Policy Specialist: Obama, McCain Have Key Differences on Trade, Energy

Policy Specialist: Obama, McCain Have Key Differences on Trade, Energy

October 3, 2008

Neither Barack Obama nor John McCain has much of a track record on agricultural issues, but differences over trade and energy will give Nebraska farm interests plenty to consider this election year, a UNL Extension public policy specialist said.

"Questions come up in ag sectors now that a farm bill has been approved," said Brad Lubben of UNL's Department of Agricultural Economics. "The questions include how much does this election matter to agriculture and does agriculture have a stake in this. There are several huge questions that remain."

Some questions relate to two major issues — trade and energy. Obama and McCain have sharply different views on these two issues that will have a major impact on agriculture, Lubben said.

"Nebraska's farm interests are really up for grabs in this election," Lubben said. "Some might support the trade policies of McCain over Obama and others might support the energy policies of Obama over McCain."

Obama has been a reluctant supporter of free trade who has called for reviews of trade agreements to make sure they protect labor and the environment, Lubben said. McCain strongly supports liberalizing trade, removing barriers and pursuing international trade agreements.

On energy, Obama supports the use of biofuels as well as alternative and renewable fuels and energy conservation. McCain supports the use of all energy sources, including nuclear power, and less reliance on subsidies and import tariffs.

How each candidate's positions will affect Nebraska farmers remains to be seen, Lubben said. McCain's desire to pursue international trade agreements sounds promising to producers, but not everyone is optimistic about trade, he said.

"There's a lot of pessimism about how big these trade opportunities are, so the whole agriculture industry is not unanimous in its agreement that all trade is good," he said.

Likewise, Obama's support for alternative fuels and energy conservation sounds good, but "very few people want to consume less energy," Lubben said. Rather, conservation might only be part of a portfolio along with new energy sources needed to meet continued growth in energy demand.

Since neither candidate has a strong agricultural background, the key will be who they put in their inner circle to advise them on the issues, he said.

Other issues awaiting the new president relate to implementing the 2008 farm bill. Though approved and signed into law, several issues within the bill await decisions on how to implement them, Lubben said. Those decisions will fall to the new administration.

The first issue is how the U.S. Department of Agriculture will set the price that determines the revenue guarantee under a new provision called the Average Crop Revenue Election or ACRE. This program provides a revenue safety net to protect producers against unexpected losses in crop revenue tied to price and production.

The second addresses commodity support programs for small farms of less than 10 acres. The new farm bill included language apparently eliminating these smallest farms from the program as a budget-saving measure, given that federal administration cost on the farm can amount to more than the program payments.

When USDA proposed a strict interpretation of the language that would make all of the small farms ineligible, several members of Congress balked that the intent was to allow consolidation of these farms into larger units to maintain supports while increasing program efficiency, Lubben said.

"The political debate on these issues and more will continue over the next several months and will eventually have to be addressed by a new administration," Lubben said. "These political issues have to be considered to implement a farm bill that was supposedly put to bed in June."

Lori McGinnis
IANR News Service