    [Senate Hearing 108-109]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 108-109

               TO REVIEW THE IMPLEMENTATION OF THE 2002 FARM BILL

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

                                    HEARING

                                   before the

                           COMMITTEE ON AGRICULTURE,
                            NUTRITION, AND FORESTRY

                              UNITED STATES SENATE

                          ONE HUNDRED EIGHTH CONGRESS

                                 FIRST SESSION

                                   __________

                                  MAY 14, 2003

                                   __________

                           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 : 2003
    89-169 PDF

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               COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY

                      THAD COCHRAN, Mississippi, Chairman

    RICHARD G. LUGAR, Indiana            TOM HARKIN, Iowa
    MITCH McCONNELL, Kentucky            PATRICK J. LEAHY, Vermont
    PAT ROBERTS, Kansas                  KENT CONRAD, North Dakota
    PETER G. FITZGERALD, Illinois        THOMAS A. DASCHLE, South Dakota
    SAXBY CHAMBLISS, Georgia             MAX BAUCUS, Montana
    NORM COLEMAN, Minnesota              BLANCHE L. LINCOLN, Arkansas
    MICHEAL D. CRAPO, Idaho              ZELL MILLER, Georgia
    JAMES M. TALENT, Missouri            DEBBIE A. STABENOW, Michigan
    ELIZABETH DOLE, North Carolina       E. BENJAMIN NELSON, Nebraska
    CHARLES E. GRASSLEY, Iowa            MARK DAYTON, Minnesota

                     Hunt Shipman, Majority Staff Director

                    David L. Johnson, Majority Chief Counsel

                   Lance Kotschwar, Majority General Counsel

                          Robert E. Sturm, Chief Clerk

                    Mark Halverson, Minority Staff Director

                                      (ii)

                                C O N T E N T S

                                  ----------
                                                                       Page

    Hearing(s):

    To Review the Implementation of the 2002 Farm Bill...............    01

                                  ----------

                            Thursday, July 26, 2003
                        STATEMENTS PRESENTED BY SENATORS

    Cochran, Hon. Thad, a U.S. Senator from Mississippi, Chairman,
      Committee on Agriculture, Nutrition, and Forestry..............    01
    Harkin, Hon. Tom, a U.S. Senator from Iowa, Ranking Member,
      Committee on Agriculture, Nutrition, and Forestry..............    05
    Coleman, Hon. Norm, a U.S. Senator from Minnesota................    02
    Conrad, Hon. Kent, a U.S. Senator from North Dakota..............    03
    Crapo, Hon. Mike, a U.S. Senator from Idaho......................    04
    Lugar, Hon. Richard G., a U.S. Senator from Indiana..............    27
    Nelson, Hon. Ben, a U.S. Senator from Nebraska...................    21
    Stabenow, Hon. Debbie, a U.S. Senator from Michigan..............    24
    Talent, Hon. James, a U.S. Senator from Missouri.................    23
                                  ----------

                                   WITNESSES

    Veneman, Hon. Ann M., Secretary of Agriculture, U.S. Department
      of
      Agriculture, Washington, DC, accompanied by J.B. Penn, Under
      Secretary, Farm and Foreign Agricultural Services; Bruce
      Knight, Chief, Natural
      Resources Conservation Service; and Keith Collins, Chief
      Economist, U.S. Department of Agriculture, Washington, DC......    07

                                  ----------

                                    APPENDIX

    Prepared Statements:
        Leahy, Hon. Patrick..........................................    99
        Letters to Hon. Debbie Stabenow..............................    66
        Stabenow, Hon. Debbie........................................    93
        Veneman, Hon. Ann M..........................................    42
    Document(s) Submitted for the Record:
        Baucus, Hon. Max.............................................   102
    Questions and Answers:
        Cochran, Hon. Thad...........................................   109
        Harkin, Hon. Tom.............................................   172
        Baucus, Hon. Max.............................................   196
        Chambliss, Hon. Saxby........................................   106
        Conrad, Hon. Kent............................................   161
        Crapo, Hon. Mike.............................................   111
        Daschle, Hon. Thomas.........................................   162
        Grassley, Hon. Charles.......................................   202
        Leahy, Hon. Patrick..........................................   120
        Miller, Hon. Zell............................................   198
        Roberts, Hon. Pat............................................   153
        Talent, Hon. James...........................................   168

           HEARING TO REVIEW THE IMPLEMENTATION OF THE 2002 FARM BILL

                                  ----------

                            WEDNESDAY, MAY 14, 2003

                                           U.S. Senate,

        Committee on the Agriculture, Nutrition and Forestry,
    Washington, DC
        The committee met, pursuant to notice, at 2:10 p.m., in
    room SR-328A, Russell Senate Office Building, Hon. Thad
    Cochran, [Chairman of the Committee], presiding.
        Present or submitting a statement: Senators Cochran, Lugar,
    Coleman, Crapo, Talent, Harkin, Leahy, Conrad, Daschle,
    Stabenow, Nelson, and Dayton.

          STATEMENT OF HON. THAD COCHRAN, A U.S. SENATOR FROM
    MISSISSIPPI, CHAIRMAN, COMMITTEE ON AGRICULTURE, NUTRITION, AND
                                FORESTRY

        The Chairman. The hearing of the Agriculture Committee will
    please come to order. We have a vote in progress over on the
    floor of the Senate and some of our Senate members are there on
    the floor for that purpose, but we will begin and give senators
    an opportunity to make opening statements and then proceed to
    hear from the Secretary.
        We are very pleased that the Secretary is here with others
    from the department to discuss the implementation of the Farm
    bill that was passed last year. Ann Veneman has been doing an
    excellent job, in my opinion, as Secretary of Agriculture and
    so has the team she has assembled at the Department of
    Agriculture to assist her. Dr. J.B. Penn, Under Secretary for
    Farm and Foreign Agricultural Services is here with her today,
    Mr. Bruce Knight, chief of the Natural Resources Conservation
    Service, and Dr. Keith Collins, who is the chief economist for
    the department. We welcome all of you.
        We know this is a very challenging opportunity to implement
    some new programs to help landowners and those involved in
    production agriculture in our country. There are some new
    complications because of options that are given to farmers to
    help decide how their benefits will be made available. The Farm
    Service Agency county offices have had their workloads
    increased enormously. Then we had the passage of disaster
    assistance legislation and the sign-up for the Conservation
    Reserve Program for them to deal with, as well.
        We appreciate the work that all of you have been doing to
    ensure that the benefits and opportunities of the Farm bill are
    made available to those entitled to those benefits. There is an
    80 percent increase in authorization for conservation spending,
    for example, and the majority of those program funds are on
    working lands. This increase in funding possibilities comes
    with the increased need for technical assistance, which I know
    the Natural Resources Conservation Service is working to make
    available.
        I was encouraged recently when I saw that Dr. Collins had
    indicated some good news in the economic outlook for
    agriculture in our country, suggesting that we would see an
    increase of about 11 percent in net cash income for farmers
    this year as compared to last year and that exports were likely
    to increase by 7 percent to a level of $57 billion, which is
    the highest level of farm exports since 1997. We hope that the
    work that the department can do in implementing the Farm bill
    will help assure that those expectations turn into realities.
        With that note, I am happy to yield to my friend Senator
    Coleman for any opening statement that he would like to make.

     STATEMENT OF HON. NORM COLEMAN, A U.S. SENATOR FROM MINNESOTA

        Senator Coleman. Thank you. Thank you, Mr. Chairman. I want
    to thank you for holding this important hearing on the
    implementation of the Farm Security and Rural Investment Act of
    2002 and I also want to join in thanking Secretary Veneman and
    Dr. Penn and Mr. Knight and Dr. Collins for appearing before us
    today.
        Since I was not here to vote for the 2002 Farm bill, I have
    the luxury of prefacing my remarks by saying that I fully
    support the provisions of the Farm bill that Minnesota farmers
    like and, of course, I adamantly oppose the provisions they do
    not.
        In any case, America's farmers have had some challenging
    times in recent years--the lowest real net cash income since
    the Great Depression, record low prices, record high cost of
    production, foreign tariffs and subsidies five and six times
    than our own, and the sheer strength of the U.S. dollar vis-a-
    vis our foreign customers and competitors. I believe a strong
    safety net for our farmers is needed and I believe the 2002
    Farm bill provides some certainty for Minnesota farm families
    in uncertain times.
        I commend President Bush for fully funding the Farm bill in
    his budget and I was pleased to join Senator Lincoln in
    successfully working to ensure that the budget resolution we
    recently passed did the same.
        I understand from USDA, as the chairman has noted, that
    things may be looking up a little this year in terms of some
    commodity prices, and that is encouraging. There are some
    things that Congress can and should do, however, to help move
    things along for our farm families in rural America. Passing an
    energy bill with a strong renewable fuel standard and providing
    tax relief for our farm families would raise commodity prices
    while lowering their costs, and I am happy to be a part of both
    these efforts.
        President Bush's decision to file a case with the WTO
    against the EU yesterday for its illegal ban on biotech
    agriculture is very important to my farm families and I
    appreciate the President's strong leadership on this issue. I
    encourage the administration to take the same strong stand with
    regard to the recent back-pedaling by Mexican on its
    commitments under NAFTA.
        All that aside, we are here to discuss the Farm bill's
    implementation 1 year and 1 day after its enactment and on the
    whole, I believe the administration has done a good job and
    deserves high marks for undertaking an awful lot of work
    without much time to get it done, particularly with the added
    workload from the disaster assistance package.
        I want to especially thank John Munson, Minnesota's state
    SFA director, the state SFA committee and all the Minnesota SFA
    team, both in St. Paul and in the field for their hard work,
    dedication, and effort in serving Minnesota farm families. Of
    course there are a few things here and there that might be
    tweaked to better serve the farmer and I will not be bashful
    talking with the department about how to fix those things.
        Again on the whole, Mr. Chairman, Madam Secretary, you and
    your team have done a commendable job. Thank you, Mr. Chairman.
        The Chairman. Thank you, Senator.
        Senator Conrad is recognized for any opening statement that
    you would care to make.

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

        Senator Conrad. Thank you, Mr. Chairman. First of all,
    thank you for holding this hearing, another one on the
    implementation of the Farm bill.
        Welcome, Madam Secretary and other representatives--Mr.
    Collins, Mr. Penn, Mr. Knight.
        Last fall's hearing on farm bill implementation focussed on
    a number of unresolved issues. Since that hearing I am glad we
    have finally been able to resolve the issue of loan rates for
    minor oilseeds and pulse crops but it is unfortunate we had to
    bring bipartisan pressure on the department to equalize loan
    rates for minor oilseeds and it is very disappointing that we
    had to actually push through legislation, again on a bipartisan
    basis, to force the department to follow the original intent of
    Congress in carrying out the new loan program for pulse crops.
    As I said, I am pleased we have finally put those two issues
    behind us.
        However, in my view there remains a major piece of
    unfinished business with regard to implementing the Farm bill
    as Congress intended and that has to do with the interest rate
    for sugar loans. As we know, the 1996 Farm bill imposed a 1
    percent interest rate surcharge on price support loans issued
    for sugar and other commodities. However, in the 2002 Farm bill
    Congress very specifically repealed the interest rate surcharge
    as it applied to sugar. I know because I wrote the new
    provision. The actual language of the new law very specifically
    exempted sugar from the interest rate surcharge and the
    conference report. Statement of managers declared that the new
    law ``makes Section 163 of the FAIR Act inapplicable to
    sugar.''
        Even USDA agrees on that fundamental point. In its final
    rule governing operation of the sugar program, as published in
    the Federal Register on August 26 of last year, USDA said the
    following. ``The 2002 Act eliminates the requirement that CCC
    add 1 percentage point to the interest rates as calculated by
    the procedure in place in 1996 but does not establish a sugar
    loan interest rate. CCC has decided to use the rates required
    for other commodity loans.'' In other words, the department
    admits that Congress repealed the surcharge but the department
    does not seem to care. USDA is going to hit farmers with this
    surcharge anyway. That, to me, is a gratuitous penalty and it
    is gratuitous in terms of its disregard for the clear intent of
    Congress.
        This provision, like others that we had to reverse, was
    paid for in the Farm bill. In the case of the interest rate on
    sugar loans, repeal of the sugar surcharge costs $5 million
    over 10 years. That was scored against the bill and we met that
    cost. As we saw with minor oilseeds and pulse crops, the
    department is attempting to undermine the law by administrative
    fiat.
        When we get to the point of asking questions, Mr. Chairman,
    I am going to ask the Secretary about this matter. I advised
    her in our call the other day that we would have a chance to
    visit about this. I am hopeful that this can get resolved.
        With that, I thank very much the chairman for again calling
    this hearing and for this time.
        The Chairman. Thank you, Senator.
        Senator Crapo, you are recognized for any opening statement
    that you would like to make.

        STATEMENT OF HON. MIKE CRAPO, A U.S. SENATOR FROM IDAHO

        Senator Crapo. Thank you very much, Mr. Chairman. I will be
    brief. I, too, appreciate you holding this hearing. As
    yesterday marked the 1-year anniversary of the signing of the
    2002 Farm bill, I appreciate Secretary Veneman being here with
    us today to discuss the implementation of this very important
    law.
        Secretary Veneman, I want to commend you and the many USDA
    employees who have worked diligently to implement the new law.
    Idaho farmers and ranchers have been well served by the many
    local USDA employees who continue to work very hard on their
    behalf. Additionally, I appreciate the department's efforts to
    work with growers and commodity groups throughout the
    implementation process to get their input on various aspects of
    the programs. Cooperation and communication with the
    agriculture industry and the department will better ensure that
    the law is responsive to the needs of our nation's farmers and
    I recognize your effort to ensure that the farmers and ranchers
    have a voice in that process.
        While throughout the process certain concerns remain to be
    addressed, some of which I will raise during questioning today,
    overall I have been very impressed with your dedication in
    getting this immense law implemented in a timely manner. I do
    want to interject right here that I share the concerns that
    Senator Conrad has just raised with regard to the sugar loan
    program and hope that we can get that issue resolved. You and I
    have discussed that before.
        Further, while the Farm bill makes great strides to ensure
    the longevity of American agriculture, our high quality, world
    renowned agriculture products continue to face trade barriers
    that stifle the ability of farmers to remain competitive. I
    appreciate the administration's efforts to work to expand
    foreign market opportunities and I encourage the department to
    continue to work to ensure that American agriculture interests
    are at the forefront of these trade negotiations. We have to
    make sure that new trade agreements bolster and do not hinder
    the ability of farmers and ranchers to compete in domestic and
    foreign markets.
        Again I want to thank you for your hard work in
    implementing the law. There will be issues that we will need to
    continue to work on, but I believe that you have done a
    yeoman's effort and that your progress is to be commended. I
    look forward to working with you in the future as we ensure
    that the farm programs are best crafted to meet the needs of
    our nation's farmers and ranchers. Thank you.
        The Chairman. Thank you, Senator Crapo.
        I am pleased that the senator from Iowa, Senator Harkin,
    who is the ranking Democratic on the committee, is here. We had
    a vote on the floor of the Senate and it delayed some of us
    from getting here but Senator, I would be happy to recognize
    you for any opening statement you would care to make at this
    time.

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

        Senator Harkin. Thank you very much, Mr. Chairman, and I
    apologize for being a little late. I thank you for having this
    hearing to talk about the implementation of the Farm bill.
        Madam Secretary, good afternoon. I am pleased that you
    could be here with your staff.
        A year ago yesterday, I am sure it has been noted,
    President Bush signed the bipartisan 2002 Farm bill into law
    after he made a very strong statement of support at the White
    House. He underscored the law's importance to farmers, the
    rural economy, and specifically he cited the landmark
    conservation provisions of the Farm bill. The 2002 Farm bill,
    as passed, represented a great boost for producers, the
    environment and rural America.
        As we have seen, those parts of the Farm bill that were
    implemented early and well have proven a success. We are also
    seeing positive results from the new policies and increased
    funding for conservation, rural development, renewable energy,
    nutrition, trade and research. Despite some fits and starts, it
    now appears that over 94 percent of eligible farmers have made
    their base and yield elections, as anticipated in the Farm
    bill. Madam Secretary, I commend you and the personnel at the
    department and all your field offices for your hard work in
    implementing these titles of the Farm bill.
        Despite these successes, too many of the more innovative
    initiatives in the Farm bill remain on the shelf as a result of
    inaction, delays, and misapplication of the law. Too often the
    administration seems to create a Herculean task where, in fact,
    a clear path lies to the intended result in the legislation,
    and these have had really negative effects on producers in
    rural America. These conservation, rural development and energy
    programs, implemented as directed in the Farm bill, hold great
    promise for us.
        Unfortunately, funding for Farm bill conservation programs
    turned out to be far less than anyone anticipated after the
    singing of the Farm bill. The promise of the conservation title
    has been limited by an inexplicable reading of the Farm bill's
    funding for conservation technical assistance. As a result,
    almost $160 million less will go to conservation in this fiscal
    year than the Farm bill provided and there will be similar
    shortfalls in future years if this reading is not reversed.
        Further, implementation of probably the most greatly
    anticipated and innovative program, the Conservation Security
    Program, is also behind schedule, but we discussed that in a
    previous meeting.
        As for rural development, virtually nothing has been done
    to carry out the Rural Business Investment Program, which was
    designed specifically to bring critically needed equity capital
    to rural communities, and I would like to have you address that
    in the question-and-answer period.
        For the first time the Farm bill included an energy title,
    for the first time ever, but USDA is still far from finalizing
    guidelines for Federal agencies to purchase bio-based products,
    which is one of the key provisions in the title. In fact, there
    is a demonstration going on down on the Mall right now with
    soy-based diesel. You probably saw it; it is down by your place
    down there, all the cars and stuff with soy diesel.
        Since the Farm bill was signed we have a budget that would
    undo much of the promise that the Farm bill held, and the
    budget proposes to drastically reduce or even eliminate funding
    for several rural development energy and conservation programs
    that were fully funded in the Farm bill.
        Again we all have a common goal and that is the successful
    implementation of the Farm bill. As you said when the bill was
    signed, you and your staff are ``strongly committed to ensuring
    timely and efficient implementation during the coming months.''
    Again I do not want to discount the work that you have put into
    it so far. I know there have been new things in the Farm bill;
    I know it has taken time; I understand that. I just hope that
    we can work together to close some of the gaps that still exist
    that are out there in rural development, in the Rural Equity
    Fund, and working with the administration, getting some
    suggestions for you on how we get over that hurdle on the
    technical assistance problem that we have.
        Thank you very much for being here. Thank you very much,
    Mr. Chairman, for having the hearing.
        The Chairman. Thank you, Senator.
        Madam Secretary, we appreciate again your being here. We
    have a copy of the statement that you have prepared and we will
    have that printed in the record in full and invite you to make
    any comments that you think would be helpful to the committee's
    understanding of the work the department is doing to implement
    the new Farm bill. You may proceed.

            STATEMENT OF HON. ANN M. VENEMAN, SECRETARY OF
             AGRICULTURE, U.S. DEPARTMENT OF AGRICULTURE,
                            WASHINGTON, DC,

    ACCOMPANIED BY J.B. PENN, UNDER SECRETARY, FARM AND
                FOREIGN AGRICULTURAL SERVICES;
            BRUCE KNIGHT, CHIEF, NATURAL RESOURCES CONSERVATION
                SERVICE; AND
            KEITH COLLINS, CHIEF ECONOMIST, U.S. DEPARTMENT OF
                AGRICULTURE, WASHINGTON, DC
        Secretary Veneman. Well, thank you very much, Mr. Chairman
    and Senator Harkin and the other distinguished members of the
    committee. We appreciate the opportunity to be here today to
    discuss the implementation of the Farm Security and Rural
    Investment Act of 2002. As has been noted several times
    already, it was just 1 year ago yesterday that that bill was
    signed into law by the president.
        As you indicated, Mr. Chairman, I do have a formal
    statement and we do appreciate the fact that you have agreed to
    make it part of the record. I would like to summarize my
    statement and then we will be happy to take your questions.
        I am pleased that we have with us today many people who
    have worked on the implementation of the Farm bill but here at
    the table with me is the Under Secretary for Farm and Foreign
    Agricultural Services, Dr. J.D. Penn, our chief economist,
    Keith Collins, and our chief of the NRCS, Bruce Knight. They
    have all been very involved in the implementation process.
        What I would like to do is first make some general remarks
    about the challenges the department has met in implementing
    this farm bill and then discuss some of the accomplishments of
    the past year and conclude with some comments on the status of
    the implementation of the Agricultural Assistance Act of 2003.
        Our No. 1 goal over the past year has been to implement the
    Farm bill provisions as quickly and efficiently as possible. I
    am very pleased and I am proud of the progress that the
    department has made to meet this goal. A major challenge was
    the late passage of this new complex bill and the fact that
    many of the provisions were applicable in the same year that
    the bill passed. Fortunately, the department was actively
    engaged in preparing for a new bill before it was passed, so as
    soon as it was enacted we moved quickly to go into high gear to
    implement it.
        We established an internal working structure by putting
    together a board of directors that was made up of the
    subcabinet and then a working group that was co-chaired by
    Keith Collins, Scott Steele of our Budget Office and Hunt
    Shipman, who now works for the chairman. They did a terrific
    job of coordinating the resources of the department and to
    coordinate the department-wide implementation of the nearly 500
    separate actions that we identified to implement the bill's
    provisions.
        Also, as has been noted, our staff throughout the country
    has been working tirelessly and aggressively to implement the
    new provisions and get the benefits flowing to producers and
    other program participants. I know you would want to join me in
    expressing our great appreciation to all the hard-working USDA
    employees, as you have, all over the country who have put so
    much time into implementing this bill. It is important that we
    do especially recognize our county-based employees who have
    been on the front line of sign-up and program delivery.
    Literally thousands of USDA employees have played a part in
    these efforts and I am incredibly proud of everybody on our
    team.
        We also want to thank the Congress for providing the
    funding to implement the Farm bill. We're making good use of
    the funds to hire temporary staff and make technological
    improvements to help facilitate the sign-ups going on for all
    the Farm bill programs, as well as for the newly authorized
    disaster assistance programs.
        We have made extensive efforts to keep the Congress, the
    general public and stakeholders informed at every step of the
    way. Based on congressional and stakeholder input we have
    received over the past year, we were able to fine-tune and make
    some adjustments where needed to meet constituent needs and the
    intent of Congress.
        Throughout the implementation effort USDA has focussed on
    customer service and a commitment to ensuring that all
    customers are treated equally and fairly. We held numerous farm
    bill sessions across the country and in Puerto Rico to reach
    out to a full spectrum of USDA customers. To date, over $8
    billion in new commodity program payments have been issued to
    agricultural producers during the first year of the Farm bill.
    Due in part to these payments, net farm income prospects will
    improve in 2003.
        The Farm bill, along with the new Agricultural Assistance
    Act of 2003 and other on-going USDA programs, is providing
    immediate relief for producers dealing with financial stress
    and these efforts will continue. Also, the administration is
    strongly urging the Congress to enact an economic stimulus
    package to get the economy moving faster. This undoubtedly will
    also have a pay-off in farm country.
        We would now like to focus in more detail on some of the
    key accomplishments of the various titles of the bill. First,
    Title I. All of the key commodity program provisions have been
    implemented efficiently and in a timely manner. These include
    direct and countercyclical payments, marketing assistance
    loans, crop bases and yield election, Milk Income Loss
    Compensation or what we refer to as the MILC program, dairy
    price support program, and the apple market loss assistance. A
    sugar marketing allotment program was established and all
    changes to the sugar loan program have been implemented for
    fiscal year 2003.
        A new peanut program was implemented with direct and
    countercyclical payments, marketing assistance loans, and a
    buy-out program for current peanut quota owners. New marketing
    assistance loans were provided for peas, lentils, chickpeas,
    honey, wool and mohair. As prescribed by the Farm bill
    legislation, the Payment Limitation Commission has been
    established. It has been meeting regularly and is working on
    its report to Congress. It is chaired by our chief economist,
    who is here with us today, Keith Collins.
        Turning to conservation, we are very pleased with the
    important changes in conservation policy made in Title II. The
    regulatory effort needed to implement these programs is an
    enormous undertaking. I am happy to report that rulemakings
    have been completed to continue conservation programs
    reauthorized in the Farm bill, such as the Wetlands Reserve
    Program, the Wildlife Habitat Incentives Program, the Farm and
    Ranchland Protection Program, and the Agricultural Management
    Assistance Program. We have also finalized the rule for the
    Conservation Reserve Program and began general sign-up for that
    program on May 5.
        Our primary focus recently has been ensuring that the
    fiscal year 2003 funding authorized by the Farm bill is
    allocated to these programs. We recently announced that funding
    allocations totaling more than $1.8 billion in financial and
    technical assistance have been made available to farmers and
    ranchers for both farm bill and non-farm bill programs. This
    includes the state allocations for EQIP totaling $562 million.
    The final EQIP rule will be published very soon, which will
    give agricultural producers the opportunity to enroll in what
    has become one of the department's largest and most important
    conservation programs. Applications will be evaluated with
    priority given to those that are most cost effective and
    address national, state and local priorities.
        We also announced the release of $53 million through the
    ground and surface water conservation provision under the
    Environmental Quality Incentives Program to provide cost-share
    and incentive payments to producers in 17 states that have been
    severely impacted by the drought.
        Further, we will soon initiate the first sign-up for the
    Grasslands Reserve Program and have issued a notice of funding
    availability to get a limited program up and running for 2003.
    We will then go through the formal rulemaking process in
    developing the 2004 program.
        We are also making steady progress on developing the
    proposed rule for the Conservation Security Program. The
    department was given very broad discretion to establish the
    program requirements. Given that, we thought it was necessary
    to seek broad public comment on the design of the program
    before we issued a proposed rule. We are now reviewing some
    4,500 comments as we work on this rule.
        Good progress is also being made in implementing the third
    party technical service provider provision that will help us
    deliver the technical assistance needed to support the
    implementation of the conservation programs. So far, more than
    400 technical service providers have been registered through an
    on-line technical service provider registry.
        We are also making excellent progress on the other titles
    of the Farm bill. While they may not receive as much attention
    as the commodity and conservation titles, they are no less
    important. With respect to the trade title, we are providing
    additional funds for market development activities, including
    the Market Access Program and the Foreign Market Development
    Cooperator Program. We are implementing the Technical
    Assistance for Specialty Crops Program and we are launching the
    McGovern-Dole International Food for Education and Child
    Nutrition Program, which builds on the Global Food for
    Education Initiative that USDA implemented during 2001 and
    2002. We expect the new program to be fully implemented before
    the end of the fiscal year.
        In the rural development area we have awarded hundreds of
    millions of dollars in rural development assistance, including
    value-added grants and water and waste disposal funds, and we
    have finalized regulations and are soliciting applications for
    an anticipated $1.4 billion in rural broadband loans and loan
    guarantees.
        Concerning the nutrition title, we are providing greater
    access to and simplification of the Food Stamp Program. We have
    allocated funds authorized for the WIC and Seniors Farmers
    Market Programs in 2002 and 2003. We have implemented the pilot
    program to increase fruit and vegetable consumption in schools.
    These pilots were very well received by schools and by students
    and we are looking at ways of expanding this program in the
    future.
        In the research area we have implemented the Senior
    Scientific Research Service, which allows the department to
    attract and retain the highest caliber scientists.
        For energy we have implemented the Renewal Energy Systems
    and Energy Efficiency Improvement Program and announced the
    availability of $23 million in grants. We have implemented the
    Biomass Research and Development Program and have announced the
    availability of $21 million in grants. We have implemented the
    key provisions to the Bioenergy Program which provides up to
    $115 million in funding for fiscal year 2003.
        Also, as authorized by the Farm bill, we have established
    the Office of the Assistant Secretary for Civil Rights. Vernon
    Parker has been confirmed by the Senate and we appreciate the
    hearing that he had in this committee. He is providing terrific
    leadership on civil rights issues in the department and I can
    tell you that he is already working very hard to put together a
    long-term plan to address these issues.
        Finally, I want to give you a brief update on the $3.1
    billion in disaster assistance that was included in the fiscal
    year 2003 omnibus budget package that was signed by the
    President on February 27. The same day the President signed the
    legislation I established a disaster assistance working group
    within USDA to begin work on the disaster assistance programs.
    Their charge is very clear--to make implementation of disaster
    assistance a farmer-friendly process and to make sure the
    program benefits reach producers as quickly as possible.
        The 2000 disaster program took five and a half months. This
    bill is much more complicated and we will do it in four and a
    half months, again showing the persistence, efficiency and
    dedication of our work force in getting this job done.
        I am pleased to announce that sign-up for the tobacco crop
    losses began on March 17. Sign-up for the additional benefits
    associated with the Livestock Compensation Program began April
    1. The Cottonseed Payment Program sign-up began on May 2. Sign-
    up for the Crop Disaster Program will begin on June 6.
        USDA has launched a disaster assistance implementation
    website that contains basic program information, such as
    announcements on program sign-up and various questions and
    answers, as well as comments and suggestions to encourage
    interested parties to provide input to USDA on how best to move
    implementation forward in a timely and expeditious manner.
        Mr. Chairman, that concludes my overview of where we
    currently stand on implementing the Farm bill. The team at USDA
    has worked very hard to implement the new Farm bill efficiently
    and responsibly to best help our farm and food sector receive
    its intended programs and benefits. We are committed to
    continuing to do the best job we can to deliver the programs.
        We are also committed to continuing to work with all of the
    Members of Congress and other stakeholders to ensure that the
    legislation is implemented fairly and properly.
        Thank you again for having us here this afternoon. We would
    now be very happy to respond to your questions. Thank you, Mr.
    Chairman and members of the committee.
        The Chairman. Thank you, Madam Secretary, for your
    excellent statement.
        The Farm bill that we passed last year provided
    opportunities for those who wanted to participate in the
    programs to update their base acreage and yields for the
    purpose of determining the amount of farm program payments they
    would receive for the 2002 and later crop years. That deadline
    for sign-up expired on April 1.
        Looking back at the process, do you feel that you can say
    that this was a fair process in terms of the familiarity that
    Farm Service Agency employees provided to farmers so that they
    could understand their options? To what extent did farmers take
    advantage of this option, if you know?
        Secretary Veneman. Well, Mr. Chairman, we do think we got
    large amounts of information out so that people could make
    informed choices about updating bases and yields. I believe
    about two-thirds of the farmers updated--well, over 50 percent
    updated their bases and yields, about 33 percent stayed with
    their current bases and yields, and there are a very few that
    are still in the process.
        We tried to make sure that our Farm Service Agency
    employees in the field had excellent training to be able to
    help farmers and ranchers. We provided as much information as
    we possibly could through web-based methods, questions and
    answers on the website. We had multiple farm broadcast
    briefings where we were able to get information out through Dr.
    Collins and Dr. Penn and other people who were involved in day-
    to-day implementation with the Farm bill. We had some web-based
    calculators that were available for farmers and ranchers to
    help them determine what was in their best interest with regard
    to the updates of bases and yields.
        I was out this week in Missouri and I was talking with our
    state FSA director out there and he said, ``You know, the
    people out here are really pleased in the county offices that
    they were able to do this. A year or so ago they just did not
    think they could get the job done and everybody is pretty proud
    of the fact that they were able to get it done and do it in a
    very timely manner.''
        That is a real indication that the tools that were put
    together worked. We got the farmers signed up for the programs
    within the time limits allotted. The payments, we have already
    made over $8 billion in financial assistance in the hands of
    the farmers.
        The Chairman. Thank you. I am also at this point going to
    ask you or Dr. Collins to comment on the economic outlook for
    farmers. I mentioned in my opening statement the 11 percent
    increase in net cash income that is expected for agriculture
    this year as compared to last year and the improvement in
    export volume by 7 percent up to an expected total for this
    year of $57 billion, which is the best performance in
    agriculture exporting since 1997. Are those numbers still
    looking good, Dr. Collins?
        Mr. Collins. Yes, Mr. Chairman, they are. You summarized
    them pretty well. The only thing I would add to that is we are
    seeing a better improvement in the marketplace this year. Part
    of it is driven by last year's bad weather, which has boosted
    prices across the board. Part of it is driven by cutbacks in
    production by livestock producers who are raising livestock
    prices substantially. We are talking about an increase in cash
    receipts this year from the sale of farm products in the
    neighborhood of $8 billion, so that is showing that the market
    economy is, in fact, starting to improve.
        Farmland values went up 4 percent last year. We think they
    will go up slower this year, a percent and a half, although I
    just met today with a bunch of bankers who told me that is
    wrong, that it is going to go up more than 1.5 percent this
    year. Almost nothing seems to suppress the rise in farmland
    values every year.
        Also interestingly, despite the drop in farm income last
    year, we really have not seen a sizable increase in
    nonperforming loans by producers. By almost every lender
    category, nonperforming loans is fairly small. Take the Farm
    Credit System, for example. Their nonperforming loans in their
    loan portfolio are running about 1.3 percent or so.
        Yes, there has been financial stress. It has been spotty.
    It has been driven by bad weather, drought. It has been
    commodity-specific in a couple of cases, like milk, but overall
    the farm economy still seems to be hanging on fairly well.
        The Chairman. Thank you very much.
        I am going to yield now to my friend from Iowa, the
    distinguished senator and ranking Democrat on the committee,
    and I am going to ask all senators if we can limit our time to
    5 minutes for this opening round of questions. Then we can come
    back around for additional rounds of questions if senators
    would like to ask additional questions.
        Senator Harkin.
        Senator Harkin. Thank you very much, Mr. Chairman.
        Madam Secretary, I do not plan to ask any questions on the
    CSP today. We covered that pretty well the other day. I would
    like to reiterate the widespread support for the Conservation
    Security Program from both environmental, sustainable
    agriculture and commodity groups.
        Mr. Chairman, I would just like to submit for the record
    two letters, one from conservation groups to Senators Bennett
    and Kohl, and one to you from major commodity groups expressing
    their support for CSP. Did I get a copy of that letter, too? I
    just wanted to submit those.
        Senator Harkin. Madam Secretary, I thank you for your hard
    work in implementing the 2002 Farm bill, including the first-
    ever energy title, and trying to move these forward. I am
    concerned about one provision of great importance that really
    lags, and that is section 9002. That is the Federal procurement
    of bio-based products.
        As we all remember, in the Farm bill we put a provision in
    the Farm bill that basically mandates that all Federal
    departments are to give a preference to purchasing bio-based
    products as long as they are equivalent in price, availability,
    and performance, if I am not mistaken. I may be off a little
    bit there, but something like that. This section gives your
    agency the primary role in ensuring that the Federal Government
    purchases bio-based products made from domestic renewable
    agriculture or forestry materials.
        Although the statutory deadline for publishing the final
    guidelines has passed, USDA has not even published a draft set
    of guidelines for agencies to follow in procuring bio-based
    products. Would you please give us an update on your progress
    in drafting and issuing product guidelines, as well as the
    status of the bio-based labeling initiative? When would this
    critical initiative be in place?
        Secretary Veneman. Well, thank you very much for your
    question, Senator Harkin. This is a program that we have been
    working very hard to implement. However, the draft regulations
    have taken longer than anticipated for several reasons, not the
    least of which is the very complicated nature of this bill
    including some of the things you talked about--comparability of
    price, availability, and so forth. How do you measure, for
    example, the content of bio-based within a product?
        There are a number of questions that have to be addressed
    in these regulations and our people have been working very hard
    to try to do that, working with the lawyers to make the proper
    interpretations of what the law requires. As they got into this
    process of implementing this provision a number of questions
    were raised that had to be answered and worked out through the
    process. That is why it has been taking considerably more time.
        I might ask Keith Collins to comment for a moment on this,
    as he has been involved directly in some of the meetings.
        Mr. Collins. Senator Harkin, you said earlier that some of
    these provisions we are not implementing with all due speed
    because we were making a Herculean task out of something that
    ought to be simple. We plead guilty to that in this case. We
    started out with just the opposite in mind, that we saw a
    Herculean statute that we wanted to implement in a simple way,
    so we drilled a couple of dry wells. We have drafted several
    sets of guidelines to make this program simple, fast,
    transparent, easy to implement, low cost to the private sector,
    low cost to us because there is no appropriation for us to
    implement it.
        That was our strategy. That is what the industry wanted.
    That is what everybody wanted. Unfortunately, that is not the
    way it is working out and the Secretary hit on what are the key
    reasons as to why. Right out of the box we ran into some very
    difficult problems of trying to define what are the appropriate
    renewable materials that are eligible to be in a bioproduct.
    Simple task, but try to answer that question for trees, for
    example.
        Then we had the problem of well, the Secretary has to
    recommend minimum bio-based content. How do you measure the
    bio-based content in a bio-product? There really is no way to
    do it, so we suggested self-certification on the part of
    manufacturers and vendors. Our Office of General Counsel does
    not particularly like that approach.
        Those are the small problems. The big problem is the one
    that you mentioned. The statute says to designate an item, the
    Secretary must consider economic and technical feasibility,
    including life cycle costs. We do not know of any other program
    that has to consider life cycle costs. Not even the Recycle
    Material Program considers life cycle costs.
        Then, on top of that, if the Secretary designates an item,
    the statute says----
        Senator Harkin. There is a reason that was put in there, by
    the way. I remember that provision very well and there is a
    reason. Maybe other agencies and departments do not have to
    consider that. It is one of the reasons we waste a lot of money
    in the government.
        Mr. Collins. Oh, I agree with you.
        Senator Harkin. Because we know something is cheap now but
    we keep buying it over and over. If we bought something more
    expensive it might last 10 years and it would be cheaper for
    the people of the United States. That is why we put that in
    there.
        Mr. Collins. Let me say I agree with that completely and
    when you consider life cycle costs, that is going to be the
    best way that bioproducts can compete with non-bio-based
    products.
        Senator Harkin. That is true.
        Mr. Collins. I agree with that. My only problem is how do
    you measure it and how long does it take to measure it and who
    measures it and who validates it?
        In addition to that, the Secretary is required to provide
    information on the availability, the relative price, the
    functional performance, the public health effects and the
    environmental effects of each of the items she designates.
        Now these are unique responsibilities put upon the
    Department of Agriculture. Can they be done? Yes, they can be
    done. Are we going to do them? Yes, we are going to do them.
    Could they be done in the few months that the bill allowed us
    to do it? That is too Herculean a task.
        We are going to get there and we will be happy to meet with
    you, with the industry, with anybody, but it is not an easy
    thing to do.
        Senator Harkin. I appreciate that and you have had a lot of
    other things you have had to do, too, and your answer makes
    common sense. I just say that if there are things that need to
    be changed legislatively or if we need to make a modification,
    I would hope that you would get those to us forthwith.
        Mr. Collins. It is important for us to get at least a draft
    out that the legal experts agree with and do that as soon as
    possible, so then people can see this path that we are on and
    if they think that we are making it unduly complicated, then
    they can respond either legislatively or through the comment
    period and that will help us a lot. We do have to get this
    first step behind us.
        Senator Harkin. Thank you.
        I do have questions on my second round, but thank you, Mr.
    Chairman.
        The Chairman. Thank you very much, Senator.
        Senator Coleman, we are going to try to stay within a 5-
    minute rule for this first round of questioning so that
    everybody will have an opportunity to ask questions. Senator
    Coleman.
        Senator Coleman. Thank you very much, Mr. Chairman. Before
    I ask my question I would like to note that I share the
    concerns raised by Senator Conrad in his opening statement
    about the sugar interest rate issue and I have introduced a
    sense-of-the-Senate resolution on this, so we share the
    concerns and I am very hopeful that we can work with the USDA
    to resolve this issue. It is a very important issue to many of
    us here.
        Let me turn my focus to the issues of the Milk Price
    Support Program and the concern that it has not been providing
    the safety net it was intended to provide, which is namely a
    price floor of $9.90 per hundredweight. Between January 2000
    and April 2003, the class 3 price, which accounts for 85
    percent of my farmers' production, actually fell below the
    $9.90 price floor mandated by Congress in 14 out of 38 months.
    With milk prices where they are today and Minnesota dairy
    farmers are struggling to survive, we need to work on this
    issue.
        There were two specific proposals that I just wanted to
    address before you and get a response. One proposal is for the
    USDA to use its authority to increase the purchase price for
    cheese, butter and powder to reflect the true cost of selling
    surplus product to the Community Credit Corporation. Another
    proposal is to have the CCC actively trade on the Chicago
    Mercantile Exchange whenever the price falls to or below the
    price support level instead of purchasing in its current, more
    passive manner.
        I am told you have authority to pursue either of these
    approaches. Would you comment on their merits and explain
    whether you intend to take such action or any other action to
    prevent milk prices from dropping below the statutory floor?
        Secretary Veneman. I am going to ask Dr. Collins to comment
    on that. He has also been involved in the implementation of the
    dairy provisions.
        Senator Coleman. Thank you, Madam Secretary.
        Mr. Collins. Senator, I guess the first comment I would
    make relates to the premise that you started with in the
    question, and that is that the price of milk has not been
    supported at $9.90 because the class 3 price has been below
    $9.90. In fact, the class 3 price has been; so has the class 4
    price.
        What the statute requires us to do is to set purchase
    prices for butter, cheese, and nonfat dry milk so that a plant
    of average efficiency can pay, on average, at least $9.90 for
    milk. The best price series we have for what farmers are
    receiving for the price of their milk is not the class 3
    minimum price under Federal orders or the class 4 price. It is
    the average price received by farmers for manufacturing-grade
    milk as reported by the National Agricultural Statistics
    Service. The most current price for the month of April is $9.90
    a hundredweight exactly.
        You can make a case that we are doing what the law says.
    Does that mean the price of milk will be under $9.90 in some
    areas at some times? Yes, that is going to happen.
        Despite the fact that I just defended our program and the
    performance of it, to go to your options, we are, in fact,
    looking at this question of whether it costs more to deliver
    products to the CCC rather than, say, to a processor,
    particularly, for example, with cheese, which is the one you
    are most interested in where the class 3 price has been so low.
        We are, in fact, reviewing that whole delivery process now,
    all the steps that a processor has to take and the requirements
    that are imposed on a processor, and trying to look at the
    costs of that to see if that, in fact, is the reason why when
    we buy cheese it is causing the return to the processor to be
    low enough to cause them to bid below $9.90 for milk. We are
    looking at that. We have that under consideration and it has
    not moved through the system yet.
        Regarding the second proposal you raised about USDA buying
    product off the Chicago Mercantile Exchange, that is one I
    cannot say that I have analyzed. Occasionally you do see the
    price on the Mercantile Exchange go below $9.90. I am not sure
    why that happens. One reason I would suggest is that when we
    buy cheese we require the seller to have the cheese graded and
    pay the cost of grading. Delivery of cheese on the Merc does
    not require the cheese be graded, so that is one reason why it
    can sell at less than what it sells to us, I suppose.
        There may be specification differences, as well. It is
    something we could look at, although I am a little reluctant to
    think of USDA as a buyer on an organized exchange where we are
    paying brokerage fees and things like that. What we have now is
    a price support program where we have an open door to buy
    product at the purchase prices that we state and that that is
    probably the most effective way and direct way we can
    effectuate that program, but it is something we can look at if
    you would like.
        Senator Coleman. The follow-up, and underlying both these
    proposals is the question of the difference between the cost of
    selling cheese on the commercial market and then selling cheese
    under the CCC purchasing program and I know some of our dairy
    farmers have talked about modernizing specifications so that
    they are more parallel to the commercial standards.
        I guess the followup question on both of these is as you
    are looking into this do you have a sense of timing? Do you
    have a sense of when we can get more definitive resolution on
    these issues?
        Mr. Collins. Dr. Penn and I have talked about meeting on
    this for the last week or so and we are going to do this pretty
    soon.
        Senator Coleman. I would appreciate that.
        Mr. Collins. We will make a decision one way or the other
    pretty soon.
        Senator Coleman. Thank you very much.
        Thank you, Mr. Chairman.
        The Chairman. Thank you, Senator.
        Senator Conrad.
        Senator Conrad. I notice that the Democratic leader has
    arrived, Mr. Chairman, and I would certainly defer to him,
    given the demands on his schedule.
        Senator Daschle. Thank you very much, Senator Conrad.
        The Chairman. Senator Daschle.
        Senator Daschle. Mr. Chairman, thank you very much.
        Secretary welcome and thank you. I will be very brief. I
    have three questions if I can. The first has to do with
    disaster assistance. You have had to cope with a number of
    different situations around the country and we in South Dakota
    have had a great deal of uncertainty with regard to disaster
    assistance. Last year we had both the Milk Assistance Program
    and the Livestock Assistance Program and both were provided to
    those who were eligible for drought assistance and it was very
    helpful.
        This year, as you may know, the milk assistance is now
    being deducted from the livestock assistance, so you are not
    eligible for both outright, as you were last year. That has
    posed obviously some problems, given the very limited nature of
    this form of assistance. I am wondering if you could give us
    some indication as to why that is.
        Also obviously there is a question of certainty and for a
    lot of these producers that is a very important matter, having
    the certainty of knowing just what eligibility would be. Could
    you address that, please?
        Secretary Veneman. Well, Senator, we have been working very
    hard to implement the disaster legislation that was recently
    passed by the Congress. My understanding is that the statute as
    it was passed requires the deduction of the milk assistance
    from the livestock assistance, that the statute, the way it was
    constructed, required us to do it that way. I am going to have
    Dr. Penn explain it in a little more detail.
        Mr. Penn. It is my understanding that the statute clearly
    said that producers could benefit from one or the other of the
    programs but not both, so we operated the Livestock
    Compensation Program first and that caused us to have to
    postpone the Livestock Assistance Program until that program
    was concluded so that we could deduct from the Livestock
    Assistance Program any benefits that had been received under
    the earlier program.
        Senator Daschle. Mr. Penn and Madam Secretary, at least my
    staff have quite a different interpretation. We will have to
    sit down and try to work through this. We understand it may be
    budget-driven but let us see if we cannot resolve that.
        I do not want to dominate the time. I have two other
    questions. One has to do with the country of origin labeling.
    Obviously there is a great deal of concern about what onerous
    implications there may be in regulation, either from the
    department or from packers with regard to compliance. Are you
    able to give us some assurance that there will not be the kind
    of onerous, burdensome regulatory framework for producers that
    will render the country of origin labeling issue relatively
    useless for our producers?
        As I travel South Dakota and the country, that is the
    concern I hear most, is obviously given your position, they are
    concerned that that may be the case. We appreciate your
    willingness to work with us in spite of the fact that you
    opposed it but can you give us some assurance that that will
    not be the case?
        Secretary Veneman. Yes, Senator. It is important to point
    out with regard to the country of origin labeling that we have
    consistently said that while we opposed country of origin
    labeling as the Farm bill was going through we had a specific
    statement in our administration position on that but
    nevertheless, it was passed by the Congress. We have worked to
    implement the provisions of the country of origin labeling.
    That required us initially to implement a voluntary program
    which we put in place to be followed by a mandatory program.
        There has been a tremendous amount of controversy about
    these provisions. As you point out, much of it is not about
    what the department's regulations would require but what the
    various steps in the food chain further up are going to require
    from the producers to assure that the country of origin can be
    verifiable. Because of the disparity of opinion and the
    strength of the opinion, we decided to have a series of
    listening sessions throughout the country to get input from
    various interested parties. We are in the process of doing that
    right now.
        We have to do an economic analysis on this as we go forward
    because it is a significant rule. We will be looking for the
    least cost alternative in terms of implementation of a new
    regulation.
        We are going to work with the interested parties including
    the Congress, but we do have some restrictions with the way the
    law was written in terms of how we can implement this
    provision.
        Senator Daschle. Obviously it would be extremely troubling
    and disappointing if we went through all of this and found a
    regulation that was so onerous for producers that it was
    rendered virtually useless. Can we assume you will be finished
    by September 9, as the law requires?
        Secretary Veneman. We are on track to complete the
    regulations.
        Senator Daschle. Finally, let me just ask you about CRP.
    Obviously we had some software glitches and because of that,
    sign-up was delayed until it was the week before May 1. There
    are a lot of producers interested in sign-up on CRP. Is there
    any possibility we might be able to postpone the deadline to
    accommodate the fact that there were the glitches and the fact
    that we are right in the middle of planting season?
        Secretary Veneman. We did begin sign-up on May 5 and it is
    going through the month of May. One of the difficulties,
    frankly, with CRP sign-up was that we had the Farm bill sign-up
    through the end of April, we have the disaster assistance sign-
    up starting June 6, so the CRP sign-up was, in terms of time,
    strategically placed so that our Farm Service Agency employees
    would be able to accommodate the farmers coming in and signing
    up, so that they would not get backed up.
        We were trying to make sure that we could actually conclude
    the sign-up for all of these programs, so the timing was set so
    that we could adjust the workload for our Farm Service Agency
    employees because we were implementing the Farm bill, we did
    have the CRP sign-up, and then we did have the disaster
    assistance to implement, as well.
        Senator Daschle. I want to again thank my colleague Senator
    Conrad, and Mr. Chairman, thank you very much.
        The Chairman. Thank you, Senator.
        Senator Daschle. Thank you, Madam Secretary.
        Secretary Veneman. Thank you.
        The Chairman. I am going to go to this side of the aisle
    now. Senator Crapo.
        Senator Crapo. Thank you very much, Mr. Chairman.
        Madam Secretary, in the interest of time I will just say I
    have been making a list here of issues being raised by other
    members of the committee and on a number of them I just want to
    say I agree; for example, concerns that have been raised on the
    sugar interest rate loan, which I assume Senator Conrad may go
    into further during his questioning, concerns about the
    technical assistance funding, on the conservation programs, the
    country of origin labeling issues and the dairy program
    concerns raised by Senator Coleman, and others, and again the
    minority leader's concern about country of origin labeling.
        Each of those is also a concern of mine and I just wanted
    to be sure that I made that point to you. With the time I have
    I am going to go into some other questions.
        The first one is that I have a strong interest in
    Continuous CRP and CREP programs. The conservation for working
    lands was a large theme in the Farm bill's conservation title.
    Continuous CRP and CREP provide the type of targeted
    enrollments that address the needs of working lands and
    frankly, do a lot to enhance our natural environment. Do you
    know how many acres will be held back for these programs?
        Mr. Penn. I do not have the number right on the top of my
    head but we have made allowance for that.
        Mr. Knight. Two million.
        Mr. Penn. Two million acres.
        Senator Crapo. Two million?
        Secretary Veneman. Two million acres.
        Mr. Penn. We have made an allowance.
        Senator Crapo. Do you feel that that is going to be
    adequate to meet the needs of the purposes of this part of the
    conservation programs?
        Mr. Penn. I believe so.
        Senator Crapo. The interim rule on CRP indicates that while
    the FSA state committees, in consultation with FSA state
    technical committees, have been granted the authority to
    determine the beginning of primary nesting and brooding seasons
    during which managed haying and grazing can occur, that the
    ending dates are still those that are set nationally by the FSA
    and the Fish and Wildlife Service in the 1990's. Initially it
    was my understanding and frankly the understanding of the
    grazers in Idaho that both the beginning and the ending dates
    would be allowed to be set locally, which makes much more
    sense. Frankly, the state technical committees do have the more
    precise understanding of just how all of the grazing conditions
    come together to justify the timing of both going on and
    leaving the ground.
        The question I have is frankly, there is a little bit of
    surprise that it is now understood that the termination dates
    are still going to be the nationally set dates that were set
    back in the 1990's. Are there any efforts under way to review
    the national ending dates and return to the policy that at
    least I thought we had been discussing earlier?
        Secretary Veneman. I have not heard of your concern. I am
    not sure that any of us have. We will be certainly happy to
    look into the issue you are raising and to work with you and
    your staff in trying to look at the various concerns that you
    are asking about.
        Senator Crapo. Thank you. I apologize for not giving you a
    heads-up on that. This is just something that came up after we
    talked the other day and I did want to raise that issue.
        Mr. Chairman, I have a number of other questions here and
    because of time, I will not be able to ask them and may not be
    able to be here at the committee when we have another round.
    Are we going to be able to submit questions?
        The Chairman. Yes, Senator, we would be glad to have you
    submit your questions and ask the Secretary to respond within a
    reasonable time for the record.
        Senator Crapo. With that understanding, Mr. Chairman, I
    will forego the rest of these questions because some of them
    are quite lengthy. I appreciate the chair and the Secretary's
    accommodation.
        The Chairman. Thank you, Senator.
        Senator Conrad.
        Senator Conrad. Thank you, Mr. Chairman. Thank you very
    much. I want to thank my colleague Senator Crapo and thank my
    colleague Senator Coleman for wading in on this sugar surcharge
    issue.
        Madam Secretary, would you acknowledge that Congress did
    repeal the surcharge, the interest rate surcharge on sugar?
        Secretary Veneman. Senator, my understanding is that the
    Congress repealed the requirement for the interest rate
    surcharge. However, in so doing--and we talked about this just
    yesterday and I told you I would talk to our lawyers and try to
    understand it better. My understanding from our lawyers is that
    in repealing the requirement for it, it left it as a
    discretionary matter for the department to decide.
        In addition to what the language said, this surcharge was
    initially put on, it is my understanding, during the 1996 Farm
    bill as a way to establish some additional funding for the farm
    programs. In the scoring of this particular provision it was
    scored at zero in the Farm bill, which because it was, in the
    opinion of our lawyers, then a discretionary matter with no
    scoring, in the discretion of the department they decided to
    leave the surcharge in place because their opinion is that we
    did have the discretion to do that.
        Senator Conrad. You know, I hope you get some new lawyers.
    This is what the department itself said. ``The 2002 act
    eliminates the requirement that CCC add 1 percentage point to
    the interest rate as calculated by the procedure in place in
    1996 but does not establish a sugar loan interest rate.''
        Now why ever would we have repealed it if we did not intend
    for that to actually be implemented? You know, as the author of
    this provision, I can confirm that we got scored for it. In the
    internal scoring this cost us $5 million over the 10 years, and
    that had to be accommodated as we put together the entire
    package.
        We got charged for it and what I find disturbing is this
    kind of trend. We had this on the loan rate for minor oilseeds.
    Congressional intent was clear, you all did not follow it, we
    had to go through a harangue to get it fixed. We had the same
    thing on the pulse crops. On the pulse crops we actually had to
    go back on a bipartisan basis and legislate because you all
    were not implementing the clear intent of Congress.
        Now this is the third case where we think it is abundantly
    clear and the department has acknowledged itself that we
    repealed the surcharge and yet you turn around and reimpose it.
    I just think you are hurting yourself in terms of your
    relations here. You are hurting yourself in terms of the
    constituency out there who had a clear understanding that we
    had repealed that surcharge, and yet USDA reimposes it.
        I would just ask you to go back and give this another look.
    It is not a big deal but it is a fly in the ointment and it is
    easily resolved. It is not a costly measure but it does rankle
    and I would hope that you would do that. I would ask that you
    get back to us in some reasonable amount of time, if you could
    reconsult not only the lawyers but maybe some outside counsel.
        Let me say, because you and I have had many back-and-forths
    on some of these issues, I do appreciate the work of the
    department in getting the sign-up completed. This was an
    enormous task and people worked very hard in the department,
    out in your field offices, and they are to be commended and you
    are to be commended. We appreciate the work that was done to
    get that complete or virtually complete. I know it is never
    complete but enormous progress has been made. I would just hope
    that there would be a review of this issue and see if we cannot
    resolve that, as well. Then we would have really cleared the
    decks.
        One other thing I wanted to mention to you is this trade
    fight. You mentioned to me the other day that you and the trade
    Ambassador had announced a case with our European competitors.
    Thank you for doing that. Our friends in Europe are fighting
    tooth and nail to preserve the enormous benefits that they have
    and they are trying to preserve a playing field that is tilted
    heavily to their advantage.
        In many talks with the Europeans they have made clear to me
    that their long-term game plan is to continue to insist on
    equal percentage reductions in these unequal levels of support.
    We cannot let them succeed in that game plan. The French, the
    Germans and other Europeans are incredibly determined to
    maintain these unfair advantages. We cannot permit that and it
    is very important that we fight back. I thank you.
        The Chairman. Thank you, Senator.
        Senator Nelson.

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

        Senator Nelson. Thank you, Mr. Chairman and thank you,
    Madam Secretary. I appreciate the courtesy call the other day
    to give me an opportunity to think about what I might ask.
        I would concur with what my colleague from North Dakota
    just said in terms of trade. Everywhere I go I encounter this
    one way or the other from businesses that produce products in
    Nebraska, agriculture products, manufacture products. We
    encounter difficulties in trade. It is not as though Nebraska
    is not trading. Nebraska, I have to point out, it happened
    during my watch and I do not take full credit for it but during
    the 8 years I was Governor we nearly tripled our international
    exports and at that point in time, we were helping reduce the
    imbalance of trade because we were exporting more than we were
    importing. The imports and the exports do not balance today and
    part of the reason they do not balance is because of unfair
    trade practices that we encounter in other parts of the world.
        I spoke to one of the ministers, Ivanoff in July about the
    chicken wars; that is the way I described it. He was not very
    pleased with the fact that I brought it up and had a different
    point of view about what Russia was doing with respect to
    poultry but the bottom line is that they are imposing
    restrictions and it is making it very difficult.
        The biogenetic issue. If we do not solve that
    internationally and support biogenetics here in the United
    States, the next thing you know, there will be local folks
    starting to put in opposition programs to that effort. As a
    matter of fact, I hear one of the fast food chains now is
    saying that they are not going to buy any kind of biogenetic
    food for sale.
        The whole area needs to be dealt with, particularly as it
    relates to food, from my perspective. I appreciate very much
    joining together with Ambassador Zoellick to bring this action.
    I wonder if we might consider and the department would consider
    certainly as it relates to agriculture products the suggestion
    of a process to deal with these trade issues in a prompt
    manner. We will all be a lot older when the WTO issue is
    resolved. I do not think that will be soon. I remember with the
    Canadian free wheat issue, filed a Section 20. I do not know if
    that has ever been resolved, but by the time it was resolved,
    many of the Nebraska wheat farmers were already tremendously
    disadvantaged and never really got an opportunity to recover
    from it fully.
        Is it possible to create a provision that we could support
    that would permit for the timely consideration and
    determination of trade disputes almost on the spot? Put them
    into two different levels, one that has to go through the WTO
    the way that we may be doing it there, but go back to other
    trade treaties or other future trade treaties that permits the
    equivalent of an umpire on the scene who rules immediately. I
    can tell you right now if those unfair trade practices can be
    stopped in a brief period of time you will see fewer of them,
    but everybody knows that you will have exhausted your remedies
    by the time you get to the end of it, whether it is the
    Canadian molasses debacle or whatever it is.
        I just wonder. I would like to get your thoughts on what we
    might be able to do together to be able to have quick
    resolution, a quick resolution provision that we can go back
    and try to sell to these trade agreements.
        Secretary Veneman. Well, Senator, I appreciate your
    comments and your concerns about trade because it is an issue
    we worked very hard on. Senator Conrad has left but I
    appreciate the support from both of you and so many other
    Members of Congress for the action that was taken yesterday in
    beginning the process against the European Union for their
    actions to not approve any more biotech varieties.
        It is obviously something we lost patience on. We had been
    trying for almost 5 years to work with the European Union on
    this.
        Senator Nelson. Excuse me. Which is my point. If you cannot
    get a quick resolution you can be dragged on and on and on and
    on.
        Secretary Veneman. I understand. Obviously we are taking
    action. One of the reasons that we have filed this action with
    the EU is also because we do not want to see the rest of the
    world go down this track of causing disruptions to our trade
    because of unjustified and unscientific regulations. It is very
    important.
        On the issue, for example, of poultry with Russia, we just
    recently had the Russian agriculture minster in. We have made
    excellent progress on that issue in terms of the sanitary
    issues and the inspection issues but again we could not take
    Russia to the WTO on this issue because they are not a member.
        We now have issues with regard to our poultry and meat with
    Russia because they are imposing quotas. We continue to work
    with them on that issue but Russia remains our largest export
    market for poultry and that is our largest export to Russia of
    any product, not just agriculture products. We have worked very
    hard on that.
        I sense the frustration and understand because we have the
    same frustration. We call them market maintenance issues. It is
    areas where we have had access to markets, we have been
    exporting product, and we now see restrictions. We spend a lot
    of time maintaining the markets that we have, in addition to
    trying to open up new ones through the WTO negotiations, new
    free trade negotiations.
        I appreciate your concept of putting together a process.
    However, we have dispute settlement processes through the
    NAFTA. That is part of the consultation process that the WTO
    and the NAFTA provisions provide.
        Senator Nelson. Excuse me. It does not seem to be timely.
    That is my point. Our frustration would be reduced dramatically
    if when one of these issues is raised you could have a quicker
    resolution.
        Now in an athletic event if you had to go as long to get
    something resolved, you would never finish a game, but there
    are dispute resolutions on the spot. A foul is called.
    Sometimes there is a replay in some athletic events. If there
    was a way to do something like that where you would agree maybe
    to make it a two- or three-tiered process, I can assure you
    that if it could get resolved quickly there would not be the
    kind of what I consider dislocations that we have right now
    with the European Union and with others, and with NAFTA.
        The Chairman. The time of the senator has expired. The game
    is over.
        Senator Talent.

      STATEMENT OF HON. JAMES TALENT, A U.S. SENATOR FORM MISSOURI

        Senator Talent. Thank you, Mr. Chairman. I am a little
    reluctant now because I was just going to open up by echoing
    what Senator Nelson said; I could not agree more.
        Let me congratulate you on filing the suit. As you can
    tell, all of us are so frustrated with them and their refusal
    to take biotech food. It is as thinly disguised a protectionist
    maneuver as I have ever seen. When they went so far then as to
    actually try to convince the European countries that have
    famine not to take the food so that people starve, that is just
    the last straw. The message is we are ready to support you in
    any way we possibly can to go after them and it just comes down
    to that.
        I also want to thank you for your efforts in the sign-up
    and that is so important in Missouri because we are just so
    diverse. We have midwestern farms in the north part of the
    state in terms of commodities and then really southern-type
    commodities in the southern part of the state. I like to say in
    Missouri we have a lot of some things and a little bit of
    everything and that is true in counties. We just had some
    counties who have really struggled but I want to say our
    Missouri FSA people have done a great job and I wanted to say
    that and congratulate you.
        Then there is an issue I want to raise and it is a
    Missouri-specific issue, so I am not going to put you on the
    spot and ask you for an answer now, but I do want to submit it
    for the record and emphasize to you how important it is to us,
    not just to Missouri but everywhere because it has to do with
    rural development loan processing.
        You are probably aware we do all of that really for the
    country in two centers in Kansas City and St. Louis and
    typically there have been proposals to privatize that function
    and that is stirring again, because of the President's
    initiative, which I support, to look for ways to privatize
    functions. I want you to consider as you consider this whether
    this is not an inherently government function because of the
    difference between governmental attitudes and standards
    regarding loans and private standards.
        Also, it is always my big fear with this that if it is done
    right, fine, but we can end up with a situation where we
    privatize this, we lose the pool of labor that has done it and
    has the expertise and then we find out that it is not working
    and we cannot put it back together and we have a real problem.
    I am going to submit to you some questions for the record, with
    the chairman's permission, just to find out what your plans are
    and how we can work with you to make certain that if anything
    does go forward it goes forward in a way that is good for
    agriculture and good for the taxpayer, as well. I thank you for
    being here, Madam Secretary.
        Thank you, Mr. Chairman.
        The Chairman. Thank you, Senator.
        Senator Stabenow.

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

        Senator Stabenow. Thank you, Mr. Chairman.
        Welcome, Madam Secretary and to all of you. I mentioned to
    you when we had a chance to talk on the phone that I had asked
    all of those who had testified at two field hearings in
    Michigan in 2001 prior to the Farm bill's completion to respond
    to how things are going and I do have a number of issues and
    would like to respond in writing so that you can have a chance
    to give me some feedback in writing, as well.
        First of all, the overall feeling is that there has been a
    great positive reaction to the technology that the department
    uses, to the website, to the efforts to get information out in
    a timely manner. There are universal compliments coming as a
    result of that. Also, the nutrition title, a great deal of
    positive feedback on that, as well.
        There is also positive feedback regarding the FSA
    employees. We have understaffed offices and people working
    overtime, as well as the regular department employees, but
    still concern about the initial sign-ups for a lot of the
    program crops being complicated and cumbersome in spite of
    that, but realizing people are working hard in that process.
        Our Michigan dairy producers have raised some of the
    concerns that have been raised before by Senator Coleman and
    also the executive director of Monitor Sugar Beet Growers
    Association, while indicating that the overall sugar program is
    going well, he did have concerns that were raised, similar to
    what Senator Conrad raised, as well, very concerned, assuming
    that this was not discretionary to eliminate the surcharge but
    that, in fact, it would be eliminated. We have heard that, as
    well, across Michigan, and I share that concern, as well.
        The major two areas though where we heard a lot of comments
    related to the Commodity Purchase Program, which I have spoken
    to you about, and also the question of conservation. We heard
    from many different people a concern about the slow advancement
    of conservation programs--from the Michigan pork producers, the
    Michigan corn growers, the Farm Bureau, Farmers Union, Michigan
    milk producers, all raising concerns about the technical
    aspects of EQIP but in the broader sense concerned about the
    security program, the Conservation Security Program. In fact, I
    heard comments like producers are skeptical about the
    government's commitment to the Conservation Security Program.
        I wondered first, my two questions, if you would respond to
    what is a message that they are feeling that there is not a
    commitment to fully implement the CSP, and I also have letters
    from a number of groups that were sent to you just, I believe,
    yesterday indicating a real concern about not delaying or
    reducing the funding, not delaying the implementation of CSP. I
    wonder if you might tell us what is happening there.
        [The letters can be found in the appendix on page 66.]
        [The prepared statement of Senator Stabenow can be found in
    the appendix on page 93.]
        Secretary Veneman. I would be happy, too, and Senator
    Harkin and I discussed this issue quite extensively last week
    at the Appropriations hearing.
        First of all, let me just say that we have an absolute
    commitment to implement these programs. It is important to
    point out there has been a lot of recognition among us, as well
    as the members that are here today, that our folks have done
    Herculean tasks to get as far as we have in the Farm bill. We
    had to set some priorities and we had to start with the
    commodity title of this farm bill and get the sign-up done but
    we are in the process of making very good progress on the
    conservation title.
        We should have the final EQIP rule out I would say at the
    latest by the end of next week. The final rule is prepared. It
    is a matter of getting it in the Federal Register. That is good
    news. Same with the grasslands and the farm and ranchland
    protection. Those are three that are just in the final stages
    of being published as the final regulations and that shows some
    good progress in terms of these programs.
        As Senator Harkin and I discussed the other day, the
    Conservation Security Program has been an enormously difficult
    one to implement because there was so much discretion left in
    the regulatory process that we have been trying to work out the
    best way to implement this. We went out with an advanced notice
    of proposed rulemaking and we got 4,500 comments. That is
    extraordinary. It is one of the highest we have ever gotten on
    any kind of request for public comment.
        We are in the process of putting together a proposed rule
    now. We will review all of these comments and try to
    incorporate them into this process and we certainly want to do
    this right. That is the most important thing. It is a brand new
    program. We feel strongly about doing the right thing and that
    is why we have taken the time to get this kind of public input
    through public meetings, and so forth.
        Let me just say on the Commodity Purchase Program--you
    expressed to me the other day, interest and thanks for the
    apple purchases. You also expressed interest in the asparagus
    purchase. I wanted to tell you that we have purchased asparagus
    this year, $6.3 million worth, so I just thought you would like
    to know that.
        Senator Stabenow. That is great and that would lead to my
    one other question, and I appreciate that, that you are doing
    that. When we look at specialty crops, fruits and vegetables,
    they are not covered by much in the Farm bill and the Commodity
    Purchase Program was something that we fought very hard to get
    in, the additional $200 million, not $200 million in total
    being spent every year but the additional $200 million, plus I
    might say the Conservation Security Program, which covers
    farmers on working lands and would cover specialty crops
    because they have not been covered in other areas. These are
    very important things for our fruit and vegetable growers.
        While we appreciate the recent purchases, overall I am very
    concerned that we have seen purchases go down. We are seeing
    that despite the fact that the Farm bill says at least $200
    million per year and in the actual report language it says,
    ``The managers intend that the funds made available under this
    section are to be used for additional purchases of fruits and
    vegetables over and above the purchases made under current law
    and that might otherwise be made without this authority,'' in
    fact, that is not happening.
        When we look at it, the 2002 USDA purchase was $189 million
    in fruits and vegetables through section 32 and it devoted, of
    course, $50 million to the DOD Project Fresh Program, which I
    support, which is very positive. When you added those numbers
    together, which barely met the goals of the Farm bill, but then
    went on to look at section 32 fruits and vegetables purchases
    in 2002 independent of the DOD $50 million, were far below the
    purchases from 2001 and from 2000. The total section 32 bonus
    and entitlement spending in 2001 was $263 million and $232
    million in the year 2000 and, in fact, again we are seeing
    these, in fact, go down.
        The purpose of the bonus program is to look at where the
    surpluses are. It is an effort to not only provide fruits and
    vegetables but to support those crops where they need the
    assistance in terms of surpluses.
        I am very concerned that we are not seeing the intent of
    this completed. There is a great deal of support and enthusiasm
    and, in fact, tremendous need in this area and this is the one
    area in the Farm bill, outside of the CSP, where we are really
    talking about helping specialty crops. I am very disappointed
    that this has not yet been fully implemented and I would like
    to know what your plan is to do that.
        Secretary Veneman. Well, let me first say that as of April
    of this year for the 2003 year, we have purchased--well,
    approved or pending approval of $135.9 million, which is well
    ahead of this time last year at $44.9 million. That is the
    significant difference from last year. Another $50 million has
    been approved for the DOD Fresh Program and we have an
    additional $251 million still available.
        We probably are much more on target than your numbers may
    have indicated and we are very aggressive in this program in
    terms of what we have available for spending in 2003 and the
    pace at which we are spending it.
        Senator Stabenow. You anticipate $251 million additional?
        Secretary Veneman. Is available for 2003.
        Senator Stabenow. You intend to----
        Secretary Veneman. Well, as you say, we have to have the
    surplus determinations and the demand for the purchase, and so
    forth, but that what remains available.
        Senator Stabenow. Thank you, Mr. Chairman.
        The Chairman. Thank you, Senator.
        Senator Lugar.

      STATEMNET OF HON. RICHARD LUGAR, A U.S. SENATOR FROM INDIANA

        Senator Lugar. Thank you, Mr. Chairman.
        Madam Secretary, I join all those in complimenting the
    department and your leadership in the sign-up situation. Our
    situation in the Lugar farm business is anecdotal. We have 15
    family members who are stockholders of a subchapter 5
    corporation, not an unusual thing with two generations of
    people and passing along the farm.
        What we have found are some unusual requirements; for
    instance, a power of attorney from each of the 15 people
    required so the farm manager can be designated to participate
    in various aspects of the program. Not an unusual requirement,
    I suppose, but as I take a look at all the farmers in Indiana,
    people have not been involved really in getting powers of
    attorney and going through these affidavits in this fashion,
    but they are doing so. It simply is another layer of difficulty
    for people there.
        Likewise, an affirmation on the part of all 15 of us that
    we do not have incomes of $2.5 million over a 3-year period of
    time. I was startled that this was a requirement of the Farm
    bill but nevertheless, we are all swearing that we have not had
    that kind of income in the last 3 years or historically ever,
    collectively.
        I mention this because here around the committee we bear
    responsibility for passing the bill that you have to implement
    and there is a staggering amount of this type of thing but
    eventually it will be worked through and we compliment those in
    the field who have that responsibility finally.
        What I want to know is at the end of the day as you are
    working through the conservation, the EQIP situation--I know
    Senator Harkin has already had these queries today and before,
    and others--what kind of back-up in terms of demand do you
    perceive? In other words, most people have not had at it yet in
    terms of getting into new conservation efforts or EQIP and I am
    wondering how many times the funds are spoken for. Do you have
    any idea of the backlog, the line there that after the rule
    happens and the window is open, what can you anticipate?
        Secretary Veneman. Senator, I appreciate your questions.
    Let me just say on some of the difficulties of implementation
    and sign-up of this farm bill. I know there was a tremendous
    amount of frustration on a number of issues, not the least of
    which was power of attorney because when I traveled around the
    country and I heard that. The fact of the matter is the power
    of attorney had not been updated since the 1980's.
        We were strongly advised that we needed, given the
    tremendous changes in this farm bill, to have powers of
    attorney updated because the landowners needed to have the
    opportunity to make decisions based upon what the new Farm bill
    did, and that is why the new power of attorney was required.
        My previous response to Senator Stabenow talked about how
    we are about to put out final regs on some of these
    conservation programs. Those are ready to be published in the
    Federal Register now and we continue to work on the CSP, but I
    am going to have our chief of the NRCS, Bruce Knight, address
    the backlog issue that you raised.
        Mr. Knight. Senator, specifically on EQIP, our latest
    estimates have about a $1.4 billion backlog for a program that
    we are announcing today will be a little over $600 million in
    available funding.
        Senator Lugar. About two and a half years at least as you
    look at it, at the same level of funding.
        Mr. Knight. Yes, that is correct. We will, however, no
    decisions will be made. Each of these applications will be
    ranked independently based on the environmental needs of that
    particular application and its success, so the wait list does
    not change the rank on how these determinations are made.
        Similar backlogs exist on the Farm and Ranchland Protection
    Program, the WHIP program. Nearly every one of these
    conservation programs have a backlog capacity behind them.
        Senator Lugar. You have a point scale depending upon the
    environmental circumstances, so you have a backlog but the
    candidates are rated according to the criteria that is in the
    legislation?
        Mr. Knight. That is correct. Those ranking processes look a
    little bit different from state to state. For this year, in the
    spirit of openness, we are going to be publishing the ranking
    processes for each of the states on the web so that every
    farmer and rancher who is actually applying for EQIP can look
    at the ranking and know precisely how best to fill out that
    application in order to be able to score as best as they can in
    the ranking process.
        Senator Lugar. Very good. How about the conservation
    backlog? Do you have any feeling on those programs?
        Mr. Knight. We do not have as much of a backlog in the Farm
    and Ranchland Protection Program. We are just about a week from
    closing the notice for applications. We expect tens of millions
    of dollars in backlogs on that one from the preliminary things,
    and the applications will be closing very quickly. We will have
    the same situation in the Wetlands Reserve Program, as well.
        Senator Lugar. Thank you very much, Mr. Chairman.
        The Chairman. Thank you, Senator Lugar.
        Senator Dayton.
        Senator Dayton. Thank you, Mr. Chairman.
        I will join with the others, Madam Secretary, in thanking
    you for your actions on the trade issues.
        Regarding EQIP, $600 million if I understood correctly, Mr.
    Knight, is that the amount for the entire fiscal year and you
    have $1.4 billion in backlog applications already? That means
    somebody making a current application would be considered in
    three fiscal years from now?
        Mr. Knight. Each one will be considered in this particular
    year and ranked accordingly.
        Senator Dayton. Those in the backlog, as well as the
    current applications?
        Mr. Knight. Those in the backlog, as well as the current
    applicants.
        Senator Dayton. That is the full amount of funding
    appropriated for this purpose on a pro rata basis, authorized
    for this purpose?
        Mr. Knight. The allocations were recently sent out to the
    states. Because of some of the technical assistance issues that
    were discussed there was a need to hold some of that back in
    order to be able to provide for the technical assistance for
    all the conservation programs.
        Senator Dayton. How much are you holding back?
        Mr. Knight. The amounts that are going out in total in
    technical assistance for EQIP is $145 million in technical
    assistance for that program.
        Senator Dayton. That is 20 percent of the amount for the
    fiscal years, $143 million? That is just under 20 percent. That
    is the amount that is necessary to be held back?
        Mr. Knight. The technical assistance for EQIP will run a
    little bit higher than 20 percent. It will be around 23
    percent.
        Senator Dayton. Is that typical?
        Mr. Knight. That has historically run a little higher than
    that and we are driving that down very rapidly, sir.
        Senator Dayton. If that is the amount, given the demand, if
    you are going to set aside 20 percent of it for technical
    assistance, that is an awful lot of money taken out of the
    program for advice. How much advice can people need? $4 for
    every dollar of technical assistance?
        Mr. Knight. The technical assistance involves a fairly
    lengthy list of work. It is the planning associated behind all
    of those contracts. Then on an individual contract it is the
    work associated with lay-out, design, all of those types of
    things.
        We are working as rapidly as we can to be able to bring
    those costs down. The advancement of today's technology and
    utilization of computers have helped a great deal in that. That
    is one of the reasons why we have been able to make any
    advancements----
        Senator Dayton. Is what you are calling technical
    assistance, is this administrative? This $143 million, to whom
    does that go? USDA?
        Mr. Knight. That is what is used under the direction in the
    statute for the technical assistance either for the assistance
    costs for running the agency in the implementation of these or
    to be able to utilize private consultants as deliverers of that
    technical assistance.
        Senator Dayton. You are taking 20 percent off the top of
    the program for your administrative costs and then the other 80
    percent goes to the program, to the farmers, and you are going
    to try to bring that down? When are you going to bring that
    down to something that is reasonable? That is an awfully high
    percentage to take away from the program.
        Mr. Knight. We are working as rapidly as we can and----
        Senator Dayton. Define to me as rapidly as you can. Is that
    something we should hold our breath about or are we talking
    about 10 years from now?
        Mr. Knight. We are moving very rapidly on that.
        Senator Dayton. What is very rapidly?
        Mr. Knight. Last year the technical assistance costs for
    the EQIP program hovered between 25 and 26 percent. This year
    we have that down to 23 percent and we will keep on driving
    those things down.
        Senator Dayton. Good. Thank you.
        One point I will just make, let me go on to the country of
    origin labeling, Madam Secretary. I am concerned and I want to
    echo Senator Daschle's comments and concerns. I hear from my
    producers that they are talking about--they think they are
    going to have to have an affidavit verified by three onsite
    inspectors and signed by the U.S. Attorney General that they
    are in this category or another, and the like.
        Also, as Senator Daschle said, some of these packers and
    the like are making this sound as draconian as possible and
    they are even trying to actually use, under the pretext of the
    program and whatever regulations you issue, to make it that way
    so that they can essentially punish farmers and probably punish
    some of us who supported it or whatever else.
        I just ask that you be explicit in your regulations as you
    formulate them what you are going to require and not, and that
    you not compromise the intent of it in any way but allow for
    some assumptions of good faith because if these kinds of
    documentation and verification in triplicate and the like that
    sometimes is foisted not by you but just by government in
    general, it is going to be crushingly unbearable for a lot of
    our producers.
        Secretary Veneman. Well, Senator, I really appreciate your
    concerns on this. The issues you are raising are exactly the
    kinds of issues that have come up in the process of trying to
    write the regulations for the mandatory program. That is why we
    decided to go out and get as much public comment as we possibly
    can.
        Senator Dayton. I commend you for doing so.
        Secretary Veneman. The statute is written in a way that
    puts the burden of proof onto the retailers and the packers, so
    it is the retailers and the packers that are now talking about
    what kinds of records they are going to require in order to
    meet that burden of proof. That is inherent in the statute. It
    is one of the issues that we need to discuss within the context
    of the statute. As I understand the law, it would not allow
    USDA to go in and verify the producers. That is a process that
    we would be verifying through the retailers and the packers
    according to the statute.
        Senator Dayton. Well, if they are going to interpret that
    as requiring the kind of proof that I indicated, they are going
    to--maybe they are out to destroy the program. If they are
    allowed to accept somebody's assertion even in writing that
    their product meets whatever those specifications, then if
    somebody is going to lie on that, that is another matter.
        Quickly because I am probably short of time here, we are
    taking up an energy bill right now and we are trying to get the
    rest of the country to understand what the potential is for
    ethanol and biofuels. I have a Ford Explorer now with an engine
    right out of the factory that can use E85, 85 percent ethanol.
        The president talked about hydrogen fuel and I respect that
    as a possibility for the future but we have something right
    before us now. It seems to me we have a chance to raise market
    prices so we can reduce the subsidies and increase the prices
    in the marketplace for these products.
        I guess I am asking is USDA taking a position on promoting
    these uses or what is your view on them?
        Secretary Veneman. Well, absolutely USDA has been very
    supportive of renewable fuels and the administration has been
    very supportive of renewable fuels.
        The President put together an energy task force very, very
    early in his term. One of the things that was explicitly talked
    about was the opportunities for renewal energy and the need to
    produce more sources of energy here at home. The President has
    been very supportive of ethanol. He did not grant the requested
    waiver for California, which was certainly giving the ethanol
    industry many more opportunities.
        In addition, the administration does support the renewal
    fuel standard that was proposed in the Senate energy bill. We
    have been very explicit about the administration's support for
    that provision.
        I might add that we continue to see increases in ethanol
    production. We expect to see about 10 percent of our corn
    produced this year going into ethanol production, which is very
    significant. We are very supportive of renewal energy and
    industrial opportunities for our farmers to get new ways to get
    access to the marketplace.
        Let me just say in response to your question about country
    of origin, we do have on the USDA Agriculture Marketing Service
    website some examples of some kinds of things that AMS has put
    together in terms of some of the documentation that can be
    considered for proving country of origin. I would invite people
    who have concerns to look the what has been listed there as
    some possible suggestions and certainly still open to public
    comment.
        Senator Dayton. Thank you, Madam Secretary.
        Thank you, Mr. Chairman.
        The Chairman. Thank you, Senator.
        Senator Leahy.
        Senator Leahy. Thank you, Mr. Chairman. I thank you and
    Senator Harkin for having this hearing.
        Secretary Veneman, I am glad to see you here. It has been
    sometime to be able to meet to discuss the Farm bill, so it is
    good to have you back and I know you tried reaching me. I tried
    reaching you back. I was down at Senator Long's funeral
    yesterday.
        It is not a very good year in Vermont for our Vermont dairy
    farmers. The price is something like $1.11 on milk. We had some
    relief by the MILC program, the Milk Income Loss Compensation
    Program so I would be interested in knowing what you are going
    to do on that.
        I am, as I notified you before, disappointed that the
    department has failed to implement the regional equity
    provisions of the Farm bill. That is one that provides a
    minimum level of conservation funding for every state.
        I will put my full statement in the record if I might, Mr.
    Chairman, but I would like to ask these questions.
        Now that the department is fully implemented the MILC
    program do you believe this program is a critical component of
    our response to crises in the dairy markets? What is your plan
    for improving the price of milk? I say that because the price
    of milk is now at a 25-year low.
        Secretary Veneman. Senator, we have, I believe, implemented
    the milk provisions as was designed by the Congress in the Farm
    bill. Dr. Collins addressed some of the dairy income issues
    earlier but I would ask him now to just repeat some of the
    economic conditions with regard to dairy and some of the things
    that we are looking at in the department.
        Mr. Collins. Senator Leahy, I agree with you that we looked
    at the April price of milk and indeed it is at a 25-year low
    for milk, so for right now we would certainly say that the Milk
    Income Loss Contract Program has been an incredibly important
    source of income for producers. The milk payment rate right now
    is running about $1.80 a hundredweight if you are eligible to
    get the full payment. That certainly helps restore some of the
    purchasing power for dairy producers.
        Regarding what we are doing to help the price of milk, it
    is simply trying to use to the best advantage the portfolio of
    tools we have available to us, which would include, of course,
    the MILC program, and we would expect that to continue for its
    life and that will provide a lot of income support to
    producers. We also have the on-going Milk Marketing Order
    Program, which helps about 70 percent of the nation's milk. We
    have the Dairy Export Incentive Program and we have used that
    to the fullest available for cheese and nonfat dry milk and for
    the first time since 1999 we have initiated it for butter this
    year.
        As I mentioned to an earlier question, we are also looking
    right now at our purchase prices for dairy products. We, of
    course, have established those prices but we are looking at
    those to ensure that we are taking account of perhaps any
    unique costs that manufacturers encounter when they have to
    produce a product to meet our specifications to make sure we
    are paying them enough to cover those perhaps additional things
    that they may have to do.
        We are trying to use all those tools to the best available
    advantage and the way Congress intended them.
        Senator Leahy. Well, doctor, I will look at the earlier
    testimony on this, too.
        If I might, Mr. Chairman, I may have a couple of questions
    for the record on this issue.
        The Chairman. I would be happy for you to submit those,
    Senator, and we will ask the Secretary to respond in a
    reasonable time.
        Senator Leahy. Thank you. I also note the Farm bill, when
    we wrote that, and this was a matter of some discussion both
    with the administration and among members, we put a strong
    regional equity provision for conservation funding in it. That
    was something worked out over a long-time negotiation. As part
    of that negotiation it was Senator Harkin and Senator Cochran,
    Senator Lugar and others. Under that, Vermont should have--and
    I realize it is almost unique for a parochial issue to be
    raised at a meeting of the Senate Agriculture Committee, but we
    should have received $12 million in conservation funding. We
    received only $8.6 million.
        Now I say this notwithstanding that is an increase of
    $100,000 over last year, but we increased nationally hundreds
    of millions of dollars in this program. We have been able to
    fund only 20 percent of our conservation applications, most
    notably EQIP in the past years, due to insufficient funds. The
    EPA regulations on large farms are coming. States like Vermont
    that have stepped up the provisions need it.
        Why can't we implement the regional equity provisions? We
    have all the applications and everything else. Can you use
    nonallocated conservation funds and immediately implement the
    regional equity language?
        Mr. Knight. One of the biggest challenges we face with
    putting more of this information up on the web and being more
    open on this is you are able to see exactly how the money has
    gone in your particular state and I knew full well you would be
    asking this question today, sir.
        The regional equity provision, as it was written in law,
    quite specifically asks us to look to ensure that we are
    implementing all these provisions in an equitable manner
    throughout the aspects of the bill and stated further that it
    had to apply to the provisions prior to April 1, and we are in
    the very difficult situation of this year, which will be very
    unusual, in that having had the late appropriations process,
    compounded by the late allocations process, we are very late in
    the year for being able to make those out, to be able to get at
    that program to be able to do as you had designed with the $12
    million.
        The program allocations are all constructed and designed by
    formula that attempt to be able to gather the resource needs
    for each of the programs. We have a different allocation
    formula that is used to design EQIP. That one, as a matter of
    fact, takes 29 different factors and it combines everything
    from acreage to----
        Senator Leahy. Before you get too far out there, the
    provision, as I understood it, required each state to receive
    at least $12 million in conservation funds by April 1. Now what
    is so difficult to understand that? I realize you may have
    applications and everything else, but why does not each state
    just get their $12 million to begin with? That money is there.
        Mr. Knight. The provision actually, sir, states that before
    April 1 of each fiscal year the Secretary shall give priority
    for funding on the conservation provisions of subtitle D--it
    goes on with those things--for approved applications if not
    received for the fiscal year in aggregate amount of at least
    $12 million for these conservation programs.
        There have been lawyers on each side of the issues who have
    advised whether it does, in fact, require that a minimum of $12
    million be spent on each of these states and this gets to some
    of the provisions we have had before--the debate of the
    differing legal interpretations.
        Senator Leahy. The interpretation seems to be that if you
    are in the so-called farm belt, you are going to get the money;
    if you are in the Northeast, you do not get the money. The flip
    side is if you are in the Northeast you pay the taxes to fund
    the programs.
        I am not trying to set up regional battles. I have
    supported those programs in the Midwest. It seems to me that
    any time we have something that seems to affect us, the
    Northeast, we are going to be asked for the tax dollars to pay
    for it but we do not get it.
        I am looking at the AMA funds, the Agriculture Management
    Assistance Programs. We all worked together to put that in
    because current crop insurance policies do not cover crops
    grown in the Northeast, could use these risk management funds,
    but now you have taken the AMA money for a new crop insurance
    subsidy. That is not going to benefit producers. We do not grow
    crops that you insure.
        We get a number of reasons. Penn here says that the
    regional equity language, he cited that as justification for
    redirecting it, the AMA funds. Now you do not implement it. We
    had 24 of the 30 senators who would be affected by it ask you
    to reinstate the old program. Are you going to reinstate the
    previous innovative program? You invested the money in
    traditional risk management programs.
        Again it is a case like you guys in the Northeast pay the
    bills but no matter how you write the Farm bill, no matter how
    many things you put in there to get a response into your part
    of the country, forget about it. I can't quite say it like my
    New York senators might say ``forget about it,'' but that is
    basically what happens. We get the bill, we send the check and
    wait for delivery.
        What are we going to do here? How many times do we have to
    rewrite the law?
        Secretary Veneman. Senator, I appreciate the concerns
    that----
        Senator Leahy. You know, I am a strong supporter of yours,
    Madam Secretary. I do not know what is happening here.
        Secretary Veneman. As I said, I appreciate your concerns
    and as Bruce Knight said, there have been some differing legal
    interpretations and I would be happy to have appropriate staff
    come and work with your staff to determine if we can work out
    some of these issues that are raising today, to determine how
    we can best address them.
        Senator Leahy. I wish you would because it not just a
    parochial thing to Vermont, although we are really getting
    shafted by it. Again it is a Northeast issue, and I am not
    trying to pit one region against the other. My record is such
    for 30 years that I have strongly supported other parts of the
    country, but this was specifically to balance some of the
    equities and I do not think we are getting it.
        With that, Mr. Chairman, I know you are pressed for time,
    too, and I will submit my other questions if I might for the
    record and I will take the Secretary up on her offer to have
    her folks meet with mine.
        Secretary Veneman. We will do that.
        Senator Leahy. I do appreciate your trying to reach me and
    am sorry we missed.
        The Chairman. Thank you, Senator.
        [The prepared statement of Senator Leahy can be found in
    the appendix on page 99.]
        Madam Secretary, the record is clear that you have led a
    gallant effort at the Department of Agriculture to
    expeditiously and with a degree of sensitivity that is very
    important implement this new writing of a farm bill and this
    hearing, as you observed in your statement, comes on the first
    year anniversary of the passage of that bill, the signing of
    the bill by the president, as a matter of fact.
        You had to hire temporary employees, over 2,000, to help
    staff the Farm Service Agency offices and undergo training to
    be sure they understood what their duties would be and how to
    carry those duties out in a responsible and sensitive way. It
    has been a massive undertaking and you have risen to the
    occasion and demonstrated a great deal of competence and good
    judgment in the process.
        I do not have any other questions. You have answered all
    the questions that have been put to you in a responsible way
    and the team you have with you--Dr. Penn, Mr. Knight, Dr.
    Collins--have done a commendable job, as well.
        Senator Harkin.
        Senator Harkin. Thank you, Mr. Chairman. I have some other
    questions which I will submit in writing. It has to do again
    with the Venture Capital Fund and why we cannot move in a more
    timely manner on that.
        The CRP was covered in terms of a possible--I appreciate
    your getting back to me on that--a possible extension of time
    on that. We have covered the other things here.
        There is one issue, Madam Secretary, that I want to bring
    up because I have been asked about it and it is important that
    we air it a little bit publicly here. That has to do with the
    reports that are coming out that the press somehow is being
    locked out of doing their job at the Department of Agriculture.
        President Lincoln called the Department of Agriculture the
    people's department and there a story that appeared in
    Feedstuffs and then there is another story that appeared in
    Congress Daily and there is another story that appeared in
    Agriculture about this and it has to do with obviously your
    press secretary, Alisa Harrison, advising three reporters, this
    one included--this is Sally Shift; I have not talked to her,
    Feedstuffs Washington editor--that the days of staking out
    closed press meetings in USDA buildings were over. She says in
    her report, ``It went like this. The three of us were in the
    lobby of USDA's Whitten Building on a stake-out of a closed
    door session''--I have a little problem with this I will tell
    you about--``a closed door session between high-ranking USDA,
    White House and U.S. Trade Representative officials and
    agriculture lobbyists on the thorny agricultural trade issues
    with Mexico. Stake-outs are reporters' traditional way to seek
    hallway interviews,'' as well we know up here, ``as
    participants emerge from government meetings.'' She went on to
    say that Harrison charged that our building passes only allowed
    us access to our offices.
        Now the report said here that she was standing out there
    and Harrison, ``Just as reporters finished talking with the
    lobbyist''--oh, I know. The lobbyists came out, evidently, of
    the meeting. Lobbyists were meeting with your people. It is
    reported that Under Secretaries J.B. Penn and Bill Hawks and
    Chief U.S. Trade Representative Allen Johnson had no problem
    answering her questions but just as reporters finished talking
    with the lobbyists Veneman and her press secretary Alisa
    Harrison talked in the front door of the building. The
    reporters said Harrison walked over to them and told them they
    must never stake out a meeting at USDA again. The reporters
    said Harrison threatened that if they do, she would revoke
    their building passes or call their editors.
        I am wondering what is the policy at the Department of
    Agriculture in terms of letting reporters stand outside of
    doors and go ahead and question people when they come out?
        Secretary Veneman. Well, Senator, let me first say that we
    try very hard to have a very open and accessible relationship
    with the press. We have done numerous press briefings. We try
    to be available to the press. We answer their questions when
    they call. We have a very unique situation in USDA in that we
    have a radio studio and a TV studio. We try to do as much as we
    can so that people can all listen in.
        Yesterday when we did the announcement on the EU biotech
    case we had that webstreamed on our web so that anybody
    anywhere that had access to the web could actually watch the
    entire press conference. Just first of all, I want to make it
    clear that we try to have a very open press relationship.
        The difficulty, as I understand it, that our press people
    have been trying to deal with is we are one of the few
    departments of government that has press actually in our
    building. Defense and State and the White House have press in
    the building. They are all relegated to certain areas. They do
    not have free access to the White House or to the State
    Department or the Defense Department in those cases. The
    concern is that we need some reasonable guidelines for the
    press access. They are invited to every public event. I
    certainly talk to them and others do in any public event
    setting. The issue is really private meetings.
        In the meeting you talk about it was with people interested
    in trade issues with Mexico. I would not necessarily have
    termed them all lobbyists, although I am sure some of them are
    registered. My understanding of that meeting was it was a
    briefing with the private sector with interests in some of the
    trade disputes we have with Mexico to get a direct briefing
    from Dr. Penn and Mr. Hawks and Ambassador Johnson following
    the meeting that they had in Mexico. We often brief private
    sector interested parties. We think that is an important thing
    to do.
        We also brief the press often and they certainly had access
    to our people to talk about the trip after Mexico, to talk
    about the issues that were discussed.
        Senator Harkin. Is this a departure? Is this a departure
    from past practice?
        Secretary Veneman. I have to tell you in all honesty until
    I read about this in the press, I did not know it had happened.
    My understanding of it is that it is an attempt to simply
    restate what the policy of the department has been, and that is
    we provide access at public meetings, we provide access that we
    think is responsible.
        Senator Harkin. I understand that but this has to be
    cleared up for your benefit and for ours, too.
        Secretary Veneman. I agree, Senator. I agree.
        Senator Harkin. Up here, because there is a concern here
    and we have to clear up one thing that was said in this story.
    I do not know. It said here that since you had just come in the
    door with Miss Harrison and she left from you to go to meet
    with these people, there is some thought that--oh, yes. ``The
    fact that Harrison was observed entering the lobby with
    Agriculture Secretary Ann Veneman moments before she confronted
    us only added to suspicions that her instructions came from the
    top.''
        Did you instruct Miss Harrison to go over and tell the
    reporters that they could not stake out any longer?
        Secretary Veneman. No, I did not. I did not even know she
    was going to talk to them. We walked in talking about something
    else.
        Senator Harkin. She did this on her own volition?
        Secretary Veneman. She did.
        Senator Harkin. Well, Madam Secretary, you really ought to
    review this. I have been around the department now for 28
    years, I guess, in and out, and I aware that reporters have
    been down there in the past, that they have access, which I
    have always thought was a very good thing.
        Again I am told that it is a departure from past practice
    on the access of these reporters with desks at USDA to the
    hallways, et cetera, that this is a departure. Again I would
    like to know why at this point in time are we making a
    departure from practices that have been going on for as long as
    I have been here and maybe longer? Why is there that departure?
    What happened?
        Secretary Veneman. Well, Senator, my understanding is that
    our press shop had tried to make reasonable guidelines, which
    generally are followed by representatives of the press. As I
    said, we have press people in the department, we have very good
    relationships with them and normally we do not have issues that
    arise coming out of these kinds of meetings.
        I have asked for a full review of this situation. I have
    asked for our folks to meet with the various members of the
    press to talk about exactly what the ground rules are.
    Obviously we need some ground rules in terms of the press
    accessibility since they do have access to the building and it
    is a unique situation in government. Most of the members of the
    press would agree that we need to have a common understanding
    of what the ground rules are, and that is what I have asked my
    people to do following this incident.
        Senator Harkin. Well, I hope you will keep us apprised of
    that. I have no problem. Obviously we have meetings up here,
    too, that are not open to the press. The press accepts that. As
    soon as you walk out the door, there they are and we have that
    all the time up here--in the hallways out here, the hallways in
    the Capitol building. We may have a meeting, a closed door
    meeting to discuss things for whatever reason now and then but
    as soon as we walk out into the hallway the reporters are there
    to ask us questions.
        I believe it is a legitimate function of theirs to be
    there, to get immediate responses from people that were in the
    meeting, to ask them questions. Obviously if I come out of a
    meeting and the press asks me a question I can demur; I can say
    I do not want to answer that, but then they get a report that I
    refuse to answer it, too. The public has a right to know these
    things and the press, no matter how much we praise them or
    despise them, they are our link to the public and we have to
    make sure that they have that kind of accessibility.
        I hope you do review this because I have been asked about
    this a couple or three times and the more I looked into it, the
    more I thought we had to air it here and get it out and
    hopefully you will review that and get back to us with what
    your policy would be down there.
        Secretary Veneman. Well, Senator, I absolutely agree with
    you about the important role of the press. One of the things
    that we try to do at the department, and as we discuss the Farm
    bill here today we could not have gotten the information out to
    the recipients of the programs without the farm broadcasters
    and the ag meeting writing the stories about the message that
    we were all trying to give about the dates for sign-up, what
    you need to do, where to get information, how to get on the
    website.
        I absolutely agree with you that our relationship and our
    dependence on particularly the ag media is very important.
        Senator Harkin. I appreciate that. I can only speak for
    myself, I would not propose to speak for any other senator, but
    look, we all have experience with stake-outs. The press is
    there and you come out of a meeting and we all have experience
    with that. Maybe it does make us uncomfortable once in a while
    but maybe that is the press's job, to make us uncomfortable
    once in a while, too. Thank you very much.
        Thank you, Mr. Chairman.
        The Chairman. Thank you, Senator.
        Madam Secretary, thank you again for your cooperation with
    our committee and the attendance at this hearing. I commend you
    and your staff for the excellent job you have done.
        [The prepared statement by Secretary Veneman can be found
    in the appendix on page 42.]
        The Chairman. There is no further business to come before
    the hearing. The hearing is adjourned.
        [Whereupon, at 4:22 p.m., the committee was adjourned.]

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

                       DOCUMENTS SUBMITTED FOR THE RECORD

                                  May 14, 2003

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

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

                             QUESTIONS AND ANSWERS

                                  May 14, 2003

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

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