Last week, we learned that farm income in 2011 is forecast to reach an all-time high, up 28 percent over 2010, signaling that American agriculture remains a bright spot in our nation's economy. The growth in farm income is also making a real difference for America's farm families, whose household income was up 3.1 percent in 2010 and is forecast to increase 1.2 percent in 2011. And despite marginal increases in retail food prices, all American families still pay substantially less for food at the grocery store than residents of nearly every other country thanks to the productivity of our farmers. All told, this is good news for our national economy.
A combination of factors has made this growth possible, including strong returns on cash receipts and off-farm employment, strong yields despite weather setbacks, and record high farm exports, which continue to make U.S. agriculture one of the only sectors of our economy to log a trade surplus year after year.
Today, exports support nearly 10 million American jobs. Overall, U.S. agriculture supports 1 in 12 American jobs in all sorts of industries from picking and processing, to packing and shipping, to shelving at your local market. Farm exports support more than 1.1 million jobs here at home. A few weeks back, President Obama signed into law a major piece of his jobs agenda: new trade agreements with Colombia, Panama and South Korea. These agreements will support tens of thousands of jobs here at home, put unemployed Americans back to work, and open new opportunities for American businesses. For America's farmers and ranchers, the trade agreements provide our best opportunity to build upon what has been a record year for U.S. agriculture. Combined, the agreements will generate an additional $2.3 billion in farm exports next year alone.
USDA believes that America needs an economy that makes, creates, innovates and exports. And there is no better way to spur productivity than by putting more money back into the pockets of American families. That's why it is so important for Congress to extend and expand the payroll tax cut that has given tax breaks to millions of families across the country this year.
If Congress fails to extend the current payroll tax cut, taxes will go up on millions of people at a time when families are struggling to make ends meet. That's unacceptable, as a typical household earning $50,000 a year will see their taxes increase by $1,000. But if Congress passes the proposal laid out by President Obama, the typical family earning $50,000 a year would see that tax cut continued, and receive more than $500 additionally — for a total tax cut of $1,500. It makes absolutely no sense to raise taxes on the middle class at a time when so many are still trying to get back on their feet and we see positive signs in growth and falling unemployment.
For our part, USDA will continue to maintain a strong farm safety net, expand local and regional food systems, and promote greater export opportunities for U.S. agriculture, all designed to increase incomes for America's farm families. But to help rebuild an economy that restores security for the middle class and renews opportunity for folks trying to reach the middle class, we also need to invest in the middle class. And Congress can do just that by extending the payroll tax cut.
Charles C. Cawley
The writer is state executive director of the USDA Maryland Farm Service Agency.