Believe me, the Congress understands that.
Kerry mentioned earlier about the reference prices were set with 2012 data. I know that for a fact and I did it, okay? I helped set that with the House Ag Committee in 2012 using the representative farm data.
It is so out of date. Costs have gone this, reference prices are flat. Farmers are losing ground every year.
That's just a fact. So, that's the first thing is we're kind of in a tough situation. The second thing I was gonna talk about is a little bit about just the Washington in general.
Obviously, we have a new administration and things are really unsettled. And people keep asking me, what do I think about the new secretary? Obviously, she's from my state, she's from my university.
And I'll just say this, every secretary, and I've been around, this is my eighth farm bill, so I'm not new to this. Every secretary needs a little bit of time to get their feet on the ground and get staffed up. And what has happened, just a little piece of insider information, if you don't, there is so much animosity between the two parties right now that the confirmation process has slowed or crawled.
So, if you don't have anybody who's supposed to be doing things for you underneath that you can delegate to, suddenly you're charged with all of it. And that is a drinking out of a fire hose experience right now, so we're gonna have to take a little bit of time to give people a break on this so they can get staffed up. There are a number of reasons to be optimistic, there's always reasons to be pessimistic.
In fact, Nathan didn't say this, but within the state of Texas, I'm known as Dr. Doom. And that's not because I'm not fun to be around, it's because I am very blunt with the farmers.
Do not get over excited. Just, we're kind of in the middle of a trade war, actually the early part of a trade war. Do not get too disheartened by that, but also don't expect the money to come just because it came last time.
I know the promises have been made, but there's been a lot of promises out of Washington D. C. out of my career that have been, not broken, but they've been adjusted so that it seemed like they didn't break.
That's the number two thing, the administration, a lot of turmoil. The last thing is, we're all very happy with the E-cap, the amount of assistance, $10 billion that was included in the CR from before the last, in December of last year. That's the, our, you know, it's basically extended the Farm Bill throughout the rest of this year to October 1st.
And so Adam and I had breakfast this morning, he was really negative, believe me. And I have been saying for the last three years, and this is from somebody who's been working on this Farm Bill for the last four years. We have been doing one analysis for four years.
If anybody's sick of doing this, it is honestly our group. And the last, up until this year, I said, no Farm Bill. There's no way we're going to get a Farm Bill.
And I had House Ag Committee Chairman mad at me, I had all kinds of people mad at me because I would get up in public and say we're not going to get a Farm Bill. And the reason why is because they hadn't done all the work that usually is required. You know when they finally finished out with this Farm Bill?
November of last year. All the work is done now. So now it's all politics and money.
And the question is, I have started saying we're going to get it this year. And to Adam's credit, he called the audit and I said, Adam, it looks terrible, doesn't it? It looks like it's not going to happen.
Well, that's when it happens. And then I asked him another question which is the most important thing. If you learn anything from me today, it's this.
I think the Farm Bill gets done in a piece this year in some other legislation. I don't think we get a standalone Farm Bill, so if you've got a Farm Bureau South Carolina has a special provision stuck in that Farm Bill that they've got somebody to put in there that bill probably will never pass. Not for a while.
What's probably going to happen is, and why do I know this stuff? Well, the Chief Economist of both the House and Senate committees are my former graduate students. I kind of know a few things.
And I know what they're working on trying to get done. It doesn't mean that they're in the position to do it, but I know what they're working on for their bosses. And they're trying to get some of the Farm Bill provisions, higher reference prices, and a few other things ready so that any kind of package that moves through Congress this year can be attached.
They can attach it and move along. Why? Because farmers need certainty.
Adam was right. Farmers need certainty more than a lot of things. The last thing is disaster assistance.
I really can't say a lot about the 10 billion people are signing up who are going to get paid within a week. Direct deposit. That's great.
The 20 billion for physical loss, everyone keeps asking what's going to happen. My insider information tells me, I've been saying this from a long time ago, that I thought it was going to be the summer. And what I found out last night is that the people working on ECAP and the physical loss, they're working at the same time.
So they're done. And they're working on it. You're not going to see USDA in this world.
They actually beat a deadline. The new secretary beat her deadline by two days. That doesn't happen in Washington.
A week late with excuses. So they beat the deadline in two days. So they're not going to announce that we're going to be out in 30 days when I do think it's coming sooner than I thought.
The physical loss, I think, is going to come sooner than I thought. But I still would feel very comfortable telling anybody with a gun to my head that it's first of summer. We can decide when summer is.
Anyway, those are the things that I'm working on and thinking about and happy to take questions later. Alright, Kyle. You're working in areas of crop protection and biotechnology and innovation technology.
Farmers rely heavily on technology. What are the issues and trends you're seeing there? Thanks, Nathan.
Thanks for the invitation to join today. For the sponsors, this is a great event and I appreciate the invitation to join. We're normally in the space of pesticides and agricultural inputs.
This is an area where we have historically faced a lot of headwinds. I was cautiously optimistic and somewhat hopeful that going into a new administration we may tend to break on a few things. What's really interesting is we're seeing some curveballs but not the ones that I would have necessarily anticipated if you would have talked to me 3-4 months ago about this.
In short, I don't think some of the challenges that we're facing are necessarily insurmountable either. I think we just have to get creative. I'm going to talk to you all about three major buckets that I'm seeing that are areas of concern.
First of all, one is staffing agencies. The second would be whatever we're going to make of this Make America Healthy Again related effort. The third, there's a few sub-areas that I think might be impacted on issues like the Food Species Act and biotechnology policy that we're digging into a little bit more.
Staffing is a big sort of 600-pound gorilla in the room right now. Let me translate it into how that affects pesticide access. EPA's pesticide program has for years now been significantly understaffed.
They have in law deadlines that they have to register new pesticides and new uses by. They call them PREA deadlines. Ten years ago they did a pretty good job of meeting those.
The United States would always be first or second to get a new product. In recent years though, because of staffing reductions, because of the legal responsibilities and additional work, lawsuits, they've really struggled to meet those deadlines. Right now, they missed over 70% of those legal deadlines.
We joke the only reason they haven't missed the other 30% is the deadline hasn't hit yet. They just have a really hard time getting those deadlines. EPA, since January, their pesticide program went from about 550 staffers.
They've lost about 100 of them. They're now down to about 450 staff. They weren't meeting their deadlines before.
I think they're going to have even greater challenges now. There was a registrant that I was talking to a couple weeks ago that said that, again, 10 years ago we would have been the first or second market to get a new product. They have a fungicide that's in the hopper for EPA right now.
If that got approved tomorrow, spoiler alert, it's not going to get approved tomorrow, we would be the 17th country to get that. That's really where the rubber hits the road is your all's ability to get new products, new innovations, new uses as being impaired because of some of these regulatory challenges. We're going to have to think of new creative, outside-of-the-box thinking ways to help the agencies be able to get this work done in this environment where they're going to have reduced staff loads.
The second issue that's looming out there, and we're not sure what to make of it yet or how it's going to really impact, we're working to try to get out ahead of this, is this Making America Healthy Again effort that's being driven out of Health and Human Services, Department of Health and Human Services. Secretary Kennedy, I know that he had some pretty a lot of ideas about things like pesticides and GMOs, and I think that there were a lot of folks who thought that there may not be as great of impacts once he was announced to be HHS Secretary. The day before Valentine's Day, it was announced that he was going to be overseeing this commission that's going to spread over most of government and include USDA and EPA space as well.
Many of the organizations that are part of this room today, that are sponsoring today, partnered with us, American Soybean Association, on sending a letter to the administration just recently sharing that there has been a lot of concern about some of the rhetoric about whether these tools are necessary or not, and just how food and agriculture will be impacted if we don't have access to them, and strongly encouraging that as the commission does its work, we really have to use good, sound science and respect the fact that there's processes in place that the agencies use to determine what is a good, appropriate study and what is not an appropriate study. We've got to make sure that those guidelines remain in place that the agencies do their work on things like pesticides and biotechnology. The third thing that I'll hit on, and this is, how is this all going to spell out, I know a number of folks in the room today had the chance to join us back in December when we talked about the Endangered Species Act.
We don't have all the time to go deep into that as I would like to today, but the short of it is this. There is a law passed in 19, it's been over 50 years old, 1973, the Endangered Species Act, and the goal of it is it's meant that there is a species that's intended that may be at risk of extinction ensuring that there aren't going to be any sort of federal activities that could endanger the population of that species. It's one thing if you're trying to figure out well, I'm going to build a bridge over this creek and there's an endangered turtle, how might that impact, it's a great impact to that species.
It's another thing entirely if you're registering a pesticide that's registered across dozens of crops, used on hundreds of millions of acres, potentially intersecting with all 1700 listed species. EPA doesn't have to consider that just once, they have to consider that for every pesticide on the market. So we're talking 900 times for every product that's currently on the market and every new active ingredient.
Now let's go back to the conversation we just had about those staffing workloads. In this environment where they have even less staff to do the work, do you think they're going to be able to do all of that work and the environmental groups and courts have pretty clearly laid it out that if we don't figure out a way to help EPA to do those types of evaluations, they're going to keep suing and we're going to continue to keep losing products to court vacatures. There's some really good elegant solutions I think that are going to help EPA meet their responsibilities here.
We just need to help the agency to implement some of those in a way that's going to make sure that these solutions are workable for agriculture. Last quick note I'll hit on and then we can talk more in Q&A, is just biotechnology. There was also a court vacature that happened in December that vacated USDA biotechnology regulations that were implemented in 2020 that provided a really nice streamlined path for new products to come to market and now as a result we've been hunkered back to these legacy regulations that were developed in the 80's.
I have a lot of optimism here. I think between Congress and USDA recognizing that there's a need to roll out new regulations to provide a new innovative path to market there's a lot of appetite and will there but this is just one more thing on the growing list of items that we're going to have to deal with to make sure that we can maintain American competitiveness and it didn't exactly come at a particularly great time. One more we can talk about here in Q&A.
Alright. Hi Michael. Obviously farmers use technology in this conference talking a lot about technology but they also rely on labor and what are the trends and issues that you're seeing or you're dealing with now in terms of labor particularly H2A and what not?
I was given five minutes. If you're Dr. Doom I'm Mr.
Gloom. Because the reality is not it's a great thrust right now on the hand labor fresh fruits and vegetables and I do bring in guys from South Africa that are starting to do row crops as well but to give you an understanding I can't tie it to just three bullet points and I'll just give you a quick rundown to understand I did it during B. W.
Bush, Obama, Obama Trump, Biden and now we're back on Trump I made the statement that there's this political atmosphere like an atmosphere of political chaos and there's like a bureaucratic inertia underneath it it's not tied to the left or the right it's every single one of those administrations I don't think any one of them has helped us and I'm talking labor other than George Duffield he actually had a H2A rule that came out that was trying to help the farmers utilize the program at costs that are more in line with what we pay on farm and immediately the day that Obama was inaugurated at the hill to sow least rescinded it and so it went to court it went to litigation and then so we were under the Obama rule for quite some time, which wasn't as good as the Bush rule but nothing had changed since 1986 when the IRCA H2A rule came out and then Biden Trump tried to come out with a rule and he did it literally the week he was going out of office Biden came in took that same rule called it the Biden rule, added two things to it none of them have been good for farmers I have to be honest with you if I was going to try to write it down people can talk about the unionization at home people can talk about worker protection standards people can talk about heat safety but the number one issue in my opinion is the wages all the other stuff is irrelevant if we're not in business and unfortunately I thought we had the best opportunity we had a Republican held house and senate when Trump came in Ray Starling was one of his advisors for ag and trade we got to meet with him at the White House and he was from North Carolina his brother was a tobacco farmer he knew H2A he was like, alright we're in it four years later nothing and in my opinion we had Sonny Perdue from Georgia one of the largest H2 states leaders of H2A I can't explain to you but I believe legislators are elected to enact laws when they don't they have this installation of hey the agency created that policy the agency created that policy the reality is it's very difficult to hold anybody accountable because any of these agencies are writing this policy and the administration whether it's Republican Democrat it can change the policy so every four years we have an instability of what's going to happen when they're going to drop their own form of it Trump didn't do anything until literally last week Biden did it in year two or three unfortunately going, well I used to tell everybody hey go talk to your congressman, go talk to your senator for twenty some odd years this is where I'm the Mr. Gloom I'm not Mr. Gloom but I'm an optimistic guy I'm just realistic it's gotten us nowhere and it's always the damn Republicans always the damn Democrats it's everybody who is in action of all of them not able to pass a law so this past summer we had a Chevron deference case which has landed us I'd say, I wouldn't call it a silver bullet but at least we have a we're not firing blanks so now under the National Council of Agriculture Employers which I'm a member of we decided to use litigation to go against some of these rules and in the past trying to litigate against an agency you basically spend the money to lose and fortunately we've had a few good wins in some of these cases the Biden rule there was one in North Carolina there was one in Louisiana and then the Georgia Fruit and Vegetable Association which we tied in, 17 state attorney generals tied into that one it got a stay, technically for the 17 states that did it and not nationally so we have some momentum I will say, this is a positive part of me that we haven't had since I started but I also realize the number one piece is the wage and there is only one of the cases that was filed and it's down in Tampa that actually tied in the adverse effect wage rate into their case, it wasn't just against the Biden rule but it was actually saying there has to be an adverse effect to a domestic population in order to have an adverse effect wage rate which is logical and that is still being heard, unfortunately it wasn't decided prior to the Chevron deference case they moved it from the end of January for their decision and we're sitting in March waiting for it right now so to me, on the labor side of things in order for us to continue to grow fruits and vegetables and commodities in our country we have to have a legal reliable, stable workforce which as of the moment it's been very difficult for any of you that are in it, you understand and with the current administration they've been brought out more uncertainty and fear amongst a lot of the community that's typically associated with handling Alright Okay, so they've kind of set the table on kind of what the issues are Just real quick, Joe, how many farm bills have you worked on?
Eight. Eight, okay I was counting mine up, I think I'm six or this will be six So you legitimately think that we could get a farm bill this year? Yeah, I think I think we're getting a farm bill a true farm bill that works normal by the end of the year not before September 30th but by the end of the year but I do think we're going to get elements of a farm bill, reconciliation That's the best hope to get something for this year How is it going to be funded?
in terms of how it's being scored If it looks like the house which has higher reference prices loan rates an increase in the payment limitation potentially base addition or update for new base, those types of things Yeah, I think what people don't think about is the previous Senate bill was from Democratic leadership they didn't add 10 billion to the overall farm bill to do a farm bill over the baseline the additional money that the house needs is 57 billion and from talking to Senate Republicans last week, they thought there were 35 or 38 billion on their bill and so we're going to need somewhere around 40 to 50 billion dollars Where do you get that money from? Obviously, there's two sources that I'm looking at the most. One is the Employment Reduction Act climate projects that were funded through NRCS I think that the ones that people signed up in this room or all across the country, those people that signed up and did things for this year, I just don't think that those contracts are going to be funded going forward and they're going to take that money back.
That's one bucket of money and there's another bucket of money that's very controversial, we'll see how this works out, but there's a bucket of money that's basically reducing the rate of increase of a SNAP program So those of you that are not as old as I am when I started doing this stuff in the 80s, we spent about 30 million dollars on farmer programs and we spent about 30 million dollars on SNAP Okay, that's a long time ago and one of them has been flat to going down, farm programs and the other one went from 30 million to 150 million dollars a year and so there's a lot of reasons for that none of them are wrong, but what they're going to do is, the expectation is they're going to cut the growth in those payments and part of it is just there's 12% error rates on SNAP For crop insurance, the error rate is about a percent and a half. For FSA programs, the error rate is less than 5%, but for SNAP which is 150 million dollars a year, the error rate is 12% So if you can get a little bit of stock paying dead people or a little bit of fraud that happens then they can save a lot of money without affecting anybody's actual benefits That's what they're trying to do harder said than done Kyle, so you mentioned you know, EPA and things have really slowed down on registrations and getting things through just staffing and the more recent regulation change or going back How competitive is the business globally? Are we falling behind?
Increasingly yes, quite a bit and as I mentioned, we're no longer we're not even the first top 10 expected to get products I think a disturbing trend that we're seeing is some of the companies that would normally submit product applications are actually slowing the rate at which they are filing new applications because it's a black hole They're sending them in and they don't know when they're going to come back in They have these deadlines in the law and they're pretty meaningless If the agency is blowing by them by months or years in some cases and there's just no predictability to that regulatory system from the company's perspectives when they develop a new molecule that has a limited intellectual property duration and if they're burning through that IP window and now it's just sitting at some bureaucrat's desk at EPA or sitting at a desk where there was a person and there no longer is a person that's not good for business I will say this there are a lot of opportunities I think that we have some ideas about how we can help to fix some of this Are there things that we could do for example, some of the companies are very well staffed If the agency instead of doing all of this in-house for example or to write up a standard operating procedure to allow the companies or some of their consultants to do a draft and then allow the agency folks to review it and then put it out for public comment that could significantly reduce the workload that the agency has to conduct books to allow us to get the work done do it more quickly and more efficiently Efficiency is the name of the day and so I think we do have some really good solutions and we have a way to get where we are to get some improvement Thank you I have a question for you Michael You said that wages are the number one the number one thing What is the A-Ware now in South Carolina and is there any hope of getting it changed or what's the issue with A-Ware basically We can do a conference on that It's currently 1608 and the issue is if we're one of the lower ones in the country I've got guys all over and I've got guys up in Michigan that are paying like 1872 an hour The problem is when we have competitors mainly Mexico who are now getting in earlier or staying later with the blueberries. The blueberries used to come in and then Florida would come in Mexico would come in, blueberries in Florida and roll up the coast toward South Carolina The average daily wage in Mexico is about $12 an hour So it's very difficult to have a US farmer compete on an open market when someone is paying $12 a day for a worker versus 1608 an hour and even if you use piece rates it is a difficult deal because when you use the program H-2A you have to provide housing and transportation to and from the home country There's an all cost that is absorbed into it which a lot of people don't think about. So when they go to the grocery store I want to support South Carolina home grown, but then they go pick the Mexican blueberries because it's a dollar cheaper Do I think there's any fix to it?
This is where I'm going to go back to the pessimist There's only one way and to me the hope is in that piece of litigation that's in Tampa right now That to me is our one true hope because I've been around the gang of eight, I've seen the good life bill all these things that have come through Congress Everyone fights about it They'll say you better jump on the train It's the last one leaving the station Well the thing is no train leaves the station and what we have seen is just a constant uptick and all the other inputs on the farm that are rising Wages is number one from all of my clients and unfortunately yes I thought we had an opportunity when Krusty Boswell was under Purdue and she tried to get in there to change the farm labor survey Our wages are derived off of a USDA set wage They sent out this farm labor survey Has anyone ever filled one out in this room? I've yet to meet anyone who filled one out Supposedly they get these farm labor surveys and this is what sets the wages and it's under USDA You'd think it'd be an easy fix but with Purdue and Boswell one of our main deals was to get it done and was unable to and so I don't have a lot of hope in our elected officials or appointed people It's going to be in court to prove that there is no adverse effect to the domestic population that supposedly wants all of these jobs I probably advertise around let's say around 10,000 jobs a year How many people do you think came in off that? The nationwide search I had one guy said that he wanted the job out of 10,000 and that's not an anomaly Thank you I'm going to ask you a question He's not prepared for this but he'll have an answer So Joe mentioned the Budget Reconciliation Act and I think maybe tax cuts is a big priority in this administration What are your thoughts on the budget the formal tax cuts that are set to expire?
They are pushing the tax cuts there are multiple things that are presently taking place One of the issues I've had when I was up on Capitol Hill a story a few years ago I was up there Michael and I were both up there at the same time actually for NCAE I remember being in one of our congressman's office and he hopped up on the back of the sofa and was talking about different things and they were pushing through at that particular time A few years ago they were hoping to have a massive bipartisan immigration bill that could be taken care of that was also supposed to help our labor and I had to be talking about a couple of those items but also dealing with taxes and I still remember the individual asking me, well what should we be focusing on? Immigration or taxes? I said I'm not here to tell you what to do I'm here to educate you on what's taking place with our farms, here are the numbers, here are the data sets He asked me another question and I said well here's the way that I'm going to put it I said we've been hearing for a long time from both parties that y'all are going to fix the immigration issue you're going to fix the labor issue and nothing ever happens, however you are constantly utilizing and making changes to tax law when it suits you for your political party at any point in time which creates also issues for our farms because we have a lack of consistency on how we have to plan and manage what we do That being said, we had a Tax Cuts and Jobs Act that was signed in 2017 that's the first major tax overhaul bill that we saw since the Reagan administration that doesn't mean there weren't changes along the way, every year we have something that takes place with regards to taxes The big push on that was lowering the corporate tax rate which brought down to 21% They threw a bone to most of us individually with regards to individual tax rates that also created some issues for us, especially some of our smaller timber guys that used miscellaneous deduction that went away for 5 or 6 years changes to state tax laws, gift tax laws and all those good things, however to be able to pay for lowering corporate tax rate there is a sunset on many of the things that we are all enjoyed that goes away, goes back to what it was pre-2018 to be able to pay this because it added debt to our budget Presently what is being discussed and it changes so often I've kind of stopped, I was sitting there running scenarios all the time, what's it going to mean what's it going to mean, and I stopped because I can't change that fast That being said they want to reduce the corporate tax rate to 15% When you reduce the tax rate to 15% we're losing revenue, when we're losing revenue we can't pay for a lot of these other things going on like what's happening in the EPA the IRS, National Park Service Social Security, Medicare, Medicaid etc.
Okay Now on top of this they want to be able to maintain all those things that they got rid of Okay, that's supposed to sunset they want to be able to keep those as well, the problem is they don't have enough money to be able to do both Presently So what will happen? I have no idea Will something happen? Yes, because right now I can't remember which Republican Congressman would like to change how OMB runs their numbers to show how debt is actually increased and added so that they don't have to count the change of the sunset of what is going to go away, because they want to go ahead and say well that's the way it is right now so there's really not a change so how are we adding any additional debt when in fact it does So that if they're able to do that and then pass this bill it will increase our debt and still be able to lower tax rates and be able to keep what is being sunset So what is going to happen?
I don't know I will tell you that they have lost staff, the IRS is presently losing staff, I meet with the IRS for a full day every year in May and they have been very helpful for us and our farming community when we meet with them, we meet with them specifically dealing with agricultural taxation and timber taxation issues and 5225 and a few other things and so they genuinely want to help but we've gone back to the same thing with what's happening EPA, Department of Labor I'm getting our labor applications done in a timely manner the IRS is the same way and no different so is it possible? Yes, because that's an easy one to be able to cherry pick everybody wants to be able to help but the reality is you have to really go through the numbers and understand really what's taking place with regards to that and that's something difficult Thank you, thank you Alright, so we've got about 15 minutes, is that right? So we'd like to open it up to the floor, I don't want to talk anymore so y'all ask anybody of our distinguished panelists here a question or follow up or another question that y'all might have if you don't mind, who's got the microphones?
Okay Jerry's over, just raise your hand and we'll bring a microphone and you can direct to whoever on the panel you want to direct a question to Thank you, Colin, Robert Atheridge and so could you say a little bit I was in a meeting last fall I think one of the guys from the Port Council addressed in the room of ag industry people and he talked a little bit about the European model being a hazard-based model where more of a risk-based model do you see that fundamental difference kind of changing in any way in the near future? Yeah, yeah, it's a fantastic question honestly this is one of the things that I'm probably most concerned about regarding a lot of these conversations about making America healthy again if there is a way that they can fundamentally move our regulatory approaches more towards a hazard based that would be very problematic so quick, quick, just going down what's sort of the difference we in the United States have a risk-based model, the Europeans and some other more precautionary countries have a hazard-based and a good equivalent would be like sharks in the ocean we know that there are sharks in the ocean people go swimming at the beach all the time just because there are sharks there we don't keep people out of the ocean we find ways to mitigate those risks, you don't go swimming at sunset when sharks are most active we have spark shotters, we have shark spotters we've got drones, things like that we get people out of the water when we know sharks are nearby those are ways that we identify the risk and we mitigate our friends across the pond would tell people to stay out of the water entirely that's not an appropriate way to do regulation, we can't have nice things if we take similar approaches like that what you've got to do is you've got to realize is there a genuine risk that exists in a lot of cases there is there are ways that we can put in place for pesticides for example personal protective equipment you can put in place spray drip buffer things like that that can mitigate those risks to make sure we can have the tools and they can be used safely there is a lot of underlying questions going on right now about is a hazard base more appropriate and I really worry that that could undermine access to a lot of tools if we get on that road can I add one more, is that model cheaper to run than the risk based model in this sphere of efficiency sadly probably yeah I mean it's a lot in the, there are several regarding this endangered species act conversation that I mentioned there are some challenges that we're having on that point where the way that EPA assesses is an endangered species going to be impacted, they start with some very very conservative high level assumptions that in no way reflect reality it's a great example, they look at the label and they say what is the label maximum rate what is the maximum number of applications what is the minimum time frame where you can reapply and they assume that's what every farmer out there is doing and for in some instances like neonics for example, they assume that you are all out there, we know that for row crops most of them are used for you know for seed treatments some tools you can use as a whole year's break, they assume every farmer out there is out spraying the maximum number of applications at the maximum rate, the maximum number of times you can and that makes a heck of a lot when they're making that assumption it's an easy assumption to make as opposed to looking at the data and trying to figure out how are farmers actually using these tools how might that in all reality impact the species it's a big concern Dave Lemine from Clemson University I have a question about I guess on the labor supply side one of you mentioned that there's fear in the environment around with HQA workers and other, perhaps other migrant labor workers and given where we are with trajectory immigration policy and everything it's understandable that might be there I'm wondering if you might be able to expound on some effective strategies for producers for support organizations like Farm Bureau, Extension and others that we might be able to engage in to help change those dynamics and perhaps reduce the fear if that's at all possible well the fear and uncertainty is in the undocumented community that's the reality of it right now I live in a lower part of the state you know, I'm pretty I was on the pulse and there was a rumor did you hear that the food truck had picked up 27 people yesterday on John's Island I was like I had heard that and it was running around but when you go within the community and you're trying to find out was it your cousin, any friends no one could figure out who it was but supposedly 27 got picked up it was false I went to the food truck to make sure I have a lot of friends that are not in agriculture that don't use what I would say undocumented labor to build houses to lay sod and everyone is living in that fear at the moment and the guys and the ladies and the kids that are involved that came here illegally you know I'll go back to your shark deal when Obama was in his first and second term he was responsible for more deportations than any other president in history no one was screaming shark Trump comes in and he's screaming shark before the shark got there so everyone is running from the beach that's kind of how I see it I have some growers who have key individuals on the farm that have been there for 20 some odd years and they're not documented they're not going to pass I&I tests or e-verify and I'm like what are we going to do and I said here's the reality we've been stuck on 11 million undocumented workers since 2006 how it's still 11 million I have no idea let's just say it's 11 million there's no way if he took every resource and spent every single day trying to round up 11 million people he wouldn't get it done in 40 years so to me it's kind of like a lottery you just hope that your numbers aren't getting fooled I kind of this is just anecdotal where I see it was New York, it was Chicago it was San Francisco it's going to these sanctuary cities Denver, Colorado so I think those may be the primary targets let's put everything on Instagram someone sent me a Customs and Border Patrol Instagram the other day with music we're coming to get you I watched the news in the morning and the Department of Homeland Security I can't remember her name right now she is currently the appointee for it, the head of it and she's like leave now we're going to come get you if you leave now you'll be able to come back if you don't leave you'll never come back so a lot of that is kind of being spread the reality is, and I know plenty of undocumented workers like what are the odds don't drive with a blinker, it's broken just don't go to I have a church on John's Island that's sending vans to pick people up on Sundays now instead of having them drive those are ways to mitigate it but the reality is there is no there is no legal pathway for someone who came here illegally to do that unless they get married to a U. S.
citizen and a lot of the bills where they would stall is California wanted to deal with immigration and then east of Mississippi wanted to deal with guest work programs and we can never get to the same page did that answer your question? yeah somewhat it describes the environment that all these agencies and producers work in I think part of the message you say is we need to get legal where we can, right? but you can't and that's the problem I don't have the solution because I can't say hey you need to call this attorney and you can use section 742 and ask for this, there is none and the ones unfortunately that do have criminal records when they come to the neighborhood or to the house or wherever they come and get the one guy what I see different is when there were seven other people they just grabbed one individual now they're just picking up the whole crew so there is no good risk management strategy for those who are working with this labor supply is that what you're telling me?
make sure your car doesn't have a bad blinker make sure your blinkers are good drive as little as you can carpool that's the reality of it there is no panacea to it the plain and simple fact right now last time we had a major immigration change revealed on these lines was again back in the Reagan administration when there was a part of that that allowed people to remain undocumented to be able to remain if they met certain criteria and as Michael said that's been one of the hangups that there has been western growers have been have had a very different view on how to handle the ag labor situation as a part of a larger immigration discussion than those on the east side of the country the plain and simple fact is right now a quasi joke about it that I've never met a farmer that hires anybody that is illegal. They have always provided especially by larger commercial growers some documentation and they are not allowed to try to examine and tell whether or not this is real or not or belongs to you and so there is no way for those individuals to become legal without leaving the country and running through the process and this is what creates some of those particular issues. These are individuals that don't typically have the time due to the security of where they are coming from nor do they have the money to maneuver through our legal process that's why they're coming here illegally in the first place real quick and then we've got time for one more question alright he just brought something up as an employer you have to fill out the I&I list A, list B, list C so let me look at that mindset I thought you were talking about employees that you may want to discuss how to live at the moment A, B, C if you have list A you don't need B or C if you don't have list A you need C if you have list A you don't need B or C if you don't have list A you need B and C on the I&I you are not a fraudulent specialist if you photograph photocopy all of your employees or you photocopy or you don't photocopy any of your employees you have to pit either or you can't do a mix and match like well I know this guy is good I'm going to take a photocopy of this this one's not so hot I'm not going to do it the best way and I would avoid e-verify at all costs one more question okay with the recent Chevron case and what happened with that whole situation and the ruling what role do y'all see that ruling playing in how you proceed with your with the issues at hand like is it going to help is it going to hurt does it give you a window I would say it's a double edged sword on one hand you know in say like pesticide and biotechnology space like EPA have been getting and other agencies have been getting sued for years they've been had a little bit more had a little bit more deference because of Chevron they gave them a little bit of a leg up they've still been losing pretty badly and don't have a great win record probably in those types of cases it makes it a little bit more challenging but on the flip side I mean if we're seeing policies coming out of the administration that are egregious that are going to harm agriculture that aren't based in good data good science like they're not doing their work that also gives us an opportunity to potentially on the flip side challenge those and have more of an opportunity for success alright I think we're out of time but I want to thank our panelists and let's thank them for the great job they did and the information thank y'all again for doing this I wish we had more time but a couple of them will be around the rest of the day I know Joe's got his scoot Thanks for listening to Cultivate Ag.
Policy may shape the road but how will you drive your farm forward on it? Stay sharp, stay rooted and until next time keep cultivating what matters