[Senate Hearing 107-933]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 107-933

 
                  NOMINATION HEARING FOR NANCY PELLETT

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                                HEARING

                               before the

                       COMMITTEE ON AGRICULTURE,
                        NUTRITION, AND FORESTRY
                          UNITED STATES SENATE


                      ONE HUNDRED SEVENTH CONGRESS

                             SECOND SESSION


                               __________

                            OCTOBER 3, 2002

                               __________

                       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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           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):

Nomination Hearing for Nancy Pellett.............................    01

                              ----------                              

                       Thursday, October 3, 2002
                    STATEMENTS PRESENTED BY SENATORS

Harkin, Hon. Tom, a U.S. Senator from Iowa, Chairman, Committee 
  on Agriculture, Nutrition, and Forestry........................    01
Grassley, Hon. Charles E., a U.S. Senator from Iowa..............    01
                              ----------                              

                               WITNESSES

Pellett, Nancy C., of Atlantic Iowa, to be a member of the Farm 
  Credit Administration Board....................................    03
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                                APPENDIX

Prepared Statements:
    Pellet, Nancy C..............................................    10
Document(s) Submitted for the Record:
    Pellett, Nancy C. (biography)................................    14

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                    NANCY PELLETT NOMINATION HEARING

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                       THURSDAY, OCTOBER 3, 2002

                                       U.S. Senate,
         Committee on Agriculture, Nutrition, and Forestry,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 11:05 a.m., in 
room SR-328A Russell Senate Office Building, Hon. Tom Harkin, 
[Chairman of the Committee], presiding.
    Present: Senators Harkin and Grassley.

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

    The Chairman. The Senate Committee on Agriculture, 
Nutrition, and Forestry will come to order.
    Today, the committee welcomes a fellow Iowan, Nancy 
Pellett, as a nominee for the Board for the Farm Credit 
Administration. I see that she is accompanied by someone that I 
recognize, with whom I am proud to work here in the Senate with 
on so many issues, and rather than my making my opening 
statement first, I will just go ahead and yield because I know 
you have probably got business to conduct, also, Senator 
Grassley.
    I would yield and recognize my colleague, Senator Grassley.

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

    Senator Grassley. Mr. Chairman, I thank you very much.
    I am pleased to present to you, Mr. Chairman, and to the 
rest of the committee, the person who the President has 
nominated to the Farm Credit Board. She is a fourth-generation 
Iowan.
    The Farm Credit Administration, as you know, Mr. Chairman, 
is responsible for ensuring safe and sound operation of banks, 
associations, affiliated services, and other entities that 
collectively comprise what is known as the Farm Credit System. 
FCA, for short, is responsible for protecting the interests of 
the public and those who borrow from Farm Credit institutions 
or invest in those Farm Credit securities. It is very critical, 
for the health and well-being of rural America, particularly 
for agriculture, that the Farm Credit Administration function 
efficiently.
    That is why I believe the President has made an excellent 
choice in nominating Nancy Pellett for the position of Farm 
Credit Administration Board. Nancy is from a farm near 
Atlantic, Iowa. You have heard me say often, Mr. Chairman, that 
I want this administration to put more people in positions of 
authority that have a farm background, and specifically dirt 
under their fingernails.
    Well, at the risk of embarrassing Nancy, I would say that 
she is one of those folks. Let me tell you, she is such a 
person, ``dirt under the fingernail type'' farmer, when her 
four children would tell you, as I have heard them say, that 
they were taught their colors and letters while Nancy was 
running the combine, helping her husband in the fall harvest.
    Nancy currently serves on the National Cattlemen's Beef 
Board, and she is a 14-year member of the Iowa Beef Industry 
Council. She previously served, from 1988 to 1995, on the 
National Livestock and Meat Board, and held several leadership 
positions with the National Cattlemen's Beef Association.
    She is president of Premium Quality Beef, Inc., an Iowa-
based company marketing things that you and I, Mr. Chairman, 
believe in, value-added agricultural products, branded premium 
fresh and pre-cooked beef products, specifically, for her 
agency.
    She has been the vice president and secretary of Prairie 
Hills, Limited, a feedlot cow, calf, and row-crop operation 
since 1979, and president of Fredrechsen Farms, Limited, a 
swine and row-crop operation since 1977.
    In addition, she brings extensive leadership beyond the 
agricultural sector, and I cannot name all of them, but one 
that we always ought to measure Iowans by because it is very 
prestigious, very outstanding, and only the best people ever 
get appointed to it, and that is the Board of Regents of our 
State universities. She was there 1993 to 1999; trustee of the 
University of Iowa Hospitals and Clinics, 1993 to 1999; a 
member of the State of Iowa Student Aid Commission, 1991 to 
1993; president of the Iowa State University Alumni 
Association, 1984. She graduated from the same university you 
did. That ought to get her confirmed.
    [Laughter.]
    The Chairman. That is right.
    Senator Grassley. She has also served on the Iowa State 
University College of Agriculture and Family and Consumer 
Science Advisory Board.
    Let me close with this. She brings tremendous experience, 
valuable insight, and obviously lots of energy that is needed 
for an important position like the Farm Credit Administration 
Board. She has demonstrated already strong leadership abilities 
in many capacities, in addition to her hands-on work in 
agriculture.
    There is no doubt, at least in my mind, that the President 
made a smart choice with her selection. The Farm Credit 
Administration will benefit greatly from Nancy Pellett's 
administration and contribution.
    Thank you, Mr. Chairman.
    The Chairman. Well, thank you very much, Senator Grassley, 
for a great statement. I would just join with you in 
congratulating you, Mrs. Pellett--Nancy Pellett--for your 
lifetime of service in our State, to our university system, to 
education, the Extension Service, and to all of agriculture. 
You have been a great leader in the State of Iowa, and I am 
glad that the President has recognized that and has recommended 
you for this Board. I can assure you will have the support of 
all of us here to get through as soon as possible.
    I have to take care of some housekeeping things. Senator 
Grassley, I know you have to go. Thank you very much, Senator 
Grassley.
    This is something I have to do, but this is just part of 
the procedure. I have to stand, and raise the right and do all 
of that kind of thing.
    [Witness sworn.]
    The Chairman. Thank you.
    Second, do you agree that if confirmed, you will appear 
before any duly constituted committee of Congress, if asked to 
appear?
    Ms. Pellett. I will, sir.
    The Chairman. Thank you very much. I will recognize you 
now, Nancy, for an opening statement, if you would like to make 
that for the record. I know you have a lot of family members 
here. If you would like to introduce them, we would be glad to 
welcome them to the committee room here.

 STATEMENT OF NANCY C. PELLETT, OF IOWA, TO BE A MEMBER OF THE 
                FARM CREDIT ADMINISTRATION BOARD

    Ms. Pellett. Thank you, and I would like to do that. Thank 
you very much for your nice remarks, as well as Senator 
Grassley's.
    I am proud that all three of us can call Iowa home.
    The Chairman. That is right.
    Ms. Pellett. Mr. Chairman, and other Senators of the 
Agriculture Committee, I appreciate the opportunity to appear 
before you today. I am honored to come before you as one of 
President Bush's nominees for the Farm Credit Administration 
Board of Directors, but before I begin, I would like to take 
the opportunity to introduce some of my family that are here 
today.
    My husband of 36 years, Jim, and I will talk a little bit 
about our operation in a minute, some of you know. I am 
especially happy to have my father here, Kenneth Fredrechsen, 
who at age 83 is still actively farming on the family farm.
    The Chairman. That is wonderful. Where is your father? Oh, 
very good. Your husband, I know.
    Ms. Pellett. The family farm is located near Walnut, Iowa, 
and that is Fredrechsen Farms, Limited, that we talked about, 
that Senator Grassley talked about.
    My daughter Beth, who works here in Washington, DC, and her 
fiance, Brian Levine; and my son Mike is here. Mike and his 
wife Stacey work for John Deere.
    Our oldest son, Brad, could not be here. He and his wife 
Kristy just gave birth to a new little girl about 6 days ago.
    The Chairman. Congratulations.
    Ms. Pellett. Thank you. Our daughter Marci, and her 
husband, Andrew Loder, and their daughter Madeleine live in 
Spain and are on assignment with Cargill.
    I just don't want to get too emotional during this, but I 
am really extremely proud to say that we have been able, Jim 
and I, have been able to pass on to our children a love of 
agriculture, and you could see that from the introductions that 
I gave to them--a love of agriculture, of the land, and 
community, just as our parents did to us, and we are proud of 
that.
    My husband and I have been involved in the agriculture 
sector all of our lives. We currently have a corn, soybean and 
cattle farm north of Atlantic, Iowa, with our son Brad and his 
wife Kristy. Since we started farming together more than 35 
years ago, agriculture and rural America have changed 
dramatically. We are constantly looking at our operation for 
new and innovative ways to adapt to the new rural America and 
to be sure that our children have the opportunity to come home 
to the farm if they desire.
    I have also been president and co-manager in a value-added 
company in Red Oak, Iowa. Premium Quality Foods is a value-
added provider of premium quality fresh, frozen, and pre-cooked 
beef products, marketed under the Red Oak Farms and Red Oak 
farms Premium Hereford beef brands.
    Public service has been a huge part of our lives. From 
local issues and projects, to State boards and commissions, to 
national leadership positions--all have broadened my 
perspectives and have given me valuable experience.
    Being a member of the Iowa Board of Regents, which has 
governing authority over Iowa's three State universities has 
given a unique perspective to working on boards of directors. 
Not only did I gain valuable experience during budgeting, but 
also in public policy, employment issues, and most of all in 
the political process.
    I have also been fortunate to serve on both State and 
national cattlemen boards, in both appointed and elected 
leadership positions. These offices and boards took me outside 
the confines of Iowa into a national arena of agriculture and 
cattlemen issues and policies, but most importantly, in my 
case, in the check-off issues. The national exposure will prove 
extremely beneficial to me should I be approved for the Farm 
Credit Board position.
    I bring a very unique perspective as a producer and a user 
of credit services to the Farm Credit Administration. I also 
bring a unique position of board leadership on both national 
and State levels. Most of all, I bring that deep passion for 
agriculture--families involved in that agriculture and now that 
extra step of value-added agriculture.
    It is with a great deal of humility that I appear before 
you here today. I share with you the vision that this committee 
and the Farm Credit Administration has for families in 
agriculture and for agriculture, in general, to thrive and to 
prosper.
    If confirmed by the Senate, I look forward to serving on 
the Farm Credit Administration Board of Directors, and I look 
forward to working with this Agriculture Committee on future 
issues.
    Thank you, Mr. Chairman, and I look forward to your 
questions.
    The Chairman. Thank you, Mrs. Pellett, very much for a very 
eloquent statement. I, again, congratulate you on this.
    I just have a couple of questions for the record.
    Senator Lugar and I have focused considerable energy on a 
crucial issue in agriculture, the ability of young farmers to 
start farming. Earlier this year, the GAO released a report 
indicating that the FCA could take additional measures to make 
sure that Farm Credit institutions serve beginning farmers more 
effectively. Specifically, the report recommended that the Farm 
Credit Administration do such things as, one, promulgate a 
regulation that outlines specific activities and standards 
dealing with beginning farmers for Farm Credit institutions; 
and, two, publicly disclose the results of the FCA examinations 
concerning service to beginning farmers.
    Again, could you just share your views on the importance of 
serving the credit needs of young farmers and your willingness 
to work with us to try to get some focus on that. Both Senator 
Lugar and I have been talking about this for some time.
    Ms. Pellett. Senator Harkin, I also share your views, and 
those of Senator Lugar's, on this issue. I have a young farmer 
in my family, and I am well aware of the struggles it is for 
these young farmers to receive credit, although they are the 
very future of agriculture in this country. I pledge to you 
that I will do whatever I can, as a Board member, and strive 
that the Farm Credit Administration do whatever they can to 
facilitate this, as well as working with your committee.
    I am a firm believer in communication and cooperation, and 
I can't believe that we in credit lending issues and so forth 
can't communicate and cooperate to make the endeavor of the 
young farmer and beginning farmer a reality in this country.
    The Chairman. That is great. It is something that always 
keeps coming back and we certainly look forward to working with 
you on that.
    One last thing. You have a lot of experience in value-added 
businesses with which you have done down at Red Oak. Again, one 
of the challenges that face the startup in rural areas is 
access to capital for value-added businesses.
    We put some things in the Farm bill to try and get more 
capital to rural areas for startup businesses and value-added 
businesses. I am not certain I know exactly how the Farm Credit 
Administration is going to fit into this, but, again, just any 
thoughts you have. I mean, did you have, did your business in 
Red Oak, did it get any help from the Farm Credit System at all 
when it was starting up and, if not, could it have? Could there 
be some changes made to help in these areas?
    Ms. Pellett. Senator, I am aware of the struggles of a 
small business value-added agriculture business with credit. I 
have dealt with it every day for the last year. Our company is 
now 1 year old, and it has been a struggle.
    I was a Department of Economic Development meeting about 3 
months ago, at which there were about 20 small companies 
represented in Iowa, and every one of them were dealing with 
credit problems. I pledge to you that I will look with, and 
follow this issue, with interest on the Farm Credit 
Administration Board because that is an issue in rural America, 
and it is one way that producers can help themselves as they 
get into value-added agriculture.
    Marketing is a huge issue when it comes to value-added 
agriculture. We know how to produce, but sometimes we don't 
know how to market. I pledge, if I am confirmed, that I will 
follow this issue with great interest and aggressively follow 
it.
    The Chairman. I appreciate that because, well, the Farm 
bill just got signed in May, and mostly we have been focused on 
getting it implemented for the payment structure and getting 
updated bases, yields, and things like that. There are some 
provisions in that farm bill that we put in over here, dealing 
with value-added businesses and also a new equity capital 
program.
    I will be honest with you, I just have not really much 
gotten into how we are going to dovetail that with the Farm 
Credit System, but the two could work together. At some point, 
I hope that we get together with the Board, and others, to 
discuss ways in which, in implementing this new equity capital 
provision that we have in the Farm bill, that the Farm Credit 
Administration might also come in on the credit side of it. We 
have one equity side, and come in on the credit side. That 
could really be a real help to a lot of businesses, starting, 
like you said, the marketing-type businesses and things like 
that that we could do.
    Ms. Pellett. It surely would be. Thank you.
    The Chairman. There are a lot of things we could be doing 
in agriculture that can add value, maybe new ways of doing 
things. I visited a small cornfield of just a few acres up near 
Fort Dodge someplace, where they are making pharmaceuticals.
    Ms. Pellett. Oh, right.
    The Chairman. The problem is they are making this 
pharmaceutical--it is for cystic fibrosis--and they have had to 
do all of these things to isolate the cornfield. It is only a 
couple of acres. They have to take the grain and ship it to 
France because only in France do they have the processes for 
storing it and taking the pharmaceuticals out and stuff. We are 
working now to try to get something at Iowa State or at the 
Research Park there near Iowa State that might do the same 
thing.
    These are things that are coming down the pike in the next 
few years, and it could be a great help to a lot of young 
farmers in the State of Iowa.
    Ms. Pellett. It certainly could be. There is so much 
opportunity in rural America just in things like this.
    The Chairman. Yes.
    Ms. Pellett. We have work ethic, we are honest, and we want 
to depend on science and technology to move us ahead.
    The Chairman. You need access to capital and low-cost 
credit in rural areas. It has always bothered me. All of the 
years I have been here, 28 years I have been on the Agriculture 
Committee now, and it has just always bothered me that that 
farmer in Atlantic, Iowa, Cass County, when they go to borrow 
money, right away they are at a disadvantage because they have 
to pay more for their money than someone that is in Chicago.
    That has just always bothered me; that right away you are 
put at a disadvantage. Well, that is where the Farm Credit 
System comes in to try to help them out a little bit, get those 
interest rates down a little bit. Whatever we can do to keep 
the cost of money down for these young people and give them the 
same kind of advantages, we have to do.
    Thank you, again, for all of your past service, and I mean 
that sincerely. We may be of different political parties, but I 
can assure you that I respect people who work in politics. I 
wish more people would do what you have done in your past. It 
is an honorable thing to do, and I wish more people would do 
it. I am proud of you for doing that. I just wish you had been 
on my side.
    [Laughter.]
    The Chairman. I am very proud of you, and take that as a 
very heartfelt commendation to you for what you have done in 
your life, and what you have done for the State of Iowa, and 
what you have done for your party. I look forward to getting 
your name, we will get it out of here, we will get it to the 
floor and, hopefully--we are going to be here a couple more 
weeks--and then, hopefully, we will get it out of here, and you 
will be on-board right away and take over Ann's position.
    I am just proud to have a good Iowan in that position.
    Ms. Pellett. Thank you very, very much.
    The Chairman. Thank you, and congratulations.
    [The prepared statement of Ms. Pellett can be found in the 
appendix on page 10.]
    The Chairman. The committee will stand adjourned.
    [Whereupon, at 11:24 a.m., the committee was adjourned.]
      
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                            A P P E N D I X

                            October 3, 2002



      
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                            October 3, 2002



      
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