Whatever the desired end result — biofuels diversification, improved crop insurance or a farm bill that meets rural America’s needs without breaking the bank — innovation is where it starts, Agriculture Secretary Tom Vilsack told farmers and ranchers at the American Farm Bureau Federation’s 92nd annual meeting.

“We need an economy that creates and innovates,” Vilsack said. “We know it can work because it’s worked in agriculture.”

Last year’s potential record farm income is primarily due to farmers’ productivity and heart, according to Vilsack, but the trade surplus agriculture posted — the only trade surplus among the many sectors of the U.S. economy — helped too.

Vilsack said administration officials are working to ensure more trade opportunities by resolving ongoing trade disputes, tapping into emerging markets and building relationships in fragile, fledgling markets, like Afghanistan.

“We’re hopeful Congress will act on the Korea Free Trade Agreement, which will provide momentum for other agreements,” he said.

Looking ahead to the 2012 farm bill, Vilsack cautioned that lawmakers will have to be creative with limited resources, but the safety net critical to so many producers will be preserved.

In the works at USDA are expanded opportunities for biofuels, Vilsack said. He plans to soon announce new facilities in rural communities throughout the country. These new facilities, which draw on a number of untapped resources like various types of waste, will be located outside of the midwestern biofuels belt and are expected to create as many as 1 million jobs and add $1 billion to the economy.

Ensuring fair and open markets for producers, providing additional conservation opportunities, enhancing research and critically looking at our regulatory process are also at the top of the department’s list, and all will require an innovative approach.

Vilsack emphasized his appreciation for all that growers contribute beyond food. Just as farmers and ranchers have grown from their troubles, the rest of the country has something to learn from rural America, where, for every $1 in debt, there are $11 in assets.

He noted that Americans spend a much smaller portion of their paychecks on food than almost anyone else in the world.

“I’d like to ask people what they do with that extra 10 percent or 15 percent in their pocket,” he said. “And when was the last time you thanked a farmer?”