US Agricultural Farming – Regulatory Environment & Key
Trends Impacting Policy – 27 September 2021
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Specialist:
Title:
Moderator: Nyree Hinton (NH), Third Bridge Sector Analyst
Dale Moore (DM)
Executive Director, Public Policy at American Farm Bureau Federation
Agenda:
1. Key trends driving regulatory policy in US agricultural farming – barriers, innovation and pandemic
impacts
2. Modern farming methods and tools – seed research and crop techniques
3. Challenges of current sustainability practices – potential discrepancies between scientific research and
implemented mandates
4. Carbon credit deep-dive – standardisation initiatives and potential regulatory risks
Contents
Q: How has the regulatory tone for new technology adoption and farming techniques evolved over the years?
3
What innovation are you noting around regulatory policy?
Q: Which areas have the highest barriers in their regulatory measures? Are there areas that you think are
less regulated than they should be vs potentially too heavy-handed?
Q: How has the pandemic exacerbated the various agricultural issues you’ve referenced, such as labour?
4
5
Q: Where might the government seek to subsidise or encourage further R&D or innovation for the trend
towards sustainability, considering the USDA’s [United States Department of Agriculture’s] loan portfolio? 6
Q: How should we frame the trend towards sustainable farming practices and ESG? It seems there’s a lot of
greenwashing going on. When do you expect a standardisation of some of the ESG initiatives across the
board to replace individualised definitions of what’s environmentally acceptable?
6
Q: Where is the conversation around new mandates on environmental conditions headed? Are there sectors
you think are the most acceptable, whether pesticides, livestock, agronomics or elsewhere? Is there more risk
8
in mandates at a state level and every state taking its own approach vs large-scale federal regulation?
Q: How would you describe the policy tone towards carbon capture and carbon credits relating to
agricultural production? Are there risks around new regulation that you’re tracking?
9
Q: How do you think the policy conversation around carbon credits is developing in Washington? Are some
key regulators starting to bring this up as a target for standardisation? Are people talking about the wide
range of different definitions and scepticism around this somewhat opaque market?
10
Q: You suggested the US shouldn’t be taking the full approach in applying some of these environmental
regulations where other countries are also contributing to the problem. That said, could you discuss the US
states that are implementing their own mandates for carbon credits and environmental sustainability plans?
How would you grade the success or lack thereof so far?
10
Q: Could you describe the relationships with big ag producers such as ADM and Cargill and how that has
impacted farmers’ profit potential? Why hasn’t there been more of a regulatory scope on the size of some of
these companies?
11
US Agricultural Farming – Regulatory Environment &
Key Trends Impacting Policy
Transcription begins at 00:00:02 of the recorded material
NH: Welcome to Third Bridge Forum’s Interview entitled US Agricultural Farming – Regulatory Environment
& Key Trends Impacting Policy. I’m Nyree Hinton and I will be facilitating today’s Interview with Mr Dale
Moore, Executive Director of Public Policy at American Farm Bureau Federation.
Dale, before we get started with today’s Interview, please state I agree or I disagree to the following statement:
You understand the definition of material non-public information and agree not to disclose any such
information, or any other information which is confidential, during this Interview.
DM: I agree.
NH: Thank you, Dale. Could you start with an introduction to your background and the various roles you’ve
held in the industry?
DM: Nyree, thank you very much. Look forward to visiting with everyone, and just a quick background. Grew
up in southwest Kansas on a livestock, hay and grain farm. I have a degree in animal science. My minor is in
communications which is actually how I ended up in Washington DC, that plus, a wife who got a job with the
FBI and we ended up back here. I went to work for then Congressman Pat Roberts who represented the 1st
district of Kansas, which is the big 1st district, and I worked for him for 13 years. When he went over to the
Senate, I spent four years as the Executive Director for Legislative Affairs at the National Cattlemen’s Beef
Association. Spent the following eight years as Chief of Staff at the US Department of Agriculture during
President Bush, Bush 43 and during that tenure, and then started with American Farm Bureau Federation in
2011 after a short stint as a for-hire lobbyist with a small, boutique farm, and have been at Farm Bureau since
2011, currently, the Executive Vice President there. I also, in Kansas, spent a short period of time with the
Kansas Pork Producers Council as their Communications Director, and that is pretty much my background.
The skills I grew up with working on ranches and cowboying, other than shovelling and cleaning out the
manure in the stalls, not much else really applies in Washington other than a gift for BSing. That’s my intro.
[00:02:27]
Q: How has the regulatory tone for new technology adoption and farming techniques evolved over the years?
What innovation are you noting around regulatory policy?
DM: That’s a great question. When you look at these issues when it comes to technology, and it’s one of the
things, and you’ll forgive me if I get a little snarky with some of my responses, there are folks that we work
with that are bringing all kinds of technology to the table. Then, there are those that will stand in line for three
days for the latest iPhone who will then use that brand-new technology to criticise the technology that would
help farmers and ranchers do a more efficient, more affordable, economically viable job of bringing food, feed
and fibre and increasingly, fuel to the marketplace. Where we see it, where the regulatory structures tend to be
fairly efficient are on those things that are mechanical, things that are bringing new mechanical devices that
help address issues like with ag labour, things that will pick the crops. This raises the question, if we can’t get
the workers on the farms, we’ve got to find other means. Certain crops, particularly in the speciality crops, are
a major challenge when it comes because not every fruit, every vegetable, lends itself well to mechanical
harvesting or handling of that nature. I would say that the livestock area is one where it is particularly a lot of
heavy pressure both when it comes to issues related to antibiotic resistance, which we obviously need for
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animal health.
We’ve got those armchair experts, self-appointed armchair experts, who seem to know better than animal care
and animal science professionals on what makes an animal, I hesitate to use the term happiest, but certainly
most productive. Dr Temple Grandin uses a phrase that really resonates with me and that is, how do we
optimise, not maximise, but optimise production in the livestock? A lot of times, that involves animal
husbandry practices that are not always easily explained to consumers or to the activists who would like to
shut down animal agriculture as opposed to simply help improve it. I think in the other areas where we see
very tight controls, understandably to some degree, crop protection chemicals, ie pesticides, the biotech area,
which we understand why that needs to be regulated, but it often seems that the very technologies that would
help reduce pesticide use, for example, are things that certain folks like to throw up regulatory barriers to or
techniques and technologies that would help innovations, that would help reduce water usage, reduce impacts
from drought, etc. Mother Nature is our major and constant business partner, and she does not always play
very fair, so that’s a challenge for us in terms of getting technologies from bench science through, I guess, the
venture capital kinds of stages and commercialised as quickly as possible.
[00:06:20]
Q: Which areas have the highest barriers in their regulatory measures? Are there areas that you think are less
regulated than they should be vs potentially too heavy-handed?
DM: If we were on a Zoom call or a Teams call or whatever, you would see me smile because I cannot think of
an area where any farmer or rancher that is a member of the American Farm Bureau Federation feels like we
are underregulated. That is not something that I’ve had too many complaints about, farmers saying, “We just
need more regulation.” I never hear that. I will tell you that the areas where we feel the most pressure, that is a
constant, back in the mid-’80s, when I went to work for Senator Roberts, once of the things he told me is,
“Dale, if you pick the right issues, you will not have to learn new stuff because you’re going to work on the
same thing over and over again.” The innovations in crop production, whether it’s the seed technology,
whether that’s through genetic modification, biotechnology or inventional in the seed productions and the
processes used to ensure the viability of those seeds, pesticides, the synthetic fertilisers, the reuse and
recycling, if you will, of organic materials that are coming off the farms and the ranches in that, and just
general agronomics, all of those things, it’s not like any one of them is by itself the problem. It’s the
combination there that when you say, “We’re not going to allow…” it was a few years back when we had the big
debate over GMOs in Congress and trying to convince them, “If you take the GMOs away, then you might as
well start streamlining the process for pesticides because those GMO products are enabling us to reduce,” us
being farmers and ranchers, “reduce the use of pesticides.” Similar on animal care, animal health products.
Those compounds that are developed, those investments and that research, it brings those forward and they
go through, whether it’s the Environmental Protection Agency or the Food and Drug Administration, you
bring those pieces together in a way that helps a farmer and rancher do two things. (1) Improve their
productivity and necessarily also improves the efficiency that leads to economic return.
You can have all of the sustainability things on the list, we could fill out three notepads of all the different ways
in Washington DC and around the world, for that matter, that folks define sustainability, but if the farmer or
the rancher is not economically sustainable in his or her operation, you’re not going to make any progress.
They’ve got to be able to make a return on these investments, and that’s one of the areas where the oversight
that comes from Congress, the oversight that comes from the executive branches and why we at American
Farm Bureau spend a lot of time in court. Right now, we’re wrestling with the Environmental Protection
Agency because they want to reverse course on the Waters of the US, the Waters Protection Rule that the
Trump administration reversed what the Obama administration had put in, because at its core, it was not
about protecting the water. The Navigable Water Rule, just as it says, waters that are navigable, but what we
saw coming out of the Obama EPA was a rule, and the US Army Corps of Engineers was right there with them,
what we saw coming out of them was a regulation that effectively had a lot more to do with land-use planning
than it had to do with regulating navigable waters. We fought that in court, in Congress, in the Executive
Branch process, got a new rule put out. Now, the Biden administration is trying to undo that rule, and so in the
course of this, that is probably the one area where we are most concerned. Outside of these regulations that
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affect whether it’s on the environmental front or on the crop protection front, on the innovations for
agricultural front, the other biggest challenge we have in agriculture is labour. That also brings to mind the
technology because if we cannot get the labour to produce the crops, plant the crops, to do whatever in this to
get more speciality crops and increasingly in livestock, then we’re going to have to come up with more
mechanical means or other technologies that help alleviate that labour demand.
[00:11:20]
Q: How has the pandemic exacerbated the various agricultural issues you’ve referenced, such as labour?
DM: That’s another great question. When you look at the impact of COVID, and again, I have an animal
science degree, not an economics degree, but we’ve got a whole website full of market intel pieces at FB.org,
just throwing in a little plug for a great economics team that we have on staff, and what we saw through
COVID were a number of things. First of all, right out of the box, the issue of supply chain. Not only getting
produce, dairy products, food, feed, whatever, from the farm, from the ranch to the marketplace. As the season
went along, it also involved getting the inputs that farmers and ranchers need on their operations, everything
from feed to fertiliser, seed, fuel in some cases and certainly throw in a few other aspects. We had things going
on with trades that were in disruptions in terms of equipment. All those things combined have a severe
impact, economic impact, on agriculture. The other part of it is that one of the things that agriculture in the
United States strives for, finding our niche. If I’m in in the commodity business, by definition, a commodity is
something that I’m going to break even on over time, hopefully. It’s always a bit of a challenge in agriculture,
but there are a number of farmers, livestock producers, etc, who had built a niche market, some of the
aquaculture folks down in the Louisiana area that were delivering crawfish, shrimp, clams, oysters from the
Gulf direct to their customer, the restaurant trade, in some cases, the hospitality trade. When COVID hit, their
market was gone virtually overnight, within 24 hours certainly. We saw that in Florida with fruits and
vegetables.
A number of the farmers, again, that had developed niche markets, delivering their produce to the cruise lines
and other hospitality, entertainment, venues, etc, those farmers, again, just literally overnight, were without a
market. That’s when we saw some of the pictures and some of the efforts by farmers and their processors
basically having to pour milk down a drain or plough under crops. Not because the farmers weren’t getting
paid for it, they just didn’t have anywhere to go with it, and we teamed up with a number of different folks,
Feeding America being one. There was another organisation that basically was the long-haul and short-haul
movers. If I’m moving from Washington DC back to Kansas, the people that I would call up to load the house
up. We had folks in the grocery business who had basically a lot of unused cold storage because of the
disruption in the food markets and chains, and so they were able to take on some of these stores, and it took a
while to get those chains restored, but in the meantime, we still had that ripple effect through the economy.
Then, while prices for foodstuffs were going up, the prices that farmers received were going down, so that was
probably one of the major impacts. We’re still growing out of that a bit. I think it’s probably been more of a
challenge in terms of some of the trade issues, international trade issues, and we still see it in some of the
supply chain. I was just at the grocery store earlier this morning and I’ve noticed this trend that if you go down
the bread aisle, you can find bread, but certain companies and certain of their product offerings are in short
supply, and I have no idea exactly why, but it is something we are still experiencing, those market-driven
ripples going back and forth through there.
Market prices by and large have been okay, dairy probably being one where they have been the toughest
because one of the impacts during COVID tied into federal law that was in the Farm Bill and piggybacking on
the federal milk marketing orders. We saw some impacts that resulted from certain folks who buy the milk
from the dairy farmer. They have options in their pools or in their regions for taking that out of the pool if
they’re in cheese production or powder production or butter, whatever it might happen to be. The net result is
that those dairy farmers whose milk is not used to produce cheese, for example, end up getting a lower price
because the higher-priced milk bought that goes into the cheese got to opt out of the marketing order
programme. It’s something that we’ve been taking a look at, so I would say that COVID has really highlighted
some of the challenges we have in the supply chain both going to the farm and from the farm, and it’s also
highlighted the importance of having a number of different, I want to say alternatives, but having a good, solid
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playbook for what happens when we have one of these events. Going back to 9/11, as we saw right at the 20th
anniversary of that tragedy, one of the things, again, that it highlights is that from a homeland security
standpoint, whatever the cause is, the response plan, the infrastructure to deal with that response plan has got
to be nimble, and flexible and able to deal with whatever the cause agent is. A lot of the impacts tend to be the
same, disrupted markets, getting food to those who need it.
[00:17:47]
Q: Where might the government seek to subsidise or encourage further R&D or innovation for the trend
towards sustainability, considering the USDA’s [United States Department of Agriculture’s] loan portfolio?
DM: This is where, having had the privilege of working at USDA, there are 27 different agencies. The Rural
Development Agency has a number of loan programmes, loan guarantee programmes, grant programmes,
different things that will help. USDA’s Rural Development division can literally build a town from the ground
up, their authority to build churches, schools, or they can lend, excuse me, to build churches, and schools and
so forth, water, and sewer and so forth. There’s where the technology that comes through USDA that is
probably most critical to everybody in rural America, certainly in the farmers, and ranchers and the rural
communities, is broadening in deployment, and the communication technology folks think, “How does that
play into whether or not farmers and ranchers are making money?” Many of the equipment opportunities, and
a farmer’s ability to analyse his or her data and the equipment that generates that data, whether it’s the planter
that’s monitoring the seed rates or the fertiliser equipment that’s monitoring where in the field you need to put
less vs more as you’re going through the field and adjusting on the fly, the harvest equipment that gives real-
time information on how the yields are working, all of that data is generated. A lot of the equipment, and I use
my mom’s farm out southwest Kansas an example, at the house, at the farmstead, she’s got great internet
connection, great wi-fi connection, but you gets half-a-mile out into one of the fields, then all of a sudden,
mom no longer has that connectivity. More to the point, the grandsons of the farmer that I grew up working
for do not have that opportunity to put together the kinds of data sheets because they’ve got to wait until they
get the equipment back to the house in order to put things together.
[00:20:20]
Q: How should we frame the trend towards sustainable farming practices and ESG? It seems there’s a lot of
greenwashing going on. When do you expect a standardisation of some of the ESG initiatives across the board
to replace individualised definitions of what’s environmentally acceptable?
DM: I smile when I say this too. We just, in fact, not two hours ago, finished up a call with US Farmers and
Ranchers Alliance, of which we are a founding member, and one of the big accomplishments of USFRA just
this past week, a lot of work going into it beforehand, was getting one of the farmers, the farmer who currently
chairs USFRA, to be part of the UN summit on sustainability, global climate, etc, etc, that is going on. This is, I
would say, where I’m not always the best diplomat, so for anybody who may be listening to this and maybe
partly offended, I’d be happy to take a poke in the eye. Many of these issues do a couple of things that are very
frustrating to farmers, ranchers and livestock producers. Number one, going back to the 1985 Farm Bill and
even before that, my gran dad was active in conservation practices going back to the ’30s. He lived out in that
area where the Dust Bowl was prevalent, so farmers and ranchers for decades have been applying best-
management practices, conservation practices, sustainability practices, because fundamentally, their factory is
the land, their factory is the environment that they are living in. Part of our frustration, with boots-in-the-dirt
farmers and ranchers, is that it’s wonderful that folks have discovered agriculture. It is frustrating that they
seem to think that farmers and ranchers have not been able to do a dang thing on their own until all the
armchair farmers and ranchers around the world decided to join in and get the United Nations to tell us how
to farm. That gets very frustrating. On top of that, we have been working with the Farmers for a Sustainable
Future. It’s a coalition that we helped start. We also helped start the Food and Agriculture Climate Alliance,
which is a coalition or an alliance of folks like ourselves, farm groups, commodity groups, working with
environmental advocates, and I make a distinction between the advocates and the activists.
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The advocates who want to work with us on helping develop voluntary incentive-based approaches, who want
to help us get technologies researched, developed, commercialised, approved, whatever the steps in the
process are to ensure that precision agriculture and other opportunities to help farmers find ways, economic
ways, sustainable ways to engage in these practices that help improve the environment. We’ve proven it over
and over again. You go back to the ’85 Farm Bill that I mentioned, there were a number of provisions in there
that were both mandates and the things that were incentive-based, and constantly, the battle is between the
mandates, and if it’s a mandate, virtually every farmer that I know will tell you that, “You tell me to do
something, you make me do something and I’ll do it, but I’m going to resent it every step of the way. Give me
an incentive, help me with the technology, help me with the technical understanding of what I need to do to
improve my farm and ranch, and cost-share with me on that,” that’s the beauty of a number of our
programmes at USDA, they provide a cost-share, “so that I as the farmer have skin in the game as well as the
government,” and the mutual benefits come from that. One of the things that we’re hoping to see as we go
forward is an expansion of that voluntary, incentive-based approach, a partnership approach. Whether it is the
government or the companies that are buying the foodstuffs, the companies that are providing the inputs and
the food processors, you name it, we keep reminding them that if you give farmers and ranchers a seat at the
table, treat them as full partners and not as serfs that belong to your fiefdom, we will be happy to work with
you, but get crossways with us and we’ll make every day seem like a really long Monday.
That’s where we are on the sustainability front. Farmers and ranchers that I work for support this, if not
without a little concern, a little trepidation, because the one thing that has tended to come with those words,
environmental sustainability, has been a list of mandates that want to come onto my farm and tell me how to
do my business, even though the folks that developed those laws and those regulations have very little concept
of what it’s like to make a farm or a ranch operate economically, in a economically and sustainable way. That’s
where we come down on the sustainability, on environmental process. Before environmental became a
buzzword that everybody likes to throw around, and this is going back 40-plus years, it was, I think, going
back to, again, the ’85 Farm Bill in early ’80s when the whole concept of Sodbuster and Swampbuster were
issues that became mandates. I remember at the time visiting with one of the USDA officials and asked why we
didn’t have a problem with Swampbuster before it was a mandate, and he said, “Dale, it’s pretty simple.
Virtually every farmer I know, if they’ve got a place in their field that’s wet, that’s full of water, whether it’s rain
or naturally, they’ll farm around it, and the federal government says, ’If you’ve got a wetland on your farm and
you don’t farm it, we’re essentially going to take it from you. We’re going to put all kinds of mandates on what
you can and cannot do,’ and that drives folks to say, ’If the government’s going to try to take it from me if I
don’t farm it, then if I’ve got to hook three tractors together to pull the plough through, I’m going to farm it.’”
That’s the kind of mentality that we are wrestling with when it comes to sustainability, and again, farmers and
ranchers being at the table, and those that are buying the produce, as long as they want to work with us, we’re
eager to work with them and find a middle ground from which to work. It’s when the mandates start coming,
and candidly, we’ve run into this more and more from some of the food companies, particularly some based
across the Atlantic that want to say, “If you do any of these practices, we’re not going to buy your produce.” No
indication of, “If I don’t do those practices, will you pay me an incentive because basically, you’ve taken away a
lot of the wherewithal, a lot of the return on investment that I’ve already got going on in my farm,” and it’s not
just conventional agriculture. We’ve seen this happen in the organic trade when certain folks decided that
folks weren’t Ivory Soap pure enough. If they provided caged porches for their poultry flocks, to be in an
organic poultry operation, they had to be out, free-range in order to count. Those things were approved
through regulation, through the process and they provide an animal care benefit, provide shade, provide
protection from predators that fly overhead. You can put up a fence to keep a fox out maybe, but you can’t
keep an eagle out unless you’ve got a porch overhead. There are all of these different kinds of things that come
together when folks, again, who don’t consider farmers worthy of being at the table come up with rules and
stuff that we spend more time trying to undo the bad stuff than we do getting to sit down and figure out how to
come together on the good stuff.
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[00:29:19]
Q: Where is the conversation around new mandates on environmental conditions headed? Are there sectors
you think are the most acceptable, whether pesticides, livestock, agronomics or elsewhere? Is there more risk
in mandates at a state level and every state taking its own approach vs large-scale federal regulation?
DM: I’m going to start with the last point first, and I would say there is always danger in state-by-state
regulation. We saw this on GMOs when Vermont put in a rule. Ironically, a rule that effectively had a
nationwide impact if it had been allowed to stand, but it also ran directly counter to a very similar type of rule
that California had relative to how their labels should be reading relative to contains GMO or biotechnology,
all these different things. Again, I shouldn’t say again, but the clear point being that in each of these debates,
science has very little to do with what the driving force is. It is coming from folks who, for some reason, if it is
not a new iPhone or a new iPad or a new smartphone or something, then it must be bad if it has anything to do
with agriculture. Here’s where the frustration of folks demanding that food become more affordable, more
widely available, more easy to distribute around the world, and it’s not just here in the United States. That is
that if you want that and you’ve got a growing population, and you want folks that are farming and ranching,
raising livestock to be able to provide those foodstuffs, you’ve got to give them the opportunity to use the tools
that are out there that help them do that basically on the same amount of land, because we can’t produce more
land than we already have, that can do that with using less water, because water is a super precious
commodity.
In fact, we’ve done some work on this whole front. Just to compare and contrast, if we were using 1990s
technology today, everything’s locked in there, and producing the amount of food that we do, we’d need
another 100 million acres available for land here in the United States. That’s how much technology has
advanced in agricultural production, the productivity of US agriculture just, what is it, 30 years, so there’s
some indication in how much progress we’ve made in just a little over one-quarter of a century. You throw into
it some of these other issues, there are certainly some things on pesticides. The process of approving a new
pesticide is so costly and cumbersome that a lot of companies are like, “You know what? I’m going to keep
trying to renew this old technology, maybe reduce or minimise or do whatever with the uses,” and so the crop
protection chemicals that farmers and ranchers need, that number gets squeezed down. Then they’ve got the
pest pressure, and so farmers resort to more tillage or if it happens to be weed pressure, for example, and then
you’ve got the folks coming in, “You’re supposed to be reducing your fuel use.” If I can’t get the pesticides I
need and I can’t get the seed technology, ie the biotech, GMO, whatever it happens to be tech in order to resist
the weeds, the only thing I’ve got left is the way Grandad did it, and that’s to get the plough out and cultivate.
Then you’ve got soil issues related to the whole sinking carbon, all those different kinds of things come
together.
There’s got to be a science-based approach to all of this, and I think that, in a lot of ways, is probably our
biggest challenge, because a lot of times, when the scientists lay something out, as soon as it doesn’t conform
with whatever the latest political itch of the left lane is touting, they get shouted down or they get shouted clear
out of the road. We’re constantly in that fight, so I would say that that standardisation process is critical,
national standards for some of these things so that we don’t end up with a patchwork quilt of regulation is
critical. In that same vein, if the federal end is going to get overly burdensome in their regulation, then
candidly, we reserve the right to start working with our state farm bureaus and others to start doing this. If we
can’t get some relief legislatively, we can’t get some relief regulatorily, then we’re going to have to resort to the
other means we have, and that is go to court and fight these issues out, which is something that we at Farm
Bureau and there’s a handful of other agricultural trade associations that will do the same thing. We’re going
to use all three branches or use all three avenues that the constitution gives us to try and move our pegs
forward relative to ensuring that farmers and ranchers, regardless of what part of the country they’re in, are all
treated fairly. Can’t treat them the same because conditions are so dramatically different, even within a state,
but they needed to be treated equally, if that makes sense.
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[00:35:15]
Q: How would you describe the policy tone towards carbon capture and carbon credits relating to agricultural
production? Are there risks around new regulation that you’re tracking?
DM: Here is one area, where some regulation is needed, and this goes back. 20 years ago, I was working on
issues related to carbon capture, carbon sequestration. On the one hand, there are a number of programmes.
At USDA, for example, we had, I think it was the 2002 Farm Bill, there was a so-called bottomland hardwoods,
a special programme that encouraged folks, particularly in areas that are more hydrophytic types of vegetation
areas, to plant bottomland hardwoods that would sink more carbon, a longer lifespan, all the different kinds of
things, not just pulpwood, things of that nature. The technologies and the science around sinking carbon are
pretty clear. We know when we use certain farming methodologies, minimum tillage, no tillage, silviculture, all
the different ways that we can do things that will sink carbon, and things that minimise the number of passes
that a tractor or combine or other implement has to go over burn less carbon-based fuels, and so on and so
forth. All those things work together. Plus, agriculture adds to the ability to produce fuel with the biofuels, and
on the farms, a lot of the farms, the wide-open spaces make great places to put wind generators and so forth.
Biomass. All the different kinds of things that work really well. The one thing I will say about carbon,
capturing carbon, there’s plenty of science and some of it is way older than I am, way older than two of me, I
guess, that we understand the science of capturing carbon, sinking carbon. However, the process of how to
generate a market for carbon, for carbon credits, it’s a little bit like the Wild West out there right now. I can
remember even 20 years ago, I had a US Senator ask the question, “Dale, what can you tell me about carbon
credits?”
It’s like, “Right now, depending on which company you talk to that’s marketing them, they’re about the size of
a bread box or they’re as big as a Ford pickup.” I don’t really know what a carbon credit looks like, and we got
into the whole notion of environmental benefit, trading, all these things. The regulation that is needed is to
provide some uniformity to what a carbon credit is, so right now, candidly, we have been encouraging, and I
say we, one of our economists has done an amazing amount of work just trying to capture, no pun intended,
but capture the carbon market and all of the different offerings that are out there. Candidly, it’s a little scary
because they’re, “Sign this contract and I promise you, I will sign you up for USD 5-10 a year for the next 20
years or 30 years,” or whatever the contract says, and then, “Here are the stipulations. Here are all the
requirements that you have to follow in order to get that,” and it’s like, “Wait a minute, you’re asking me to up
my input costs by USD 35-40 an acre.” If we’re just talking cover crops, that’s what the seed cost to put a cover
crop down is these days, so, “You want me to up my input costs and you’re going to help me offset that with
USD 5 an acre when I just spent USD 40, USD 50, USD 60 an acre in order to meet your carbon credit
requirements.” That is not sustainable in the short term, let alone the long term, and more to the point, from
my perspective, it is seeking to take advantage of the farmers, so I think there’s one area where frankly, we
have encouraged farmers, “Before you sign any contract relative to carbon credits, talk to us, talk to an
attorney, talk to somebody who is familiar with them outside that particular company.”
It’s a bit like computer technology. Every time we turn around, I just got my iPhone 12, and I know they’ve
been out for a little bit, but just got it uploaded, everything working fine, and one of the first notices I got on it
was I could sign up for the iPhone 13 that’s coming out soon. That’s how fast IT technology is advancing, and
I’m thinking about it in terms of because the marketplace is still a pretty wide-open thing, there are a lot of
marketers out there that are selling snake oil. There are some that are certainly legitimate. I’m not taking that
away from them, but once you get past the first three or four sentences in their contract, they really cannot
spell out what exactly it is they are paying for and what are the opportunities. Once the market establishes
itself, if I’m an early adopter getting USD 5 an acre, what happens when it turns out that it’s USD 50 or USD
500 or USD 5,000 an acre that’s getting paid for this, and you’ve got me locked into a 20-year contract? Those
are the kinds of things that we’re looking at with the carbon market. Carbon capture, we’ve been doing that for
years in different ways, shapes and forms. It just wasn’t called that. I think that there are a lot of things in
Washington and frankly, around the country, but particularly in Washington, there are a lot of things that
farmers have been doing for decades, we’re just putting new names on it and all of a sudden, folks discover
that, “I didn’t realise Grandad was capturing carbon when he was leaving the stubble out in the field or when
he was summer fallowing the wheat,” and so forth.
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[00:41:50]
Q: How do you think the policy conversation around carbon credits is developing in Washington? Are some
key regulators starting to bring this up as a target for standardisation? Are people talking about the wide range
of different definitions and scepticism around this somewhat opaque market?
DM: I will tell, and this is a pragmatic observation, not a cynical observation, so what happens with issues like
this, it’s like carbon capture and carbon credits, they’re very exciting because it’s easy. It’s like good people are
going to do farming practices and other things that sink carbon, take carbon out of the air, reduce greenhouse
gases, improve the environment, reduce global warming, all of these different things that we can do, and when
you get folks to say, “Let’s take a look at the science,” and you realise that the United States is not the only one
that is contributing to greenhouse gases, so let’s not put anything on ourselves that we don’t expect other
countries, particularly the G7 countries or the G20 countries, certainly the first- and second-world countries,
ought to participate. China comes to mind, Russia comes to mind, just to pick two out of the air, so maybe they
ought to help reduce greenhouse gases as well. My breath is not being held that President Xi or Putin or going
to sit up and say, “You know what? The United States is right. We all need to work together to reduce
greenhouse gases.” Ain’t going to happen. We look at this partly from, the United States should not be the one
doing all of the regulatory burden because in this country, when it comes to reducing greenhouse gases, they
tend to think, “Alright, let’s start with where’s it coming from? It must be the farmers’ fault, so let’s put some
restrictions, some mandates on them to reduce what they’re putting out.” It’s a little bit of a side bit here. In a
previous life, I worked a lot on dioxin and one of the things that, for years, we were talking about, how we
needed to reduce the use of different chemicals and processes that cause dioxin to be released in the
atmosphere.
Again, greenhouse gas and other deleterious effects, and when I was at USDA, we had a report come out,
because we had some cattle our inspection systems tested regularly for dioxin, and we had a group of beef
cattle that came into a plant that tested very high for dioxin and the world was coming to an end because the
EPA was already starting to ramp up the process, so we got to tighten up dioxin regs. Then we discovered,
contrary to all the understanding of dioxin before that, that the dioxin that the cattle were exposed to came
from soot clay that was mined 300-400 feet underground, meaning that that dioxin was deposited millennia, I
don’t mean millennia, but eras ago and it hadn’t been caused by man-caused events. This was even before man
really appeared on Earth kind of a situation, so as we went through that process and talked about it, the
discovery was that dioxin in the United States… and to give EPA credit, the EPA worked on a voluntary basis
with the agricultural industry and vice versa. The industry agreed to work voluntarily, so between the middle
part of the Clinton administration, up through the middle part of the Bush administration, man-caused dioxin
in the atmosphere was reduced 90%. Of the remaining 10% that had not been reduced, 90% of that was being
caused by volcanic eruption, lightning strikes and wildfires. That was part of the challenge, so there was this
desire to say when the Obama administration came in, “We’ve got to jump on top of dioxin,” and it was like,
wait a minute, you’re going to regulate Mother Nature? “No. We’re going to regulate farmers,” but if a farmer
doesn’t deposit, Mother Nature causes a wildfire and that puts dioxin down in the ground, you’re going to
blame the farmer and make him or her mitigate thousands of dollars an acre because Mother Nature started a
wildfire? Those were the kinds of things we wrestled with when it comes to these regulatory issues when they
get on the environmental side. We need to have an opportunity to have some influence where it comes in and
have some practical science-based impacts on this process.
[00:47:09]
Q: You suggested the US shouldn’t be taking the full approach in applying some of these environmental
regulations where other countries are also contributing to the problem. That said, could you discuss the US
states that are implementing their own mandates for carbon credits and environmental sustainability plans?
How would you grade the success or lack thereof so far?
DM: Here is something that I can circle back around to, whether it’s on carbon capture or on sustainability,
when you put together a voluntary, incentive-based type of programme that helps encourage farmers,
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essentially makes them as partners, provides them economic incentive. If I’m not convinced by my altruism,
I’m convinced by how I can add to my bottom line because, again, I want to make money. I’m not in farming
just to be in farming, so when we look at it from that perspective, I think that that’s where we see the positive
benefits. You’ve got the national-scope programmes. If the state of California or New York or any state in
between says, “You know what? If you as a farmer, you can be participating in USDA’s conservation security
programmes, you can be participating in, let’s say, EPA or somebody has another incentive-based-type
programme, but here in the state of California, if you will do four of these 10 practices on your farm in an audit
trail process and you can’t just say you’ve done it, here’s an incentive.” It could be a reduction on property tax.
I don’t even know what the incentives might be. It could be just a straight up cash payment. Whatever those
things might be, again, it’s something we see in different parts of the country. Typically, they’re tailored. We’ve
even seen some different types of programmes where a county, an urban or suburban county will set up a
farmers’ market. For farmers that are farming natural or using sustainable practices, they may get reduced
boot space. It doesn’t have to be major dollars and cents, and there’s also the flip side, not the flip side, but the
other side of the point that also, the farmers and livestock producers themselves.
For example, the Farm Bureau, we have a Young Farmers & Ranchers group, we have a Women’s Leadership
Committee group, we have a Promotion & Education Committee group, and they do it in different ways
relative to their respective states, because we have national committees, and we have state committees and so
forth, that will share information. Go into the urban and suburban settings, go to the state house on legislative
days, whatever that happens to be, and share a little bit about who we are, who are the farmers and ranchers
that are providing this food, and answering some of those questions. We talked about or I talked about it early
on, the United Nations, and one of the questions that, as we understand it, enabled US Farmers and Ranchers
Alliance to get somebody in the door was when Erin Fitzgerald, who is my counterpart there with USFRA,
said, “How is it that you can have a discussion with the United Nations on farming and ranching practices
without having a farmer or rancher in the room, let alone on the panel that is having these discussions?”
Again, when you come back to these things, I’m going to shift on you just real quickly, but we have our own ag
innovation challenge, we call it. It’s like a mini shark tank approach where we have folks that developed
everything from a new way to pick rocks out of a field without breaking your back, that was one of last year’s
winners, to folks who are developing new algorithms that can take a picture of a bin full of wheat or some
other feedstuff and from that algorithm, and I’m saying this like I know exactly how it works, but can detect if
there’s a mycotoxin in that feed from a picture off my smartphone.
These things are under development and they typically are coming from the folks who are working, the
proverbial garage innovators, who could be the super innovators of tomorrow. One of the things that this does
is give these folks an opportunity not only to compete in this challenge that we have, but expose them to folks
who can help mentor them on the venture capital kinds of circuits or the technology circuits. Increasingly, a
number of the land grant universities, as well as some of the science and tech schools are connecting up with
folks to provide technology for agriculture. That’s where we get excited because, again, I can remember
growing up and the neighbours that I worked for, the housewife, she ran the whole operation, but the
housewife who was there used to complain, in a joking manner, but that every time the farm made money, it
got reinvested back in the farm. New equipment, some new technology, whether it’s on the business side or on
the planting side, whatever it happened to be, but if she wanted a new dishwasher, she had to save her own
money. These were the kinds of things that the farmers and ranchers out there, men and women alike, if
they’ve got a new tool, if they’ve got a new technology and it proves itself, you don’t have to sell it to them.
They will buy it because they see it working. They will take that innovation, and bring it to heart and make for
certain that it becomes part of the legacy that they leave their children and grandchildren on how to keep that
farm operating.
[00:54:13]
Q: Could you describe the relationships with big ag producers such as ADM and Cargill and how that has
impacted farmers’ profit potential? Why hasn’t there been more of a regulatory scope on the size of some of
these companies?
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DM: Oh my goodness. There is a ton of regulatory scope on it. I think what happens is that this is one of those
areas where there’s a ton of regulatory scope if you keep these two or three or five companies from
consolidating. I’m convinced there’s plenty of regulatory. If I am opposed to consolidations or I’m adamantly
opposed to it, and they go ahead and merge anyway, obviously, there’s not nearly enough regulation. We at
American Farm Bureau, and this is one where we represent farms and ranches of all sizes, from somebody
that’s got an acre that they may be raising two goats and a carrot patch on, to folks who literally farm
township-sized operations. A lot of our members in Montana, 50,000-60,000 acres just on the ranch that they
own the deed to, plus another 100,000 acres that they lease from the federal and state governments in terms
of grazing land, so the size just within farms and ranches is all over the board. When it comes to the
companies, each time one of these has the courage, unlike other general farm organisations, we are not
opposed and we recognise that the law does not prohibit monopolies. It prohibits monopolistic practices.
That’s one of the things that we always like to point out. Not like to. One of the things that we point out. For
example, when Dow and DuPont were coming together to merge, they’re both US companies, and one of the
questions, Mr Collins came in to visit, this was very early, this was before it had been approved for them to
even go forward, he wanted to know, “What is Farm Bureau going to say?” and we said, “Our approach is that
farmers and ranchers want competition.”
They want to be able to look at their seed companies or their tech providers and have a competitive market out
there so they’re not captured by a single product company. That they have some competition that they can
check with. Number two, when two companies combine their resources, and at the time that Dow and DuPont
started coming together, our chief economist at the time, Dr Bob Young, made the observation that these
companies were consolidating for precisely the same reasons that farms and ranches were consolidating, the
down economy. We went through about a seven-, almost eight-year down economy in agriculture that had a
tremendous impact all around the world, not just here in the United States, so for us, we understand and we
appreciate that there are business practices, administrative expenses, HR, whatever they might be that might
benefit from the two companies coming together. What we asked for is, “Give us some level of assurance that
you’re going to continue to provide the research levels, that you’re not just going to consolidate research and
cut the two companies’ research budgets effectively in half, but rather continuing in robust research to find
those new products, those new innovations.” That’s how it goes across the board, whether it’s on the input side
or it’s on the output side. When, shoot, I can’t think, the Chinese company that bought Smithfield hog
producers, a lot of folks were concerned about that, as we were, looking at it, but our analysis was that we had
been trying for some time to get the Chinese market open to US pork. If China buys a US pork company, we
couldn’t hardly believe that they would let the company go under by not providing some opportunity for that
company, Smithfield, to ship product to China.
That might not necessarily mean that Cargill or Conagra or whoever else is in the pig business gets that same
opportunity to go to China, but if Smithfield has pigs disappearing to go to the Chinese market, that’s got to
open up markets somewhere else, and so everybody’s boat floats up some in those kinds of situations, and it
gives us a chance to crack that, no pun intended, but crack the wall with the Chinese market. Similarly, I have
long been fascinated that a lot of the innovation in crop protection chemicals and in GMO technologies has
come from companies based in Europe, a place where it is dang near impossible for US products to get in,
when science-based technologies, those European-based companies make a tremendous profit off selling their
products to the United States. They just don’t want us to be able to ship the commodities they’re from to their
markets. There are some of those kinds of issues that resonate and sometimes, I get a little bushy-tailed just
talking about them, but when it comes to the companies, as long as they are working with us and treating us
fairly. When you look at ADM, Cargill, Tyson, whether it’s on the livestock front, the crop front, fruit and
vegetable front, if we are hearing, as a fairly membership-based group, and our members are all farmers and
ranchers, if they’re not happy, then we will make sure that those companies understand we’re not happy. A lot
of times in Washington DC, when those companies are fighting regulations that may not have a direct impact
on us, they will need our help. Therefore, their cooperation in understanding and partnership is critical
coming back the other direction.
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[01:00:45]
NH: Let me close there and say thank you for your input today, Dale. We were able to cover a lot. Thank you,
clients, for joining Third Bridge Forum’s Interview. If you would like to speak to Dale in a private call or
meeting, please let your relationship manager know. Have a good one.
DM: Thank you, Nyree.
Transcription ends at 01:01:00 of the recorded material
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