[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
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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

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                                                                   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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                            A P P E N D I X

                              May 14, 2003



      
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                   DOCUMENTS SUBMITTED FOR THE RECORD

                              May 14, 2003



      
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                         QUESTIONS AND ANSWERS

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