2018 Florida Agricultural Policy Outlook Conference

As supporters of Florida agriculture, we stay up-to-date on issues that impact rural America. This year, we visited the University of Florida Institute of Food and Agriculture Science’s (UF/IFAS) Food and Resource Economics (FRE) department’s annual Agricultural Policy Outlook Conference. Great industry minds ranging from professors, to agricultural scientists to policy experts update those in attendance on policy initiatives and the research or causes that shape those initiatives.

Here’s what we learned:

Maintaining prominence on the global agricultural stage is grasping the economic climate AND effective industry advocacy.  

Agriculturists are equipped with a network of professionals whose sole job is to enable advocacy and empower legislative action to work in favor of Florida producers. To achieve our economic and trade goals, Florida agriculture must have a distinct voice when collaborating with policy makers and government officials.

Jaime Jarrels and John Walt Boatwright, respective director and coordinator of Ag Policy and National Affairs for the Florida Farm Bureau Federation, look out for the best interests of Florida’s farmers and producers by navigating the complex world of agricultural policy and legislative action.

They listed and gave a status update of Farm Bureau’s legislative priorities (Boatwright & Jarrels, 2018):

  • Hurricane Relief and Recovery
    • Legislature is working on policy that will rebuild operations that suffered damage or loss from Hurricanes Irma and Nate, improve the response to natural disasters so farms can resume operations quickly and safely, and increase the readiness of agencies dedicated to strengthening all-hazard disaster capabilities.
  • Rural and Family Lands Protection Program funding increase
    • This agricultural land preservation protection program protects important agricultural lands through restrictions places on that property to protect its resources, or in legislative terms, easements. Farm Bureau supports a funding increase for this program in order to best serve Florida’s agriculture industry.
  • Ag Water Policy funding increase
    • In order to address water quality and conservation, farmers are encouraged to implement Agricultural Best Management Practices (BMPs). Working closely with FDACS Office of Ag Water Policy and Florida’s five water management districts, developing regional water supply plans for areas that do not have adequate supplies to meet future demands of water users take priority.
  • Fresh From Florida budget restoration
    • Both large and small Florida farms greatly benefit from the promotional and advertising campaigns of the “Fresh From Florida” brand. After funding for this vital program was drastically cut in the 2016-2017 budget, Florida Farm Bureau is working to ensure funding is increased and maintained for 2018 (Legislative Issues Brief, 2018 Legislative Days, 2018).

Dr. Hayk Khachatryan, Assistant Professor at the UF/IFAS Mid-Florida Research and Education Center, has conducted extensive research about consumer behaviors and decisions and how we can take that information to give us a competitive edge in our advocacy efforts and global market.

He noticed that the industry growth was slow, even absent in some sectors, and demand for local food was decreasing. He also knows a solution will lie in, “…innovation, sustainable production practices and repositioning and offering plants with novel attributes.”

To pinpoint those “novel attributes,” Dr. Khachatryan considers two key questions when gathering this information:

  1. Do consumers value locally grown products?
  2. Do consumers’ perceptions about environmentally friendly production practices matter?

By studying the 2013 decline of honey bees and other pollinators, Dr. Khachatryan established three research objectives to answer the aforementioned questions:

  • Investigate the effects of “pollinator-friendly” and “local production” attributes on customer preferences and willingness to pay.
  • Investigate visual attention to labels and effects on purchase likelihood.
  • Investigate effects of consumer knowledge and misperceptions on preferences.

After explaining the nuances of incorporating visual attention measures in consumer research, Dr. Khachatryan concluded that, “…steps taken to reverse pollinator depletion directly correlated with influencing consumer buying decisions.”

Therefore, customers were more inclined to purchase products with “Fresh From Florida” and “Pollinator Friendly” labeling, proving that consumers do value locally grown products and want to purchase products aligning with environmentally friendly production practices (Khachatryan, 2018).

In order to educate consumers the essential nature of Florida agriculture, messaging and advocacy undoubtedly matters. Our second conference takeaway taught us:

Florida is a prominent player on the global agricultural stage, so we should pay attention to trade talks.

And that means the North American Free Trade Agreement (NAFTA) renegotiations—which have not happened since the agreement’s implementation in 1994.

Dr. John VanSickle, a professor in the UF/IFAS FRE department, dubbed NAFTA renegotiations the centerpiece of President Trump’s trade agenda during his presidential campaign, often voicing opposition to the agreement.

As the first round of negotiations approached, the office of the United States Trade Representative published the three original goals of the objectives on July 17, 2017:

  1. Improve the U.S. trade balance and reduce the trade deficit with the NAFTA countries.
  2. Increase transparency in import and export licensing procedures.
  3. Discipline import and export monopolies to prevent trade distortions.

A month later, negotiations began, as described by Dr. VanSickle, “in earnest.” Six rounds have been completed, with the next scheduled for February 25 – March 6, 2018 (VanSickle, 2018).

Those following the NAFTA renegotiations should note that congress has yet to grant the Trump administration Trade Promotion Authority, which “defines the terms, conditions and procedures under which Congress allows the Administration to enter into trade agreements, and sets the procedures for Congressional consideration of bills to implement the agreements (“Trade Promotion Authority”, 2018).”

What does this mean for Florida?  Hopefully, a reform in trade policy conducive to Florida specialty crop producers. As one example among many, the trade of Florida-grown tomatoes has been negatively impacted by NAFTA’s original implementation in 1994.

“We are not opposed to free trade - however, it must be fair trade,” said Florida Tomato Exchange Executive Vice President Reggie Brown during a July 2017 U.S. House of Representatives Agriculture Committee hearing.

“Unfortunately, the current trade environment under NAFTA has not fared well for many U.S. fruit and vegetable producers,” he added in the same testimony (Testimony, Reggie Brown, Florida Tomato Exchange, July 26, 2017, 2017).

Dr. Zhengfei Guan, Assistant Professor at the UF/IFAS Gulf Coast Research and Education Center agrees that the current sanctions are a strain on Florida specialty crop producers. He concentrates a large portion of his research on trends in the U.S. and Mexican competition in specialty crops and spoke to current market trends.

“Favorable government support and lower cost of production make Mexican tomatoes more competitive than U.S. tomatoes,” he said. “At the same time, NAFTA eliminated trade barriers and encouraged year-round imports from Mexico.”

Another commodity that experienced a production decline is strawberries. The USDA National Agriculture Statistics Service indicates that Florida is the second largest strawberry producing state, with the commodity having a significant impact on the state economy. However, the difficulty to maintain the strawberry industry is only amplified with the ever-present shortage of domestic labor and the expense of H-2A provisions.

Solutions? Dr. Guan says the industry should continue to innovate and change to remain competitive. He says subsidies for Mexican imports should be eradicated, and H-2A should be reformed to reduce labor cost and an investment made in public research and development (Guan, 2018).

Since Florida’s producers depend on reliable trade and export markets, many give hawk-like attention to NAFTA renegotiations. Monitoring commodity market trends and production factors (like labor) will, in the long-term, allow producers to optimize their operation with NAFTA-compliant methods. Which brings us to the next conference takeaway:

In order to maintain prominence on the global agricultural stage, policy-makers need to iron the wrinkles.

The aforementioned Florida strawberry producers are battling a labor shortage that may have a detrimental effect on Florida’s economy. However, this issue isn’t exclusive to the strawberry industry.

Florida agriculture—as a whole—is labor-intensive, meaning a more than “normal” amount of able bodies are required to maintain and grow the industry.

Dr. Fritz Roka, Associate Professor at the UF/IFAS Southwest Florida Research and Education Center articulated concerns regarding this issue:

  • There is a shortage of domestic workers, so producers are turning to the H-2A program to meet the labor demands of their operation. However, H-2A is costly and the program’s impact raises concerns for local communities and economies.
  • Mechanization is a viable solution to this problem, but is limited due to the sheer development cost.
  • More than 70 percent of field workers are not legally documented.  

H-2A, or the Temporary Agricultural Employment of Foreign Workers, was implemented as a solution for the agricultural labor crisis, but is now being petitioned. This petition demonstrates the shortage of domestic workers, but also wants to ensure that new provisions will not adversely affect those workers and the jobs they do.

The proposed solution? H-2C, or the Agricultural Guestworker Act, plans to reform current provisions with a vision of solving the domestic labor shortage.

If H-2C provisions are implemented, here are two noted benefits:

  • Lower costs for producers and lower renting costs in the community, as producers will not be required to provide workers in the H-2C program housing.
  • H-2C will mitigate the labor crisis across the entire industry, as what was labor assistance for only specialty crops, will expand labor assistance to the forestry, fishery, dairy, packing houses and meat processing sectors.

As with every new policy proposal, concerns follow close behind: there was no annual worker quota for producers using workers in the H-2A program, but a maximum annual quota of 450,000 people will be enforced with new H-2C provisions (an annual quota of 40,000 people for the meat packing sector will be enforced). This poses quite the dilemma for large, multifaceted agricultural operations that are labor intensive (Roka, 2018).

The labor crisis is a perpetual conversation that considers economic and demographic data. Other resources vital to agricultural production, like water, require extensive environmental research for viable policy.

Ray Scott, Deputy Director of the Office of Ag Water Policy with FDACS explained the challenges and action-oriented steps that lead to Florida’s water conservation.

He noted two main challenges in meeting future agricultural water supply:

  1. Competing demands for traditional water supply sources
  2. Avoiding unacceptable impacts to the natural system, like natural disasters that contaminates water supply or drought that depletes the water supply.

Two additional challenges related to reducing the impacts of agricultural nonpoint sources are:

  1. Achieving full implementation of Best Management Practices (BMPs)
  2. Achieving additional reductions beyond BMPs needed to meet Basin Management Action Plan (BMAP) allocations (Scott, 2018).

The Florida Department of Environmental Protection (FDEP) defines BMAPs as, “…the "blueprint" for restoring impaired waters by reducing pollutant loadings to meet the allowable loadings established in a Total Maximum Daily Load (TMDL) ("Basin Management Action Plans (BMAPs) | Florida Department of Environmental Protection", 2018).”

Scott says that agricultural nonpoint sources within adopted BMAP areas have two options:

  1. Implement FDCAS BMPs.
  2. Follow a FDEP or water management district-approved water quality monitoring plan at the operator’s own expense.

Understanding the necessity of a plentiful and quality water supply, producers across Florida have enrolled 60 percent of agricultural acres within BMAP areas. As enrollment increases, water pollutants will decrease (Scott, 2018).

With every natural disaster, effective water policy is conferred and investigated. Natural disasters also have a substantial impact on agricultural waters.

Dr. Christa Court and Dr. Alan Hodges, both scientists in the UF/IFAS FRE Department expounded on the damage and loss natural disasters, especially Hurricane Irma, afflicted on Florida’s agricultural economy.

 “Approximately 1.3 disasters that cause over $1 billion in loss occur annually in the state of Florida,” said Dr. Court. “Our economy also loses anywhere in between $5 and $10 billion annually due to natural disasters.”

Since so much loss ensues, dynamic policy that doubly serves as a recovery plan is crucial. Dr. Hodges says that these policies must reduce disaster risk while supporting resilience and sustainable agricultural development. Here’s how it is accomplished:

  • Addressing disasters that cause the greatest losses.
  • Designing measures specific to the crop, livestock, fisheries and aquaculture, and forestry subsectors.
  • Adopting strategies that counteract the impact of disasters on sector growth and development and on national food security.

Above all, Dr. Hodges emphasizes that effective policy requires crop-specific damage and loss data for the agriculture sector. From Hurricane Irma alone, Florida experienced significant loss from several commodity groups totaling $1.86 billion.

Commodity production is also forecasted to drop. Strawberries and citrus, two prevailing commodities in Farm Credit of Central Florida’s territory, is forecasted to drop 15 percent and 35 percent, respectively, from previous years.

Dismal forecasts put producers on-edge, and many are implementing risk management plans that include purchasing a federal crop insurance policy. In 2017, 519 claims were filed in the state of Florida due to natural disaster-related loss. The Risk Management Agency categorizes these claims into three different loss categories:

  1. Excess Moisture/Precipitation
  2. Hurricane/Tropical Depression
  3. Wind/Excess Wind (Court & Hodges, 2018)

While crop insurance is an excellent safety net to help manage risk or losses outside a producer’s control, 2017 natural disasters still devastated the industry and federal assistance is still needed.

After an early damage assessment jointly conducted by FDACS and UF/IFAS, it was determined that agriculture suffered a $2.5 billion loss. Florida agriculture was omitted from the second congressional disaster aid package; in a letter to Florida’s congressional delegation, FDACS Commissioner Adam Putnam then checked Congress’s inattentiveness to the industry’s needs plus their migration from ad-hoc disaster assistance programs (similar to the ones administered in the aftermath of the 2004 bought of Florida Hurricanes).

“However, the reality is that that program was effective, efficient, and enabled growers to quickly recover from such an extraordinary event,” wrote Putnam.

He went on to voice his intent on working with Congress to craft a beneficial 2018 Farm Bill that will bolster the safety net for operations, but immediate disaster relief should not take a back seat.

“Congressman Tom Rooney has crafted language that will enable the USDA to provide $1.5 billion in emergency disaster assistance to address the catastrophic crop losses producers suffered due to this storm,” wrote Putnam. “I am hopeful that the entire delegation will support its inclusion in the next disaster relief supplemental.”  (Putnam, 2017)

In February 2018, the United States Senate Committee on Appropriations passed a third aid package providing supplemental appropriations for disaster relief and recovery, which included an ad-hoc appropriation of $2.36 billion for crop disasters as a result of hurricanes and wildfires (SUPPLEMENTAL APPROPRIATIONS FOR DISASTER RELIEF AND RECOVERY, 2018).

Even with the convoluted process to secure relief funding, Dr. Hodges stressed that natural disasters are the new “normal,” and distinguishing between damages and losses is key. Damages may appear worse than they seem and losses can occur over an extended period. However, in order to stay policy-relevant, rapid assessment tools are needed (Court & Hodges, 2018).

Researchers and industry experts are making great strides to ensure optimal rural policy is implemented. To continue on a positive trajectory, we must be diligent in our messaging and advocacy.

Once the consumer is exposed to the inner-workers of agriculture, it becomes easier to understand the policy that shapes rural America and ultimately creates a network of industry support. With the support of educated consumers and the implementation of conducive policy, Florida agriculture will maintain its prominence on the global agriculture stage.

UF/IFAS’s Agricultural Policy Outlook Conference enables open discourse between researchers, lawmakers, industry experts and producers so progressive ideas can shape a secure future of agriculture.

As always, Farm Credit of Central Florida has Florida producers’ best interests in mind, and is committed to providing reliable, consistent credit and financial services to the agricultural and rural communities of Central Florida.

 

REFERENCES

Basin Management Action Plans (BMAPs) | Florida Department of Environmental Protection. (2018).  

Floridadep.gov. Retrieved 26 February 2018, from https://floridadep.gov/dear/water-quality-restoration/content/basin-management-action-plans-bmaps

 

Boatwright, J., & Jarrels, J. (2018). Ag Legislative Update. Presentation, Florida Agricultural Policy

Outlook Conference, UF/IFAS Food and Resource Economics Department.

 

Court, C., & Hodges, A. (2018). Economic Impacts of Natural Disasters on Agriculture. Presentation,

Florida Agricultural Policy Outlook Conference, UF/IFAS Food and Resource Economics Department.

 

Guan, Z. (2018). Trends in U.S.-Mexico Competition in Specialty Crops. Presentation, Florida Agricultural

Policy Outlook Conference, UF/IFAS Food and Resource Economics Department.

 

Khachatryan, H. (2018). Agricultural Product Consumer Marketing Research - The Answer to Global

Competition?. Presentation, Florida Agricultural Policy Outlook Conference, UF/IFAS Food and Resource Economics Department.

 

Legislative Issues Brief, 2018 Legislative Days. (2018) (pp. 1-4). Gainesville. Retrieved from

http://www.floridafarmbureau.org/wp-content/uploads/2016/12/Issue-Briefs-Full.pdf

 

Putnam, A. (2017). Florida Department of Agriculture and Consumer Services, Commissioner Adam H.

Putnam (pp. 1-2). Tallahassee: Florida Department of Agriculture and Consumer Services. Retrieved from https://www.freshfromflorida.com/es/content/download/78066/2311839/Hurricane_Relief_Letter-CoChairs_FL_Delegation11282017.pdf

 

Roka, F. (2018). Agricultural Labor Economics. Presentation, Florida Agricultural Policy Outlook

Conference, UF/IFAS Food and Resource Economics Department.

 

Scott, R. (2018). Agricultural Water Supply. Presentation, Florida Agricultural Policy Outlook Conference,

UF/IFAS Food and Resource Economics Department.

 

SUPPLEMENTAL APPROPRIATIONS FOR DISASTER RELIEF AND RECOVERY. (2018) (p. 2). Washington, D.C.

Retrieved from https://www.appropriations.senate.gov/imo/media/doc/020718-SUPPLEMENTAL-SUMMARY.pdf

 

Testimony, Reggie Brown, Florida Tomato Exchange, July 26, 2017. (2017) (p. 1). Washington, D.C.

Retrieved from https://agriculture.house.gov/uploadedfiles/7.26.2017_brown_testimony.pdf

 

Trade Promotion Authority. (2018). Ustr.gov. Retrieved 26 February 2018, from https://ustr.gov/trade-

topics/trade-promotion-authority

 

VanSickle, J. (2018). NAFTA Renegotiation. Presentation, Florida Agricultural Policy Outlook Conference,

UF/IFAS Food and Resource Economics Department.

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