[Senate Hearing 107-137]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 107-137

                     CONFIRMATION OF ANN M. VENEMAN

=======================================================================

                                HEARING

                               before the

                       COMMITTEE ON AGRICULTURE,
                        NUTRITION, AND FORESTRY
                          UNITED STATES SENATE


                      ONE HUNDRED SEVENTH CONGRESS

                             FIRST SESSION


                               __________

                            JANUARY 18, 2001

                               __________

                       Printed for the use of the
           Committee on Agriculture, Nutrition, and Forestry


  Available via the World Wide Web: http://www.senate.gov~agriculture

                                _______

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           COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY



                       TOM HARKIN, Iowa, Chairman

PATRICK J. LEAHY, Vermont            RICHARD G. LUGAR, Indiana,
KENT CONRAD, North Dakota            JESSE HELMS, North Carolina
THOMAS A. DASCHLE, South Dakota      THAD COCHRAN, Mississippi
MAX BAUCUS, Montana                  MITCH McCONNELL, Kentucky
TIM JOHNSON, South Dakota            PAT ROBERTS, Kansas
BLANCHE L. LINCOLN, Arkansas         PETER G. FITZGERALD, Illinois
ZELL MILLER, Georgia                 CHARLES E. GRASSLEY, Iowa
                                     LARRY E. CRAIG, Idaho
                                     RICK SANTORUM, Pennsylvania
                                     GORDON SMITH, Oregon

                     Mark Halverson, Staff Director

                          Alison Fox, Counsel

                      Robert E. Sturm, Chief Clerk

              Keith Luse, Staff Director for the Minority

                                  (ii)

  
                            C O N T E N T S

                              ----------                              
                                                                   Page

Hearing:

Thursday, January 18, 2001.......................................     1

Appendix:
Thursday, January 18, 2001.......................................    55
Document(s) submitted for the record:
Thursday, January 18, 2001.......................................    81
Question(s) and answers submitted for the record:
Thursday, January 18, 2001.......................................   111

                              ----------                              

                       Thursday, January 18, 2001
                    STATEMENTS PRESENTED BY SENATORS

Harkin, Hon. Tom, a U.S. Senator from Iowa, Chairman, Committee 
  on Agriculture, Nutrition, and Forestry........................     1
Lugar, Hon. Richard G., a U.S. Senator from Indiana, Ranking 
  Member, Committee on Agriculture, Nutrition, and Forestry......     4
Cochran, Hon. Thad, a U.S. Senator from Mississippi..............    19
Roberts, Hon. Pat, a U.S. Senator from Kansas....................    24
Fitzgerald, Hon. Peter G., a U.S. Senator from Illinois..........    33
Craig, Hon. Larry E., a U.S. Senator from Idaho..................    30
Conrad, Hon. Kent, a U.S. Senator from North Dakota..............    16
Lincoln, Hon. Blanche L., a U.S. Senator from Arkansas...........    27
Miller, Hon. Zell, a U.S. Senator from Georgia...................    31
Stabenow, Hon. Debbie, a U.S. Senator from Michigan..............    35
Dayton, Hon. Mark, a U.S. Senator from Minnesota.................    40
Nelson, Hon. E. Benjamin, a U.S. Senator from Nebraska...........    38
Johnson, Hon. Tim, a U.S. Senator from south Dakota..............    22
Grassley, Hon. Charles E., a U.S. Senator from Iowa..............    44
                              ----------                              

                     Introduction of Ann M. Veneman

Feinstein, Hon. Dianne, a U.S. Senator from California...........     6
Boxer, Hon. Barbara, a U.S. Senator from California..............     7
Dreier, Hon. David, a Representive from California...............     5
                              ----------                              

                               WITNESSES

Veneman, Ann M., Designee for Secretary, U.S. Department of 
  Agriculture....................................................    10
                              ----------                              

                                APPENDIX

Prepared Statements:
    Harkin, Hon. Tom.............................................    56
    Boxer, Hon. Barbara..........................................    58
    Craig, Hon. Larry E..........................................    62
    McConnell, Hon. Mitch........................................    63
    Baucus, Hon. Max.............................................    65
    Johnson, Hon. Tim............................................    60
    Leahy, Hon. Patrick..........................................    67
    Santorum, Hon Rick...........................................    73
    Grassley, Chuck..............................................    76
    Veneman, Ann M...............................................    78
Document(s) submitted for the record:
    Biographical information of Ann M. Veneman...................    82
    Letter of Opposition submitted by Marcia Merry Baker, 
      Executive Intelligence Review..............................   104
    Letter of Support submitted by National Federation of Federal 
      Employees..................................................   109
Question(s) and answers submitted for the record:
    Lincoln, Hon. Blanche........................................   112
    Johnson, Hon. Tim............................................   119
    Conrad, Hon. Kent............................................   122
    Harkin, Hon. Tom.............................................   126
    Leahy, Hon. Patrick..........................................   130
    Roberts, Hon. Pat............................................   134
    Baucus, Hon. Max.............................................   138
    Smith, Hon. Gordon...........................................   141
    Lugar, Hon. Richard G........................................   143

 
       CONFIRMATION OF ANN M. VENEMAN AS SECRETARY OF AGRICULTURE

                              ----------                              


                       THURSDAY, JANUARY 18, 2001

                                       U.S. Senate,
         Committee on Agriculture, Nutrition, and Forestry,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 9:00 a.m. in room 
538, Senate Dirksen Building, Hon. Tom Harkin (Chairman of the 
Committee) presiding.
    Present: Senators Harkin, Lugar, Grassley, Roberts, 
Cochran, Craig, Fitzgerald, Miller, Conrad, Nelson, Johnson, 
Dayton, Lincoln, and Stabenow.
    The Chairman. The Senate Agriculture Committee will come to 
order. And I will at this time recognize our distinguished 
Senator from Indiana, Senator Lugar.
    Senator Lugar. Well, thank you very much, Chairman Harkin.
    It's my privilege to pass the gavel over to Chairman 
Harkin, who has already used it to commence this meeting.
    [Laughter.]
    But nevertheless, I advised him a few days ago, it's well 
to get loosened up, he may need this. This is a 50-50 Senate, 
there is every attempt always made in this committee to work in 
a bipartisan and collegial fashion. And I'm grateful that, that 
has been so. And Tom Harkin is a major reason why that is so.
    So it's a privilege to pass the gavel over to you for this 
very, very important meeting. And I just have the admonition, 
make sure that you do well.

OPENING STATEMENT OF HON. TOM HARKIN, A U.S. SENATOR FROM IOWA, 
  CHAIRMAN, COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY

    The Chairman. Thank you very much, Senator Lugar. I will be 
returning it shortly.
    [Laughter.]
    I must at the outset first of all thank Senator Lugar for 
his many kindnesses and generosities during our tenure together 
here on the Senate Ag Committee. It truly has been a bipartisan 
effort. We've had a great working relationship and I believe 
that will continue to be so during this session of the Senate 
also.
    And so I look forward to working with you, Senator Lugar, 
and addressing the many problems that we have in agriculture 
and moving our agenda forward with our new Secretary of 
Agriculture.
    I also have said at the outset that this is again a 
singular honor for me to chair the Ag Committee for a couple of 
days. The last Iowan to chair the Senate Agriculture Committee 
was Jonathan P. Doliver from Fort Dodge. He served as chairman 
of this committee from March 15th, 1909 to June 25th, 1910, a 
little over a year. So that was a short time.
    Well, I'm going to beat him.
    [Laughter.]
    I will go down now in history as being the second Iowan to 
ever chair this committee. And I will also go down in history 
as having the shortest tenure as chairman of this committee.
    [Laughter.]
    So it is an honor for me.
    And it's an honor to be here today to welcome our Secretary 
of Agriculture designee, who is here today. Here is the 
procedure that we'll follow. I will make my opening statement, 
I will recognize Senator Lugar for his opening statement. I 
know that Senator Feinstein and Senator Boxer, and I assume 
Congressman Dreier, will also have other things they have to go 
to, other hearings.
    I will recognize you for introducing Ms. Veneman and then 
you can be excused. Then we'll come back to the Committee and 
each Senator will be recognized for up to 10-minutes, both to 
make an opening statement and to propound questions to the 
Secretary of Agriculture designee.
    So with that, let me just open by again welcoming you here, 
Ms. Veneman. We look forward to a good hearing and one in which 
we can exchange some thoughts about agriculture and the future 
of agriculture. The Secretary of Agriculture has one of the 
toughest and too often under appreciated jobs in our 
Government. In any number of ways, the programs and activities 
of the Department of Agriculture touch upon and improve all 
Americans, in every walk of life. And particularly, if I might 
be a little bit home bound, in a great agriculture State like 
Iowa, it's tremendously important who serves as Secretary and 
how well he or she carries out those responsibilities.
    I must tell you, I was encouraged by the nomination of Ann 
Veneman to serve as Secretary of Agriculture. I've known her 
for a number of years, worked with her in previous posts at 
USDA. Ms. Veneman is an intelligent and capable person, with 
solid experience in administering food and agriculture 
programs, both here in Washington and in her own State of 
California.
    Her credentials include service as Deputy Secretary of 
USDA, and Secretary of the California Department of Food and 
Agriculture.
    I believe we can work together and we have to work together 
across party lines to do the work that must be done for farm 
families and rural communities and consumers. As we have both 
said here, we have a strong record on this committee of 
bipartisan cooperation. And again, I want to thank Senator 
Lugar for that cooperative attitude.
    As I mentioned, the Department of Agriculture has far 
reaching responsibilities, from farm programs to food safety to 
conservation to nutrition assistance. I hope today's hearing 
will be the start of a productive discussion and working 
relationship on the many critical issues that fall under USDA's 
jurisdiction.
    Starting with farm policy, I believe it is essential that 
we rework the Freedom to Farm bill, and we should make every 
effort to do that this year. We should keep what is working, 
mainly planting flexibility and conservation, and improve that 
which is not working. Mainly that involves improving the farm 
income features of the bill, so that our Nation's farm families 
do not have to depend on the uncertain prospect of emergency 
assistance packages year after year.
    This year, we will also begin the process, I've already 
discussed this with Senator Lugar, of having hearings and 
beginning the process for the next Farm Bill, the present one, 
which expires next year. Again, I feel the next Farm Bill 
should include a much stronger emphasis on conservation.
    I and Senator Smith of Oregon have proposed a new voluntary 
program to provide financial incentives for maintaining and 
installing conservation practices. It's a proposal that will 
both improve farm income and bring about far greater dividends 
to farmers and our Nation as a whole in the form of improved 
conservation of our natural resources for future generations.
    Building markets and demand for agricultural products is a 
critical need in agriculture. We have a number of pressing 
issues in the area of agricultural trade. And I expect that Ms. 
Veneman's experience here will be valuable in working to expand 
our export markets.
    We have a lot to do on the domestic side through creating 
and developing new uses and markets for our commodities, along 
with much greater use of ethanol, biodiesel and biomass fuels. 
Biotechnology offers a lot of promise in this regard, although 
we have some knotty issues that will have to be resolved if 
agricultural biotechnology is really to succeed.
    We also can and must do more to help rural communities 
share in the prosperity that the rest of the country is 
enjoying. Our rural communities are falling far behind. That 
includes jobs and economic growth and a higher quality of life 
in our rural communities. And USDA has a critically important 
role in rural utilities, electricity, telecommunications, sewer 
and water services, assisting rural cooperatives and 
businesses, improving community facilities, channeling 
investment capital to rural areas.
    I think our strategy for rural revitalization must include 
promoting the success of farmer owned cooperatives and 
businesses that process and market farm commodities. An 
overriding concern is the future of the independent family farm 
producer in American agriculture. We've seen a dramatic change 
in the structure and landscape of farming as a result of rapid 
and sweeping consolidation, vertical integration and economic 
concentration.
    A key responsibility of the next Secretary of Agriculture 
will be to enforce the laws in USDA's jurisdiction 
aggressively, to work with the Department of Justice and the 
Federal Trade Commission, to enforce the antitrust laws fully 
and to work with us on needed new legislation.
    From the consumer perspective, USDA has no role more 
important than protecting the safety of our Nation's food 
supply. We are blessed with an abundant supply of safe and 
wholesome food. But there's more that can and should be done to 
improve the safety of our food. And as a Nation, we cannot fail 
to meet our responsibilities to combat hunger and malnutrition 
here and abroad.
    We Americans enjoy a level of wealth and abundance 
unprecedented in history. We simply cannot tolerate or condone 
hunger or malnutrition in our own country. We can do more to 
help people in developing countries, especially children. I 
strongly support the initiative proposed by former Senators 
Dole and McGovern, and as begun by President Clinton, to 
provide food assistance in ways that both combat hunger and 
promote education in developing countries. The proposal for an 
international school lunch and school breakfast program is one 
that we need to pursue vigorously.
    So again, I welcome you, Ms. Veneman, to the Committee. I 
look forward to today's hearing and to working with you in the 
coming months and years.
    And with that, I would recognize Senator Lugar from 
Indiana.
    [The prepared statement of Chairman Harkin can be found in 
the appendix on page 56.]

    STATEMENT OF HON. RICHARD G. LUGAR, A U.S. SENATOR FROM 
 INDIANA, RANKING MEMBER, COMMITTEE ON AGRICULTURE, NUTRITION, 
                          AND FORESTRY

    Senator Lugar. Mr. Chairman, I join you and our colleagues, 
Senator Feinstein and Senator Boxer and Congressman Dreier, in 
welcoming this distinguished nominee to our committee this 
morning. I was pleased a few days ago to visit again with Ann 
Veneman. I have appreciated her leadership over the years at 
the State and local level and at the Federal level in a 
previous administration. She demonstrated then the wisdom and 
the diligence that are required for the job that is at hand. 
Her combined knowledge of domestic affairs and international 
experience make her an ideal candidate.
    As she knows, the U.S. Department of Agriculture is a very 
difficult department to manage. One of my suggestions 
throughout my tenure on this committee has been that the 
Secretary manage it, as opposed to accepting a stovepipe 
mentality of 41 duchies, or reduced, as this committee has 
helped, to 35, by my count. It is important that the Secretary 
be the Secretary, and that she manage ably and comprehensively 
in behalf of all of the interests that somehow come together in 
USDA.
    And that will encompass a wide, diverse set of issues, that 
you have illustrated in your presentation, Mr. Chairman. And I 
agree with the agenda that you have. Each of these are very, 
very important subjects, which I'm certain will have the 
attention of all of us.
    For the moment, I have confidence in Ann Veneman. And I 
look forward to her testimony. And I appreciate very much your 
leadership in expediting both the hearing and the possibilities 
for her early confirmation. I thank the Chair.
    The Chairman. Thank you, Senator Lugar.
    As I said, then, I would recognize our distinguished 
colleagues from the Senate and the House for purposes of 
introduction of Ms. Veneman. Then we'll return back to the 
Committee for opening statements and questions.
    And in that regard, I would again exercise the right of, I 
will recognize our member from the House. We like to be our 
generous to our people who take the time and effort to come 
across all the way from the House side over here, as many of us 
have done in the past. So we welcome you here, Congressman 
Dreier, and please proceed.

  STATEMENT OF HON. DAVID DREIER, A U.S. REPRESENTATIVE FROM 
                           CALIFORNIA

    Congressman Dreier. Well, thank you very much, Mr. 
Chairman. Let me join my friend Dick Lugar in congratulating 
you on the fine job that you're doing chairing this committee. 
We appreciate the fact that you've expedited this so well.
    I want to say that it's a special privilege for me to be 
here with the distinguished former Chairman of the House 
Agriculture Committee, my friend Pat Roberts, and also to join 
with my colleagues, Senators Boxer and Feinstein, in this very 
important introduction.
    Both you and Senator Lugar, Mr. Chairman, have just spoken 
about the bipartisanship that goes on here in the Agriculture 
Committee. And bipartisanship is very clearly the flavor of the 
month now. Virtually everyone is talking about it with a great 
deal of enthusiasm.
    And I congratulate this committee for the approach that 
you've taken. I think it's very important that we note that Ann 
Veneman is in fact one of the greatest models for 
bipartisanship and has been throughout her entire life. Her 
father was a very prominent State assemblyman in California.
    In fact, a column that was just written by a great, a very 
famous columnist with the L.A. Times, George Skelton, said that 
Ann's father was in fact clearly among the top 10 most 
respected State assemblymen in the last 40 years in California. 
He came to that position in large part because of the 
bipartisan approach that he took to dealing with public policy 
questions. And his daughter has clearly emulated that.
    You've gone through already the distinguished positions 
that she has held. She's clearly extremely qualified, extremely 
talented, and I believe will do a great job as Secretary of 
Agriculture.
    Not many people know that the number one industry in 
California is agriculture. People think it's technology, the 
entertainment industry, tourism. But agriculture continues to 
be number one. In fact, the San Joaquin valley, from which Ann 
Veneman hails, I was told when I was up there a few months ago, 
if they had enough water, could feed the entire world for 100 
years. And it seems to me that when you look at, if you look at 
the very great importance that agriculture has for the world 
from a California perspective, and having had Ann Veneman as 
the leader of that effort in California, she is well trained 
now to serve as U.S. Secretary of Agriculture.
    The issue of trade is for me one of the top priorities. I 
spend most of my time, my focus on the Rules Committee, which I 
chair, we talk and focus on trade issues. I was very privileged 
to have worked with Ann on the North American Free Trade 
Agreement. She was very involved in the U.S.Canada Trade 
Agreement, the very important granting which Senator Lugar and 
I worked on, the granting of permanent normal trade relations 
with the People's Republic of China.
    These are all very key issues for agriculture. And Ann's 
expertise in these areas will, I believe, serve her very well 
when she becomes the first woman ever to serve as Secretary of 
Agriculture.
    Thank you very much, Mr. Chairman.
    The Chairman. Congressman Dreier, thank you very much for 
that great statement, and thank you for being here this 
morning.
    I now recognize our senior Senator from California, Senator 
Feinstein.

    STATEMENT OF HON. DIANNE FEINSTEIN, A U.S. SENATOR FROM 
                           CALIFORNIA

    Senator Feinstein. Thanks very much, Mr. Chairman and 
members of the Committee.
    It's a great pleasure for me to be here with my colleagues, 
Senator Boxer, Mr. Dreier from California, to really indicate 
in my introduction also my personal support for this nominee. 
Ann Veneman has really built a very distinguished career. She 
has supported farmers by opening new markets for California's 
agricultural products. She brings 20 years of experience, a 
truly global perspective, and I think this will serve the 
American farmer well.
    Interestingly enough, her father also was a distinguished 
Modesto peach farmer. And all through the course of her career, 
she has been a strong advocate for agricultural products. I 
think an interesting aside that also demonstrates the support 
she has is that a delegation from the California Farm Bureau 
has traveled here for this nomination hearing, headed by the 
President of the Farm Bureau, Mr. Bill Pauli. I'd like to ask 
him to stand, if he would, and just welcome him and the 
delegation to Washington.
    Ann Veneman first joined the United States Department of 
Agriculture's Foreign Agricultural Service in 1986. She rose to 
Deputy Under Secretary for International Affairs and Commodity 
Programs in 1989.
    Two years later, she was appointed as the Deputy Secretary 
of Agriculture by President Bush. In that capacity, she was a 
leader in the fight to open world markets to American 
agricultural products. And as Mr. Dreier said, she helped to 
negotiate both the NAFTA agreement and the Uruguay Round of 
talks for the GATT Agreement.
    In 1995, she was named California Secretary of Food and 
Agriculture by Governor Pete Wilson. As California's 
Agriculture Secretary, Ms. Veneman successfully ran an agency 
of 1,800 employees with a $200 million budget. She emphasized 
biotechnology and food safety. She expanded overseas trade, 
especially in Asia and South America, and she tightened border 
controls to protect California's crops against pest 
infestation, which has become a major problem.
    Under her watch, the value of California's agricultural 
commodities grew by some $4 billion, from $22 billion to $26 
billion. In addition to her work in State and Federal 
Government, she has extensive experience in the private sector, 
giving her insights into the needs and challenges facing this 
key industry.
    As a board member for the biotechnology company, Calgene, 
she gained a deep understanding of the possibilities and the 
real and the perceived dangers of genetically modified crops, 
which I think we all believe is going to become a much more 
important and also deeply concerning area in the future. So 
this experience should serve her well, as questions about the 
safety of these crops continue to arise.
    The next Secretary of Agriculture is going to have to 
confront the global and technological changes facing the 
agricultural industry. And I think with her experience in both 
the public and private sector, Ann is really well suited to 
deal with these issues. Based on her record, we can assume that 
she will take a lead in opening new markets for our country's 
agricultural products, while developing policies to ensure both 
traditional and genetically modified crops are safe for the 
American consumer.
    So I'm really delighted. For California, and I think my 
colleague and friend will agree with this, this is a very 
important appointment. And I'm just very proud to see Ann here, 
her family here, and to wholeheartedly introduce, recommend and 
support her appointment as Agricultural Secretary.
    So thanks very much, Mr. Chairman. If I might be excused, 
there's a certain hearing in Judiciary which I'm involved in.
    [Laughter.]
    So I'll go back there. Thank you.
    The Chairman. I understand. Thank you very much, Senator 
Feinstein.
    Senator Boxer.

STATEMENT OF HON. BARBARA BOXER, A U.S. SENATOR FROM CALIFORNIA

    Senator Boxer. Thank you very much. Senator Feinstein, your 
words were just right on the mark, and I endorse everything you 
said. I endorse the comments of David Dreier, as well.
    Mr. Chairman, congratulations, Mr. soon to be chairman, 
congratulations. And to all my friends on this committee, 
you're all my friends, you're my good friends--it's nice to be 
here.
    I also wanted to note your two new members, Senators Nelson 
and Dayton. And I wanted to tell them, since I've been around a 
little longer than they have, enjoy this day. This is a good 
day. In the future, there will be more contentious hearings. 
This one I think you will enjoy.
    I wanted to say how pleased I am to be here, and that my 
schedule worked out so that I could be, Ann. I also want to 
welcome the members of your family who happen to be sitting 
behind me. And I know they are as proud as they can be.
    Clearly, Ms. Veneman has a long list of firsts associated 
with her career: the first woman to head California's 
Department of Food and Agriculture, the first woman to hold the 
post of Deputy Secretary of the U.S. Department of Agriculture; 
she sits before you as the first woman ever nominated to be the 
Secretary of Agriculture. It's a very proud moment, I think, 
for women and for men as well, who care about women and care 
about equal opportunity, and I know it's all of you.
    I also think there's another first. I think she's the first 
peach grower to be nominated to be Secretary of Agriculture.
    [Laughter.]
    So we have a number of firsts here, Mr. Chairman, in 
addition to yours.
    And this of course makes our peach growers very happy, and 
frankly, all of our growers, from almonds to avocadoes and all 
of the things that we grow in our State.
    I am not going to go into everything she's ever done in her 
life because I think most people have touched on it, other than 
to say, far longer than the list of firsts is the list of 
praise and kind words that her nomination has received. My 
friend Leon Panetta has said that President elect Bush could 
not have picked a more moderate, hard working and intelligent 
candidate. The California Farm Bureau praised her nomination, 
saying she understands agriculture and knows where it needs to 
go.
    As the members of this committee know well, and I know 
well, even though I'm not on this committee because I am often 
involved in what you do. Agriculture often breaks down along 
regional rather than party lines. Ann Veneman brings 
substantial California experience to this job, but she has 
drawn praise nationwide. The Des Moines Register, for example, 
praised her nomination, calling her ``talented, energetic, 
knowledgeable and personable.'' And I know that you will find 
all those things to be true and more.
    She has been broadly praised for her knowledge and her hard 
work in the areas of trade, food safety--which matters so much 
to all of us--and of course, the high tech developments in the 
ag industry.
    We have a $27 billion per year agricultural industry in 
California. And it's not shocking to know how pleased they all 
are with this nomination. Some of them are here Senator 
Feinstein introduced a couple of folks. And I really know that 
she will serve all of our Nation's farmers well.
    In closing, I trust that her confirmation will be smooth 
and that she will follow her colleague, mentor and fellow 
Modesto native, Richard Lyng, to be the second Californian to 
assume the post of Secretary of Agriculture. And again, my 
friends on the Committee, I think you're going to be very 
pleased.
    And with that, I will take my leave, Chairmen both. And of 
course, if you ever need to talk to me about Ann in the future, 
I'll be right here, johnny on the spot. Thank you very much.
    [The prepared statement of Senator Boxer can be found in 
the appendix on page 58.]
    The Chairman. Thank you very much, Senator Boxer.
    Senator Boxer, Congressman Dreier, you're excused. I know 
you have other business to attend to.
    Again, before I administer the oath to Ms. Veneman, I would 
like to welcome our two new members. I think we may have at 
least one new member on that side, but we don't know who that 
person is right now. But I would like to welcome our two new 
members, both neighbors of mine, one to the north and one to 
the west.
    Senator Nelson, of course, former Governor of the State of 
Nebraska, who takes the seat of our former colleague, Senator 
Bob Kerrey, who served with distinction on this committee. I 
have known Senator Nelson for many, many years. We've done a 
lot of work together. I can assure all of you that you will 
find no one with a broader and more intense interest in all of 
the aspects of agriculture than Senator Nelson. And we welcome 
you to this committee, Senator Nelson.
    And my neighbor to the north, Senator Dayton, again, I have 
to tell you this, I first campaigned for him for the Senate in 
1982. So if there's a guy that never gives up, it's Mark 
Dayton. And he has served with distinction in his State as 
State Auditor of the State of Minnesota, has distinguished 
himself also in the private sector. But again, someone I've 
known for many years and again, someone who has a very deep 
knowledge and appreciation for all aspects of agriculture. We 
certainly welcome Senator Dayton to the Committee also. And we 
look forward to the new member on the Republican side as soon 
as we can whenever they come up.
    [Laughter.]
    Ms. Veneman, if you'll rise, I'll administer the oath and 
we can get on with this.
    Please raise your right hand. Do you swear that the 
testimony you are about to present is the truth, the whole 
truth and nothing but the truth, so help you, God?
    Ms. Veneman. I do.
    The Chairman. Thank you.
    Ms. Veneman, do you agree that if confirmed, you will 
appear before any duly constituted committee of Congress if 
asked?
    Ms. Veneman. Yes, Sir.
    The Chairman. I should also mention for the record that a 
number of letters of support for Ms. Veneman's confirmation 
have been received, and without objection, they'll be placed in 
the record.
    [The information referred to can be found in the appendix 
on page 81].
    Members are asked to submit any written questions by the 
close of business today, Thursday. In submitting questions, 
members may want to keep in mind that because Ms. Veneman does 
not have full access to all of the resources of USDA, she may 
have some difficulty in answering questions that are especially 
technical, and that may take some time to get back.
    So Ms. Veneman, again, welcome to the Committee. This truly 
is an historic occasion for a number of reasons, not the least 
of which is you will be the first woman Secretary of 
Agriculture. And I say it's about time.
    Ms. Veneman. Thank you.
    The Chairman. The history of agriculture in America has 
mostly been about the men who have farmed and who have led 
certain farm issues. But basically I think for too long we've 
forgotten the intense role that women have played in all of the 
aspects of our frontier, the development of agriculture, new 
products, many of the scientists or plant geneticists and many 
of the people involved in genetics and livestock, these have 
been women.
    And I think for too long they've been forgotten and shoved 
by the wayside. And so I think your being Secretary of 
Agriculture will send a very positive message to young women 
around the country that they, too, can have a great future in 
agriculture, in all aspects of agriculture.
    So I think this is truly historic. And I want to 
congratulate President elect Bush for picking you as his 
nominee to be our Secretary of Agriculture.
    I had a couple of housekeeping questions. I asked two. The 
third one is that the Committee has your committee 
questionnaire and the financial disclosure report and analysis 
from the Office of Government Ethics. For the record and for 
the benefit also of any members of the public who may have any 
questions, will you briefly describe for us the process you 
have followed and the steps taken to make sure there will be no 
conflicts of interest for you relative to any clients you may 
have represented, boards you may have been on or any 
investments you have or may have had? And will you assure the 
Committee that if there ever is any question that arises, you 
will consult closely with the experts on ethics in USDA's 
Office of General Counsel to guide your actions?
    Ms. Veneman. Yes, Sir, and I have been continuing to 
consult with the Office of the General Counsel at USDA and the 
Ethics Office to ensure that everything that I've been involved 
in the past will appropriately be dealt with as I assume if 
confirmed assume the position.
    The Chairman. Thank you.
    Ms. Veneman, I would recognize you for an opening 
statement.

   STATEMENT OF ANN M. VENEMAN, DESIGNEE FOR SECRETARY, U.S. 
                   DEPARTMENT OF AGRICULTURE

    Ms. Veneman. Thank you very much, Mr. Chairman, and almost 
Mr. Chairman Lugar, and members of the Committee. I truly am 
honored and humbled to be here as the President elect's choice 
for Secretary of Agriculture.
    I would like to thank the Committee members for your 
gracious reception that I've received from most of you that 
I've been able to meet with over the past couple of weeks. I've 
appreciated the opportunity to meet with you and discuss the 
areas of interest to each of you.
    I also want to thank the staff for their assistance and 
cooperation in preparing for this hearing.
    The issues facing our farmers and ranchers today are 
complex and challenging. The hard working men and women who 
provide our food and fiber have been tested by low prices, bad 
weather and other adversities. Government has appropriately 
lent a hand during these trying times, and it is important that 
we continue to focus our attention on trying to solve the 
challenges that face producers throughout the country.
    In addition to assisting our farmers and ranchers in 
difficult times, we must also work together to help them seize 
market opportunities, both at home and abroad. With 96-percent 
of the world's population living outside of the United States, 
we need to expand trade and eliminate barriers to access for 
our products in what is an ever-expanding global market.
    As we seek market growth, we should continue to search for 
new and alternative uses for our farm products and find ways to 
strengthen the competitive position of our producers. Our 
producers also need help in adapting to changing environmental 
standards. Regulations should be based on sound scientific 
principles and Government policy should help, not hinder, the 
ability of farmers to be good stewards of the land.
    Working with Congress, the Department needs to be vigilant 
in protecting the safety of our food supply and in protecting 
agriculture from unwanted pests and diseases. Our research 
programs should assist us in achieving these goals.
    Technology is driving change in every part of the economy, 
including the food chain. Advances in technology are leading to 
new products, increased productivity and more environmentally 
friendly farming. Research should enhance such technologies and 
the programs should help farmers take advantage of the new 
opportunities.
    The mission of the Department of Agriculture extends beyond 
production agriculture. From feeding hungry families and 
children to assisting rural communities to managing our 
majestic forests to consumer protection, the Department's 
responsibility reaches the lives of nearly every American.
    If confirmed, I intend to promote cooperative working 
relationships with other agencies of Government to ensure that 
the concerns of farmers and ranchers are understood and 
advocated throughout the Government. Because as you all know, 
many of the areas of the Department's responsibility overlap 
with other parts of Government.
    If confirmed, I will work to foster an atmosphere of 
teamwork, innovation, mutual respect and common sense within 
the Department and focus our delivery systems on quality 
service to our customers.
    Those of you who know me also know that I believe in 
working cooperatively with Congress. If confirmed, I will look 
forward to renewing old friendships, and building new ones, 
particularly as we work together to craft farm policy in the 
new century.
    As President elect Bush has said, ``The spirit of the 
American farmer is emblematic of the spirit of America, 
signifying the values of hard work, faith and 
entrepreneurship.'' This is the spirit I hope to bring to the 
Department of Agriculture and the position of Secretary.
    I look forward to working with you toward our common 
objective of helping America's farmers and ranchers continue to 
be the most productive, innovative and profitable in the world. 
Thank you very much.
    [The prepared statement of Ms. Veneman can be found in the 
appendix on page 78].
    The Chairman. Thank you very much, Ms. Veneman.
    And I understand that you have relatives, and I want to 
mention them for the record. If they would please stand and be 
recognized, we welcome them here. I understand your sister, 
Jane Veneman, is here, and your sister in law, Heidi Veneman, 
is here. And your niece Allison Hughes, please stand. Welcome 
to the Committee. Thank you for being here today. It's a great 
day today.
    Well, I would introduce again another distinguished new 
member of our Committee, who just arrived, Congressman Debbie 
Stabenow, Senator Debbie Stabenow now, of Michigan. That minor 
slip means that she has served distinguished in the House, on 
the House Agriculture Committee. So we welcome her to the 
Senate Agriculture Committee. Senator Stabenow also served in 
the State legislature in Michigan on that agriculture 
committee.
    So this may be a record, three agriculture committees in a 
row. So we welcome Senator Stabenow to our committee.
    Ms. Veneman, I will start off the questions. As I said, we 
will take up to 10-minutes, then I will recognize Senator 
Lugar, then we'll just go back and forth with questions. As I 
said in the beginning, we'll just each take 10-minutes, you can 
make your opening statements and ask questions. If we have 
another round, we'll come back to that.
    I just have a couple of questions. I do not intend to take 
the full 10-minutes.
    Ms. Veneman, just a couple of things that we had discussed 
earlier. The 1994 USDA Reorganization Act consolidated food 
safety activities within the Food Safety and Inspection 
Service, and created the Under Secretary for Food Safety 
position. This Under Secretary position was created by Congress 
to elevate the importance of food safety at USDA and to ensure 
that USDA's food safety programs would be kept separate from 
its market promotion programs, to avoid any potential conflict 
of interest.
    The reorganization recognized that Food Safety and 
Inspection Service [FSIS] was a public health regulatory agency 
and a vital part of this country's public health. The Under 
Secretary for Food Safety is one of the country's top public 
health and scientific appointments, and the country's highest 
ranking food safety official.
    Will you pledge to continue to build on this public health 
foundation that we have established at USDA, seeking a 
candidate for Under Secretary for Food Safety who has solid 
public health credentials? And will you maintain the public 
health focus at the Food Safety and Inspection Service, 
including the FSIS Office of Public Health and Science?
    Ms. Veneman. Mr. Chairman, I think that my record speaks 
for itself with regard to my commitment for food safety. And I 
would certainly continue that commitment, and to ensure the 
safest food supply that we can possibly have in this country.
    As you know, consumers in this country do enjoy the safest 
food supply anywhere in the world. And I think we should do 
everything we can to continue the record that this country has 
with regard to food safety.
    I also believe with regard to food safety that we ought to 
continue to work with the other agencies of Government that 
have responsibility for food safety and the research 
organizations that are looking at some of the challenging 
issues with regard to food safety.
    So I would certainly continue the commitment of the aspects 
in the Department of Agriculture that deal with food safety and 
commit to you that we will work closely with other agencies of 
Government to make sure our food safety policies are 
coordinated as effectively and efficiently and in the public 
interest.
    The Chairman. I appreciate that, Ms. Veneman. Again, I want 
to point out that when we created that position here, and I 
remember the debates very well on that, it was a strong 
bipartisan effort to create this Under Secretary for Food 
Safety. Again, we envisioned it as one of the top public health 
and scientific appointments. I emphasize that as the kind of 
credentials that we hope that you would look for in appointing 
and finding a person to fill this position: public health, 
scientific, it's the highest ranking food safety official in 
our country, and someone who has solid public health 
credentials in that regard.
    Second, in 1996, USDA issued its hazard analysis critical 
control points and pathogen protection rule. Let's call it 
HACCPP, we all know it by that. As you know, the pathogen 
reduction portion of the rule was partially struck down in the 
Supreme Beef case recently in Texas.
    One of the next Secretary's first tasks will be to work 
with the Attorney General to decide whether to continue the 
appeal in that case, and to decide how to approach revision and 
updating of the salmonella performance standard.
    We need to have the most effective and scientifically sound 
microbiological performance standards possible. But at the end 
of the day, those standards have to be enforceable. For some of 
us, there's a lot of bills that are pending in Congress to 
ensure the enforceability of performance standards. A majority 
of the members of this Committee voted to support enforceable 
performance standards. And I think the majority of the public 
would support that, also.
    So my question is, do you support having enforceable 
microbiological performance standards, where at some point, the 
Secretary of Agriculture would have the power to withdraw 
inspection for failure to meet them?
    Ms. Veneman. Yes, I would, Mr. Chairman. I think it's an 
important aspect of any food safety regulatory authority to 
have enforceable standards, and to have scientifically based 
standards for enforcement purposes.
    The Chairman. Thank you very much, Ms. Veneman. I 
appreciate your candor in that.
    I would recognize Senator Lugar.
    Senator Lugar. Thank you very much, Mr. Chairman.
    Ms. Veneman, in your experience, both in Washington and in 
California, one of the highlights has been your negotiating 
ability with regard to foreign trade possibilities with 
farmers. And this Committee has dealt with the export issues 
almost every week of our existence, because this is so 
critical. And there has been disappointment on the part of most 
of us that we have not progressed more.
    As you take a look at the horizon, from your experience as 
an attorney, as well as one involved in the administration of 
agriculture, what are the prospects for exports? Are the EU 
people so intransigent? Are others so tied up in protection of 
their own agriculture that we can anticipate very slow going? 
Or do you have some ray of optimism to share with us this 
morning? And give us that flavor, if you can, from your current 
experience.
    Ms. Veneman. Well, Senator, I think that, as you have 
indicated, some of these trade issues have gotten more and more 
difficult. They've gone on for many years in the case of some 
of these cases that have been brought both before the WTO and 
ones that we're still trying to work out, not having brought a 
case yet.
    We also want to continue to look toward opening up markets 
further. I think that the agreement with China on MFN and 
joining the WTO has been an important opportunity for 
agricultural products, and hopefully we can get that agreement 
finished and get it effectively enforced in accordance with 
what has been negotiated. We need to continue to work on the 
bilateral issues, so many of which we have with the European 
Union now.
    And I've had several conversations already with Mr. 
Zoellick and intend to work very closely with USTR. I think 
that we certainly heard in his announcement the other day the 
word agricultural mentioned several times during that 
announcement, emphasizing both the President elect's 
recognition and Mr. Zoellick's recognition of the importance of 
looking at agricultural trade issues as we move forward with 
our trade agenda.
    I might also add that the President elect has been very 
forceful in his statement that he wants to pursue with the 
Congress the granting of additional Fast Track authority to 
negotiate additional trade agreements.
    Senator Lugar. Well, I hope that you'll be a teammate with 
Bob Zoellick, because that would be a good team, and a very, 
very important mission, which you understand and which this 
Committee, I think unanimously, would like to work with you, 
would like to inquire of you really with some frequency as to 
how it is going and how we can be helpful.
    I want to take up a complex subject. Chairman Harkin has 
mentioned in our pursuit of new farm legislation, most of us 
are in favor of the flexibility, the so-called Freedom to Farm. 
Most of us likewise are in favor of more income for farmers. 
And the question is how to do both. We must find better 
formulas for that.
    I'm intrigued by Sparks Company, Inc. analysis using the 
1997 Census for agriculture. And there's no need for you to 
worry about these facts, per se, because we'll deal with them 
more in detail. But they point out that commercial farms, as 
they define them in this country, that is with sales of over 
$250,000, now comprise only 8-percent of our farms, but 72-
percent of our production. Almost three quarters coming from 
just these 157,000 farms.
    A second group, called transition farms, 189,000 of them, 
have sales of $100,000 to $250,000. My farm is one of those. I 
hope not in transition, but nevertheless, it is not a 
commercial farm by this definition. And finally, there are 1.57 
million farms that, and this is 82-percent of all the farms, 
and these have sales of less than $100,000.
    Now, that group, the 1.57 million, produce only 13-percent 
of everything we now produce. The transition farms, my crowd, 
do 15-percent and 72-percent of this 157,000, just 8-percent.
    Even more startling is that 72-percent of the income from 
the families that operate the commercial farms come from the 
farms. Seventy-two percent they get from the farm, 28-percent 
comes from off the farm. When you come down to my group, the 
transition farmers, we get only 43-percent of our income from 
our farming and 57-percent from somewhere else.
    And when you come to the 1.57 million, the 82-percent, 100-
percent of the income comes from off the farm, net. Now, that 
doesn't mean that some people don't make some money on those 
farms. But they lose more in that process than they make.
    Now, this is, I think, a pretty startling fact. So we want 
to pursue that with the Sparks people and the Census people. If 
82-percent of our farms in our net basis are losing money, and 
100-percent of their income comes from somewhere else, that is 
a very, very tough farm policy to fashion.
    Now, you've dealt with this in California. This is a 
microcosm across the board of just what I've suggested. Ten-
percent of the Nation lives in California, and probably 10-
percent of the farmers, maybe more. How have you dealt with 
this? You clearly have seen this coming, either a consolidation 
or the larger situation or the production. Because when we have 
our payments, our AMTA payments, the criticism is made that 
these monies are going to the large farms. Well, of course, 
they are, 72-percent of all the production is with this group. 
Only 13-percent with the 1.57 million.
    And so it goes, round and round, however, we try to 
supplement farm income. And maybe that's the way that it should 
be.
    But can you give us, once again, any flavor of how you 
begin to approach this, or how you have approached it, as 
Commissioner of Agriculture in California?
    Ms. Veneman. Well, Senator, I think it is important to look 
at the changing structure of agriculture as we enter into any 
discussion about farm policy. And I think these statistics are 
very enlightening. In California, of course, we weren't dealing 
with farm policy in the sense of farm income programs and so 
forth. Those were dealt with primarily at the Federal level.
    I did often get the question, though, about consolidation 
of farms and the declining number of farms and so forth. I 
looked carefully at the statistics and what we saw happening 
out there was actually an increase in the number of farms. And 
part of that was because people were taking advantage of niche 
markets and being able to produce, as a very small acreage 
farmer, to a very niche market, whether it was the strong 
system of farmers markets that we had that was regulated by the 
State government, or it was roadside stands, or it was new 
products that were tailored to specific markets or specific 
high quality restaurants.
    But I think that one of the things that, the lessons 
learned from all of that is that we do have to help our farmers 
learn how to market up the food chain, so that they can get 
more value for what they are producing. And I think that's a 
role that we can play together with Congress in working and 
looking at farm policy for the future.
    Senator Lugar. That's a very important consideration. I'll 
not go through the rest of this, but the farmers in the 
commercial markets got as much as 20 or 30 cents a bushel more 
for corn or beans or wheat than did others. Because their 
marketing skills, their ability to use futures markets, the 
crop insurance products, all of these. And this is a big 
educational question. How do we all come up to the table with 
some degree of equality in terms of skills of marketing, the 
education of how you might do this sort of thing.
    But these are issues that you're well aware of. This is why 
we have confidence in you. I simply raise them because I think 
they are fundamental to the farm income problem, finally, and 
the ability to actually take revenue from the farm.
    I thank the Chair.
    The Chairman. Thank you very much, Senator Lugar.
    Senator Conrad.

STATEMENT OF HON. KENT CONRAD, A U.S. SENATOR FROM NORTH DAKOTA

    Senator Conrad. Thank you, Mr. Chairman, and thank you, 
Secretary Designate Veneman, for being here. Thank you very 
much for coming by my office the other day and giving us a 
chance to talk about issues that are important, certainly to my 
State, but I think agriculture writ large as well.
    I'd like to just put up a couple of charts to frame the 
discussion. This first one shows what's happened over the last 
decade. The green line is the prices farmers paid for input, 
the red line is the prices farmers received. And we can see why 
there's a crisis in agriculture, and why we've had to write 
four disaster packages in the last 3 years.
    The arrow points to the 1996 Farm Bill passage point. And 
we can see the gap has dramatically widened since the passage 
of that legislation. Many of us believe it's been a disaster in 
terms of farm policy, and certainly in terms of the income to 
the farm producers that we represent.
    Let's go to the next. This chart shows the level of support 
that the EU is providing domestically to their producers versus 
what we do for our producers. This is on a per acreage basis. 
You can see roughly that the Europeans are providing ten times 
as much support to their producers as do we. And I think 
they've clearly got a strategy and a plan to dominate world 
agriculture, and part of that strategy and plan is, go out and 
buy markets.
    We can see in the next chart how they're doing that with 
respect to export subsidy. The blue part of this chart shows 
the European share of world agricultural export subsidy. It's 
about 84-percent of all world agricultural export subsidy is 
accounted for by the Europeans. We're 1.4-percent.
    So this creates an unlevel playing field for our producers. 
The deck is fundamentally stacked against our producers.
    So my first question to you would be, what would you do to 
change this?
    Ms. Veneman. Senator, I think that it's important to 
recognize, as you say, it's both competition within the country 
as well as outside the country, and that agriculture has become 
more and more competitive as time has progressed.
    I think that with regard to the future of farm policy in 
this country, there are a number of proposals that have been 
advanced. There's a number of regional differences that we've 
seen. As I've talked with many of you on the Committee, there 
are many differing interests, depending on the region, 
depending on the commodity.
    And I think that what we need to do is work together to 
find as much consensus as we can on the future of farm policy 
and the future of programs in this country.
    With regard to the European Union and the subsidies you've 
talked about, this has been an issue that has been plaguing 
producers in this country, the Government for many years, and 
in fact was part of the background of what created the 
proposals that were negotiated in the Uruguay Round, beginning 
to bring down export subsidies and domestic support, 
particularly targeted at that which the European Union has. And 
I think that needs to continue to be negotiated, to continue to 
bring down the levels of support in trade negotiations, as was 
begun in the Uruguay Round.
    But I think that a combination of trade negotiations, of 
future farm policy, we need to together work to address the 
kinds of issues you're bringing up.
    Senator Conrad. Let me just say that I think the Uruguay 
Round in many ways is part of the problem. Because there, we 
agreed to equal percentage reductions from these very unequal 
bases. I can tell you, the Europeans in my talks with them have 
told me, that's exactly what they want to do. They want to 
continue to get equal percentage reductions from these unequal 
bases, always leaving them on top. And I hope very much that we 
will not go back to any other round and agree to equal 
percentage reductions when they start out in this incredibly 
dominant position.
    Let me ask you specifically, yesterday President elect 
Bush's spokesman Ari Fleischer reacted to President Clinton's 
final budget report. In that final budget report by the 
President, he advocated an additional $74 billion over the next 
10 years to agriculture to in part change this dynamic, to 
level the playing field.
    Mr. Fleischer reacted in an interesting way to a question. 
The question was, it's becoming a pretty regular thing each 
year for Congress to pass bipartisan support for aid to 
farmers. Are you saying that President Bush might want to stop 
that? Mr. Fleischer, in response, ``That's not aid to farmers. 
That's an assumed bail out above and beyond all existing levels 
of spending. And the history is that legislation of that order 
comes about when there are dire straits in the agricultural 
community. For President Clinton to assume that there will be 
dire straits for 10 years in a row, either he's a very good 
weather man or he's inflated the spending.''
    Do you believe that President Clinton has inflated the 
spending in the budget report that he put out?
    Ms. Veneman. Senator, to be perfectly honest, I have not 
reviewed President Clinton's budget report. I am not familiar 
with the specifics of it. But if confirmed, it would be my plan 
to quickly review the budget that has been presented, and have 
input into the supplemental budget or the addition to the 
budget that would then be submitted by the new Administration.
    Senator Conrad. Let me just be more clear. Without respect 
to the specifics of his budget proposal, do you believe more 
resources need to be put into agriculture to help level the 
playing field here between the U.S. and the EU, and to provide 
leverage for the negotiation with the Europeans?
    Ms. Veneman. Well, Senator, I think that that's an issue 
that we need to look seriously at. But until I see all of the 
numbers and all of the basis of the current budget, I'm not 
able to tell you specifically what the current needs are going 
to be for the coming year and beyond.
    Senator Conrad. Well, I would just hope that as the 
Secretary Designate, that you would have a sense of this now. I 
really do. I mean, to me, this is right at the heart of what's 
happening to us. And unless we help level the playing field, 
we're going to consign our people to failure.
    I don't know what other conclusion one could come to. It 
reminds me a little of the Cold War, when we built up to build 
down. We built up in part to get leverage for a negotiation. 
And for some reason, we haven't figured that out with respect 
to agriculture. I can tell you, the Europeans have told me, 
look, we believe we're in a trade war with you. We believe at 
some point there will be a ceasefire. And we believe it will be 
a ceasefire in place, and we want to occupy the high ground. 
And the high ground is market share.
    And so they've had this strategy and plan of spending a lot 
of money to get market share, so that they're able to dominate 
in these trade talks. And we don't seem to be able to figure 
this out. To me it's not complicated, it's really very simple. 
They occupy the high ground, and we can either go out and try 
to match them or be consigning our people to failure.
    I've got a bit more time. I'd like to go to a trade 
question if I could. In North Dakota, we've been very adversely 
affected by the Canadian Free Trade Agreement. I call it the 
so-called free trade agreement, because with respect to 
agriculture, it wasn't so much free trade as negotiated trade. 
And on many terms, we lost that negotiation.
    We saw in durum, which is the type of wheat that makes 
pasta, very popular all across America, certainly popular in 
California, North Dakota is the major producer, the Canadians 
went from zero percent of our market to 20-percent, not because 
of any competitive advantage, not because they're better 
farmers, but because of loopholes in that agreement. Incredibly 
damaging to the producers that I represent.
    The USTR has started an investigation as to the question of 
whether the Canadians are selling below their cost in our 
market. Would you support that investigation?
    Ms. Veneman. Well, certainly, Senator, I would support a 
very strong enforcement of the trade laws that we have on the 
books. If in fact there is a violation of trade agreements, or 
if there is any kind of indication of dumping, we ought to 
investigate and we should enforce our trade agreements. That's 
part of what makes trade agreements effective, is the 
enforcement mechanisms in our trade laws that allow us to make 
sure that they are being complied with.
    And so certainly, if investigation shows that there's a 
basis for a violation, I believe we should proceed to take 
action as appropriate.
    Senator Conrad. Final question. Will you come to North 
Dakota to meet with the farmers there at some point if it fits 
into your schedule?
    Ms. Veneman. I would be happy to come to North Dakota, 
hopefully when it's not too cold.
    [Laughter.]
    Senator Conrad. You know, our weather is not reported 
accurately.
    [Laughter.]
    Ms. Veneman. I was there once.
    Senator Conrad. It's very mild, especially in February.
    [Laughter.]
    Thank you.
    The Chairman. Compared to the Arctic Circle, yes.
    Senator Cochran.

STATEMENT OF HON. THAD COCHRAN, A U.S. SENATOR FROM MISSISSIPPI

    Senator Cochran. Thank you, Mr. Chairman.
    As I was considering this hearing today, Ms. Veneman, it 
occurred to me that you're probably the best qualified nominee 
who has been suggested for this job of Secretary of Agriculture 
since your fellow Californian and former Secretary Richard 
Lyng. The background you had at the Department of Agriculture 
and Foreign Agriculture Service and in California as head of 
the Food and Agriculture Department there, and your service as 
Deputy Secretary truly do make you the best qualified nominee 
who's been before this Committee in some time. I congratulate 
you on your nomination and look forward to working with you in 
your capacity as Secretary of Agriculture.
    I have a few observations I'm going to make, and I don't 
really have a long list of questions. First of all, Senator 
Helms told me to tell you that he hopes to be able to get here 
for the hearing, to congratulate you and to tell you that he is 
certain you will make a great Secretary of Agriculture. He 
appreciated your visit to his office the other day. He has 
other obligations that may keep him from the meeting. But he 
has asked me to advise the Committee that he will submit a 
statement for the record in due course.
    Let me say that there are a number of things that I think 
are major concerns in agriculture right now, one of which is 
the fact that last year, we passed disaster assistance 
legislation, and unfortunately not all the benefits of that 
legislation have been made available to agriculture producers 
who are eligible for these benefits. Some have told me that as 
much as half the benefits have not yet been paid out.
    I hope that you will take a quick look at what can be done 
by the Department to accelerate the action that's needed to 
carry out the provisions of our disaster assistance 
legislation. Farmers are having more than a tough time with the 
cost of inputs, particularly energy costs now, that are making 
it very, very difficult for them to continue to stay in 
business.
    On another subject, I hope that you will consider our 
research program, which consists of a balance, I think, between 
cooperative research programs with colleges and universities 
and laboratories around the country, along with the Agriculture 
Research Service programs, as a very finely balanced effort to 
identify ways to make farming more efficient, to make food more 
safe, to in many ways strengthen the agriculture economy in our 
country. And so I hope that you will support Congressionally-
directed research activities and respect the views of Congress 
on these subjects.
    We also had in our last Farm Bill a very aggressive and 
comprehensive conservation program, including a number of 
initiatives, such as the Wetlands Reserve Program, Conservation 
Reserve Program, the Wildlife Habitat Incentives Program, all 
of which are proving to be very important incentives for 
private landowners to use their lands in ways that conserve 
water and soil resources and conducting farming operations that 
are consistent with environmental interests that we all share.
    I hope you will be able to support additional acreage being 
put into these programs and being designated for us. And one 
other thing that's come to my attention recently on this 
subject, is that many of those who work in the county offices 
throughout the country are not as familiar as they should be 
with the details of these programs. I've had farmers tell me, 
they've gone in and asked about some of the programs, and the 
person in the local office will have to get out a book, or a 
regulation, directives, and start reading along with the farmer 
to try to figure out whether there is eligibility for the 
program, how you apply, what are the criteria, what do they 
mean.
    I hope that this can be a part of this Administration's 
policy, and that is to help ensure that those who are 
administering the programs and advising farmers know what 
they're talking about, and are aware that these are priorities 
of this Administration.
    I didn't know I was going to make such a long speech, here, 
Mr. Chairman. I'm sorry about this.
    On foreign trade, your background particularly equips you 
with knowledge about our foreign trade programs, opening up new 
markets, making sure that our exporters are treated fairly in 
other countries when they're trying to sell what they produce 
in overseas markets. We've adopted a number of legislative 
initiatives over the last several years, the middle income 
training program, to try to acquaint emerging economies through 
exchange programs with our economic system and our agricultural 
products, in ways in which we can work together with some of 
the countries that are developing their economies. These lead 
to better trade relations, better opportunities on both sides 
of those programs.
    The market access program occasionally gets criticized. But 
it has proven to be very effective in breaking down barriers to 
trade and making sure that trading practices in foreign 
countries are fair to us.
    Passage of normal trade relations legislation with China 
and other countries is also an enormous step in the right 
direction, in my opinion. But some are concerned that the 
Chinese may seek designation in the World Trade Organization 
that would place them at an advantage over other developed 
countries in WTO. I hope you will take a look at that and work 
to ensure that China's accession to WTO is monitored and ensure 
that it meets market access, subsidy reduction and other 
targets that are consistent with other developed countries.
    Finally, I'm going to close with this. I think you need 
someone at the highest level of the Department who is 
acquainted with southern agriculture who is able to make sure 
that the interests of those in the South are expressed during 
debates on policy and programs at the U.S. Department of 
Agriculture. I know you are aware of these interests and these 
concerns, but there are some special problems that exist in our 
part of the country. And I think having a southerner in a high 
ranking position at USDA would be a very good thing.
    Also in that connection, I got a call from Kenneth Hood, 
who is President of the Delta Council, which meets annually at 
Cleveland, Mississippi, to invite you, in his behalf, to be 
their speaker. This is kind of like Senator Conrad's question. 
I'm not going to ask you to come to Mississippi in July or 
August.
    [Laughter.]
    But this is the last Friday in May, which is kind of nice.
    [Laughter.]
    And they're having their annual meeting. This is a very 
important meeting for the mid South, for agriculture and 
economic development proponents. The Delta Council really is a 
prime mover in the economic development effort for the 
Mississippi Delta. And they've had a distinguished line of 
visitors and speakers at that meeting. The first, I guess, that 
got national and international attention, was Dean Acheson, 
when he was Under Secretary of State. He unveiled the Marshall 
Plan at that meeting, and then he got credit for doing it at 
Harvard or Yale or some other more fancy venue.
    But he tried out the speech at Delta Council in 1947. Well, 
anyway, there have been governors and Secretaries of 
Agriculture, Vice President Bush came and spoke. So I'm 
inviting you to come down and speak. I hope you can work it 
into your schedule.
    If you have any reaction to any of my comments or 
suggestions, I'll be glad to hear your thoughts on any of 
these.
    Ms. Veneman. Well, you gave me quite a list. With regard to 
the administration of programs, particularly disaster 
assistance, I have heard this from several members of the 
Senate and the House about the, and people in agriculture as 
well, about the concern about getting the programs, once they 
are passed by the Congress, implemented as quickly as possible. 
And I will pledge to you that we will do everything we can, if 
confirmed, to do that.
    I share your interest in research. I think that research is 
very important in agriculture. One of the initial missions of 
the U.S. Department of Agriculture when it was created by 
President Lincoln was to conduct research. It was to help 
agriculture in this country through research. And I certainly 
have a strong commitment to research and believe that our 
research ought to continue to work not only in the traditional 
areas of production enhancement, but also be focused on helping 
us solve the issues that agriculture faces today, whether it's 
food safety issues, environmental issues that we need to focus 
research in areas that will help farmers.
    I also share your interest in conservation programs and the 
fact that they should be voluntary, incentive-based, and we 
should give our farmers the opportunity for additional 
conservation programs and opportunity to participate in those 
programs. Because as you know, farmers often get criticized for 
the manner in which they farm. But farmers are truly the 
environmentalists. They have to have the land, the air and the 
water in order to be farmers. They are the best stewards of the 
land, and we need to help them find ways to do that.
    You mentioned the county offices not being familiar with 
the regulations. As you might recall, I was very involved when 
working with Secretary Madigan in looking at this whole issue 
of reorganization and bringing the offices together. One of the 
ideas at that point, and one of the things I would hope to 
continue to pursue, is bringing cross training to these 
agencies of the USDA, so that we can provide, as I said in my 
opening statement, the best possible service to our customers. 
I believe that it's important that the different parts of the 
Department not just be looked at for their separate programs, 
but they understand each other's programs because they're 
serving the same and similar constituencies.
    Finally, on trade, I think it is important to continue the 
trade programs that have been effective in helping us open up 
markets. And I will pledge to continuing to do that.
    And I understand your concerns about the South. One of the 
things I said before, there are regional differences in 
agriculture in this country. I understand that fully. We want 
to make sure that we bring balance, regional balance, to the 
appointments that we make at USDA. And we plan to do that.
    Finally, I will check my schedule.
    [Laughter.]
    Senator Cochran. Thank you very much.
    The Chairman. Thank you, Senator Cochran. I might just say, 
in the interest of good time management, if other Senators have 
requests for Ms. Veneman to appear in their State that they 
submit it to Chairman Lugar. We'll get it to you en bloc, and 
that way you can just map out your whole schedule for the year.
    Senator Johnson.

STATEMENT OF HON. TIM JOHNSON, A U.S. SENATOR FROM SOUTH DAKOTA

    Senator Johnson. Thank you, Chairman Harkin. I would ask 
unanimous consent to submit a full statement for the record, as 
well as some additional questions for Ms. Veneman.
    The Chairman. Without objection.
    Senator Johnson. But I welcome Ms. Veneman to the 
Committee, you and your family. I want to thank you again for 
taking some time out to meet with me in my office earlier, to 
discuss some of these key issues, particularly Northern Plains 
and Great Plains issues.
    Of course, we in South Dakota are proud that Ms. Veneman 
has some South Dakota ties. In fact, her Dutch ancestors 
homesteaded in Charles Mix County near Platte, South Dakota in 
1892. That was a long time ago, and there's not much peach 
growing in Charles Mix County, South Dakota. But nonetheless, 
we're proud of your connections to our State. And as you 
evaluate the visits that you're going to be making, I'll join 
in inviting you back to your ancestral State, keeping in mind 
that South Dakota is the balmy part of the Dakotas.
    [Laughter.]
    It is on the south coast of the Dakotas. And also, I join 
in, in expressing some concern that there be that regional 
balance that you've alluded to in terms of staffing. I think 
there is a real concern that the northern plains agriculture 
has its regional, unique qualities to it. And I'm certain that 
you will take that into consideration as you develop your staff 
and your offices at USDA.
    I look forward to additional discussions with you in a less 
formal setting on the farm program, on trade, on concentration, 
antitrust and vertical integration, both in the grain and the 
livestock sector, in particular. I have concerns about where 
we're going with value added agriculture, conservation 
programs. And we did have an opportunity to discuss very 
briefly the conservation reserve program [CRP] wetlands pilot 
project that we currently have in South Dakota and across our 
region.
    Of course, our research in Genetically Modified Organisms 
[GMO] issues as well, that we can spend some time talking 
about. These are matters of enormous importance to the State of 
South Dakota.
    A point that I wanted to raise with you is one that is 
fundamental in our part of the country. Over the past three 
years, Congress has enacted disaster legislation to augment the 
farm program transition payments, and in fact, our financial 
assistance to farmers in fiscal 2000 was a record $28 billion. 
There's no particular rebound on the grain side in terms of 
price anticipated in the near future. If we are to head off a 
fiscal 2001 price crisis for family agriculture in this 
country, I wonder if you'd share a couple of thoughts with us 
about whether you think additional ad hoc disaster legislation 
is the best vehicle for addressing that problem on the near 
term, or whether you believe some modification in the context 
of the existing farm program makes more sense and would be more 
efficient in that way.
    If we are to do disaster legislation, do you believe that 
we should continue down the road that we have in the past, 
essentially, of bonus AMTA market loss payments, or are there 
other mechanisms and more efficient mechanisms for providing 
badly needed financial resources during times of record bull 
prices, particularly on the grain side? I'd be interested in 
any insights you might have to share with us, Ms. Veneman.
    Ms. Veneman. Senator, I'm fully aware of what the 
Government has done in terms of stepping up to the plate to 
help farmers in these times of low prices, primarily low 
prices, but also we've had some disastrous weather and other 
things in the past several years that have created the need to 
continue to provide additional safety nets for farmers. And 
certainly, I believe that it's important that we continue to 
provide safety nets.
    I'm not prepared today to say what form that ought to take. 
I understand what you're saying in terms of, should it be 
additional ad hoc or should we have something a little more 
structured and a modification to the existing farm programs. I 
think we need to look at all those options and determine what 
will best serve agriculture, not only for the short term 
difficulties they're having, but also for the long term.
    Senator Johnson. Well, I appreciate your observations on 
this, and look forward to working with you. As I have shared 
with you earlier, there's a time and a place for disaster 
legislation, when unique, unforeseeable circumstances occur. 
But it troubles me that this is a relatively inefficient way of 
providing resources. It is not the kind of predictable, 
manageable kind of plan that allows farmers to go to the bank, 
allows them to plan long term. And I would hope that we could 
come up with a more institutionalized, more reliable and 
hopefully more cost efficient, hopefully utilizing market 
forces, that would complement what we're doing, to see to it 
that we survive these low price swings that we have under the 
current program.
    So I look forward to working with you on that. I know we 
have several members of the panel, and I want them to have 
opportunities to discuss these matters with you as well. I have 
a simultaneous confirmation hearing going on in the Energy 
Committee, and I'm going to have to excuse myself for that 
purpose. But thank you again, and congratulations on this 
nomination.
    [The prepared statement of Senator Johnson can be found in 
the appendix on page 60.]
    The Chairman. Thank you very much, Senator Johnson.
    Senator Craig.
    Senator Craig. I slid in under the cover of darkness, Mr. 
Chairman. I believe Mr. Roberts was here first.
    The Chairman. All right, do you defer to Senator Roberts?
    Senator Roberts.

   STATEMENT OF HON. PAT ROBERTS, A U.S. SENATOR FROM KANSAS

    Senator Roberts. I thank my distinguished friend.
    Madam Secretary to be, you're going to be a busy person. I 
have it down here that you're obviously going to go back to 
California. And in order to be confirmed, it looks like to me 
you're going to Minnesota, Nebraska, Michigan, Georgia, also 
Arkansas.
    Senator Craig. Am I on the list?
    Senator Roberts. Yes, we have Idaho down here.
    [Laughter.]
    South and North Dakota, Iowa, and Indiana, Mississippi and 
now Illinois. However, not one of those places can make you an 
honorary marshal, so come to Dodge City, Kansas.
    [Laughter.]
    I am extremely pleased to be here today for the 
confirmation of a good friend as Secretary of Agriculture. I 
have had the opportunity, Mr. Chairman and Mr. Chairman, to 
work with Ann many times down through the years. So I am 
pleased to join the Ann Veneman marching band. I don't know if 
I should play the bass drum, the trumpet, or the trombone or 
the piccolo, but I'll pick an instrument.
    You bring a wealth of experience to the job, not only in 
regards to your previous service as the Deputy in regards to 
the previous Bush Administration, but as Secretary of 
Agriculture for California. I have been to California many 
times. They have unique problems in agriculture. And Mr. 
Chairman, Ann Veneman has always brought sound science and 
common sense to reach some satisfactory conclusions to the 
challenges we face in regards to agriculture and the 
environment.
    I'm particularly pleased with your previous experience in 
the ag trade policy arena. I'm extremely happy that you'll be 
working with Bob Zoellick in that respect. I might add, you 
mentioned, I think it was the cross-trainer tour, I think we 
needed some cross-training shoes to do that. That was back 
during the days when there were amendments to the Farm Bill and 
ag legislation by Charlie Stenholm of Texas, and some fellow 
named Pat Roberts of Kansas. There were more Stenholm 
amendments at one time and more Roberts amendments during 
another time, but that's another story.
    And the Assistant Secretary joined us. Mr. Chairman, we 
went to South Carolina, we went to Kansas, we went to Kansas, 
those are the obligatory stops. We went to California, went up 
in the northeast to try to streamline the paperwork and the 
information between Farmers Home and at that time it was SCS 
and ASCS. Ann Veneman sat in the back of the plane, by the way, 
it was coach, because I know we were back there talking about 
her dad, my dad and politics. She comes by this very naturally. 
And I don't know of anybody who persevered more to try to bring 
that cross-training expertise to the Department.
    If Senator Conrad is upset with the amount of payments and 
how they're being paid and all that, and I think all of us are, 
whether we need either more or less, and I'm concerned about 
the trade picture. I think we always need an aggressive and 
consistent and comprehensive trade program. So as we enter the 
WTO negotiations, we need somebody who will use the bully 
pulpit. And I know you plan to do that in behalf of American 
agriculture on the international scene.
    Now, we visited about this issue at length when you came up 
and paid us a courtesy call. I would remind every member that 
Ann Veneman was in Seattle, most of us were in Seattle, the 
distinguished Chairman and the Secretary of Agriculture at that 
time says we cannot fail. I somewhat affectionately call the 
Seattle Round the Tear Gas Round. I'm not sure we failed, but 
we sure didn't make much progress.
    And so as we go into the next round, as you have indicated, 
we really need a bully pulpit champion that will stand firm. 
And it has been mentioned that we're going to be undertaking a 
major debate on the Farm Bill in the not too distant future. 
And I'll just say this, I hope you and the Administration will 
play an activist role in helping us reach some logical 
conclusion.
    I want to turn to another issue. And it is sort of 
reflective of the question that I'll have for you, and I will 
try to make this fairly quickly. We have an energy crisis that 
is now looming all across farm country. Natural gas prices 
increased from $2.30 per unit as of this time last year to 
$8.10 today. We just checked on it today. Last year, it cost 
$100 to produce a ton of ammonia for fertilizer. The cost of 
natural gas now makes up 72-percent of the cost of production. 
At today's prices, it would cost nearly $400 to produce that 
same ton of ammonia. And that makes fertilizer production 
economically impossible today. We had people from the 
Fertilizer Institute in my office yesterday saying, we're 
shutting down.
    If that's the case, a shortage of fertilizer is really 
looming, and it will be very quickly. Additionally, in Kansas, 
many producers, as in other parts of farm country, use the 
natural gas to simply run their irrigation pumps. So already, 
our farmers in America's breadbasket are planning to shut down 
their wells this spring.
    So now you enter the small town banker. He has a big stake 
in all of this and the bankers are telling me that their 
farmers are having a very difficult time, make that our 
farmers, making their crop operations cash flow, even without 
the added costs of fertilizer and natural gas. And we've heard 
these comments by my colleagues. No water plus no fertilizer 
equals huge production drops. And that spells disaster.
    Now, I won't go into it any more than that, except to say 
that I think that is looming. We're sitting on an economic and 
energy powder keg in regards to rural America.
    Now, these issues remain largely outside the USDA. My 
question to you is, and we have talked about this, I remember 
when Senator Kerrey held an emergency meeting of all members of 
the Ag Committee, all the farm groups, all the commodity 
organizations, urging the Secretary of Agriculture to get more 
involved in behalf of farmers and ranchers in regards to global 
climate change.
    So much of this that deals with the farmer's daily life and 
pocketbook and his future comes from other agencies. So my 
question to you is, do you plan to form some kind of, I don't 
want to call it a task force, but it would be certainly a 
coordinated effort with the Interior Department, with Gayle 
Norton, with EPA, with Secretary Whitman and with the FDA, we 
have the Starlink issue and all of that. And it seems to me as 
I recall it during the previous Bush Administration, when we 
would have a food safety scare or something like that, that 
there was a task force, and the Secretaries would meet. And 
they would be able to allay the public fears within maybe 24 
hours and deal with the State departments of agriculture all 
throughout the country.
    What kinds of plans do you have for that kind of 
coordination so that we can really get at these problems that 
sometimes are beyond the purview of the USDA?
    Ms. Veneman. Senator, as I said in my opening remarks, 
Ithink it's very important that USDA play a key role in the 
interagency process. I'm a strong believer that interagency 
processes need to be well coordinated, that we need to seek out 
our sister agencies and look at commonalities of issues, look 
at whether it's the trade issues where we'll be working with 
USTR, State Department, Commerce and a host of other agencies, 
environmental issues with the Environmental Protection Agency, 
Interior and so forth.
    In fact, President-elect Bush held an initial meeting with 
Agriculture the Friday before Christmas. And not only was I in 
attendance with producer group representatives, but Christine 
Todd Whitman was also in attendance. I thought that was a very 
important sign that we are going to work together. She made a 
commitment to work together to understand the issues of 
agriculture.
    I think certainly with the Interior Department there are a 
number of issues, whether it's our resource management programs 
with regard to our forests and public lands, or our use of 
water. And the FDA and other food safety agencies, we intend to 
work very closely with them. I've already had a conversation 
with Tommy Thompson about the overlapping responsibilities 
we're going to have in that area.
    I have talked with Mr. Abraham about the importance of 
energy and the energy issues to agriculture. I think it goes 
beyond inputs that you're talking about and the production 
agriculture impacts. But also, we're seeing the impacts on the 
ability, the potential ability of farmers to sell their 
products to food processing firms because they're being 
squeezed by the energy crisis as well.
    So at every end of the food chain, the energy crisis is a 
serious issue. I would agree with you.
    I have also talked with the Attorney General designate, and 
he got asked in his hearing, about the issues of antitrust and 
concentration. So I think this issue of overlapping 
jurisdictions and overlapping areas of interest is an extremely 
important one. And I'm committed to working with other 
departments and agencies of Government to make sure that 
agriculture is well represented and that the interests are well 
understood at the table.
    Senator Roberts. Thank you for that response. I have one 
very quick observation. We spent $8.2 billion last year in 
what's called the Roberts-Kerrey Crop Insurance bill, along 
with the help of every person on this committee. Actually, if 
it works, it's going to be the Roberts-Kerrey bill. If it 
doesn't, we'll call it the Kerrey-Roberts bill. And we have a 
staff member over here against the wall who had a lot to do 
with that, and a staff member back behind me as well.
    But we spent $8.2 billion to give the farmer some real help 
in that regard that could help allay the problem of the 
expenditures that everybody is talking about. And as far as I'm 
concerned, we need, I won't say a new broom, but we need some 
real help on that. I understand in our conversations in the 
past that we will really try to make sure that that program 
works. It's just extremely important with that kind of 
investment.
    And I thank you, and I look forward to your speedy 
confirmation.
    The Chairman. Thank you very much, Senator Roberts.
    Senator Lincoln.

   STATEMENT OF HON. BLANCHE L. LINCOLN, A U.S. SENATOR FROM 
                            ARKANSAS

    Senator Lincoln. Thank you, Mr. Chairman.
    Welcome to Ms. Veneman. We are delighted that you are here.
    I would like to take a few seconds and thank the Chairman, 
Chairman Harkin and Chairman Lugar, for their incredible 
leadership in this committee. It is one that I thoroughly enjoy 
serving on because of my roots, and certainly because of where 
Arkansas stands in the agricultural realm of things. I'd also 
like to welcome the new members to the Senate Ag Committee. 
Senator Miller joined us last year, but it's certainly good to 
have him back right here by my side. As you have noticed, it's 
really nice to have those from your region. And I'm delighted 
to have another southerner over here, as well as Senators 
Nelson and Dayton and Stabenow. We're delighted to have you 
here, and looking forward to working with all of you, as we are 
with you, Madam Secretary.
    I represent a State that relies on agriculture as its 
largest industry, and I shudder to think of what my State's 
economy would look like without the poultry farms in the north 
and the west or the cotton and rice fields of the Mississippi 
Delta region of our State, or the timber forests in the South. 
Our Nation's agriculture policy is at a critical juncture, and 
we will, I hope, develop and implement a new Farm Bill during 
our work here, and certainly your tenure at USDA. It will be 
very easy for you to visit Arkansas when you're in Mississippi 
for Senator Cochran, because I'm right across the river.
    [Laughter.]
    It won't take you long to jump across the river.
    But I certainly look forward to working with you and 
hearing your vision for the Department of Agriculture. And I 
appreciate your taking time to come by my office to introduce 
yourself and for us to get better acquainted, for that working 
relationship I certainly look forward to.
    As I do often, I will identify with some of the other 
members. When you get to this end of the table, you realize 
that much has been said, you just haven't had your opportunity 
to say it. But I'd like to echo, as I often do, some of Senator 
Cochran's comments, especially about the conservation programs, 
as well as the disaster assistance. The sign-up for the yield 
loss portion of the program begins today, actually, January 18. 
And FSA still has yet to develop rules for covering the quality 
of losses there.
    So I think it's very important, his question, and certainly 
your response, that we are looking for a dedication from you 
when we complete those programs and that disaster assistance, 
to implement the required regulations that are necessary to get 
those programs implemented and out there to those agricultural 
producers. So I can't emphasize that enough, of how important 
that is, and I appreciate my colleagues for bringing it up.
    Also, as you well know, Arkansas is the Nation's number one 
rice producing State. You know that because California is the 
second. But nearly half of the U.S. rice crop is exported each 
year, and our farmers are suffering from low prices, in many 
cases due to the lack of fair competition around the world and 
the barriers to our exports. I'd like to at that point 
associate myself with the comments from Senator Conrad. I think 
that having someone on our behalf in terms of agriculture who 
is at the table fighting in regard to trade, I certainly 
appreciate your emphasis and your willingness to work with the 
new representative from USTR, who I met with yesterday. How 
absolutely vital it is going to be for you to be bold and 
aggressive in that, in standing up for agriculture. I think 
that's going to be absolutely essential for us to regain those 
market shares that we do need, and to ensure that we're going 
to change the face of that pie chart that Senator Conrad shared 
with us.
    But just specifically, Japan has, to my knowledge, recently 
announced its agricultural proposal for the WTO negotiations, 
which calls for reduced market access for U.S. rice. Its 
current important policies do little to facilitate selling 
competitive U.S. rice to Japanese customers. A second entity to 
that question is Cuba, which was an enormous market for our 
rice in Arkansas, and southern rice, and how important it is 
that whatever law we may have passed in the 106th Congress, and 
I have to say my expectations are low in what it's going to be 
able to accomplish.
    But I'm really looking to you for what it is you anticipate 
you'll be able to do and what you're going to be willing to do 
in moving Japan and our other trading partners to eliminating 
trade distorting import barriers as well as helping us to open 
up those very, very important markets to us.
    Ms. Veneman. Well, as you know, Senator, Japan, before the 
Uruguay Round, had a complete ban on any imports of rice. One 
of the outcomes of the Agriculture Agreement in the Uruguay 
Round was a concept called tariffication, which converted non-
tariff barriers into their tariff equivalents and gave a 
minimal but increasing level of market access for certain 
products, particularly in the cases of things like rice to 
Japan, where there was a complete ban on the productpreviously.
    That gave us certainly the ability to enter into that 
market. The concept that was negotiated in the Uruguay Roundwas 
that that access amount should continue to increase, theminimal 
level of access should continue to increase, and theamount of 
overall high tariffs should continue to come down. The concept 
of tariffication I think is still a workable one. It's 
certainly not something I think the U.S. would want to 
backtrack from in terms of the agreement in the next WTO round. 
And I would certainly commit to you that we should work 
strongly and very hard to make sure that Japan and other 
countries that have allowed product to come in continue their 
commitments that they made in the Uruguay Round and allow 
access to continue to increase on a gradual basis, to all them 
to adjust but allow competitive product to come into the 
market.
    I think with regard to other trade agreements, we need to 
be, as I've said before, vigilant in our enforcement but 
continue to find openings for new markets for our agricultural 
products.
    Senator Lincoln. I hope that all goes to say that you will 
stand firm. We oftentimes find out that agricultural products 
in those negotiations tend to be the last negotiated, and they 
also seem to be the most susceptible. Also in light of your 
comments about looking for those markets, I hope that does 
include Cuba and a strong support of being able to try and open 
up those markets for our producers.
    Just in closing, I'd like to also touch on something you've 
already talked about and apparently have begun in some detail, 
and that is the interagency cooperation. I think many of us 
have been frustrated from the agricultural standpoint of the 
interagency cooperation and really communication. Time and time 
again, new regulations are put forth by one agency, with little 
more than a peep out of USDA. And we truly, as producers, can 
be affected more so than absolutely anybody.
    Looking in retrospect from the 106th Congress, the TMDL 
issue, which we would really hope that there's going to be 
significant input from USDA on many of these particular issues. 
The Kyoto Protocol negotiations, Fish and Wildlife issues which 
you and I have discussed, and I hope I've introduced you to a 
few new species out there that tend to devastate our fish crops 
down there in Mississippi and Arkansas.
    The FQPA certainly is another example where I think farmers 
definitely and producers feel that USDA should take a 
leadership role in working with EPA and others. So I'm pleased 
to hear your comments that you've already made contact with 
those other agencies, and I hope that we won't lose the overall 
impact of what that has on producers, your capability to 
communicate and certainly be very proactive and aggressive on 
behalf of producers with the other agencies.
    So welcome, we're delighted you're here, and I'd also like 
to echo Chairman Harkin's comments that women have had a great 
deal to do in agriculture, and we're delighted to have a woman 
now at the head. Thank you.
    Ms. Veneman. Thank you very much.
    The Chairman. Thank you very much, Senator Lincoln.
    Now Senator Craig.

    STATEMENT OF LARRY E. CRAIG, A U.S. SENATOR FROM INDIANA

    Senator Craig. Mr. Chairman, thank you very much, and thank 
you for being here this morning and congratulations. We look 
forward to your confirmation and your active role with this 
committee in the coming years as we shape all those things that 
all of these members have suggested are critical and important. 
And I will only echo that they are and that for the sake of 
American agriculture and America's consumers, that we remain an 
abundant, productive country.
    Let me stop talking about agriculture at that point. I'll 
only mention potato wart once. I'll only mention the 40 million 
hundredweight overhang of potatoes in the market once. And the 
need to deal with those critical situations that are plaguing a 
very large segment of Idaho's agricultural economy as we speak.
    Last year, while this committee worried and fretted about 
the farm situation in our country, and while this marvelous 
chairman right here worked with all of us to produce that 
abundance of resource to help American agriculture, and Thad 
Cochran did a marvelous job as Chairman of the Ag Subcommittee 
of Appropriations, something else was going on across America 
that is on your watch and that you will have a major role to 
play in. The smoke clouds over Idaho and Montana were blinding 
to the average citizen. The community of Salmon, Idaho, was 
shut down for 3 weeks, people walking around with masks over 
their face, people with respiratory problems evacuated from the 
town, because the Nation's forests were ablaze.
    Over 6.8 million acres of public and private land burned in 
our Nation this past year. This Government will spend, when the 
bills are all totaled, well over $2 billion putting out fire. 
And in my State of Idaho, where you are the steward over nearly 
half the public domain that makes up my State, the Forest 
Service is in a desperate need of leadership and direction. It 
has been politicized and effectively destroyed as it relates to 
esprit de corps and a responsibility of leadership, as to a 
balanced use of our public lands.
    And as a result of that, the chaos that reigned supreme 
this summer was something that many had predicted years in 
advance. In 1981, a team of forest experts gathered, just 
happened to gather in Idaho, but from across the world, to 
examine the forests of the inland west. And they determined at 
that time that those forests were sick and dying and some 
already dead. And that report was issued in 1982, and they said 
at that time, if active management is not the word of the day, 
then we can expect massive forest fires that will change the 
ecosystems of the west and the public lands and the forests.
    And they began. They started in 1984. We went into a wet 
cycle, we came out of that wet cycle a year and a half ago, and 
they began again last year.
    Idaho at this time is only at about 50-percent of its 
snowfall and its snow pack, as is true of Utah, parts of 
Montana, parts of Wyoming, eastern Oregon and eastern 
Washington. The inland west, by all appearances, is dry and 
getting dryer. And what we experienced last summer could well 
be something we experience again in the coming year.
    And you are the steward over a very large portion of that 
land. Who you select as your deputy secretary in charge of the 
Forest Service is critical. How you reestablish command and 
control and esprit de corps to our Forest Service is going to 
be ever so important as we work to implement public policy.
    In another committee, I happen to chair the Forestry 
Committee, and have developed a knowledge there that I'm 
anxious to work with you in seeing if we cannot develop a 
collaborative process at the local and State level and involve 
our State governments to assure the kind of environmental 
integrity we want of our forested lands. But not to sit idly by 
and suggest that sweeping, massive forest fires are just mother 
nature at her worst best. It is not. These fires are abnormal, 
they are extremely hot as a result of the fuel buildup on our 
forest floors. And the Nation is reaping the whirlwind of that 
kind of man-caused destruction.
    That's just another agenda that I suspect would not get 
discussed very thoroughly in this committee today because we're 
all so focused on our farmers and their needs and on production 
agriculture. But as you know, you have the responsibility of a 
rather massive agency. And a part of that agency is the U.S. 
Forest Service, which has the responsibility of stewardship 
over America's treasures, America's public lands.
    I will not ask you questions, but only to suggest to you 
that let's de-politicize the U.S. Forest Service. Let's bring 
it back on-line as a construction conservation corps, 
responsible for the management of these public lands in a way 
that shares the benefits of those lands both environmentally 
and for productive resource purposes with the American people.
    You will be confirmed. We are anxiously awaiting the 
opportunity to vote for you and to begin to work with you in 
the shaping of not only agricultural policy for our Nation, but 
public land resource and forest policy for the years to come. 
Congratulations.
    [The prepared statement of Senator Craig can be found in 
the appendix on page 62.]
    Ms. Veneman. Thank you very much.
    The Chairman. Thank you, Senator Craig. And now Senator 
Miller.

   STATEMENT OF HON. ZELL MILLER, A U.S. SENATOR FROM GEORGIA

    Senator Miller. Thank you, Mr. Chairman. And it's good to 
see you again.
    Ms. Veneman. Nice to see you.
    Senator Miller. I do not think that the importance of this 
Cabinet position can be overstated. We are headed toward a new 
Farm Bill, while in the midst of an agricultural crisis. Our 
rural economies are suffering, and this has tremendous impact 
in States like Georgia, where one out of every six residents is 
engaged directly or indirectly in agriculture.
    With emerging farm technology, with competitive trade 
realities, with labor shortages, I don't think it's any 
exaggeration to say that American agriculture is at a 
crossroads. We met earlier, and it was a good meeting. While we 
may differ on the quality of Georgia peaches compared to 
California peaches, I know you're going to be a very strong 
advocate for all regions of U.S. agriculture.
    My State has great agricultural diversity, poultry and 
peanuts and cotton and tobacco and timber and many specialty 
crops. This diversity creates unique needs, and you know that 
because of California's agricultural diversity.
    I'm also very pleased, as has already been said, that you 
have great experience in foreign trade. I think this is an 
extremely important credential. American agriculture is 
becoming more and more dependent on trade. And I encourage the 
Department to work with other departments and other pertinent 
Federal agencies to find new markets for our producers, as 
Senator Lincoln has already said.
    I also believe that the Department of Agriculture and Labor 
must work quickly to develop a guest worker program that is 
economically viable and is fair to both producers and laborers. 
And this will take leadership by you and the Secretary of Labor 
and the Labor Department.
    I want to close with just one question, albeit a 
complicated and controversial one. We have all heard the old 
adage that all politics is local. Well, so are foreign 
interests. And if you will indulge me, you can see where I 
think I'm headed, towards peanuts. Peanut growers right now are 
facing very difficult decisions. With diminishing import tariff 
rates, imports will continue to offset U.S. grown peanuts, 
pushing Government costs to new levels. At present, the program 
is no net cost. So we will either have to accept increased 
program costs under the current system or change the program to 
a more market oriented structure, which if other commodity 
programs are any example, will cost a lot of money.
    So my question is twofold. Will you support a peanut 
program that does have some reasonable cost for the Government? 
Or if we move to a more market oriented program, would you 
consider supporting compensating those individuals who have 
invested in the peanut quota?
    Ms. Veneman. Senator, I haven't looked closely enough at 
this issue to tell you where I would come out on what kind of 
solution to the peanut issue is appropriate. I know that the 
program has been under increasing pressure, that there are 
difficulties with the program that's operated, as you say, as a 
no net cost program for many years.
    But I would hope to bring together the interests of the 
producer groups and work with them and members of the Senate 
and the House to find acceptable solutions to particularly 
these programs that are beginning to feel the stress of not 
working the way they have in the past. But I think we should 
bring all interested parties together to find the most 
appropriate solutions and I would look forward to working with 
you in that regard.
    Senator Miller. I do also. Thank you.
    The Chairman. Thank you, Senator Miller.
    Senator Fitzgerald.

  STATEMENT OF HON. PETER G. FITZGERALD, A U.S. SENATOR FROM 
                            ILLINOIS

    Senator Fitzgerald. Thank you, Mr. Chairman.
    Ms. Veneman, congratulations. I think you'll do a wonderful 
job as Agriculture Secretary. And I would add Illinois to your 
long list. I take some comfort that you worked under Ed 
Madigan, who is of course a native of Illinois. I think that 
the town of Lincoln, Illinois, actually, in the land of 
Lincoln. And I look forward to working with you over the next 4 
years.
    I noted that in your opening statement you said that if 
confirmed, I intend to promote cooperative working 
relationships with other agencies of Government to ensure that 
the concerns of farmers and ranchers are understood and 
advocated throughout the Government. I think that's a very good 
statement, it was a very encouraging statement that you had 
made.
    And I did want to bring up one such issue, which would have 
cross-departmental implications. And that is the issue of 
ethanol. Last year, the USDA released a study that concluded 
that if MTBE were phased out and replaced with ethanol over 3 
years, it would create approximately 13,000 new jobs in rural 
America, increase farm income by more than $1 billion annually 
over the next 10 years, and reduce farm program costs and loan 
deficiency payments through an expanded value added market for 
grain.
    The study also concluded that within 3 years, ethanol could 
be used as a substitute oxygenate for MTBE in nationwide 
markets without price increases or supply disruptions. And I 
guess my request from you would be to work across departmental 
lines. This committee has always had pretty bipartisan support 
for ethanol. And I think you will probably be having some 
contact, particularly with EPA, over this issue. And I guess 
I'd ask for your commitment that you will promote ethanol as an 
environmentally friendlier alternative to MTBE, and that you 
would work closely with your counterpart at EPA to ensure a 
strong future for ethanol.
    Can you give this commitment to this committee?
    Ms. Veneman. Senator, I think throughout the past several 
months during this campaign, President-elect Bush has made it 
very clear that he is committed to promoting ethanol and other 
renewable fuels and other alternative uses for agriculture 
products. So yes, I can commit to working with the 
Administration and particularly with EPA on these issues. And 
as I said, we've had conversations with Christine Todd Whitman 
about the importance of agriculture and working with her on 
agriculture issues. She has committed to working in close 
working relationships to understand the issues of agriculture, 
and I would intend to continue to do that.
    Senator Fitzgerald. If I could just ask a little bit of a 
follow-up. Would you be willing to advise Ms. Whitman to reject 
your home State's waiver request from the oxygenate requirement 
in the Clean Air Act?
    Ms. Veneman. I'm certainly familiar with that. It's 
obviously not in the jurisdiction of USDA, but I'm certainly 
willing to have conversations with her about it to discuss the 
pros and cons of such a waiver request, and also to express the 
strong interest of production agriculture in this request.
    Senator Fitzgerald. Well, I appreciate that. And I do have, 
in the interest of time, I'm going to just give you one other 
question. I think this is a question that's being asked, I've 
noticed in watching the other hearings, a lot of Cabinet 
nominees are being asked the same question. Since 1990, all the 
agencies of the Federal Government have had to undergo audits. 
And I guess prior to 1990, we did no audits of all the 
different Government agencies, all the money the Federal 
Government spent, they didn't do any audits, which always 
struck me, coming as I did from a banking background, where if 
a teller line was $10 off, no teller could go home until they 
found that $10.
    With respect to our Federal Government spending $1.8 
trillion, almost $2 trillion a year, they are now doing audits. 
But over the last 10 years, while this requirement has been in 
place, only a handful of the departments and agencies have 
gotten clean audits. And most of them have gotten adverse 
audits.
    And some of them, like the USDA, have had a disgraceful 
record in terms of their books and records. Their auditors have 
repeatedly refused to give any opinion whatsoever. They've 
issued what's called a disclaimer of opinion on the USDA's 
books, I believe for 10 years in a row now. The disclaimer of 
opinion means the books are in such bad shape auditors can't 
make heads or tails of them. You can't tell what money is 
coming in or what money is going out.
    Last year, I chaired a subcommittee hearing where the 
Inspector General of the USDA testified. I was much chagrined 
to find that the USDA's fund balance disagreed with the 
Treasury Department's fund balance for the USDA by $5 billion. 
Now, they were thrilled, because they worked that difference 
down to $230 million. They were uncorking the champagne at the 
USDA that they were only out $230 million. That is an awful lot 
of taxpayer money.
    And they had a car listed on their books for $98 million. 
Now, I don't know what kind of car it was, maybe it was a 
Batmobile or something. It certainly must have had all the 
options.
    But this is really a disgrace. They had found that money 
was taken from a soil erosion fund and used to paint wall 
murals in urban areas. They found that checks for day care 
homes were being sent to empty lots. And the list went on and 
on.
    When you come back, when I in subsequent years, after 
you've been in there, do those hearings to hear from the 
Inspector General, will we find that the USDA's books and 
records still aren't in order, and that you still can't get a 
clean opinion?
    Ms. Veneman. Well, Senator, I would certainly hope that we 
can improve the record of the USDA in that regard. I am a 
strong believer in accountability in Government programs. I 
think that one of the difficulties in an organization that is 
as huge as USDA and has so many different missions is that it 
has not in the past had accounting systems that are consistent 
with each other. That is something I would hope to improve upon 
so that we can have more consistent accounting systems and 
better accountability. So hopefully we're not getting the 
unqualified audits that you're referring to.
    Senator Fitzgerald. Will you make it a top priority of 
yours to clean up the books and records over there?
    Ms. Veneman. I will commit to you that we will work very 
hard to address this issue.
    Senator Fitzgerald. Thank you very much, and good luck to 
you.
    Ms. Veneman. Thank you.
    The Chairman. Thank you, Senator Fitzgerald. I just want to 
add my support for what Senator Fitzgerald just said on both 
those issues, but especially on the ethanol issue. We hope that 
you will be a strong advocate for ethanol.
    Senator Stabenow.

STATEMENT OF HON. DEBBIE STABENOW, A U.S. SENATOR FROM MICHIGAN

    Senator Stabenow. Good morning, and Mr. Chairman, I 
appreciate very much having the opportunity to serve on this 
Committee with you and with our incoming Chairman, Senator 
Lugar. It's a pleasure to be with both of you.
    And I do apologize for coming in in the middle of your 
statement. I had the opportunity to introduce the incoming 
Energy Secretary to the Committee on Energy this morning. So I 
was a few minutes late. It is a pleasure to see you again. I 
appreciated the opportunity to have you come visit in my 
office. I know we share many common interests, both from 
California and Michigan being the top States in terms of 
diversity of crops, Michigan second only to California. I think 
that's very important. Many people don't realize that about 
Michigan.
    On a personal note, I would just indicate that it's been a 
very long time since a Michigan Senator has served on this 
committee. Of interest to me is that the last time our State 
was represented was in 1959 to 1963 with Senator Phil Hart, who 
I know is certainly someone, represented by the Hart Building 
and held in high esteem by this body. So it's my pleasure to be 
once again serving Michigan on this committee.
    Let me indicate that while most people associate Michigan 
with automobiles, and I would start by saying that as you visit 
the other States, I've invited others, you can start in 
Michigan, purchase a vehicle, I promise you it will not cost 
$98 million in order to purchase the vehicle.
    [Laughter.]
    And then you could drive to each of the other States. We 
would be happy to start your visits that way.
    I would associate myself with many of the comments made by 
colleagues in terms of so many of the issues raised that affect 
Michigan. But let me juste add that we all have a very large 
task ahead of us with the reauthorization of the Freedom to 
Farm bill. I'm extremely concerned about strengthening the 
current farm safety net and look forward to working you as we 
sort through those issues.
    I'm very interested in the opportunities for agricultural 
research. Of course, having a premier land grant institution, 
Michigan State University, in my hometown, as well as my alma 
mater, and developing new demand for commodities, bio-based 
fuels. I would also like to associate myself with the comments 
regarding ethanol and support for continuing and expanding that 
focus.
    Food safety is a growing concern that's been a priority for 
me, particularly in light of the fact that we all remember the 
contaminated strawberries that were consumed by school 
children. Some of those were in my Congressional district, so I 
have been focused on food safety and working for a balanced 
approach, focused on research and consumer involvement. I think 
that's very important.
    The rural programs through USDA are also critical to my 
State. Between 60- and 70-percent of the benefit goes to the 
upper peninsula in Michigan, which is a very important part of 
my State. And I'm very committed to expanding the opportunities 
to rural communities, economic development as well as 
supporting agriculture through the USDA.
    Let me just mention that like California, Michigan is a 
salad bowl State. We have traditional crops, wheat and soy and 
corn and as well a diversity of specialty crops, which we have 
discussed. So those issues regarding specialty crops, whether 
it be pesticides, whether it be crop insurance, a variety of 
issues are important to us. We have tart cherries and apples 
and asparagus and blueberries and peaches and lettuce and sugar 
beets, and I could go on and on with the diversity of crops.
    So it is important, and I have been particularly focused on 
crop insurance to expand that opportunity to specialty crops. 
When we look at the issue of pesticides, there are some of our 
crops that have only one or two pesticides available. So what 
happens becomes very important in the decisions of the USDA 
regarding pesticides. And I look forward to working with you on 
those issues.
    I would have two questions for you today specifically that 
relate to Michigan I would appreciate your comments on. One we 
discussed briefly in my office, but I want to reiterate because 
it's so important to Michigan today. And that is the question 
of bovine TB. While we produce a broad range of agricultural 
products, as I've mentioned, dairy has the highest amount of 
cash receipts and is a very important component of our 
agricultural economy in Michigan. Last year, Michigan lost its 
TB-free status granted by the USDA, due to the presence of 
bovine TB in our cattle. And while Texas and New Mexico also 
have bovine TB in cattle, we're the only State with the 
presence of bovine TB in non-captive animals, namely, free 
roaming deer, which is a tremendous issue as we try to wrestle 
with this.
    The deer transfer the disease to the cattle which 
consequently must be euthanized at a severe hardship to our 
farmers. The State of Michigan, along with Michigan State 
University, has developed a State plan to combat this disease 
and it's expected to take at least 20 years to totally 
eliminate this problem. Last year, the Michigan delegation 
worked closely with the USDA to inform the Department about the 
problem. The USDA declared an emergency in Michigan and 
provided funds through the Commodity Credit Corporation to help 
combat the disease, to increase research, implement tests and 
compensate our farmers.
    Combatting this disease in our State is one of my top 
priorities. And I would ask that you continue to focus 
resources from the USDA on this issue, and would ask for any 
comments that you would have regarding this particular issue 
that we discussed.
    Ms. Veneman. Thank you, Senator. I was pleased to be able 
to talk with you about this issue, because as you know, until 
we were in your office, I was unaware of this issue and its 
severity in your State. I will commit to work hard to combat 
diseases in animals that impact our agriculture. I think this 
leads to a much bigger issue, an important mission of the U.S. 
Department of Agriculture and Government and agriculture, and 
that is, the importance of programs that combat not only animal 
diseases, but pests and diseases that affect plants as well.
    As you know, agriculture, both USDA and State agriculture 
departments have a very important role in this regard. And I 
think we cannot underestimate it. It's not just with animals, 
and it's not just Med flies and specialty crops. We saw a very, 
very serious impact on our wheat production a few years back 
when we dealt with carnal bunt. Again, we had to find a way to 
control the disease so that it did not impact our ability to 
market that product abroad, so that we were able to control it 
and contain it and eliminate it as quickly as possible.
    I also agree that as we see new and emerging kinds of 
issues come up with regard to pests and diseases that we have 
to focus research continually on these types of problems to 
find better ways to deal with them.
    Senator Stabenow. Let me ask one just follow-up. First of 
all, I am aware as well of the issues related to wheat. In 
fact, the first bill I introduced in the U.S. House of 
Representatives dealt with the question of wheat and barley 
scab, which is a wonderful name of a bill to be introducing, 
your first bill, on wheat and barley scab. But a critical 
issue, and I was very pleased to help lead an effort to bring 
the land grant universities together to form a consortium 
regarding research.
    And that would lead to my final question, which relates to 
research through our land grant universities. I would welcome 
your thoughts and perspectives. As we have talked before, and I 
know that you are a friend and associate of our president at 
Michigan State University, and we are very proud of what 
happens through that land grant institution. It's critical to 
Michigan's agricultural base, and the work that's done there. 
We have formed a National Food Safety and Toxicology Center, 
bringing in multiple disciplines.
    But I'm very concerned that cooperative extension and that 
our land grant universities continue to receive the support 
that I believe they deserve, as they are critical to us. And I 
would welcome your thoughts regarding those institutions.
    Ms. Veneman. Well, Senator, as I said, I believe that 
research is a very, very important part and component of what 
USDA is involved in, and that research has been critical to the 
success of agriculture in this country. The land grants have 
played a major role in that and I believe need to continue to 
do so.
    As we discussed in your office, one of the things that the 
land grant universities are now able to do and are beginning to 
do is work with other parts of their universities, whether it's 
medical schools or environmental sections of the university, to 
begin to find common solutions to issues that impact 
agriculture. And I would certainly want to encourage that 
through our land grants and find models like you have at 
Michigan State to encourage cooperative research that addresses 
the kind of issues that we're dealing with today in the food 
and agricultural system and the health related issues that are 
so tied in today with food and agriculture.
    Senator Stabenow. Thank you. Well, welcome. It's wonderful 
to see such a well qualified person being nominated. And I'm 
pleased to support your confirmation.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Stabenow.
    Senator Nelson.

   STATEMENT OF HON. E. BENJAMIN NELSON, A U.S. SENATOR FROM 
                            NEBRASKA

    Senator Nelson. Thank you, Mr. Chairman. I'm unofficially a 
member of this committee today, and I appreciate the 
opportunity to be here. Thank you for the invitation. And it's 
a pleasure for me to continue the Nebraska tradition of having 
a representative on this Agriculture Committee.
    Congratulations, Ms. Veneman. I want to thank you for your 
opportunity to come to Nebraska, and I want to welcome you 
back. Ms. Veneman came to Nebraska for my Governors Agriculture 
Conference in the early 1990s, when we shared the opportunity 
to talk about agricultural issues at that time.
    Nebraska is also a diverse State when it comes to 
agriculture. I'm not going to start listing the levels of 
agriculture for fear of leaving one out, and I don't want to do 
that. Also, the University of Nebraska in Lincoln is a land 
grant institution, very much interested in, very deeply 
involved in ag research. And I'm encouraged by your comments 
about the necessity and support of agriculture research to the 
future of agriculture in the country and certainly in the 
world.
    One of the things that has been suggested, I think it was 
Senator Cochran who made reference to having someone from the 
South involved in your agricultural, Department of Agriculture 
hierarchy, because of the differences in agriculture as it 
relates to the South. And we talk about agriculture as though 
it's unitary, and we know that it's very diverse. And the 
diversity is not only dependent upon region, although it's much 
affected by region. But there are certain areas.
    And I would hope, without being parochial or regional in my 
request, probably being supported by my midwestern and Great 
Plains colleagues, that you would have a person involved that 
would understand the unique problems and the diverse problems 
that we have in the Midwest, recognizing not only the 
difference in agriculture products, but the difference in 
weather and where the most recent disasters occurred in terms 
of weather due to the drought, largely across a good part of 
the Midwest.
    I am concerned about the Freedom to Farm Act, and what we 
might do to develop a new farm program that will in fact 
deliver the kind of support safety net that you referred to in 
a way that will work for agriculture where those needs exist 
today. Risk management, the Federal Crop Insurance Program 
certainly have a lot to do with it. And if you take a look at 
the payments that have been spread out over the last several 
years, maybe in some respects the Freedom to Farm Act has been 
the most expensive non-farm program that we've entertained in 
this modern time.
    I was hopeful that you might give us a little bit of a 
preview or some peek about what you might have in mind about 
modifications to the Freedom to Farm Act, but I guess we'll 
have to stay tuned to see what you develop and what you come 
back and provide in the way of leadership.
    I'd like to think about agriculture as it relates not only 
to production agriculture but as it relates to energy, to world 
security and in so many different areas, a comprehensive 
approach. The trade agreements not only involve, they involve 
food safety, biotechnology, they involve trade barriers, they 
involve opportunities for free and fair trade. And they're in 
many respects all interrelated.
    I certainly encourage the cooperation that you're referring 
to under the EPA, Energy and Agriculture, but also as it might 
relate to Foreign Affairs and other areas to see that we can 
have a comprehensive approach. Because I think agriculture, 
when we've come to the trade agreements, has always been a 
stepchild. It is the last thing that seems to get included.
    And if I had one criticism to level at the trade agreements 
as it relates to agriculture, not as to other products from the 
United States, but as it relates to agriculture, it is that we 
didn't spell NAFTA right. It needs two Fs, Free and Fair Trade. 
I think that's the point that I would like to make to you and 
leave with you on trade agreements, that we spend the kind of 
time necessary to be sure that these trade agreements are not 
only open opportunities, but they level the playing field.
    And I was taken by Senator Conrad's charts, because I think 
that's exactly what I have in mind. I'm not opposed to free 
trade, as long as it's fair, and as long as we work toward 
making it fair where it isn't.
    Therefore, much of the hoopla today about GMOs and 
biotechnology from other parts of the world, I would put not 
only in the category of food safety, because that's the 
question that's raised, but I would put it also into the 
category of trade of trade barriers, another way of protecting 
local production, local industries. I'm not a protectionist, on 
the one hand. On the other hand, I am very concerned about the 
lack of protection we have very often for our own producers 
here at home when we open up the agreements and we don't 
provide for the level playing field at the very outset.
    Now, we have all kinds of mechanisms to go in when we 
encounter unfair trade practices, but that's the equivalent of 
having a referee, not having a referee on a basketball court, 
but having a committee, years after the infraction, decide 
whether it was foul. I'm not going to suggest to you that it 
would make sense to have an actual referee with a black and 
white striped shirt standing there making every decision that's 
brought before that individual.
    But we need something that is prompt, not time consuming, 
something that is also accurate in dealing with these issues. 
Otherwise, dumping or other violations can go on for a long 
period of time and be ruinous to many producers, whether it's 
in the sugar industry, North Dakota, Nebraska or Michigan, 
wherever it may be. We have to be sure that we work diligently 
to be certain that every effort is made that these trade 
agreements and the actual encounters under the trade agreements 
are free and fair.
    I also hope that as you look at market assistance programs 
and export enhancement programs that you'll work to make these 
part of the leveling of the playing field. If we can't get out 
competitors around the world to bring down their level of 
support, I'm not one that likes to move away from market 
conditions, but I have to admit that part of the market 
conditions include the level of support in other countries. So 
we have to join or we have to get them to join us by reducing 
their levels of support.
    And I don't like to get involved in other countries' 
business. But when it affects what we're doing, we can't ignore 
it.
    I'm very encouraged by what you said about ethanol. As a 
Governor, I was pleased to have the opportunity to start the 
Governors' Ethanol Coalition. Today I believe there are 22 
States that are now members of the Ethanol Coalition. I'm not 
going to tout all the things we've done in Nebraska, except to 
say that we went from nowhere up to third in terms of ethanol 
production during my 8-years. I want to continue to work with 
Senator Lugar and Chairman Harkin and other members of this 
committee to be sure that we push forward for more ethanol 
production, more biofuels, biodiesel, more renewable resources 
soybeans, other biomass energy sources because I think we can 
put an energy policy for our Nation together that will include 
a large portion of renewable resources that will go into energy 
production.
    But I'm not sure we have it working in the right direction. 
I would never suggest that we don't trust people out in the 
field; they are, after all, your employees. But I think there 
has been a system of bringing that back into Washington for 
command and control, and I for one would like to urge you to 
look very carefully and seriously and get back to this 
committee, or at least to me, on your recommendations regarding 
this. I think it would facilitate and would better, I think, 
streamline the whole process so that it can be done in a very 
timely manner, because when it is delayed it certainly doesn't 
serve the public in this case, the producer very well.
    So I thank you very much and it is good to see you again, 
and I do welcome you back to Nebraska.
    Ms. Veneman. Thank you.
    Senator Nelson. What you can do is buy your car in 
Michigan, and all across the midwest you can fill your tank 
with ethanol.
    [Laughter.]
    Ms. Veneman. There you go. I like that.
    Senator Nelson. Thank you very much.
    The Chairman. Thank you very much, Senator Nelson.
    Senator Dayton.

  STATEMENT OF HON. MARK DAYTON, A U.S. SENATOR FROM MINNESOTA

    Senator Dayton. Thank you, Mr. Chairman. I look forward to 
serving with you, and also you, Senator Lugar, when you become 
the Chairman. Thank you for your gracious words about my 
perseverance. I would only point out that the difference 
between your electoral success in the last 18 years and my lack 
thereof is reflected in the relative positions on this table 
here. But I am glad to be here.
    Ms. Veneman, historically I've had great affinity for 
California; I think we associate it with Disneyland and the 
Rose Bowl. But now that those experiences have become distant 
memories for most Minnesotans, perhaps less so; and in the area 
of agriculture, the State of California represents fairly or 
unfairly, at least in the common perception of Minnesota's 
farmers and producers many of the economic and production 
dynamics over the last years that have driven thousands of 
Minnesota farmers into bankruptcy and have threatened our rural 
way of life and are harming every business on Main Street in 
Minnesota.
    These conditions we saw most of them in Minnesota have been 
exacerbated by the effects of the 1996 Farm Bill. Without 
supply management and increased production under our basic 
economic law of supply and demand, market prices have fallen 
precipitously in our key commodity sectors. When I ran this 
summer, the price of corn in southern Minnesota was $1.25 a 
bushel; it was $1.85 a bushel when I ran for the Senate in 
1982. Wheat, $2.60 a bushel in northwestern Minnesota compared 
to $3.50 a bushel in 1982. Dairy, $9.90 a hundredweight, 
compared to $12.50.
    So contrary to the intent of the 1996 Farm Bill, the 
survival of the remaining Minnesota farmers has become 
increasingly and in some cases, totally dependent on these 
Federal payments.
    You will recall, Mr. Chairman, that you were with me last 
fall in southern Minnesota, and a number of farmers there were 
asking you, ``What will the emergency assistance payments be 
next year? Not even the regular program payments; what would 
the emergency assistance be next year?'' because they needed 
those dollars committed to go to their banks for financing for 
this year.
    So I guess my first question is, what do you propose to do 
to put the marketplace back into American agriculture, to help 
get prices in the domestic marketplace to levels where farmers 
can make a profit and we won't need these kinds of huge 
Government payments?
    Ms. Veneman. Well, as I indicated, Senator, in my opening 
statement, I think the Congress has appropriately responded in 
these difficult times of low prices, bad weather in many cases, 
and other adversities.
    At the same time we are looking at opportunities for 
farmers, and I think we need to look at opportunities for 
farmers, to expand markets for products, as you said, both at 
home and abroad. As we've had a lot of discussion today, we 
need to find ways to not only open new markets for our 
products, expand markets, but also tear down trade barriers 
that exist.
    At home, I think we need to continue to find ways to have 
additional marketing opportunities for our farm products, 
whether it's new and renewable fuels, as we've had some 
discussion about, whether it's new products out of agriculture 
which our research will help us find, or whether it's helping 
farmers understand the realities of the marketplace so that 
they can participate in marketing further up the food chain and 
therefore get more value for their products.
    All these are difficult, but I think that if we work 
together we can find ways to strengthen the competitive 
position of our farmers, and hopefully strengthen prices over 
the long run.
    Senator Dayton. Thank you. I wanted to just put on the 
record my concern. I don't disagree with anything you said, and 
it's been said for the last number of years. In fact, I think 
the increased marketing and foreign trade opportunities for 
American farmers has been set forth as the ``Holy Grail'' to be 
achieved if we're going to and I think in fact, while it is 
certainly important, it has been demonstrated so far, and this 
last Administration has certainly been aggressive in these 
areas and hopefully the next Administration will be doing more 
but the result has not been higher prices. In fact, even with 
some of the value added, I support what the Senator said about 
ethanol. But the reality is, we have levels of production in 
corn the second highest in the Nation's history last year; 
soybeans, the highest and again, the basic law of supply and 
demand is that the prices are going to be down, not only 
through the floor but into the subbasement, and the 
alternatives are either massive subsidies and record high costs 
to American taxpayers, or letting farmers literally fall into 
increasing bankruptcy.
    So I think we have a fundamental problem. We have a 
program, with whatever good intentions it was designed, that 
has had a contrary effect, and I think it is really causing a 
systemic crisis in many of our commodities. We now have, we are 
told by the USDA, over a year's inventory of corn in this 
country. Well, it's just given then that the economics, barring 
some climactic disaster, are going to continue.
    So I would urge you to look at these areas and come forward 
with your recommendations in ways that are really going to 
fundamentally address the scope and degree of the problem. We 
are talking about the same kind of euphemisms that we've kind 
of hung on before.
    I would say of all the regional inequities in the U.S. 
programs, none for Minnesota is more inequitable and unfair 
than current Federal law as it relates to dairy producers. A 
combination of the price support levels being set lower and 
lower, and the regional marketing order system which 
disadvantages Minnesota, means that, again, our price support 
not only has the floor dropped, it's really down into a level 
where we lost from 1982, when we had 32,000 dairy producers in 
the State, and now it's less than 7,000. I ended up with close 
to 1,000 of them in two meetings just 2 weeks ago with 
Congressman Collin Peterson of northwestern Minnesota, and I 
was struck by the size of the turnout meaning, the desperation 
that many of them are experiencing now.
    And California, by contrast, is a different situation. It 
has its own price support system and has ever-increasing 
production and expansion in the size of its operations.
    What faith should Minnesota dairy farmers have that you 
would understand and be concerned about, the circumstances in 
which they find themselves, given that California's experience 
seems to be so different from it?
    Ms. Veneman. Well, Senator, certainly I've been involved 
with much more than just California in looking at agriculture 
policy. But we've talked a lot today about the regional 
differences. There is probably no better example of regional 
differences in terms of what people think ought to be done 
about agricultural policy than dairy. It's going to be a very 
challenging subject as we go forward in the future because 
people do have such differing opinions about what the dairy 
policy ought to be for the future.
    I would hope that all the different dairy interests could 
work together to find and recommend programs that would be of 
benefit to dairy producers nationwide, so that we can not have 
to arbitrate the regional differences, but find something that 
is good for dairy around the country.
    As I said, this is very contentious. And it is one of the 
issues that creates, probably, the most regional divisions of 
any commodity that we have.
    Senator Dayton. Well, we are quite confident that we have 
all the answers in Minnesota. If you could just get the 
California dairy producers to go along.
    [Laughter.]
    Ms. Veneman. I don't think this is a California versus 
Minnesota issue, though.
    Senator Dayton. No. I agree with what you said. And I echo 
what others have said today about the concern about imports, 
about inequities in the way that our policies have not only 
shaped these, but also permitted exports, dairy being an 
example. According to the figures I have had cited for me from 
some of our producers, this last year some 14-percent of the 
foreign imports of dairy products were 14-percent of our total 
production, where the law calls for 5-percent. And I am 
appalled that there has not been better enforcement of these 
agreed-upon restrictions, and I was pleased to hear you say 
today that you will do so. I think that is very, very 
important.
    As part of that, I wonder if you have taken a position or 
what your views are on labeling of food products, of imported 
products, as such.
    Ms. Veneman. Well, Senator, as you know, many of our 
imported food products are labeled. The question is, should we 
have additional labeling? And there is truly a split among 
producer groups, among various other groups up the food chain, 
about what ought to be done with labeling.
    I think for the most part, consumers do have labels that 
are explicit. And if there is a need for additional labeling, 
we certainly will look forward to working with the groups to 
determine what needs to be done.
    Senator Dayton. Would you support in principle the notion 
that consumers ought to have a right to know what is in the 
food products they purchase, including where those products 
come from, particularly since some of the environmental 
pesticide measures in other countries don't even come close to 
our own? Is that something you would support in principle?
    Ms. Veneman. Well, most food that comes into this country 
is country-of-origin-labeled already. I think that's important.
    The second thing that I think is very important to point 
out is that food cannot be imported into this country unless it 
meets U.S. standards.
    Senator Dayton. In theory, yes.
    Ms. Veneman. And I think that it is very important that we 
have the necessary resources to make sure that we enforce those 
standards on food that is coming into this country.
    Senator Dayton. Well, I support you strongly, Madam 
Secretary. I think that enforcing those is, again, part of it.
    One final question if I may, Mr. Chairman, quickly?
    I just want to commend you, as you mentioned, for asking 
Administrator Whitman to work with you. I would urge the same 
reciprocity in areas like the ever-increasing size of our 
feedlots throughout Minnesota and much of the country. I don't 
know what your experience in California has been, but I am 
concerned that we are putting our citizens more and more at 
risk with the kind of ecological consequences of these ever 
larger operations, the lagoons, the lack of place to put that 
waste, and the like.
    Ms. Veneman. Well, those kinds of regulations, as you know, 
have been an increasing focus of the Environmental Protection 
Agency, and I think certainly, if confirmed, I would have the 
intent to work closely with Ms. Whitman to make sure that there 
is a clear understanding of agricultural operations so that 
they have that input in the process of making regulations that 
regulate those industries.
    Senator Dayton. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Dayton.
    My colleague from Iowa, Senator Grassley.

STATEMENT OF HON. CHARLES E. GRASSLEY, A U.S. SENATOR FROM IOWA

    Senator Grassley. Thank you, Mr. Chairman, and welcome to 
chairmanship, and also for the history about Iowa having once 
before had a person in your position. Maybe you could research 
for me if anyone from Iowa has been Chairman of the Finance 
Committee before
    [Laughter.]
    Since you have all that information. I'll just let you do 
that for me.
    Congratulations, Ms. Veneman, on your nomination and what 
it does for American agriculture. I'm only going to have two 
questions: one on value added, and one on concentration, but I 
wasn't here to give an opening statement and I'd like to do 
that.
    I believe that you already know a great deal about the 
economic and cultural ramifications of Federal agricultural 
policy, and these are very important to me, as well. You 
probably know that maybe I brag too much about being a farmer, 
and my father before me was. I think I understand agriculture 
and how policy decisions from Washington impact hardworking 
farmers, including my son, Robin, who operates our family farm.
    Before I ran for office and after I leave, God willing I 
would still plan on being in farming. There is little that I 
feel more strongly about than providing the agriculture 
community with the potential not only to survive, but more 
importantly, to thrive, and that means profitability. An area 
where you're so strong is in international trade, and if 
there's going to be profitability in American agriculture, 
obviously such a strong suit that you have will help us along 
in that direction.
    I know, Ms. Veneman, that you recognize the complexity of 
the issues facing our farmers and ranchers, and due to your 
previous experience as Secretary of the California Department 
of Food and Agriculture and before that as Deputy Secretary of 
the USDA, I know that you understand many aspects of 
agriculture and what a strong agricultural economy means to my 
friends and neighbors in Iowa.
    Your past service and knowledge of international trade 
policy is outstanding. Trade is one issue that California and 
Iowa do have in common. Iowa ranks second only to California in 
farm exports, and I believe by increasing our world market 
share we will improve the plight of the family farmer, and you 
are the right person for that task.
    Agriculture is always very broad, and it's a very diverse 
field. For instance, in the State of California and I don't 
pretend to know all about agriculture in California, but I 
believe you are a leading producers of vegetables harvested for 
sale, and tomatoes and grapes and strawberries, and you 
probably have hundreds of crops that you raise. In my home 
State of Iowa, we lead the Nation in the production of corn, 
soybeans, and hogs. There are significant differences between 
agriculture production in California and Iowa.
    While it has been a number of years since the Secretary of 
Agriculture has hailed from Iowa that was Henry Wallace, 1933 
to 1940 my home State and the midwest have historically had 
strong representation within the U.S. Department of 
Agriculture.
    I would also like to see working farmers end up in one or 
more of the top slots at the USDA. I believe it is very 
important for the Bush Administration to seek farmers, not 
Washington insiders, to best represent the interests of our 
agricultural community. I have been saying for a while now that 
I would like to have individuals with ``dirt under their 
fingernails'' for the top spots. But let me clarify this point.
    I want someone who uses Schedule F to report the majority 
of their income. I would like to see top-level decisions 
deliberated by people who have friends and neighbors on the 
farm. I want judgments made by people who understand what it 
means to be a midwestern farmer in the 1980s when things were 
so tough. This is very important to me.
    I have faith that if you will address my concerns, you will 
do an outstanding job leading the Department of Agriculture. In 
addition to developing new and improved trade prospects, I look 
forward to working with you to provide new rural development 
opportunities through value added ventures.
    I hope that we also move quickly to address issues of 
agribusiness concentrations, through legislation like my bill 
to provide USDA authority to challenge mergers, in a similar 
fashion as the Department of Justice, and a bill that I am 
going to introduce with Senator Johnson next Monday limiting 
packer ownership of livestock for slaughter. And of course, one 
of the biggest tasks in front of us all is shaping our next 
Farm Bill.
    Mr. Chairman, it is my hope that today's discussion that we 
have had with the President elect's choice for Secretary of 
Agriculture will result in better understanding by both sides 
of what we feel needs to be addressed to make the 107th 
Congress a success for family farmers in our rural communities.
    In regard to agribusiness concentration, as I follow-up on 
my statement, I want to outline my question. During the 106th 
Congress I introduced the legislation already referred to. The 
legislation in a very short statement, without doing justice to 
it gives USDA the same authority to challenge a proposed merger 
as the Department of Justice currently possesses.
    I also sponsored legislation that will give your Department 
responsibility to implement, and this legislation codifies a 
recent General Accounting Office report outlining suggestions 
for improved investigations of competitive practices within 
packers and stockyards.
    Then I already referred to the bill that Senator Johnson 
and I are going to introduce. In a very general statement, but 
one that I hope you can be fairly precise in answering, is 
this: how does the issue of agribusiness concentration fall on 
your priority list? And are you interested in moving quickly on 
the issue?
    Ms. Veneman. Senator, you and I have discussed this issue 
in our meetings. There is probably no other issue that came up 
so consistently as concentration, in my meetings with various 
members of the Committee and various people not on the 
committee. In fact, I understand that Senator Ashcroft or I 
should say, Attorney General designate Ashcroft was asked a 
question about this as well in his hearing. So I know that it's 
on people's minds, and I know how important it is.
    As you know and as you have indicated, the Packers and 
Stockyards Act in USDA is an important authority and we would 
intend to use that authority to its maximum degree. In 
addition, I would intend to, and I've had conversations already 
with Mr. Ashcroft about the Justice Department's role in these 
concerns, and he has pledged to me that we will work closely 
together to address these issues.
    But I also think that while we find ways to make sure that 
our laws are appropriately enforced in this regard, we also 
should look at alternative opportunities for our producers, 
whether it is helping producers take advantage of niche markets 
so that they have an alternative market for their products, so 
that they can have the opportunity to participate up the food 
chain by different kinds of ``agri organizations,'' new 
cooperatives, etc. And we provide the kind of education to 
allow them to understand how to take advantage of such 
opportunities.
    So I think it is both an issue of enforcement and an issue 
of assistance in terms of helping them find new opportunities.
    Senator Grassley. I welcome those new opportunities that 
you seek, and I think that you have spoken strongly about how 
you will approach concentration. Just don't let somebody get 
you off course on the enforcement aspect at the same time that 
you are trying to do the other things that that leadership 
requires you to do, and I'm glad to hear that you are 
interested in doing those.
    Along the lines of, and this is not something that you have 
to respond to, but along the lines of making maximum use of the 
Packers and Stockyards Act, the General Accounting Office 
report suggested more than suggested, flatly stated that in 
many respects, the Packers and Stockyards Act, to make sure 
that we have adequate competition in agriculture, is stronger 
than the anti trust laws in a lot of other areas. And so it is 
an opportunity to do a lot. We talk about anti trust laws so 
much; we have not given proper attention to the Packers and 
Stockyards Act, and we are starting to do that now. So we would 
be backing you up in your strong enforcement of that.
    Now, for my second question, taking off on what you said 
about alternative opportunities, and this would involve not 
just agriculture but rural development, et al., while it is 
important for us to guarantee an environment free of unfair 
trade practices, it is just as important and this is exactly 
what I think you just said for us to assist farmerswith 
alternative opportunities. I would bring up the value added 
opportunity ventures so that they may capture more of the cents 
of every dollar spent at the retail level for commodities from 
the farm.
    Last year I sponsored legislation creating a value added 
opportunity fund for producers to draw grants and for the 
development of value added enterprises. Would you support the 
continuation of this program? And can we work together to 
provide new opportunities for producers and producers' groups 
seeking working capital?
    Ms. Veneman. Well, Senator, I have to admit that I'm not 
actually familiar with the fund that you proposed in detail, 
but I think that based on my previous answer, I am committed to 
the kinds of programs that you're talking about, and that is 
opportunities for producers to participate in partnerships, 
cooperatives, and so forth that allow them to share in the 
value up the food chain. I think there are many examples we 
have seen of producers coming together to do just that, all 
throughout the country, and hopefully we can find and seek 
those out and use them as models to show producers how they can 
get more value up the food chain and more value for their 
product.
    Senator Grassley. I accept that answer, and I hope you will 
have a chance to study it.
    In the process of studying it, because some special 
interest fought our legislation so hard, wanting Congressmen 
and Senators to think it was unfair brick and mortar type 
competition to existing business in agricultural processing, I 
want to make it clear that it is to facilitate this process, 
not to build businesses and competition. It is to empower 
family farmers to accomplish the goals that you have stated 
well, and those interests may come to you and try to convince 
you that this is just a subterfuge for doing what I say it is 
not intended to do.
    Thank you.
    [The prepared statement of Senator Grassley can be found in 
the appendix on page 76.]
    The Chairman. Thank you, Senator Grassley.
    I have just a couple of follow-up questions. In fact, I 
wanted to just follow-up a little bit on what Senator Grassley 
just raised on this whole issue of concentration and 
consolidation, vertical integration.
    Last August, August of 1999 the Department of Agriculture, 
the FTC, and the Department of Justice entered into a 
memorandum of understanding to work cooperatively to monitor 
competitive conditions in the agricultural marketplace. They 
agreed to confer regularly to discuss and review law 
enforcement and regulatory matters, etc. I bring this to your 
attention and ask if you plan on continuing to abide by this 
memorandum of understanding, or if you would at least take a 
look at it and respond back to me, if you haven't been briefed 
on it by now.
    Ms. Veneman. Mr. Chairman, I am not familiar with the 
memorandum per se, but I think I have made it clear today that 
I would intend to work very closely with counterparts 
throughout Government on issues that are related to 
agriculture, whether it is through this memorandum of 
understanding or other kinds of cooperative working 
relationships. I am committed to working inter agency for the 
best interests of agriculture.
    The Chairman. Thank you.
    It has been brought up a couple of times here as you know, 
Senator Lugar and I introduced legislation to establish in the 
Anti Trust Division, Department of Justice, a position with 
responsibility just for agricultural anti trust matters. So in 
response to this, the Department promised to appoint a special 
counsel in the Anti Trust Division to focus on agriculture and 
agri business matters. They did that; Mr. Doug Ross, I believe, 
is that person who is down there now. But there is no 
requirement. They sort of preempted our legislation and we 
never got it through, so there is no real requirement for the 
Department of Justice to continue that practice.
    Again, I think you mentioned it earlier, but I just wanted 
to reemphasize that I hope you work with the incoming Attorney 
General to make sure that we keep that position, and I hope you 
will be an advocate for that, to keep that position there. If 
not, I assume that Senator Lugar and I will work again to try 
to get the legislation through. But if we don't have to, if 
they keep the position, that would be the best way to proceed.
    Again, picking up on what Senator Grassley said, the GAO 
issued this report last September on the Packers and Stockyards 
programs, entitled ``Packers and Stockyards Programs: Actions 
Needed to Improve Investigation of Competitive Practices.'' 
Again, as Senator Grassley said, they did say that basically 
Agriculture has a lot of authority under Packers and Stockyards 
in this area.
    They made two major recommendations: one, that USDA should 
develop a ``teamwork'' approach with economists in GPSA in the 
crane inspection in the Packers and Stockyards Administration, 
a teamwork with them, and with attorneys in your Office of 
General Counsel, so it should be a teamwork approach between 
OGC and Justice, with the attorneys there; and second, that 
USDA should determine the number of attorneys needed to 
participate in investigations. That's one of the things we kept 
hearing back from Secretary Glickman and others, that well, 
they just didn't have the wherewithal to do that. So after this 
GAO report was released I wrote to the Secretary and asked him 
for a timeframe to implement the recommendations. Well, he 
wrote me back on October 19th andhe said, ``GPSA is now taking 
steps that are expected to implement the GAO recommendations by 
April 1st, 2001, except that GPSA will only be able to do so 
fully if the Office of General Counsel receives from Congress 
an additional $500,000 for additional attorneys in the Trade 
Practices Division.''
    So we worked with Senator Cochran I am on the Ag 
Appropriations Committee we worked with him and we got the 
additional money. So in the final appropriations package there 
was $500,000 for the Office of General Counsel to assign 
lawyers specifically for enforcement of the Packers and 
Stockyards Act. So the funding is no longer an issue, and I 
hope you can assure me that these recommendations will be 
implemented by April 1st, as your predecessor has promised.
    Ms. Veneman. Mr. Chairman, I am not familiar with the 
details of what you have expressed here, but certainly I will 
do everything I can to make sure these recommendations are 
implemented.
    I wanted to say one word about the recommendation on 
teamwork approach. That is something I truly believe in. We 
have to use the resources of Government in a way that maximizes 
the expertise of all areas and creates opportunities to work 
together so that we can utilize the resources in the best way 
to implement the programs that we are administering and the 
rules and regulations that we are required to enforce.
    The Chairman. Let me kind of sum up a little bit on where 
they cycle has come now.
    We had this memorandum of understanding that all of us 
worked hard to get them to implement or to agree on: the FTC, 
Department of Justice, and USDA. At the same time, a number of 
us I don't know who all was on the letter asked the GAO to do 
this study on the Packers and Stockyards Act on anticompetitive 
activities in agriculture, vertical integration, the whole 
panoply of things in terms of concentration. As I said, they 
came back with this report last September.
    We then moved ahead and tried to get the Department of 
Agriculture to implement it. They said, ``Look, we would like 
to, but we don't have enough attorneys to do that.'' So we got 
them the money. We are now at the point where we hope we can 
implement the GAO recommendations as early as possible, April 
1st or something like that, and then move ahead to, hopefully, 
this year see the Department of Agriculture taking a more 
aggressive position in really looking at some of these 
practices in agriculture. We are at the point now where we have 
just a few I forget now; I had the data here but now I can't 
find it I think we have four firms handling about 80-percent of 
the meat right now. I don't know what the other figures were on 
that. But these have to be looked at yes, 80-percent of the 
beef is four firms, and 54-percent of the pork is done by four 
firms in the United States.
    The one thing that I constantly hear from my farmers is 
that they just have no markets left. They get one bid. That's 
all they get; take it or leave it. That's not much of an open 
marketplace for agriculture when that happens.
    So one of the things that I hope to be focusing on this 
year with you is the utilization of your division, GPSA, and 
the attorneys and the additional money that we got so that we 
can begin to really be more aggressive in this area.
    The next thing I wanted to ask you about before we finish 
here is in the area of conservation, specifically, the CRP 
program, the WRP that's Wetlands Reserve Program and the WHIP 
program, the Wildlife Habitat Improvement Program.
    Let's start with the WRP and the WHIP program. Both of 
those, Senator Cochran has been very helpful in funding, but 
they are basically running out of money and acreage. I hope 
that we can have some input from you early on regarding both 
the WRP and the Wildlife Habitat Improvement Program in terms 
of more acreage and how much more money we need to enroll more 
acres in that program.
    The third part of that stool is the CRP. We now have the 
limit in law is 36.4 million acres right now, that is allowed 
by law to be put into the CRP. I think we're now at around 33 
million acres in the CRP. There is a push by many in the sports 
area, a number of wildlife organizations, asking that we 
increase the CRP level actually, they want 45 million acres, 
which sounds high, but I personally believe that we could raise 
the ceiling on the CRP to somewhere in the neighborhood of 40 
million acres from 36.4 million, and by raising that ceiling, 
hopefully get more enrolled than the 33 million that we have 
now.
    Many of the farmers who had land in the CRP initially did 
not get back in the second round. Again, this committee, and I 
think the Committee in the House, rightly so, said that because 
of budgetary concerns we were going to try to really enroll the 
most fragile lands first in the CRP. When they finally got down 
to some of the farms that had been in the CRP before, farmers 
found they couldn't bid it in.
    So I am wondering if we might look at different ways that 
we might expand the CRP in a way that will allow some of the 
people who had land in the CRP to bid it back in once more.
    So again, my question to you is just your feelings about 
how you feel about increasing the number of acres that we have 
in CRP, the Wetlands Reserve Program, and the Wildlife Habitat 
Improvement Program. I just want to get your general philosophy 
on that.
    Ms. Veneman. Mr. Chairman, I think that these programs are 
very important. I think we have model programs in terms of 
voluntary, incentive-based programs that are usable in our 
country.
    I have not seen any studies yet on the pros and cons of 
increasing the acreage, but it is something I certainly would 
want to look at carefully and work with you on. I understand 
that the money has been used up in these programs fairly 
quickly each year, which would indicate that there is a demand 
for these kinds of programs. So I would certainly want to work 
with you to look at what kinds of proposals we may want to make 
for the future.
    The Chairman. Well, I really want to work with you on that, 
because, again, working with Chairman Lugar, I hope we can have 
some hearings this spring on conservation and what we can do to 
maybe even move an agenda on that this year, even though the 
Farm Bill doesn't expire until next year.
    I have introduced legislation that I've worked on for some 
time now; it has been introduced in the House, it has 
bipartisan support on the House and Senator Smith and I have 
introduced it in the Senate, which we have dubbed the 
``Conservation Security Act,'' but names are not important. It 
is basically a voluntary-based conservation program. Now, you 
are right, there are programs out there that farmers can use, 
and in your opening statement you said that farmers are the 
best stewards of the land. But a lot of times, in doing 
conservation work, it may cost them in terms of production, or 
it costs them in terms of time, fuel, equipment usage it costs 
them one way or the other a lot of times to engage in what they 
already do.
    I hear a lot from farmers, ``I've been a good 
conservationist, I'm doing these things, but I'm not getting 
anything for it.'' And so I have worked with many of these 
conservationists to develop a voluntary program where farmers 
could come in and sort of ``pick from the menu.'' At one level, 
they could do so much conservation, then a higher level and a 
higher level. Depending on how much they do, they would get a 
payment for it. And as we look at it, I think what we're facing 
is a phased-back cutdown and things like that. Perhaps one of 
the things we can do is begin to help give incentives to 
farmers and to help pay them for the good conservation work 
that many of them are already doing, and to give them an 
incentive to even do more. Again, it would be voluntary. If 
they want to do it, fine; if they don't, they don't have to. 
But it has gotten a lot of support from different farm groups, 
and I hope that you would take a look at that. I welcome any 
thoughts you have on it or changes or modifications, any input 
that you might have, but I would hope that we could perhaps 
move some kind of a conservation agenda even this year.
    Now, just a couple more items I want to cover. One is Food 
Stamps and the Food Stamp Program. I've had the unusual 
experience in Iowa of finding that our Food Stamp usage is 
down, but the number of people going to food banks is up. I 
said, how could that be? Why is that happening? Why is the 
usage of food banks going up? What has happened is that because 
of the change in our welfare laws, many people who are working 
now can get some Food Stamps. They qualify for some Food 
Stamps, but they run out before the end of the month. They are 
working, but they are not making enough money to really afford 
to continue to feed their families, so what they do is, toward 
the end of the month they go to food banks. I can give you the 
data on that, on how much more and I checked with other States, 
and I find that that is true in a lot of areas around the 
country. Food banks, the demand has gone up, even though we 
have a Food Stamp Program.
    So I am hopeful that we can take a look at the Food Stamp 
Program and see what we can do to increase its usage. My 
opinion is that it's better for people to have the Food Stamps 
than it is for them to go to the food banks. We're always going 
to need food banks, but that ought to be sort of the ``last 
bastion,'' the last safety net. But Food Stamps is an important 
program. It's a Federal program.
    Again, I guess my question to you, if I had one, would be 
just your thoughts on the Food Stamp Program. Do you agree that 
it's an economic stabilizer, a safety net? Do you agree that it 
should be a Federal program and that it ought to be linked to 
food, and not just some kind of income assistance? See, the one 
thing we have always tried to do with Food Stamps is keep the 
link to food. And now we hear things like, well, maybe that 
ought to be a cash assistance type of program.
    At the outset I would like to ask for your thoughts on how 
you view the Food Stamp Program and how you feel about it being 
a food program rather than just a cash assistance program.
    Ms. Veneman. As I recall the history, Mr. Chairman, this 
has been a debate that has entered into the food assistance and 
Food Stamp Program since its inception. A lot of people are 
surprised that the Food Stamp Program is housed at USDA. Part 
of the reason that it is housed at USDA is because of that link 
between providing a food benefit, not just an additional 
payment benefit.
    I think that a lot of the other food programs that have 
been administered by USDA are just as important. The WIC 
program has been very important in helping with nutrition 
assistance for pregnant and lactating mothers and small 
children.
    The Chairman. A great program.
    Ms. Veneman. A very good program. And I think that these 
are programs that we want to continue for the future, but also 
find ways to make them operate better.
    The Chairman. Well, the WIC program is a great one.
    Again, we have to look at the Food Stamp Program in terms 
of eligibility, especially for children, that type of thing, 
and again I hope we could take a look at that. My strong 
feeling is that it has to remain a part of the food program. I 
have had a lot of people come up to me time and time again in 
all my years on the House Agriculture Committee and say, 
``Well, all this money goes out for Food Stamps, and it makes 
it look like an agricultural program. It makes it look like 
we're spending all this money on farmers. We're spending it on 
Food Stamps.'' My response is, well, it is a food program.
    But quite frankly, it is one of the things that keeps that 
linkage with all of our farm programs and with the fact that 
people need food to eat, and it's that one strong link that we 
need to keep there. So I feel very strongly about keeping it as 
that, and not just as a cash assistance type of program.
    I had some other questions, but time is getting late, but 
quite frankly, it's one of the things that keeps that linkage 
with all of our farm programs and with the fact that people 
need food to eat, and it's that one strong link that we need to 
keep here. So I feel strongly about keeping it as that, and not 
just as a cash assistance type of program.
    I had some other questions on trade and different things 
like that, but time is getting late. Like I said earlier, I 
would like to submit some questions to you in writing, and I 
look forward to your responses to those on some trade issues 
and on some rural development issues. I really did want to get 
into that, but it's getting too late rural utility services, 
the infrastructure of rural America. The rural utility services 
and the Department of Agriculture, I've seen them do some great 
things out there. We have need for clean water, we have need 
for waste disposal in rural areas. We need some economic 
incentives also, rural water we've done some great things out 
there, but I just think we need some more if we're going to 
have a healthy rural America.
    I will submit some of these questions to you in writing. If 
you could get back to me, I would appreciate it.
    Senator Lugar.
    Senator Lugar. Mr. Chairman, I would just commend you on an 
excellent hearing.
    And likewise, I look forward to working with you as 
Secretary of Agriculture. Thank you for your forthcoming 
responses.
    Ms. Veneman. Thank you.
    The Chairman. Senator Leahy apologizes. He is unable to be 
here because he is chairing the Judiciary Committee, and I have 
a statement of his which will be made a part of the record.
    [The prepared statement of Senator Leahy can be found in 
the appendix on page 67.]
    Senator McConnell also has a statement which will be made a 
part of the record.
    [The prepared statement of Senator McConnell can be found 
in the appendix on page 63.]
    Again, thank you very much, Ms. Veneman. We congratulate 
you on your selecting. We look forward to your swearing-in and 
we look forward to your appearance here as the first woman 
Secretary of Agriculture. Thank you very much.
    Ms. Veneman. Thank you, Sir.
    The Chairman. This hearing is adjourned until the call of 
the new chair.
    [Whereupon, at 12:17 p.m., the Committee was adjourned, to 
reconvene at the call of the Chair.]
      
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                            A P P E N D I X

                            January 18, 2001



      
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                   DOCUMENTS SUBMITTED FOR THE RECORD

                            January 18, 2001



      
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                           January 18, 20001



      
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