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What New Agriculture Leadership Could Mean for Minnesota

December 18, 2008 By Lee Egerstrom, Economic Development Fellow

Rural Minnesotans, like people associated with food and agriculture everywhere, learned late Tuesday that former Iowa Governor Tom Vilsack was announced as Agriculture Secretary-designate for the incoming administration.

Not bad, on the surface, for Minnesota. An Iowan succeeding another neighbor, from North Dakota, as head of a department that has direct impact on the lives and fortunes of so many rural Minnesotans and on the food supply for all Minnesotans.

And there are other promising aspects to this nomination that connect Vilsack with Minnesota. First, he knows the problems communities in rural Minnesota are experiencing with economic development from dealing with similar problems during two terms as governor of Iowa. And, rural Minnesota needs all the help it can get.

Let's look at the condition of the economy, and then ponder what we Minnesotans might do with new Ag Department leadership to revive our rural economy.

The appointment was a secondary flash on Tuesday. Ben Bernanke, chairman of the Federal Reserve, and the Fed's rate-setting Open Market Committee made the headlines.

The Fed dropped overnight bank loan rates to near zero in an attempt to help bankers be bankers, and get the economy rolling again. What's more, the Associated Press quoted an Open Market Committee statement as saying, "The outlook for economic activity has weakened further ... the Federal Reserve will employ all available tools to promote the resumption of sustainable economic growth and to preserve price stability."

That latter pledge came after woeful news was released by government statisticians and regulators that showed industrial production and overall prices measured by the Consumer Price Index falling precipitously, prompting economists to warn the U.S. has moved into a period of "deflation." This followed news that banks had parked funds in 30-day Treasury instruments that pay zero percent interest. That means the banks are simply hoarding cash holdings, not lending to business or consumers in any activity that might strengthen the economy. Moreover, it came before the U.S. Labor Department releases data today showing thousands more jobs lost in the past month. 

So let's look briefly at what the incoming secretary's leadership might mean to rural Minnesota.

What neighbors might remember of Vilsack's terms as Iowa governor is his concern with the ongoing "brain drain" that affects much of Iowa and most of rural America.

I once asked Vilsack at a Des Moines conference how Iowa could keep exporting college degrees? Iowa educated people populate the Twin Cities, Chicago, Kansas City and St. Louis, Denver, and other points east and west.

It was like throwing raw meat to a wolf. Vilsack went into an impassioned and detailed call for rural economic development to keep the newly educated at home and building the Iowa economy.

We face the same demographic situation in much of rural Minnesota. We do have Rep. Collin Peterson as chairman of the House Agriculture Committee. That means he is in place to work with the department on economic development stimulus packages that might come forth from both the Fed and the new administration in the month's ahead.

The U.S. Department of Agriculture has a strong infrastructure in Minnesota with its rural development, farm program (farm service agency), conservation and forestry units. In other words, a pipeline to Washington is built. There needs to be leadership right here in Minnesota, on our end of the pipeline, to make economic development work.  So far, Minnesota's governor doesn't appear willing to take the help.

That should give state officials and lawmakers pause as they wrestle with the $5.2 billion state budget deficit.  We cannot cut our state programs and public personnel so deeply that we are unable to use federal help that might be on the way. If we do ourselves in, to paraphrase Vilsack, everything will "drain" from rural Minnesota, and not just "brains".

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