ICYMI: The Policy Landscape Affecting Ag
By Michelle Pelletier Marshall, Women in Agribusiness Median (November 14, 2024)
At this year’s WIA Summit, Gregg Doud and Janae Brady addressed the most pressing governmental policy concerns affecting ag advancement and agtech adoption in their presentation “The Policy Landscape”. The duo touched upon regulations for technology and the implications of Farm Bill, and how the continual improvement of the environmental, safety, and nutritional impacts of our food system relies heavily on these policies, both at home and abroad.
And make no mistake, investment in agtech innovation is hot. U.S. companies spent nearly $23 billion in pursuit of agtech innovation over the course of 2021 and 2022 alone. While investments in agtech were down 44 percent in 2022, in 2021 venture capital investors pumped $51.7 billion into agrifood technologies – an 85 percent increase over 2020.
But what matters most is farmer adoption of farm-management systems, which due to many reasons, such as high cost and unclear ROI, has not been on the uptick. While there is a high openness to innovation, adoption is slow, according to global management consulting firm McKinsey & Company, which also noted that external capital flowed into the upstream agriculture food-technology industry with approximately 38 percent year-on-year growth since 2021.
We wanted to learn more and add in-person expertise from WIA Summit speakers Gregg Doud, who is COO of the National Milk Producers Federation, and Janae Brady, vice president, Government Affairs, American Seed Trade Association. So in case you weren’t one of the nearly 1,200 attendees who joined us in Nashville to hear this presentation, here are the highlights:
Janae Brady: I've been in D.C. for about 15 years now in a handful of capacities and have worked directly on the same staff as Gregg so we're used to having a lot of conversations about policy.
Gregg Doud: A lot of what we're going to talk about today is trade and policy in Washington, but it's also technology. In 2021, we spent 53 billion in innovation in agriculture globally. Last year, we spent about $30 billion, with about $10 million of that in the U.S. I bring that up because agriculture is changing very, very rapidly. At the forefront of that is the American Seed Trade Association. So Janae, when I talk about agtech and ag, what does that mean to you?
[JB] We think about things like mechanization or precision agriculture, or the different tools of the trade that are constantly evolving. The seed industry is both the oldest technology and the newest technology. We bridge an interesting gap. Everything starts with the seed. That's one of our slogans, and it's been that way for hundreds of years, 1000s of years. And for us, it's all about innovation. We're not planting the same seed that we were hundreds of years ago or even decades ago, or even just a few years ago. In our industry we really live or die by the ability to constantly be innovating and discovering whatever tool is going to get us through the next challenge, whether that be climate or a consumer demand, you name it, we've got innovators who are that are working to perfect the highest quality seed.
[GD] Today, we've got all this investment in agriculture, we have it all teed up, companies that are sponsors out there spend all this money, and yet they get to Washington, and what happens?
[JB] Not a lot is the short answer. To the point about investment, first of all, there can always be more investment. We're working on that in the Farm Bill and other avenues. But we do have significant investment, which is something that doesn't happen overnight, it takes years of research and development to bring products to the market. It's tough to put in that investment and work and R&D when you don't know if the federal government is going to allow that product to reach the farmer. So we spend a significant amount of time working with the USDA, EPA, USTR, all of the ABC agencies in D.C. to make a little bit of a smoother path for those products to eventually get to the producer.
[GD] To bring a new farm-input, chemical pesticide to market today, it takes the EPA anywhere from 16 to 23 years to approve that product. And so here we are, we have all these companies that have spent all this money and if they can't get a return on investment, where's this venture capital going to go? It's going to go to Brazil, or it's going to another country to innovate and have this technology. We're stuck in this country that we can't innovate and move on.
One of the key points I want to make is the fact that when you talk to somebody at the EPA, they have precious little understanding of what happens at the farm. When you talk to somebody at the FDA, even a lot of sections of USDA, the understanding of what goes on at the farm gate is so much poorer than when I came to Washington. We need your help in Washington.
[JB] That's exactly right. The biggest challenge that we have is that they just don't understand what you all do. They don't understand what happens at the farm and how it works and how their regulations, data keeping, and the amount of time that you need to keep records and how all those different variables have a pretty serious impact at the end of the day. Education is a big part of that. That's a lot of what I do, but to Gregg's point, we need aggies in D.C. We need folks that really understand to be centering up these efforts.
[GD] I want you to speak to this next Janae… we're getting hustled around the world. When you go to Canada, their folks understand this. When you go to Europe, they're friendlier on the use of CRISPR technology than we are in our own government. Japan is ahead of us. And we'll get into talking about China here a little bit. Both of our experiences in dealing with foreign regulators is that we're behind the curve on all of this.
[JB] That's a great point. Those of you in the room who are familiar with what biotechnology has done for our industry over the last 20 years can speak to the benefit that it has, but I want to highlight some of the other new technology that’s on the horizon. Gregg mentioned CRISPR technology. Gene editing has tremendous potential for U.S. agriculture, particularly for those sectors that haven't been able to see the benefit from biotechnology like the vegetable or the specialty crop sectors. There are products in the pipeline right now that can have an incredible impact on the environment, on nutritional value, on the things that make kids want to eat produce because it lasts longer on the shelf, and it looks prettier. You name it, the potential is endless.
But we're still working through the biotechnology issues of dealing with our federal regulations. With gene editing, we're on the verge of some serious progress, but we're also on the verge of completely stopping it before we ever get to that point if we don't have friendly environments. And to Gregg's point of looking around the world… let’s use Canada as an example. They published their gene-editing regulations just a couple of months ago, and essentially, if your products can be achieved conventionally, then they don't even need to see you, you can check the box and move on. It's a completely different ballgame than in the United States.
[GD] I was the guy who negotiated the ag piece of the China Phase One agreement for the previous administration. For me, that was a year of my life in 2019 – 33 negotiating sessions, hundreds and hundreds of hours meeting with the vice minister of agriculture of China and 40 or 50 of his best people, and behind me, 20 or 30 of the best people in U.S. government. One of the areas where we had the greatest conflict was over biotechnology.
And why do we talk about China? Because China last year imported $236 billion in agricultural products and food from the rest of the world. Total U.S. ag exports last year were $196 billion dollars. So China's total food imports from the world are more than U.S. total food exports to the world. That's why this relationship is so important. And lo and behold, what has happened in China in the last three months? They have announced for the first time ever in their history that they’re going to allow Chinese farmers to plant biotech seeds.
[JB] China is outpacing us in ag research across the board. They're investing significantly more than the United States. We have been leaders, and second to none in agriculture, but we are at a serious risk of falling behind, and the investment in research is a big reason for that, particularly what we see in China.
[GD] One quick thing to put this in context. China in the last couple of years has gone from zero to the largest corn importer on the planet. This is what has driven a big change in commodity prices recently. China's corn yields over the last 20 years have been pretty flat, but if they could increase their corn yield by just 10 percent, they wouldn't need to import corn anymore. Just 10 percent. This is why this is such an important conversation.
[GD] Now to the policy landscape update. We're supposed to talk about where we are in Washington. So it's the swamp… we get that. It's not a very pretty picture right now. And in the context of this, there's the Farm Bill. I've been involved in writing one, Janae’s been involved in writing two.
[JB] The Farm Bill is the omnibus legislation that provides a safety net for U.S. producers that has several titles spanning from conservation issues to commodity support programs, to crop insurance, to forestry programs, to trade programs. A significant portion of that is the SNAP nutrition program.
The Farm Bill is reauthorized every five years. The current one that we're looking at expires in about four days. And I'm pretty sure we're not going to see it passed into law in that time. But it really is the safety net of U.S. agriculture. It's absolutely critical that we continue to work forward to find success over the coming months. But I will point out, because it is the elephant in the room, we also have a government that may or may not be working after four days. So how do we balance things like trying to pass important legislation that matters to our producers, while also working through the, as Gregg pointed out, the sort of swamp of D.C. and challenges that brings?
[GD] Right now, we can't even pass money for the Pentagon. So that's part of the challenge here. For all of us in agriculture, we think we're the most important industry in this country, and we are very important. One big thing I learned when I was in the Senate after all my years in Washington and thinking agriculture was the most important thing, that when you get to the U.S. Senate, you realize, oh, there are a lot of other important things.
So you have to have relationships with folks on the finance committee and the banking committee and all the other groups that we work on with regard to this conversation, be cognizant of how you lobby on Capitol Hill. Many of you have done that before. I want to leave you with one comment on that as a guy that's been on both sides of that table for many, many years… don't ever go up there and just complain – make sure you bring a solution.
Janae, what other topics on the on the Farm Bill that we want to mention here as we wrap up?
[JB] I would just add that it's so critically important to tell your story, whether it is to a Congressperson or a Senator, whether they're in Washington, D.C., whether they're in your local library for a town hall, you all are the experts. You've got folks like Gregg and I in D.C. that are advocating for you, but you are the experts. We need folks with boots on the ground with real life experiences to explain why this is so important. We just we can't do it without you.
To learn more about the other sessions that took place at the 2023 Women in Agribusiness Summit – in Nashville, September 26-28 – take a look at the website.
ABOUT JANAE BRADY
Janae Brady serves as VP Government Affairs for the American Seed Trade Association. She previously served as staff for Chairman Pat Roberts on the Senate Committee on Agriculture, Nutrition, and Forestry where she advised on policy issues including international trade, agricultural research, biotechnology, crop protection and agricultural defense. Brady successfully led negotiations on the trade and research titles during the 2018 Farm Bill reauthorization. Additionally, Brady represented the Chairman during the consultation process for multiple international trade negotiations, including the U.S.-Mexico-Canada Agreement.
Brady began her career as a high school English teacher. She grew up working on her family’s wheat and sorghum farm located in Kansas. Janae holds degrees from Kansas State University and the George Washington University.
ABOUT GREGG DOUD
Gregg Doud is COO of the National Milk Producers Federation and is set to succeed Jim Mulhern as President and CEO. He is the former VP of Global Situational Awareness & chief economist for Aimpoint Research. Before that, Doud served as chief agricultural negotiator with the rank of U.S. Ambassador and was one of the primary architects of the U.S.-China "Phase One" trade agreement.
He is a former president of the Commodity Markets Council and senior staff member of the Senate Agriculture Committee where he helped craft the 2012 Senate Farm Bill. Doud previously worked as chief economist for the National Cattlemen’s Beef Association and market analyst for the U.S. Wheat Associates.
Doud grew up on a wheat, grain sorghum, soybean, swine, and cow-calf operation near Mankato in North-Central Kansas and received a B.S. in agriculture and M.S. in agricultural economics from Kansas State University.