In a major speech on Monday, Agriculture Secretary Tom Vilsack lauded U.S. agriculture then outlined the perils it faces in coming years. Vilsack’s comments at the annual conference of the American Farm Bureau Federation (the nation’s largest farmer advocacy group) touched on strengthening rural American infrastructure, strong export numbers for U.S. agriculture, the coming funding struggle over the next farm bill and biotechnology.

“When dealing with reducing deficits, we're going to have to make difficult choices,” while crafting a new farm bill, Vilsack warned the audience. “It's one of the reasons (the USDA) stepped up in an effort to convey a sense that we were serious about this deficit in restructuring our crop insurance program to save $4 billion to apply it to deficit reduction.

“But we didn't stop there. We decided that we could become innovative with crop insurance. We could figure out how to use resources to expand coverage in range and pasture land, which we’ve been wanting to do for some time. So, we not only reduced the government's exposure, but we figured out a way to expand coverage.”

Vilsack also pointed to the recently hatched “good producer premium discount, which acknowledges that those who have great production records and those who have had good records in terms of crop insurance ought to perhaps receive a break on their premiums. So there are ways in which we can be creative with our resources while making sure that we spend our money wisely.”

Regarding future difficulties in funding agriculture programs, Vilsack was beaten to the punch by Georgia Sen. Saxby Chambliss, who opened the AFBF conference.

“The good news is, when we look at American agriculture today, it’s as healthy as it’s ever been in my lifetime,” said Chambliss, a farm bill veteran, who will be replaced as ranking member on the Senate Agriculture Committee by Kansas Sen. Pat Roberts (Chambliss is now expected to be ranking member of the Senate Intelligence Committee).“And that’s due certainly to in some small part policy, but from an overwhelming standpoint it’s due to what you do, and your family and your farmer friends around the country do every single day.”

However, continued Chambliss, “It’s going to be the toughest farm bill we’ve ever produced.”

And, according to reports, Chambliss will wait before adopting Vilsack’s positive attitude on crop insurance savings. Will the Obama administration gives agriculture credit for those cuts when constructing a 2012 budget?

“We know that the current baseline is going to be reduced if nothing else because of the hit we took on crop insurance,” said Chambliss. “That’s already a price agriculture is paying to try to reduce the deficit. I expect there will be additional shots taken at us. You know, we’ve always been willing to step up, whether it’s in a reconciliation process or whatever to try to pay our fair share in reductions in spending and we’re going to continue to do that. But we’re only going to be willing to do what’s fair and appropriate for agriculture compared to other agencies around Washington and we’re not going to let there be an undue burden be put on farmers because of excess reductions of spending in agriculture.”