[Senate Hearing 107-828]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 107-828

      CONSERVATION ON WORKING LANDS FOR THE NEW FEDERAL FARM BILL

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

                                HEARING

                               before the

                       COMMITTEE ON AGRICULTURE,
                        NUTRITION, AND FORESTRY

                          UNITED STATES SENATE


                      ONE HUNDRED SEVENTH CONGRESS

                             FIRST SESSION


                               __________

                             JULY 31, 2001

                               __________

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


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

                               __________

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                            WASHINGTON : 2002
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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
BLANCHE L. LINCOLN, Arkansas         PAT ROBERTS, Kansas
ZELL MILLER, Georgia                 PETER G. FITZGERALD, Illinois
DEBBIE A. STABENOW, Michigan         CRAIG THOMAS, Wyoming
BEN NELSON, Nebraska                 WAYNE ALLARD, Colorado
MARK DAYTON, Minnesota               TIM HUTCHINSON, Arkansas
PAUL DAVID WELLSTONE, Minnesota      MICHEAL D. CRAPO, Idaho

              Mark Halverson, Staff Director/Chief Counsel

            David L. Johnson, Chief Counsel for the Minority

                      Robert E. Sturm, Chief Clerk

              Keith Luse, Staff Director for the Minority

                                  (ii)

  
                            C O N T E N T S

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                                                                   Page

Hearing(s):

Conservation on Working Lands for the New Federal Farm Bill......    01

                              ----------                              

                         Tuesday, July 31, 2001
                    STATEMENTS PRESENTED BY SENATORS

Lincoln Hon. Blanche L., a U.S. Senator from Arkansas............    01
Hutchinson, Hon. Tim, a U.S. Senator from Arkansas...............    02
Thomas, Hon. Craig, a U.S. Senator from Wyoming..................    03
                              ----------                              

                               WITNESSES

Dunklin, George, Jr., USA Rice Federation, DeWitt, Arkansas......    07
Klein, Lee, Nations Corn Growers Association and American Soybean 

  Association, Washington, DC....................................    04
Mast, Gary, National Association of Conservation Districts, 
  Washington, DC.................................................    09
Serfling, Dave, land Stewardship Project, Preston, Minnesota.....    11
Shaffer, Mark, Defenders of Wildlife, Washington, DC.............    13
                              ----------                              

                                APPENDIX

Prepared Statements:
    Dunklin, George..............................................    35
    Klein, Lee...................................................    30
    Mast, Gary...................................................    40
    Serfling, Dave...............................................    52
    Shaffer, Mark................................................    57
Document(s) Submitted for the Record:
    Eddleman, Robert, L., Soil and Water Conservation Society....    76
    Letter to Senators Grassly and Graham........................    83


 
      CONSERVATION ON WORKING LANDS FOR THE NEW FEDERAL FARM BILL

                              ----------                              


                         TUESDAY, JULY 31, 2001

                                       U.S. Senate,
         Committee on Agriculture, Nutrition, and Forestry,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:28 a.m., in 
room SR-328A, Russell Senate Office Building, Hon. Blanche L. 
Lincoln presiding.
    Present or submitting a statement: Senators Lincoln, 
Conrad, Dayton, Wellstone, Thomas, Hutchinson, and Crapo.

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

    Senator Lincoln [presiding]. The Committee on Agriculture 
is called to order.
    Good morning, and thanks to all of you, colleagues, 
witnesses, and the public here to join us for this hearing this 
morning.
    I first want to give Chairman Harkin's regrets. He is 
terribly sorry that he was unable to be here this morning. As 
many of you all know, this is a very important issue to the 
chairman, but he is tied up on the floor with some other 
important matters on behalf of agriculture, and we are glad 
that he is there.
    For several weeks now, the committee has been holding a 
series of hearings to gather testimony from a wide range of 
voices all focused on how best to design a farm bill. These 
hearings have examined the various elements, both the good and 
the bad, of Freedom to Farm, to help us figure out how we can 
design a new and better farm policy.
    Just last Thursday, the House Agriculture Committee marked 
up its version of the Farm bill. We have a lot of ground here 
in the Senate to cover to catch up with the House, but I know 
that if we set our minds to it, we can achieve it.
    Chairman Harkin called this hearing to explore the benefits 
of good conservation practices in agriculture, specifically on 
working lands or lands already in production. Unfortunately, as 
I mentioned, he is tied up on the floor as the Senate now 
debates the market loss assistance package, and he has asked me 
to chair this hearing in his absence; and I am very proud to 
sit in as chair of this hearing on his behalf.
    Over these past several weeks of hearings, Chairman Harkin 
has made it very clear that he believes the next Farm bill 
should contain a strong conservation title. As chairperson of 
the Subcommittee on Forestry, Conservation, and Rural 
Revitalization, I share this belief.
    The preservation of soil and clean water is a key component 
of any long-term plan for agriculture. As the daughter of a 
seventh-generation Arkansas farm family in East Arkansas, I 
know how important good farming practices and the enhancement 
of natural resources are to a farm's success. I also know how 
important the success of farming is to the vitality of our 
small towns and rural areas.
    While the business of farming is to produce the food that 
we eat and the clothing that we wear, the soul of farming is in 
the relationship between the farmer and the land. This business 
of farming helps to strengthen our rural economy, and the 
farmer's relationship to the land helps to strengthen our rural 
society.
    This is one reason why farmers take so much pride in the 
work that they do feeding this Nation and the rest of the 
world. They feel a special bond to their work, a bond that goes 
beyond a simple vocation.
    It is also why they work so hard to take care of the land, 
for as we all know, farmers are the original conservationists. 
I come from that first-hand, having watched my father for 
years, as well as my grandfather, and understanding not only 
their love of the occupation that they had but, more 
importantly, their love of the land.
    If you do not work hard to preserve the land that you farm, 
it cannot continue to produce a plentiful harvest year after 
year--any farmer will tell you that--nor can it endure to be 
handed down to your sons and daughters, which is also at the 
forefront of these incredible people's minds.
    As we convene today to explore the role of conservation 
policy in the context of the new Farm bill, it is important 
that we keep in mind both the business of farming and the 
relationship of the farmer to the land. A fragile bond connects 
the two. We have limited resources, and we must choose between 
an array of policy priorities.
    That Chairman Harkin must miss this hearing to manage the 
debate on yet another emergency market loss assistance package 
illustrates just how important it is that we choose wisely in 
these debates.
    I thank the witnesses for joining us today to share with us 
their views on how to improve conservation policy as we move 
forward on this new farm bill. Their expertise on the many 
issues in conservation is very much appreciated and, as I 
mentioned, is extremely important for us in the debate that we 
find in front of us.
    Before I introduce the panel, I want to welcome the 
gentleman from Arkansas and ask if he has a few comments.

 STATEMENT OF HON. TIM HUTCHINSON, A U.S. SENATOR FROM ARKANSAS

    Senator Hutchinson. Madam Chairman, my colleague from 
Arkansas, I have a very few comments, but I want to thank you 
for chairing the hearing today. It is a very important hearing, 
and I know that Chairman Harkin is involved in some very, very 
important business in ensuring that this farm bill moves 
forward which we sent out of committee last week.
    I want to express my own sense of urgency about seeing all 
action completed on that bill before we leave for the August 
recess. You alluded to this last week in the committee markup, 
that we have been hearing since January about the need for 
Congress to act and act expeditiously. We have not acted 
expeditiously. We have not moved this forward as we should 
have, and it has caused uncertainty and instability, and I 
regret that. Well, it would be compounding our errors to fail 
to move this bill forward prior to the August recess. I do not 
want to go back and face them, and I am sure Madam Chairman 
does not, either.
    This hearing is very important, as we look at the new Farm 
bill and what role conservation is going to play in that new 
Farm bill and in particular how the conservation efforts and 
production are going to be related. I look forward to this as a 
learning experience.
    I especially want to express my welcome to Mr. George 
Dunklin, Jr., from DeWitt, AR, who is one of our leading 
citizens and leading agricultural leaders and a good friend of 
all of us in Arkansas. We appreciate his expertise and his 
willingness to share that today.
    Thank you, Madam Chairman.
    Senator Lincoln. Thank you.
    Senator Thomas, would you like to offer any comments before 
I introduce the witnesses?

  STATEMENT OF HON. CRAIG THOMAS, A U.S. SENATOR FROM WYOMING

    Senator Thomas. Good morning.
    Senator Lincoln. Good morning.
    Senator Thomas. Of course, I always have to take advantage 
of that.
    Thank you very much for holding the hearing, and I thank 
all the witnesses for being here.
    Certainly this business of the conservation segment of our 
farm bill has become one of the more important things, partly 
because it is very important that we do something with 
conservation and with the lands, and partly because it is a 
different, unique way of supporting agriculture in addition to 
or apart from, frankly, program crops.
    Being from Wyoming where the program crops are less 
important, I guess--or, not less important, but the dominance 
is livestock and so on--so of course, it makes a great deal of 
difference; we are fairly limited in our participation in the 
farm programs.
    I do not know exactly how this will work. Certainly, I am 
interested in hearing your ideas. The funding of the EQIP 
program is important. That is one that has been very useful and 
continues to be. We are talking more and more about protecting 
wildlife and protecting wetlands, doing some things that will 
keep open space and the technical assistance that goes with all 
those things.
    It is a new area and one that we certainly need to explore. 
Our conservation district program in Wyoming has been very 
important. We are dealing with clean water and non-point source 
water problems, of course, and many of the agricultural people 
need some assistance if they are going to comply with those 
things. Hopefully, the regulations can be made a little more 
useful and workable beforehand, but nevertheless that is there.
    This is kind of a breakthrough, a little bit of a change in 
the way we handle agriculture, so we are doing something to 
support agriculture more generally, frankly, without tying it 
to production so that we are not working against ourselves in 
terms of overproducing and yet paying for production in this 
change of ways of doing things.
    Thank you, Madam Chairman. I look forward to the testimony.
    Senator Lincoln. Thank you.
    Senator Crapo has joined us. He has also been quite up 
front and very, very involved in the conservation issue, and I 
appreciate all of his hard work.
    Senator do you have any opening comments?
    Senator Crapo. I have no opening statement, Madam Chairman. 
Thank you.
    Senator Lincoln. I will now introduce the panel. First, we 
have Mr. Lee Klein, who will testify on behalf of both the 
National Corn Growers and the American Soybean Association.
    Mr. George Dunklin Jr. Is from our great State of Arkansas, 
a native of that great Delta town, DeWitt, AR. I have to also 
comment that Mr. Dunklin comes from a farm family as I do, 
having known his father and the great work that his father has 
done, and seeing George follow in his footsteps is a great 
thing. He will be testifying on behalf of the U.S. Rice 
Federation.
    Mr. Gary Mast is here on behalf of the National Association 
of Conservation Districts.
    Mr. Dave Serfling will be introduced by our good friend 
from Minnesota, Senator Wellstone, who will be joining us 
shortly. We are delighted to have you with us, Mr. Serfling.
    Last but not least, Dr. Mark Shaffer is here on behalf of 
Defenders of Wildlife.
    We thank the panel very much for your willingness to be 
here and share the expertise that you all have with our 
committee. We hope that it will be an ongoing relationship and 
something we can call on you on as we continue to move forward 
on the Farm bill. We look forward to your testimony, and we 
will start with Mr. Klein.

         STATEMENT OF LEE KLEIN, NATIONAL CORN GROWERS 
         ASSOCIATION AND AMERICAN SOYBEAN ASSOCIATION, 
                         WASHINGTON, DC

    Mr. Klein. Thank you, Madam Chairman, for the opportunity 
to testify here today about conservation.
    I serve as president of the National Corn Growers 
Association, and I also serve as a member of the board of 
directors of the Lower Elkhorn Natural Resources District. I 
farm near Battle Creek in northeast Nebraska, where my wife and 
I raise corn, seed corn, soybeans, rye, alfalfa, and hay, and 
have a cow/calf operation.
    This testimony is also presented on behalf of the American 
Soybean Association.
    The National Corn Growers Association's members have a 
commitment to our community to ensure that we have clean water 
and health, viable soil to ensure the land is productive for 
many years to come. We take responsibility for our farming 
activities and must do so with a keen eye toward conservation, 
productivity, and marketing.
    We support voluntary, incentive-based conservation programs 
that the past Farm bill have created. We believe that 
flexibility in programs is essential for their widespread 
adoption, given local variances in conservation and water 
quality priorities, production practices, climate, soil type, 
and many other factors.
    Several members of the committee have introduced 
legislation to address the expansion of voluntary, incentive-
based conservation programs. We look forward to working on 
elements of each of each of these bills in a comprehensive farm 
bill package. The National Corn Growers believes that the 
conservation title of the next Farm bill should focus on 
conservation practices of land in production rather than 
conservation programs that take land out of production. Given 
scarce Federal dollars, we prioritize those programs that 
provide financial assistance for conservation practices on land 
in production.
    National Corn Growers is interested in a new conservation 
program that assists growers in maintaining or undertaking new 
conservation practices in their farming operations. It is 
important that these programs be implemented on ground that is 
in production and will not become a set-aside program.
    As we look at broader Clean Water Act issues and 
regulations such as confined animal feeding operations, total 
maximum daily loads, and hypoxia in the Gulf of Mexico, we know 
that corn growers play an important role in maintaining a 
healthy environment. Agricultural producers face increasingly 
regulatory burdens whether it is local, State or Federal 
requirements on the management of their land. We support 
programs that will work with our members in utilizing 
conservation practices and work to maintain a healthy 
environment.
    Specifically, National Corn Growers has been focusing on 
legislation that would provide environmental incentive payments 
for growers currently utilizing conservation practices on their 
ground or will undertake new practices that provide 
conservation benefits.
    The Conservation Security Act, a conservation incentive 
payment program, reaches these goals. National Corn Growers 
believes that the Conservation Security Act, working with 
commodity programs and the past Farm bill conservation 
programs, allows for a new focus on conservation. The 
Conservation Security Act is unique in its approach because it 
recognizes an important part of conservation practice adoption 
across the farming community, which is that growers need 
financial and technical assistance in the management of their 
operations, based on conservation principles.
    This is not always as easy or as obvious as creating and 
managing a filter strip along the waterway that runs through 
your land; rather, it is the intensive management practices, or 
altering tillage practices, that can become as much or more 
important in reaching our conservation goals.
    These management practices also add to the costs and risks 
of the farming operations. These are the areas that need to be 
the focus of the next farm will where policymakers work with 
growers to find conservation practices that fit in with their 
management and stewardship of the land.
    The Environmental Quality Incentive Program, or EQIP, has 
great goals of targeting scarce resources at the most 
significant soil and water quality needs in each State. 
However, the targeting of funds has been excessive, creating a 
very narrow program.
    National Corn Growers supports changes that would broaden 
the participation in EQIP and increase funding for both 
livestock and crop sectors in the program. EQIP implementation 
should ultimately be altered to change the length of the 
contract, the ability to receive payments in the first year of 
the contract, and eliminate the size restrictions on animal 
operations.
    Each of these conservation measures provides an integral 
part of the overall conservation environment and water quality 
objectives. Federal programs provide financial resources and 
technical assistance to facilitate the adoption and management 
of conservation practices. Federal, State, and local cost-share 
and incentive programs are essential for the greater benefit 
provided by these practices. Our members are engaged in farming 
as a livelihood and must maintain the ability to raise 
productive crops on their land and market their crops to 
maximize profitability.
    National Corn Growers recognizes the regulatory activity is 
increasing regarding livestock operations and manure management 
and application. Regulatory actions in this area will have 
significant impacts on both our customers and the U.S. corn 
industry. The U.S. livestock industry is the No. 1 consumer of 
domestic corn. Just as we are concerned that the corn 
production could shift to foreign countries, we are also 
concerned about livestock production shifts to foreign 
countries. Both areas must be given the tools and resources to 
comply with new regulations if we are to remain competitive in 
the global marketplace.
    National Corn Growers closely monitors the speed at which 
new land comes into production in South America. As set-aside 
and acreage-idling programs in the United States increase, such 
as increasing the acreage in CRP, the rate at which land in 
South American is cultivated increases. The United States 
cannot maintain a competitive advantage if U.S. regulatory 
activity forces up production costs, if the U.S. transportation 
infrastructure cannot deliver our goods to domestic and foreign 
markets in a cost-effective manner, and if the United States 
drives our customers further from the point of domestic corn 
production.
    All these elements must be considered when analyzing the 
impacts of domestic environmental regulatory activity.
    As the committee continues its work on the Farm bill, we 
urge you to take all of these elements into consideration. 
National Corn Growers members strive to be good stewards of the 
land and must do so in a manner in which they maintain their 
productivity and competitiveness in global markets.
    We see the pressures of environmental regulatory activity 
having significant impacts on our domestic customers, the 
livestock industry, and potential impacts on row crop 
production. Conservation programs must acknowledge these 
factors and work with producers to undertake conservation 
practices on land in production while allowing for the 
flexibility for differing regional areas of production.
    I thank you for the opportunity to testify.
    Senator Lincoln. Thank you, Mr. Klein. You made it before 
the light came on; that was excellent.
    [The prepared statement of Mr. Klein can be found in the 
appendix on page 30.]
    Senator Lincoln. Before we continue with the panel, I would 
ask if there are any other Senators who would like to make 
opening statements; if not, we can continue.
    Senator Wellstone, I know that you will want to introduce 
one of our witnesses. Would you like to do it now?
    Senator Wellstone. I would be pleased to do it with Senator 
Dayton; thank you.
    Senator Lincoln. Great.
    Senator Wellstone. As my colleagues know, I could say a 
lot--do I have about an hour to introduce Dave Serfling----
    Senator Lincoln. Don't worry; we will turn the lights on.
    Senator Wellstone. Dave is from Preston, Minnesota, and we 
have known each other for a while. I have been to many Land 
Stewardship Project gatherings, especially in Saint Dominick's 
Church in Northfield, Minnesota. His testimony will go to the 
heart of what this question is about with conservation. He is a 
smart, clear thinker, and smart, clear farmer who has a very 
diversified operation which is very respectful of the 
environment, holds down input costs, and is really an example 
of some of what is happening in agriculture in southeast 
Minnesota especially. We see a lot of focus there on land 
stewardship, and Dave represents the very best of it.
    Thanks, Dave. It is just great that you are here and much 
appreciated.
    Mark?
    Senator Dayton. Madam Chair, I would just second what 
Senator Wellstone said. When Chairman Harkin was in Iowa last 
fall, we had some meetings, and it was clear that the Land 
Stewardship Project was already deeply involved with the 
chairman in developing the legislation which he has now 
introduced, which I am proud to be a cosponsor of.
    It is very appropriate that you and your organization are 
represented on the panel today, Dave, and I look forward to 
hearing your remarks.
    Thank you.
    Senator Lincoln. Thank you, Senator Dayton.
    We will proceed now with Mr. Dunklin.

STATEMENT OF GEORGE DUNKLIN, JR., USA RICE FEDERATION, DEWITT, 
                            ARKANSAS

    Mr. Dunklin. Thank you, Madam Chairman and committee 
members.
    My name is George Dunklin, Jr., and I am a rice farmer near 
DeWitt, Arkansas. I live near DeWitt. I do not actually live in 
DeWitt. I live on the farm with my wife and my three daughters, 
Megan, Hillary, and Lauren. We live on a working farm where we 
practice conservation every day.
    Madam Chairman, as you well know, in the rice industry, we 
require a lot of water. We conserve every drop of water on that 
farm, literally. The systems that we designed on our farm are 
such that we can do that, and it is very important that we do 
that.
    We also flood our fields every winter for the migratory 
waterfowl that fly in, the ducks, the geese, and what-have-you. 
We had, until a big wind storm at Easter, a nesting pair of 
bald eagles. Over the last nine years on our farm, which the 
Arkansas State Game and Fish Department have documented, about 
nine eaglets have been born. We take a lot of pride. Our 
children love growing up there. My wife loves living there. We 
practice what we preach.
    The U.S. Rice Producers' Group has asked me to come today 
to testify in front of this committee. The U.S. Rice Producers' 
Group is a charter member of the U.S. Rice Federation. I serve 
on the Conservation Committee; I also serve on the Conservation 
Committee for Ducks Unlimited and also for the last nine years 
have been chair of my local FSA office back home.
    We have turned in our testimony, and today I would really 
just like to go through the highlights of it instead of just 
reading it to you.
    What we would like to talk about today is this balancing 
act of the conservation payments, whether they go for working 
land or non-working land--sort of what Mr. Klein was talking 
about.
    First, I would like to address the state of the rice farm 
economy. We are not immune to low prices. Like other 
industries, since water is one of our main components; 
fertilizer, nitrogen, is another main component of our 
operation. Energy prices have certainly hit us hard as they 
have hit everybody else.
    Without a doubt, the emergency payments that you all have 
made over the last few years without question have made a 
difference in keeping several of my friends in business. My 
banker friends are able to continue loaning money. We 
appreciate what you have done in the past, and we appreciate 
the work that you are doing this year for this year's funding, 
which apparently is going on as we speak, and what is going on 
for next year. Without those payments, simply, a lot of us 
would not be there.
    Attached to my testimony are several examples of what we as 
rice farmers do for what we call best management practices. Our 
committee went to six different State to get examples of what 
we are doing right now in the rice industry. They address 
improving soil, water, air quality, and improving wildlife 
habitat.
    What I want to talk about, though, specifically, is this 
balancing act between the working and the non-working land. We 
also want to comment on some of the other proposals that we 
have seen.
    We do support all the existing conservation programs--the 
CRP at the current level; the WRP program; the WHIP program; 
the EQIP program; and the technical assistance that NRCS has 
given us and what we hope they will give us more of.
    We do not support the payment limitations on these 
conservation program benefits. I just do not think we can get 
the work done if we are limited in the amount of money. It is 
just not going to get off the ground. There is so much work to 
be done.
    Also, these conservation payments should not be a 
substitute for existing or future farm safety net programs. We 
want them to be voluntary-based, incentive-driven payments. We 
want them to be science-based programs, and they need to be 
measured as such.
    They need to enhance the rural economy and maintain private 
property rights. They need to be designed to be WTO-consistent 
and meet those ``green box'' measures that we have heard so 
much about. I am not quite sure I understand all the green and 
amber boxes, but I understand green boxes.
    Something else that is important is the administration of 
these on the local level. As I said, I have served for the last 
nine years as chair of our FSA county committee. We would like 
to see these come through the FSA office, the NRCS, where local 
farmers and local producers are very much involved. They simply 
know what works and what does not work in a local way.
    Again, in short, we believe that careful balance between 
the farm safety net programs and the conservation program 
payments that are going to go to retire the land need to be 
considered, Madam Chairman.
    Again, we really appreciate your leadership, Senator 
Harkin's leadership, and this committee's leadership in coming 
up with the conservation title for the next Farm bill, that 
will help producers to increase conservation and environmental 
benefits in America.
    I for one, personally, am very excited about any new farm 
bill that talks about and rewards land stewardship because 
frankly, in the rice industry, we have been practicing land 
stewardship since day one.
    I will be happy to answer any questions, and I thank you 
for the opportunity to testify.
    Senator Lincoln. Thank you, Mr. Dunklin.
    [The prepared statement of Mr. Dunklin can be found in the 
appendix on page 35.]
    Senator Lincoln. Mr. Gary Mast, representing the National 
Association of Conservation Districts.
    Welcome.

 STATEMENT OF GARY MAST, NATIONAL ASSOCIATION OF CONSERVATION 
                   DISTRICTS, WASHINGTON, DC

    Mr. Mast. What a pleasure to be here, Madam Chairman, 
members of the committee. We appreciate being heard.
    I am a sixth-generation farmer, and my 13-year-old daughter 
claims that she is going to be the seventh-generation farmer. 
We milk about 600 dairy cows, so I understand the AFO/CAFO 
rules and all the challenges that those are bringing to us and 
appreciate the wisdom of Senator Thomas in realizing that we 
cannot just make all the rules in Washington, DC and expect it 
to happen out on the local level. There needs to be some give 
and take and local input.
    I might also say that I have a son, too, and how many of 
you can say that your son is playing in the State baseball 
tournament at 10 years old? He is going to be doing that on 
Saturday, so I am pretty proud of that and of a very good wife 
who is an attorney and keeps me straight.
    I have been interested in conservation pretty much all my 
life. My father put in wildlife areas and practiced 
conservation; we do no-till; we grow the crops or the cows. I 
have been on the local Soil and Water District board. I served 
on the State FSA committee. I know the ins and outs of how 
these programs work and how they work locally.
    I am also here representing all the conservation districts 
across the country. I am their vice president. We have been out 
there, quietly doing the job, getting the technical assistance 
out there along with our partners, NRCS, with the help of FSA. 
A lot of people do not know about conservation districts, but 
they are an extremely important force, especially up there in 
Wyoming; they do a wonderful job up there.
    As far as districts, I would explain it like this. If I am 
flying across the country, if I am over private lands and you 
push me out of the airplane, I will probably land in a soil and 
water conservation district. We are out there, covering this 
country.
    In the interest of time, I would ask that my written 
statement be inserted into the record. In my oral remarks, I 
want to focus on three points--the challenge we face; what is 
needed for further gains in conservation; and our preliminary 
assessment of the House conservation title.
    Our challenge--over the past several decades, we have made 
some good progress in protecting our resource base. Progress is 
leveling off, and we still have a long way to go. In the recent 
farm bills, we have created numerous new programs. The programs 
have been pretty complicated, to say the least, and not real 
well-coordinated, oversubscribed, underfunded, and serve only a 
small percent of land managers. It is where we fall the 
shortest. We talk about EQIP; it is not available to too many 
land owners out there.
    Too much energy is now focused on implementing programs 
rather than helping land managers solve conservation problems. 
Programs solve a lot of problems out there, but each community 
has different, specific, small problems, many of which have to 
be solved in a local level, so a Federal program probably will 
not help solve those.
    What is needed? We have spent two years in our own group 
putting our farm bill recommendations together. We had 1,700 
district people respond to that, so we feel like we have had a 
pretty good core response, and we think we know what they need 
and want. We heard the same message over and over again--
current programs are important, but their reach is limited. We 
need a new incentive program that reaches all producers and all 
lands.
    Conservation districts are very support of the bill that 
Senator Harkin has put forth and feel that proposed programs 
fill a lot of the critical gaps that we are missing. As a way 
to further strengthen the proposed program, we would like to 
see greater integration with ongoing State and local government 
efforts. I guess that is where we feel it may fall a little 
short; we would like a little more local input.
    We would also like to see the States have the ability to 
take care of a lot of their own planning, rather than from on 
high telling us all what to do.
    As important as these financial assistance and land 
retirement programs are, producers have even a greater need for 
technical assistance. We all know the work load that is coming 
down, and there has to be technical assistance.
    It is imperative that adequate resources be made available 
to provide the technical assistance that producers have told us 
they need. We have done surveys, and we should have 37,000 
full-time-equivalents out there; currently, we have 15,000.
    As far as the House conservation title, we have not had a 
lot of time to check it out. We are pleased to see the 
increased funds. It has a good beginning, but we are concerned 
about the underestimated technical assistance that it is going 
to take to administer that program. I guess if anything, that 
is really what we are concerned about.
    We would also like to say that NRCS should be the entity 
that knows about conservation, and they should be not 
necessarily writing the checks but administering what the new 
Farm bill would be over on the House side. That is the way we 
see it.
    We feel very strongly that conservation programs should be 
managed by USDA's conservation agency. They have the knowledge, 
the technology, the experience, and the link with government. 
They have the science. Farmers need a place to go that has the 
science.
    I realize that I am running out of time. I would like to 
thank you very much for the opportunity to be here. We believe 
that the incentive-based approach to the conservation bill will 
reach more producers and land in this country, provide more 
flexibility and local control, provide significant public 
benefits in the form of better soil, cleaner water, greater 
profits, and a brighter future.
    Thank you very much.
    Senator Lincoln. Thank you, Mr. Mast, and you will have 
plenty of opportunity to express yourself more during the 
questions. I must add that I have 5-year-old twin boys, and we 
have not made it to the State baseball tournament yet, but I 
guarantee you we will be there one day.
    Mr. Mast. It is coming.
    Senator Lincoln. Absolutely.
    [The prepared statement of Mr. Mast can be found in the 
appendix on page 40.]
    Senator Lincoln. Mr. Serfling, welcome.

STATEMENT OF DAVE SERFLING, LAND STEWARDSHIP PROJECT, PRESTON, 
                           MINNESOTA

    Mr. Serfling. Thank you, especially to Senator Wellstone 
and Senator Dayton for their very kind comments. My wife does 
not even talk that well about me. I really appreciate your 
comments.
    My name is Dave Serfling. I am here today representing the 
Land Stewardship Project, which is a member of the Sustainable 
Agriculture Working Group and a member of the National Campaign 
for Sustainable Agriculture.
    I would like to start by sincerely thanking you for all the 
support that the Government has given my farm over the last 
five years. Through the emergency payments, the AMTA program, 
LDP, EQIP, SHOP, and SARE programs, I have been able to average 
a little over $20,000 in Government subsidies on my 350-acre 
farm over the last five years, and I really do appreciate it. 
It has really helped my farm and my family.
    We have beef, pigs, and sheep enterprises on our farm. We 
really try to market all of our crops through the livestock. We 
have a 6-year crop rotation of 2 years of corn, 1 year of oats 
with an underseeding, and 3 years of meadow which is either 
grazed rotationally or hayed. We farm on gently rolling hills; 
about 85 percent of my farm is considered highly erodible. It 
is good land, but it needs protection.
    Farmers in my area have become very adept at ``farming'' 
the Government program. Looking at the present program, the 
easiest way for them to expand their crop subsidies is by 
expanding their acres. Even during this time of terribly low 
market prices, we see rising rental rates and increasing land 
values, which makes it even tougher for young farmers to get 
started farming. Farmers are not responding to the marketplace, 
they are responding to the Government subsidies.
    A neighbor of mine who increased his crop acres 
significantly said, ``At least we know the Government is going 
to help the crop farmers.''
    In our rolling hill,s the corn and soybean rotation has 
increased dramatically. In the last two years, we have seen the 
worst soil erosion on our land that I have ever seen. Even the 
most conservation-minded conventional farmers using no-till and 
strip-till tillage have had severe erosion damage on their 
farms.
    This last April 5th, we had an inch and a half of rain in 
less than an hour during our snowmelt. We still had a lot of 
frost on the ground, and the water could not soak in. I had 
damage on every one of my cornfields. The only fields where I 
did not have damage were my pastures and my hayland. The water 
just ran off the tight sod.
    I am a big believer in forages. They protect my land, they 
build my soil, and they spread out my labor throughout the 
year; but it is very hard for them to compete economically with 
program row crops.
    I am asking you today to consider a new type of farm 
program, one that provides stewardship incentives on the land. 
Currently, we are giving 85 percent of our conservation dollars 
to land retirement programs. I challenge you to envision a 
future where we spent two-thirds of our conservation dollars on 
working lands. I believe that we can produce similar benefits 
as CRP gives us on our working land and gives economic benefits 
to our rural communities and our farmers.
    I am a great believer in farmer ingenuity. If you tell us 
what environmental results you want on that working land and 
give us the financial incentive to achieve them, the farmers 
will find a way to deliver. That is why I am asking you today 
to support the Conservation Security Act.
    The Conservation Security Act has three levels. The first 
level, any farmer can participate in by using conservation 
tillage, nutrient management, integrated pest management. The 
second level, the farmer has to be willing to incorporate a 
more complex crop rotation system than the traditional corn/
soybean rotation. The third level is where I really hope the 
farmer's creativity can come into play. This is where the 
farmer can sit down with the NRCS staff person and use such 
techniques as whole-farm planting to really individualize the 
conservation plan on his farm and really use some farmer 
innovation.
    One example in our area of southeast Minnesota--we have 
actually documented an improvement in fish habitat and water 
quality by using controlled grazing on stream banks. This 
controlled grazing actually narrows the stream channel and 
deepens it. The end result is better fish habitat and cleaner 
water.
    The Land Stewardship Project is going to release a report 
this fall on the multiple benefits of agriculture. This is 
going to come out with some hard numbers on some of these 
benefits that agriculture can produce on their lands, ranging 
from reduced soil erosion to improved wildlife habitat to 
increasing social capital.
    The Conservation Security Act is a major change in farm 
policy. It rewards farmers for the conservation they do on 
their farms. It is not a land retirement program. It is not 
going to affect the market or jeopardize trade agreements. It 
will give farmers an incentive to do conservation on their 
lands.
    The CSA addresses all kinds of agriculture and moves us 
away from supporting only the program crop acres. The CSA will 
sell to your urban colleagues, and we need their support to 
pass this farm bill. I ask that you fund the CSA at substantial 
levels so that every farmer who wants to participate can.
    Please do not tell farmers how to farm; just tell us what 
results you want out there on the working land, and we American 
farmers will not let you down.
    Thank you.
    Senator Lincoln. Thank you, Mr. Serfling.
    [The prepared statement of Mr. Serfling can be found in the 
appendix on page 52.]
    Senator Lincoln. Last but not least, Dr. Mark Shaffer from 
Defenders of Wildlife. Welcome.

 STATEMENT OF MARK SHAFFER, DEFENDERS OF WILDLIFE, WASHINGTON, 
                               DC

    Mr. Shaffer. Thank you, Madam Chairman and members of the 
committee, for the chance to be here today.
    My name is Mark Shaffer, and I am Senior Vice President for 
Programs at Defenders of Wildlife.
    Defenders is a national membership conservation 
organization with about 476,000 members and supporters, and as 
you might guess from our name, we are focused on wildlife 
conservation, the maintenance of all wild plant and animal 
species in their natural environments.
    As you are well aware, agricultural land and agricultural 
policy are terribly important to maintaining our national 
wildlife heritage. Let me give you just a few statistics to 
frame the issue.
    Currently, the U.S. Fish and Wildlife Service lists more 
than 1,200 native species of plants and animals as threatened 
or endangered. The State network of Natural Heritage programs--
and every State government has a heritage program--lists 
another 5,000 or more species as imperiled or vulnerable, 
species that could eventually end up on the endangered species 
list. Eighty-five percent of all these species are in some kind 
of trouble because of the loss, alteration, or degradation of 
habitat, and agriculture is the leading cause of that habitat 
loss, affecting 38 percent of currently listed species.
    Despite that fact, 60 percent of the known populations of 
threatened, endangered, and imperiled species occur on private 
land, and the vast majority of private land is in agriculture. 
Our chance to save many declining, rare, threatened and 
endangered species is going to depend on private landowners. We 
believe that voluntary, incentive-based programs to encourage 
landowners, particularly agricultural producers, livestock 
producers, and foresters, to integrate habitat conservation 
into their operations is a critically important need in 
maintaining our wildlife heritage.
    Producers face a number of choices in conducting their 
business, but two are of particular importance to the future of 
our wildlife heritage. One is where on their lands to produce, 
and the other is how to produce on those lands they put into 
production. Both, we think, are equally important to 
maintaining our wildlife heritage.
    Defenders of Wildlife strongly supports the existing 
conservation title programs--Conservation Reservation Program, 
the Wetlands Reserve Program, the Wildlife Habitat Incentive 
Program, EQIP, the Farmland Protection Program, and the others.
    We do think that some changes are probably necessary and 
desirable in those programs as you move forward with 
reauthorization. We have submitted detailed comments with our 
written testimony about that.
    We think the major limitations of these programs are that 
there is not enough money in them, and they need to be expanded 
to a broader range of agricultural and livestock producers.
    We also recognize the existing conservation title programs 
are really geared primarily to helping producers answer that 
first question--which of my land should I put into production?
    CRP is really designed to encourage farmers to take highly 
erodible lands out of production. The Wetlands Reserve Program 
is really aimed at helping farmers take valuable wetlands out 
of production or restore them where they have been put into 
production.
    We think it is time to complement those very good set-aside 
programs with increased programs that help producers with the 
second question, which is how do I produce on the lands put 
into production. We applaud Senator Harkin and his cosponsors 
for introducing the Conservation Security Act, because we think 
this could be a valuable addition to the Farm bill that would 
help provide new programs that help producers answer that 
second question--how do I produce--in a way that will maintain 
environmental quality and our wildlife heritage.
    Why do we think that that is so important? Maybe 
conservationists have a reputation of focusing on the set-aside 
issue. We do think set-asides are terribly important. It is 
part of the formula. Helping producers with their management 
practices is incredibly important, too, and let me give you a 
few statistics just to bear that out.
    Most agricultural land remains in production and will. No 
matter how successful the set-aside programs are, we are not 
going to retire all the habitat we need to maintain our 
wildlife heritage.
    Also, if you look at some species, aquatic organisms in 
particular are affected by what goes on on the broader 
landscape; and if you look carefully at aquatic taxi, you find 
out that our native fish species, our native amphibian species, 
and some of our aquatic insects are endangered at a much higher 
rate than our native birds and mammals and reptiles. Obviously, 
agricultural practices that affect water quality and water 
quantity have a lot to do with that. Since we are going to have 
most of our agricultural lands in production, how they are 
managed is going to be terribly important to our aquatic 
wildlife.
    We recognize that having increases in the existing 
conservation title programs and having a meaningful 
Conservation Security Act will not be cheap. It would probably 
take $5 billion to put the existing conservation title programs 
to best effect. We have not seen a scoring yet on the 
Conservation Security Act, but I would guess that it would take 
$4 to $5 billion in that program to really fulfill the kinds of 
objectives that have been laid out for that program.
    The total together would be $9 to $10 billion, which is 
perhaps 40 to 50 percent of what is being talked about as 
agricultural support under this next farm bill. An investment 
in our environment that benefits the producers is going to end 
up benefiting us all and would be a wise investment.
    Thank you very much.
    [The prepared statement of Mr. Shaffer can be found in the 
appendix on page 57.]
    Senator Lincoln. Thank you, Dr. Schaffer, and thanks to all 
of you for being here and adding your expertise to the debate 
that we have before us.
    Almost every one of you has mentioned the issue of funding. 
Unfortunately, it would be great if the sky where the limit for 
us up here, but it is not, so our job is truly to, with your 
guidance as well as your input, figure out how we can in the 
most wise way spend the dollars that we have in a way that can 
be most beneficial to you in the conservation that we want to 
achieve. The Farm bill gives us that opportunity.
    I will begin with just a couple of questions and then move 
to my colleagues, who I am sure will have some as well.
    One issue that comes up most often--and each of you brought 
it up--as we talk about conservation policy is how to balance 
the reward for those who have already been engaging in good 
conservation practices against the incentives for those whom we 
are trying to encourage to begin good conservation practices. 
We have talked about, obviously, set-aside lands versus those 
lands in production.
    Some people worry that we devote too much of our 
conservation funds to offering incentives for new conservation 
practices, and we slight those that have already been engaging 
in good practices.
    Just to give you all the opportunity to be a little bit 
more specific or to vet any more of your concerns that you may 
have, I would like to ask everyone on the panel your belief, 
basically, or how you approach the paying producers to maintain 
good conservation practices; is that a good investment? Some of 
you cite the need for supporting not only practices already 
being implemented but also additional practices. If you would 
like to be a little bit more specific on some of the practices 
that you have in mind and what types of additional practices 
you might support--anybody?
    Mr. Klein?
    Mr. Klein. I will start. One thing we like about the 
chairman's bill is that it is tied to the producer and not tied 
to the land; it does not come into land value.
    Different that we have seen on the local--we do not have 
conservation districts in Nebraska, we have natural resource 
districts, and the one that I am on is all or part of 15 
counties; it is a watershed. We work with producers to have 
split applications of nitrogen, different types of tillage to 
keep as much residue and stop the runoff. Residue management is 
a big thing. Buffer strips are a huge issue in our State and 
are very popular around the country now.
    Those are some of the small things that have added up to a 
lot. One of your questions was not taking away incentives for 
people who are already practicing good things. It would be a 
terrible mistake to take it away from them and just give it to 
those people who have not been doing it. We need to treat them 
all equally.
    Senator Lincoln. Mr. Dunklin?
    Mr. Dunklin. What we do on our farm and what we have been 
practicing for the last 10 or 12 years is a zero-grade system, 
meaning that we zero-grade our fields, we have water control 
structures, and we virtually eliminate any soil erosion 
whatsoever. The water that is going out of our rice fields is 
virtually cleaner than what is coming into it. That is 
something that some of these moneys could be going to to really 
incentivize the farmers and the landowners to do that more. 
Also, total water recovery systems, so we are not nearly as 
dependent on the groundwater--which is a major debate in our 
State.
    As an example of what is going on right now, Madam 
Chairman, in the Grand Prairie water irrigation--you sent down 
$22 million last year--I have been amazed at the amount of 
participation that that has generated from the landowners' 
side. Just that incentive has really caught fire. If you drive 
across the Grand Prairie now, you see reservoirs and water 
recovery systems going in everywhere, just because the 
financial incentive was in place there to do that.
    Like I mentioned, water control structures, reservoirs to 
be able--we get approximately 55 inches of rain in Arkansas, 
and a lot of that water goes right down the bayou into the Gulf 
of Mexico--we need incentives to be able to capture a lot of 
that water.
    These are just some of the systems that these moneys could 
go toward. EQIP is one program that is already in place, but it 
is just not adequately funded. We have to bid against our 
neighbor for it; the payment cap knocks most of us out of that 
program. I have never taken one dollar into our operation from 
EQIP because it is just not worth it.
    Senator Lincoln. Thank you. I am going to followup on that 
later on with one more question, Mr. Dunklin.
    Mr. Mast?
    Mr. Mast. The list could go on and on and on. Part of the 
list should be comprised of the local people and their local 
needs.
    As far as rewarding those who are doing a bad job, I do not 
know--maybe I ought to go back and plow up my whole farm to get 
ready for this so I can be rewarded.
    Senator Lincoln. We do not want to encourage you to do a 
bad job.
    Mr. Mast. No. I am making light, but I am trying to make a 
point that it is very important that we reward those folks who 
have been doing a good job and put a system together that does 
that.
    Senator Lincoln. Mr. Serfling?
    Mr. Serfling. I would like to second those comments. The 
EQIP program is a good program to help fix the problems out 
there, and right now, it is on a competitive basis, and it is a 
good program.
    I guess I would like to see a little bit more discussion 
about the percentage cost-share. It has been traditionally 75 
percent, forever, and yet you could stretch those dollars a 
little further if you would play with that a little bit and 
drop it to 50 percent, and the farmers could have a little more 
ownership and a little more input on the solutions to their 
problems; and then, maybe go up to 90 percent for beginning 
farmers and limited-resource farmers.
    The Conservation Security Act is a new thing, and it is 
rewarding people for the environmental benefits. Right now, we 
are rewarding farmers to produce commodities that the 
marketplace does not want, so we need to change that mind-set.
    Senator Lincoln. You mentioned in your testimony that you 
thought two-thirds of the conservation dollars should go to the 
working land as opposed to the set-aside.
    Mr. Serfling. Yes. I am a firm believer that we can produce 
the same or very similar benefits or the environmental results 
on CRP on our working lands if we adopt some innovative farming 
practices that we have out there.
    Senator Lincoln. Thank you.
    Dr. Shaffer?
    Mr. Shaffer. Yes, Madam Chairman, with respect to your 
question on how we treat people who have been doing good 
conservation versus others, there is another part to that which 
is also the universe of producers that the traditional programs 
have been geared toward and have been able to reach.
    We would very much like to see the existing conservation 
titles more accessible to a broader range of agricultural 
producers--fruit and vegetable growers, ranchers. There are 
some proposals afoot for a grasslands reserve program which 
would be targeted toward ranchers and somewhat equivalent to 
CRP, which we think is a good idea.
    I guess that would be our main recommendation is to try to 
reach as many agricultural producers with these programs as 
possible.
    Senator Lincoln. Of course, as my grandfather used to say, 
``All it takes is money.''
    Just to followup, many of you have mentioned EQIP, and one 
of the most difficult issues that we are grappling with is how 
to restructure the Environmental Quality Incentive Program. 
Last week during our hearing on animal agriculture, our 
panelists expressed some very mixed views, some suggesting that 
we allow the livestock producers to be eligible for sizable 
funds to construct manure storage facilities; others felt that 
very large payments might be counterproductive.
    In terms of increasing funding for EQIP, does anybody 
disagree with that? As I said, all it takes is money. I cannot 
imagine someone wanting to cut some of those programs.
    Mr. Serfling. You do have to be careful. There are so many 
economies of size in agriculture today, and we do not want to 
speed up the trendlines or anything. One of the other things 
that the large operations are doing is dumping some of their 
costs on society, whether it is through Government subsidies 
for manure storage structures, or whether it is odor that 
crosses the property lines, and the neighbors have to live with 
it. There is a thing they call ``externalities'' now, and there 
is cost avoidance on these large structures. We just need to 
make sure that they pay their fair share of the costs that they 
are incurring for society.
    Senator Lincoln. Mr. Dunklin?
    Mr. Dunklin. You talk about money and there being plenty of 
it--obviously, there is not. It comes back to yes, we would 
love to have all of these things, but we cannot forget the 
balance that I talked about in my testimony--the farm safety 
net to the production. If we do not have the farmers there, who 
is going to deliver these programs?
    I know that that is the balancing act that you all are 
trying to work with, and it is something that we are very 
concerned with as well.
    Senator Lincoln. I appreciate that, and it is a very 
important part of what we are all here to talk about.
    Mr. Klein, did you have one more comment?
    Mr. Klein. We did say that we wanted to remove the size 
limitation on EQIP, because now, on animal feeding operations, 
the large operations are not eligible at all. Serving on a 
board where we are the ones who end up saying who gets the 
funds, it is very competitive, and we would obviously like to 
see more funding for it. The larger operations are not getting 
any of the funds today, and we think they need them just as 
badly.
    Senator Lincoln. Thank you.
    Thank you, gentlemen.
    I want to make sure that I go by the Committee rules. We 
normally recognize members by their order of appearance.
    Senator Hutchinson, please, from Arkansas.
    Senator Hutchinson. Thank you, Senator Lincoln and Madam 
Chairman, and let me point out that I have been told this is 
the first time in the history of the Agriculture Committee, 
which began in 1825, that a woman has chaired a hearing of the 
Senate Agriculture Committee.
    Senator Lincoln. Well, I feel very old.
    [Applause.]
    Senator Lincoln. I must say my father would be proud.
    Senator Hutchinson. We are, too, and it is another first, 
so congratulations.
    Mr. Dunklin, in your testimony, you mentioned that the U.S. 
Rice Producers' Group proposes a number of principles which are 
very, very helpful, but you mention in your testimony as well 
and as part of these principles that ``In order to strike a 
better balance between conservation dollars devoted to retiring 
land versus working land, we do not support increasing the 
Conservation Reserve Program from its current level to 36.4 
million acres.''
    One of the suggestions has been that for existing programs 
like CRP, new money that might be added to those existing 
programs be targeted toward land that is in production. If it 
were so targeted, do you feel that that objection to additional 
funding for existing conservation programs would still be 
there?
    Mr. Dunklin. You are talking about the objection to----
    Senator Hutchinson. To increasing the acreage from 36.4 
million acres if additional funding and additional acreage were 
targeting land that was in production.
    Mr. Dunklin. You are talking about retiring land from 
production to the CRP--am I following you?
    Senator Hutchinson. Well, my understanding, at least, is 
that in Senator Crapo's legislation--and I will let him talk 
about it; he knows it far better than I do--while he would 
increase the acreage from the 36.4 million, new acreage would 
be for conservation programs that he would really refine 
existing conservation programs to ensure that they are 
addressing land in production as opposed to taking it out and 
setting it aside.
    If it were so modified, would that address your concern 
about----
    Mr. Dunklin. You are talking about buffer strips, I assume.
    Senator Hutchinson. Exactly.
    Mr. Dunklin. A targeted type, no; we certainly would agree 
there are definitely some places where that would fit. We are 
talking about mainly widespread, taking out good production 
land that is viable--not marginal land, but we are talking 
about good production land--and just retiring it because there 
is a Government program, like Mr. Serfling referred to 
``farming'' the program. That is what concerns us.
    Senator Hutchinson. OK. In your testimony, you used the 
word ``balance'' a number of times, and that is our great 
challenge. Most of us like the kinds of things that the 
chairman has proposed in his proposal. The concern will be how 
do we balance the funding and whether that is going to erode 
our ability to fund adequately price support programs or 
whatever it might look like in the new Farm bill--whether it is 
an AMTA payment or whether it is something else.
    My understanding is that the cost of the chairman's bill 
will be over $40 billion over a 10-year period. We are spending 
$73.5 billion over 10 years. I would like a sense of the 
support there is for existing support programs, whether they 
are modified or not, but that price support, and for the 
existing conservation programs, and how much concern there is 
that should there be a new program created, the risk that there 
may be in eroding the funding for the existing programs we 
have, both conservation and price support.
    Mr. Dunklin. I guess that gets back to the total amount of 
dollars and how we work that. I hate to keep using the word 
``balance,'' but it keeps getting back to striking that balance 
between the farm safety net, which keeps our producers there, 
and the amount of money that has to go there, and these new 
initiatives that you are talking about that we have to fund on 
top of the current conservation programs which I testified that 
we agree to and concur that they are very important.
    I guess it is where those funds are going and how much they 
are going to be and how much is being taken away from the 
current farm safety net that is going to take money from that 
to fund these. That is what concerns us.
    Senator Hutchinson. That is what I wanted to get on the 
record. If this were all additional funding for a supplemental 
program dealing with the conservation and land in production, 
we would all be for that if we were able to do that. If it is a 
threat to the funding for existing programs, how much concern 
is there? Maybe I will let everybody address that.
    Mr. Mast?
    Mr. Mast. I would say that we have some awfully good tools 
in the toolkit right now. I would hate to see those go by the 
wayside.
    As far as myself personally, just so you get a little 
understanding of what is going on out there on the farm, I rent 
probably 20 different farms, and lot of these farms have come 
up in the last 3 or 4 years. They were not part of the farm 
program. I am getting zero dollars of Government help from 
those. I farm a lot of acres, but I do not get a lot from the 
Government. In my particular case, if I am doing conservation 
practices now on those farms, I would assume that I would get 
some more help. I am just telling you this as one scenario.
    Going back to one other question, if CRP happened to be 
increased, if we could target that toward riparian areas and 
buffer zones, we could really get bang for the buck.
    Senator Hutchinson. Good. Thanks.
    Dr. Shaffer?
    Mr. Shaffer. I guess the way I would look at it, Senator, 
is that I agree with the gentleman who just said we have some 
proven tools in the toolbox; they are working. We need to hang 
onto those.
    As far as the question of balance, we have to look at the 
whole spectrum of agricultural payments and what they are going 
for and not just look at whether CSA is a threat to the 
conservation title or vice versa.
    There is the issue of what the Congress plans to spend and 
then, what we end up spending through the emergency 
supplementals and so on. I do not have the precise figure, so 
correct me if I am wrong, but that last year, we probably spent 
close to $30 billion total on the various programs, and that 
was far in excess of what was planned at the time.
    If we are looking out over 10 years, and we are saying we 
are planning to spend $79 billion with the current programs, 
some of which may not be doing an effective job at curtailing 
the underlying problem of overproduction relative to market, 
then we have to ask how are we going to spend these moneys in a 
way that does support the farmer, particularly the family 
farmer, and give him some predictability, and not end up 
feeding into an overproduction cycle that hurts the farmer, 
hurts the market, and frankly, hurts the environment.
    Mr. Mast. I have a question to you folks----
    Senator Hutchinson. Address that to Madam Chairman, please.
    [Laughter.]
    Mr. Mast. Madam Chairman, is the $74.5 billion over and 
above what our baseline funding is right now?
    Senator Lincoln. Yes.
    Senator Hutchinson. Yes, it is.
    Mr. Mast. This would be new dollars.
    Senator Hutchinson. Thank you, Madam Chairman.
    Senator Lincoln. Senator Wellstone?
    Senator Wellstone. Thanks, Madam Chairman.
    One thing that occurs to me on this whole question of 
balance--and I will pick up, on what Dr. Shaffer was saying--is 
that I am not so sure that this is a zero-sum game; that if in 
fact we move forward on conservation credits, we therefore move 
away from CRP and other conservation programs. Quite to the 
contrary, we can do both.
    Now, maybe you want to make sure that CRP is truly for 
erodible land; maybe you want to make sure that farmers cannot 
take out whole counties, which then do in a lot of businesses 
in the area. There are ways of targeting, and there are ways of 
making it work better, and I do not believe that we are in an 
absolute zero-sum game, one versus the other. As Dr. Shaffer 
was mentioning, I do a lot of work with Pheasants Forever and 
Ducks Unlimited, and both programs are very important from the 
point of view of wildlife. I am not ready to say that moving 
forward with a focus on those farmers who have the land in 
production and are doing better by way of incentives is somehow 
going to subtract from some of the good work that is being done 
with existing conservation programs. In terms of economic 
resources, I do not think it is automatically a tradeoff, and I 
certainly think, conceptually and policy-wise, it is not, just 
for the record.
    Mr. Serfling--and others can respond as well--you said that 
if in fact we had some changes in our farming systems, is the 
way you put it, there would be multiple benefits in rural 
communities. You have listed some of them, and one of them was 
social capital. I would like for you to develop that point a 
little further.
    Mr. Serfling. I am a proponent of small family farms, as 
you probably gleaned from my testimony. Basically, if we can 
put a family farm on every 360 acres, and it is middle class 
and feeds that family, compared to one family farmer on 2,000 
acres with a bunch of employees--and we do not pay people very 
well in agriculture--there is a tremendous amount of economic 
benefit, but there is also a tremendous amount of social 
benefit to the community that it supports.
    Our country is built on a strong middle class, and our 
small rural communities are built on a strong middle class, and 
we are losing that middle class in agriculture. We are getting 
a very small upper crust and a very large contingent of small 
wage earners in our communities.
    There are types of agriculture where we can diversify and 
make good livings on smaller tracts of land, and then we will 
have some increases in social capital. One of the studies 
coming out this fall is going to try to put some hard numbers 
and measure that, because we do have places in the country 
where that type of farming is still prevalent, and we can 
measure the social capital that comes to it.
    Senator Wellstone. Dave, isn't there a classic study that 
was done years ago that looked at the relationship between the 
number of family farmers who actually live in the community--in 
other words, somebody is going to farm the land, and somebody 
is going to own the animals; the question is how many family 
farmers live there in the area. There was a classic study of 
that kind of community versus the community where most of the 
decisionmaking is by absentee investors. You are right on the 
mark.
    Madam Chair, as my final point, I would like to see the 
very strong focus on conservation and land stewardship that we 
will have in the bill linked to an emphasis on family farm 
structure of agriculture--that is to say, the people who make 
the capital investment decisions are the people who live on the 
land; they are the entrepreneurs. For my own part--and I was 
kidding Pat Roberts the other day--I would also like to see 
that linked--although I am not sure that our committee has all 
the jurisdiction over this question--we can deal with some of 
packers and stockyards--I would also like to see more 
competition in the food industry. I would like to see us put a 
little more free enterprise back into this system so that our 
independent producers can get a fair shake, which is also 
critically important.
    Thank you.
    Senator Lincoln. Thank you, Senator.
    Just for the benefit of the witnesses, this committee has 
been a very bipartisan committee in the past. One of our 
biggest challenges is the differences in our demographics, and 
obviously, a large farm in Minnesota might be very different 
from a large farm in Arkansas. That is one of the other 
challenges we have here on this committee is to recognize that 
there are many differences in the farming operations that we 
have across this country.
    Senator Wellstone. True enough, although that is why I put 
my emphasis on the actual pattern of investment and 
decisionmaking.
    Senator Lincoln. I will also apologize to my colleague. I 
am not sure if I am following the actual pattern in the 
committee; I know that in Finance, where Senator Thomas and I 
serve, we go by the order of appearance, so I would like to 
recognize Senator Thomas now.
    Senator Thomas. I get the last word. Thank you, Madam 
Chairman.
    Many of the things that I am concerned about--and you have 
talked about some--but you are here on a specific mission, and 
so are we, but when we get to it, we are talking in a broader 
sense about agriculture. We are talking in the broader sense 
about a farm bill that is not just conservation; it is lots of 
things.
    It seems to me that our challenge is to take a look at 
where we want agriculture to be in 10 years, 15 years. You have 
to take those things into account, and one thing that seems 
pretty obvious is that in the past, farm bills have been 
basically oriented toward program crops--basically, you raise 
so many crops, and if the price is not good, you get paid for 
it, or a loan program. Now that is changing. We are looking 
now, and there is lots of interest in broadening this. We are 
talking about apples and cranberries and everything else being 
in the farm program. It is going to be different than it has 
been in the past. We are also facing a whole different market 
situation in the world.
    I guess I would simply challenge you to say where do we go 
with the total farm program; do we in fact move toward having 
more support for a broader base in agriculture as opposed to 
rice and corn and those specific program crops?
    Mr. Dunklin, you are indicating that you would like to have 
both, and I do not know whether you can go that way. Is that 
what you want? Can you see in the future where you still 
encourage people to raise more and more of the crop, whether it 
is marketable or not, by having support programs, or do you go 
to spreading it a little more broadly so the basic support for 
agriculture is there, but without encouraging increased 
production? I do not know the answer.
    Mr. Dunklin. I personally like the second measure you 
mentioned. One thing I have liked about Freedom to Farm is the 
fact that we have had the freedom to plant for the market 
instead of being told or being required to plant so much 
percent of your base in rice--even if you were going to lose 
the money, even if it was not profitable, you still had to 
plant to protect the base.
    The second alternative is one that I like. I like Senator 
Wellstone's comments about entrepreneurship in agriculture. 
That is something that we do not hear about very often.
    Senator Thomas. He is talking about processors, I believe.
    Mr. Dunklin. OK, but I want to put that to producers. I 
know that in our own operation, we do not farm by the book. We 
have kind of written our own book as we have gone along. We 
have done it in a way that with no-tillage, we have reduced our 
equipment needs, our labor needs. We have taken a lot of our 
risk by the systems that we have put in, our zero grade 
systems, which are all environmental and conservation-minded. 
We have not been rewarded for those directly at all, but we 
have been rewarded through the farm safety net features that 
were there. We have done quite well with those in the nineties 
by putting these systems in. We have reduced our energy 
consumption, our water consumption, our repair bills, our risks 
that we have to weather.
    The ideal system would be one that had the safety net, that 
would eliminate the caps. Caps have been very troublesome in 
our operation in rice and cotton, which Madam Chairman Lincoln 
is very familiar with, which is different from Minnesota and 
these other parts, because it does require that we do other 
things that do not really make a lot of sense, and we spend a 
lot of work trying to figure out how to do it, how to ``farm'' 
the program, instead of just farming and being good 
businessmen.
    In the conservation systems, we are basically doing a lot 
of these best management practices without any incentive.
    Senator Thomas. Why do you want to do that, then? Why don't 
we just leave those alone?
    Mr. Dunklin. Well, we would like to be rewarded for them. 
If we are going to be competitive----
    Senator Thomas. We cannot reward you for everything you do.
    Mr. Dunklin. No, sir. I realize that.
    Senator Thomas. We can reward you by guaranteeing you a 
price so that you can produce more and at the same time reward 
you for other things.
    I come from a State where livestock is the issue. How about 
those folks? Don't they deserve something as well? How are we 
going to keep the small rancher in place? He does not get a 
guaranteed price. He does not do those things.
    What I am challenging you is to think about how you want 
agriculture to be over time, and what should be in this farm 
bill to move it.
    Mr. Dunklin. Yes, sir. Over time, it needs to be market-
driven, without any question.
    Senator Thomas. I agree.
    Mr. Dunklin. Madam Chairman well knows the problems that we 
have had with Iraq, with Iran, and with Cuba, with these 
markets being closed where our biggest rice markets are. We 
have no control over that. If we did, we would open them all 
up.
    Senator Thomas. Yes, we have some big problems with----
    Mr. Dunklin. Yes, sir--but keep us viable until we get 
those markets open.
    Senator Thomas. Let me ask if anyone else has a comment.
    Mr. Serfling. If I could say, your ranchers produce a lot 
more than just cattle. They are taking care of their land. They 
are producing a landscape--a beautiful landscape when you drive 
through Wyoming--and they are not getting paid a dime for that.
    The Conservation Security Act addresses all parts of the 
country and encourages diversity and recognizes some of those 
nonmarket benefits that your ranches are producing. That is why 
it is a big change, and it is not going to come easily; I am 
afraid you are going to have to fight for it, and we are going 
to try to help you as much we can.
    Senator Thomas. There is pretty good support for it. It is 
going to be basically at some point a question of how involved 
you want the Federal Government to be in this industry, how 
much money is it going to take to do this, and over time, do we 
want to continue to grow the Government's role in agriculture, 
or don't we? I do not know. That is the question.
    Yes, sir?
    Mr. Shaffer. If I could make a comment in reply, Senator 
Thomas, you asked where do we want agriculture to be in 4 
years. I would submit that there are probably four 
characteristics that we would like it to have over the next 10 
years.
    We would like to see it be diverse, we would like to see it 
be sustainable, we would like to see it be responsive to the 
market, and we would like to see it be globally competitive.
    We think that a larger investment in the conservation 
programs to a broader range of producers is the way to ensure 
that those four attributes are there in 10 years. As long as 
the supports or rewards are predominantly geared to a handful 
of crops that represent an important segment of the 
agricultural industry, but only a segment, how are we going to 
give people the freedom to really make decisions about what 
they want to produce if they know that the only safety net is 
for a certain group of things?
    That is why we stress an emphasis on conservation, because 
that is an important thing that farmers, ranchers, and 
foresters--we have not talked much about forestry here today--
can really affect to benefit all of us.
    Mr. Mast. That stewardship rewards will certainly get money 
into the farm economy, but also is much more saleable to the 
public. If they feel like they are getting something for the 
dollars they are putting in, rather than just a handout, that 
is probably the direction in which we need to go if we need 
help in producing our food.
    Senator Thomas. Some people may have to pay a little more 
for what they eat, too.
    Mr. Mast. That would certainly help.
    Mr. Klein. I would like to see that crystal ball that tells 
us where agriculture will be in 10 years. Someone mentioned 
that they thought the optimum farm size would be 350 or so 
acres. The amount of labor that it takes anymore to raise a 
crop has gone down significantly. When I look back 30 years, 20 
years, and 10 years ago, it is amazing how little time it takes 
to raise 1,000 acres of corn compared to what we used to do.
    For the future, we have got to develop new uses for 
agricultural products. We have got to get the agricultural 
producer closer to the grocery store shelf and closer to the 
consumer. That has got to be the answer. New uses like 
ethanol--ethanol has been a tremendous example, and--Senator 
Wellstone is not here--Minnesota has had the farmer-owned 
cooperatives and has been at the leading edge on that; it has 
been a success story that I hope continues. Research has to be 
done into what we can do with our products. The foreign markets 
are important, and we need a better transportation system in 
this country to get our products out.
    As far as livestock, we are in the calving season right 
now, and I can assure you it is a good time to be done.
    Senator Thomas. One thing that is happening in Wyoming in 
livestock is that they are trying to get a lamb coop. There is 
such a difference between the price that the producer gets and 
the retail price.
    My final point is that we really need to take a look. We 
are writing a new farm bill which will hopefully put a new 
direction in agriculture--or at least, that is the opportunity 
that we have--the input that you have given us is very good, 
and I appreciate it.
    Senator Lincoln. Thank you, Senator. I have just figured 
something out. Every morning when I pull into the garage in the 
Dirksen Building, I see a great bumper sticker that says: ``Eat 
More Lamb--10,000 Coyotes Can't be Wrong.'' Is that yours?
    Senator Thomas. That is what it says. I do not mean to pull 
the wool over your eyes, of course.
    [Laughter.]
    Senator Lincoln. I would like to wrap this up and give the 
panelists an opportunity to make any further points they would 
like to, but I just have to get in a few last comments of my 
own.
    We are the producers of the safest, most abundant and most 
affordable food supply in the world, and we do it in the most 
environmentally sound way of any other country on the globe. 
For all the faults and certainly the things that we want to 
correct and we want to improve on, I hope we can recognize that 
we have done a pretty good job so far.
    There are definitely differences that we want to point out 
from the Agriculture Committee's standpoint, and that is why 
each of the States have two representatives here in the U.S. 
Senate; and we try very hard to point those out.
    Mr. Dunklin brought up issues in terms of trade, which are 
critical. Senator Thomas and I deal with those on the Finance 
Committee.
    I am sorry that Senator Conrad is not here, because he 
usually has a great chart to share with everybody, and one 
things that sticks in my mind is the fact that well over 80 
percent of the export subsidies in the world are consumed by 
the EU. The fact is many of our farmers are not competing with 
other farmers globally; they are competing with other 
governments. That is why I go back to one of the other things 
that has been brought up in many of your testimonies, and that 
is a good balance--a balance of our being able to compete in 
terms of production and being able to compete in a global 
marketplace, balancing that with what it is that we ultimately 
want to achieve, and that is good conservation measures, a 
sound economy, and a sound environment.
    We have that duty here, and we are going to be calling on 
many of you all to be able to do that. Mr. Klein mentioned 
Brazil in his earlier testimony. I can remember talking to some 
of our farmers in Arkansas who finally realized, unbelievably, 
that they were competing with Brazil after we had seen some 
major infrastructure investments down there for transportation 
to get their products to the global marketplace, not to mention 
some of the technology that we have already shared.
    We have been very generous as a country to the world 
economy, and it is very important for us in addressing this in 
the Farm bill that is up and coming, that we recognize this, 
and that we do create a good balance between the safety net 
that we can provide these great farmers and producers who are 
providing that safe and abundant and affordable food supply.
    I also hope that we will not miss the opportunity to 
address the issues of biomass, the diversity that is out there, 
the ability for us to look at those issues, but also look at 
them on a local level. In ethanol for us, there are many 
opportunities in terms of rice hull and rice straw in 
production of ethanol that give us not only an opportunity 
locally to do something with our biomass, but also to encourage 
a greater use of ethanol. Because of difficulties putting it in 
the pipeline, obviously, if we can create more local interest 
in what we are doing in biomass, we are going to move the 
efforts at using ethanol in a much quicker fashion.
    There is a lot that we can do. Just one last thing--Mr. 
Dunklin brought up the issue of payment limits and his 
opposition to that. Again, we do have pretty capital-intensive 
crops in our area. Some of those are a little bit different 
from that others may do. Last but not least, it will not work 
unless we have the input and involvement of local landowners. 
Many of you have touched on that. If you have any comments on 
how we can better design, any thoughts about how our Federal 
conservation programs should be designed to facilitate what is 
done at the local level in concert with the State conservation 
efforts, certainly we would appreciate hearing from you if you 
have seen something that you think is very noteworthy, or if 
you have ideas about how we could better integrate with the 
State and the local issues.
    Are there any comments on that?
    Mr. Shaffer?
    Mr. Shaffer. Madam Chairman, last year and this summer as 
well, Defenders and some partner organizations brought together 
groups of producers in the State of Oregon to discuss this. 
Now, it is a little Oregon-specific, but nonetheless we have 
reports from those workshops that tried to identify what is 
working, what is not working so well, what could be changed--
and these are obviously primarily with regard to the 
conservation title--and we would be happy to share those with 
you and the committee.
    Senator Lincoln. That would be excellent. Actually, there 
have been several other situations in some States where they 
have had those local meetings to better work out what is going 
to be the most efficient way of implementing what it is we want 
to do in order to achieve the results.
    Are there any other comments from our panelists?
    [No response.]
    Senator Lincoln. We appreciate very much your time and, 
more importantly, your interest and enthusiasm on this issue. 
It is going to be a critical part of what we do in the upcoming 
Farm bill along with many other issues that are going to be 
involved.
    I will remind you that, as my grandfather used to say when 
he would take me to the Dairy Queen when I was little, ``The 
sky is the limit, but you can only spend a nickel.'' We wish 
the sky were the limit here, but it is not; we are going to 
have to make some delicate balances, and we will be calling on 
your frequently to help us make the right decisions.
    Thank you very much.
    The Committee on Agriculture stands adjourned.
    [Whereupon, at 10:52 a.m., the committee was adjourned.]
      
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