    [Senate Hearing 109-283]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 109-283

     NOMINATION HEARING OF CHARLES F. CONNER TO BE DEPUTY SECRETARY, U.S.
                           DEPARTMENT OF AGRICULTURE

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

                                    HEARING

                                   before the

                           COMMITTEE ON AGRICULTURE,
                            NUTRITION, AND FORESTRY

                              UNITED STATES SENATE

                           ONE HUNDRED NINTH CONGRESS

                                 FIRST SESSION

                                   __________

                                 APRIL 6, 2005

                                   __________

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

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               COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY

                       SAXBY CHAMBLISS, Georgia, Chairman

    RICHARD G. LUGAR, Indiana            TOM HARKIN, Iowa
    THAD COCHRAN, Mississippi            PATRICK J. LEAHY, Vermont
    MITCH McCONNELL, Kentucky            KENT CONRAD, North Dakota
    PAT ROBERTS, Kansas                  MAX BAUCUS, Montana
    JAMES M. TALENT, Missouri            BLANCHE L. LINCOLN, Arkansas
    CRAIG THOMAS, Wyoming                DEBBIE A. STABENOW, Michigan
    RICK SANTORUM, Pennsylvania          E. BENJAMIN NELSON, Nebraska
    NORM COLEMAN, Minnesota              MARK DAYTON, Minnesota
    MICHEAL D. CRAPO, Idaho              KEN SALAZAR, Colorado
    CHARLES E. GRASSLEY, Iowa

                Martha Scott Poindexter, Majority Staff Director
                    David L. Johnson, Majority Chief Counsel
                  Steven Meeks, Majority Legislative Director
                          Robert E. Sturm, Chief Clerk
                    Mark Halverson, Minority Staff Director

                                      (ii)

                                C O N T E N T S

                                  ----------
                                                                       Page

    Hearing(s):

    Nomination Hearing of Charles F. Conner to be Deputy Secretary,
      U.S. Department of Agriculture.................................    01

                                  ----------

                            Wednesday, April 6, 2005
                        STATEMENTS PRESENTED BY SENATORS

    Chambliss, Hon. Saxby, a U.S. Senator from Georgia, 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..............    04
    Leahy, Hon. Patrick, a U.S. Senator from Vermont.................    03
                                  ----------

                                   WITNESSES

    Conner, Charles F., Nominee to be Deputy Secretary, U.S.
      Department of Agriculture......................................    05
    Lugar, Hon. Richard G., a U.S. Senator from Indiana..............    03
                                  ----------

                                    APPENDIX

    Prepared Statements:
        Letters to Senator Saxby Chambliss and Senator Tom Harkin....    26
        Conner, Charles F............................................    30
    Document(s) Submitted for the Record:
        Conner, Charles F. (Biographical Information)................    34
    Questions and Answers Submitted for the Record:
        Baucus, Hon. Max.............................................    92
        Crapo, Hon. Mike.............................................    95
        Harkin, Hon. Tom.............................................    96
        Roberts, Hon. Pat............................................   101
        Salazar, Hon. Ken............................................   103
        Talent, Hon. James...........................................   106

    NOMINATION OF CHARLES F. CONNER TO BE DEPUTY SECRETARY, U.S. DEPARTMENT
                                 OF AGRICULTURE

                                  ----------

                           WEDNESDAY, APRIL 6, 2005,

                                          U.S. Senate,,
            Committee on Agriculture, Nutrition, and Forestry,,
                                                        Washington, DC.
        The committee met, pursuant to notice, at 9:17 a.m., in
    room 328-A, Russell Senate Office Building, Hon. Saxby
    Chambliss, chairman of the committee, presiding.
        Present or submitting a statement: Senators Chambliss,
    Lugar, Talent, Coleman, Harkin, Leahy, Conrad, Baucus, Lincoln,
    Nelson, and Salazar.

    STATEMENT OF HON. SAXBY CHAMBLISS, A U.S. SENATOR FROM GEORGIA,
      CHAIRMAN, COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY

        The Chairman. Good morning. We are here today regarding the
    nomination of Chuck Conner to be Deputy Secretary of
    Agriculture.
        Mr. Conner is no stranger to this committee. From 1980 to
    1985, he served as Senator Lugar's agricultural aide. From 1985
    to 1987, he was a professional staff member with the Senate
    Agriculture Committee. From 1987 to 1997, he served first as
    Minority Staff Director, then as Majority Staff Director of
    this committee.
        I will have to say, just from a personal perspective,
    having served in Congress for 10 years, I have known Chuck for
    basically all of those 10 years, and Senator Lugar, you made an
    excellent choice when you chose Chuck Conner to join your
    staff. He is certainly someone who has extensive knowledge of
    agriculture and of our programs and has been a very good person
    to work with over the years.
        Mr. Conner was President of the Corn Refiners Association
    from 1997 to 2001. Since 2001, he has been the Special
    Assistant to the President for Agricultural Trade and Food
    Assistance.
        Mr. Conner is accompanied today by his wife, Dru, and their
    four children, Katie, Ben, Andrew, and Emily. We are pleased to
    have all of you with us. Also in attendance today are Chuck's
    brother, Mike Conner, and his sister-in-law, Sally Lindsey.
    Welcome to each of you.
        Senator Harkin is not here yet, but we will give him an
    opportunity to make any comment he wishes to when he comes in.
        I want to let you all know what we are going to do this
    morning. Because of the Joint Session later this morning, I
    will ask my colleagues either to submit their opening
    statements for the record or present them during the first
    round of questioning. We have the session at--I believe we need
    to be on the floor at 10:30, so we are going to try to move
    this along, and that is our reason for bumping up the time
    table.
        With that, I would like to turn to Senator Lugar for an
    introduction of Mr. Conner. Senator Lugar.

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

        Senator Lugar. Thank you very much, Mr. Chairman. This is
    an especially high moment for me and I am grateful to have this
    opportunity to introduce to my fellow members Chuck Conner. He
    is a true friend of American agriculture and certainly a loyal
    friend of mine.
        Almost 20 years ago, Chuck Conner was a young member of my
    staff, was with me when former Secretary of Agriculture John
    Block visited our farm and announced the first Conservation
    Reserve program. It is fitting that both Chuck Conner and the
    Conservation Reserve have matured during that generation into
    pillars of American agriculture, in my judgment.
        He began working for me, as you have mentioned, Mr.
    Chairman, in 1980 in my personal office as a legislative
    assistant handling agricultural issues. Chuck was always in
    tune with agricultural issues on a national level, but more
    importantly, he understood the issues farmers were facing and
    that he faced in the fields of Indiana. In fact, he grew up on
    one of those Indiana farms in Benton County, was an active
    participant in the family's 1,100-acre corn and soybean farm,
    and paid for his college education at Purdue University by
    starting his own hog operation that I believe blossomed to
    nearly 20 registered Chester white sows.
        Chuck combined this formative experience and his Bachelor
    of Science work in agricultural economics at Purdue just prior
    to coming to Washington to serve on my staff. Subsequently,
    Chuck has been an integral figure in forming Federal
    agricultural policy. While working with me as a member of the
    staff and later as the staff member and Staff Director of this
    committee, Chuck helped usher forward farm bills through the
    Senate, including the 1996 FAIR Act that ended 60 years of
    Federal reduction controls. Chuck's work in the Senate can be
    seen in moving American agriculture to a more free market
    system, thoughtfully making the USDA more efficient, making
    food safer, reforming the farm credit system, updating
    commodity futures laws, and preserving and improving our
    nation's child nutrition laws.
        Chuck later played important roles in policy development as
    President of the Corn Refiners Association, and most recently
    as President Bush's Special Assistant for Agriculture.
        I have had the distinct pleasure of witnessing Chuck
    succeed in each of these professional pursuits. More
    importantly, my wife Charlene and I have also enjoyed watching
    Chuck marry another Hoosier who also worked in my office. His
    wife, Dru, is with us today. They have done a tremendous job in
    raising their four children, Katie, Ben, Andrew, and Emily.
        Chuck has always possessed sound character, an ability to
    work in a bipartisan manner to improve our nation's food and
    fiber infrastructures. As both a farmer and Senator on this
    committee, I am confident that Chuck will serve our nation
    superbly as Deputy Secretary of Agriculture at the United
    States Department of Agriculture.
        I thank you, Mr. Chairman, for allowing me to make this
    statement. I will ask your leave in a few minutes to go do my
    duty on the floor as we proceed with the other responsibility I
    have in foreign relations. There will be a vote probably about
    10:10, so this may influence the work of the committee
    likewise. Thank you.
        The Chairman. Thank you, Senator. We appreciate your
    continued strong leadership as a member of this committee. I
    just received that same information, that there is a vote on
    your bill at about 10 this morning. I will just say, too, there
    is a possibility we may not finish until after the speech of
    President Yushcenko. If we are not finished, we can come back
    and we will resume the hearing.
        Senator Leahy had a quick comment.

      STATEMENT OF HON. PATRICK LEAHY, A U.S SENATOR FROM VERMONT

        Senator Leahy. I do, Mr. Chairman, and I appreciate it. I
    couldn't help but think, I was talking with Chuck Conner
    earlier and it feels like old times with Dick Lugar and myself
    and Chuck. I have known him for a lot of years. The President
    could not have made a finer choice. He really could not have
    made a better choice for the No. 2 slot at USDA.
        I know during the time he worked for Senator Lugar and
    worked with this committee, part of the time I was chairman,
    part of the time Senator Lugar was chairman, and we all
    benefited by his good judgment. I told him today he has that
    facility, which very much reflects Senator Lugar, that he
    always kept his word, and it made our life a lot easier as a
    result.
        It was in 1990, we did a farm bill in about a week, a 5-
    year farm bill that had taken, 5 years before, had taken seven
    or 8 weeks, but because we could work together, we worked out
    probably 95 percent of the Farm bill by consensus and a lot of
    that is because of the great work that Chuck was doing.
        I know there are going to be a lot of challenges ahead. I
    want to commend you, Mr. Chairman, for your effort to protect
    the programs. A lot of them are facing funding cuts. I know you
    have been working with Chairman Gregg on that. Obviously, I
    wish we didn't have any cuts, but we are in far better shape
    because of the work you are doing.
        Chuck Conner and I talked earlier about some of the feeding
    programs. It has been a hallmark, a bipartisan hallmark of this
    committee from the time of Dole-McGovern to Dole-Leahy to
    Lugar-Leahy, feedings programs that have gone through here. It
    has worked very, very well.
        We will have questions on the MILC program here. Chuck
    knows well there have been divergent views on dairy in this
    committee. We have found something we can bring a lot of those
    views together.
        Frankly, Mr. Chairman, your leadership is going to be very
    helpful to us, but you are going to be helped by having such a
    consummate professional at USDA. I compliment the Secretary. I
    compliment the President. I hope that doesn't hurt you, Chuck--
    --
        [Laughter.]
        Senator Leahy [continuing]. I compliment you all for this,
    and I thank you, Mr. Chairman. I will put my full statement in
    the record.
        The Chairman. Thank you.
        The Chairman. Before I turn to Mr. Conner, let me say that
    we received a letter this morning addressed to Senator Harkin
    and myself from over 60 commodity groups that are in support of
    the nomination of Chuck Conner for this position.
        [The letter can found in the appendix on page 26.]
        Senator Leahy. Also, Mr. Chairman, if you do reach a point
    where you are going to be voting, you have my proxy to expedite
    this in any way you can.
        The Chairman. Thank you.
        Senator Harkin, we are just getting ready to turn it over
    to Mr. Conner, but if you prefer to go ahead and make a
    statement, we will let you go ahead, whatever is your
    preference.
        Senator Harkin. Thank you, Mr. Chairman. I apologize for
    being late to the committee.
        The Chairman. Senator Harkin.

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

        Senator Harkin. I will put my whole statement in the
    record. I won't burden you with reading the whole thing, but
    again, just to welcome Chuck Conner here, to congratulate him
    on his nomination to serve as Deputy Secretary.
        Obviously, I first met Chuck when I came here in 1985 when
    he was with Senator Lugar and we have had a great relationship
    ever since. I can say without any hesitation or any fear of
    contradiction that any time that we worked on farm legislation
    in the 1980's--we had some pretty tough bills in those days, on
    the credit bill that we passed, Chuck was working on that--on
    through the 1990's, every time we had any dealings, Chuck was
    always there, open, above board, willing to work with us, just
    a great person to work with.
        Then I followed him through his work in the administration
    on the last Farm bill when I was privileged to be chairman for
    a brief shining moment and Chuck was representing the White
    House and we had a great relationship. We got the Farm bill
    through in a great bipartisan manner and had a great signing in
    the White House.
        I just say that in the 20 years I have known Mr. Conner,
    Chuck Conner, I can say that he is an outstanding individual,
    someone I admire greatly, someone who knows agriculture, cares
    about rural America deeply, and I just congratulate him on this
    new position, look forward to working with him, and hope we can
    expedite this, Mr. Chairman, and get him confirmed as soon as
    possible.
        Thank you, Chuck, for so many years of service to this
    committee, to agriculture, and to our country.
        The Chairman. Thank you, Senator.
        Chuck, before we ask you to testify, would you please stand
    and let me swear you in.
        Do you swear or affirm that the testimony you are about to
    provide is the truth, the whole truth, and nothing but the
    truth, so help you, God?
        Mr. Conner. I do.
        The Chairman. There is one question we need to ask you for
    the record, before you make any comment. Do you agree that you
    will appear before any duly constituted committee of Congress,
    if asked to appear?
        Mr. Conner. I will, Mr. Chairman.
        The Chairman. Thank you very much, and we look forward to
    your comments.

    STATEMENT OF CHARLES F. CONNER, NOMINEE TO BE DEPUTY SECRETARY,
                     U.S. DEPARTMENT OF AGRICULTURE

        Mr. Conner. Thank you. Mr. Chairman, Senator Harkin,
    members of the committee, I am grateful to the Committee on
    Agriculture. Thank you, Mr. Chairman, also for promptly
    scheduling this hearing to consider my nomination. I am humbled
    and honored to have been nominated to serve President Bush in
    this way.
        I want to begin my opening statement by thanking the man
    who is responsible for many of my professional successes.
    Senator Lugar, as most of you know, has had a profound impact
    on my life. You will note from my information that I was only
    22 years old when Senator Lugar took a chance and offered a
    farm boy from Indiana the opportunity to come to Washington to
    work on food and agricultural policy. On the day that I started
    working for Senator Lugar, I left behind tearful relatives in
    Indiana and flew on an airplane for the first time and traveled
    to Washington, DC. My life would never be the same, and the
    next 17 years were some of my very best. Senator Lugar, you
    have modeled for me a life of integrity and decency in public
    service, and for that, I will always be grateful.
        Senator Lugar, as he mentioned in his opening statement,
    has had a large impact on my personal life, as well. He also
    gave an opportunity to a young woman from Fort Wayne, Indiana,
    to work in his office. My wife, Dru, and I met and were married
    while working for him and I will always be grateful to him for
    providing me that opportunity to meet my wife, and, of course,
    now to have our four terrific children who are here with me
    today.
        Mr. Chairman, if confirmed by the Senate and by this
    committee, I want you to know that I will be guided by my
    experiences that have helped to shape my professional career
    over the last 24 years.
        I have seen this committee through many leadership changes.
    Herman Talmage, a Democrat from Georgia, was the chairman of
    this committee when I started working here in 1980. Senators
    Lugar, Cochran, and Leahy, I believe, are the only members
    still serving from those days. The issues have changed
    somewhat, but one thing that has not changed is the fact that
    this committee continues to accomplish great things through
    bipartisanship efforts.
        During my tenure as Staff Director of this committee, I
    hope, Mr. Chairman, that I demonstrated my desire and ability
    to work with both sides of the aisle. We may disagree, but we
    can debate those disagreements knowing that each participant
    has a common goal, the goal of promoting the welfare and
    interest of the farmers and ranchers of this great land and
    those who produce the products that sustain us. That is a value
    shared by Secretary Johanns and President Bush. If confirmed by
    this committee and the full Senate, I pledge to you that I will
    continue to make every effort to work with both sides of the
    aisle and to reach out to all regions of the country.
        Second, my firsthand experiences have developed in me an
    appreciation of the honor and importance of production
    agriculture. I grew upon a family farm. I watched my father
    toil every day of his life just to provide a modest living for
    his family. If confirmed, I will be an advocate for the farmers
    and ranchers. The farmers and ranchers who provide an abundance
    of low-cost food and fiber for this country and others around
    the world should be given the opportunity to earn a decent
    living for their family. This applies to the farmers and
    ranchers of Georgia, Mr. Chairman, North Dakota, Vermont,
    California, wherever the case may be, and including, of course,
    the farmers and ranchers of Indiana.
        Third, I believe we must do everything we can in order to
    keep a competitive advantage around the globe for U.S. farmers
    and ranchers. This principle means that, just like President
    Bush and Secretary Johanns, I am firmly behind our trade
    negotiations and their efforts to reduce tariffs and duties on
    our agricultural exports. It is difficult to remain competitive
    if big duties must be paid in order to export. I believe this
    can be done in an environmentally sensitive manner by using
    incentive-based programs, many of which are targeted at working
    lands. To remain competitive, we also must utilize our strong
    agricultural research system, which I am a strong advocate of,
    and must get this information into the hands of our producers.
        Mr. Chairman, my experiences on this committee have not
    been limited to farm programs. The late 1980's and early 1990's
    were difficult years for American agriculture. The senior
    Senator from Vermont, Senator Leahy, was the chairman of the
    committee during many of those years and we faced difficult
    challenges. We tackled issues like rescuing the Farm Credit
    System, promoting conservation programs, providing a safety net
    for the poor, reorganizing the U.S. Department of Agriculture,
    managing our National Forest System, and strengthened our rural
    development programs, and many others. All were priorities of
    the chairman and ranking member, and it has gone a long way
    toward preparing me for the awesome responsibility that awaits
    me if I am confirmed by this committee.
        I close, Mr. Chairman, by simply thanking the members of
    this committee, past and present, for your help in preparing me
    for this job. If confirmed by this committee and the U.S.
    Senate, I can assure you that I will work hard to earn your
    support and respect and to live up to the standards exemplified
    by the members of this committee.
        Thank you, Mr. Chairman, and I would be happy to answer any
    of your questions.
        The Chairman. Chuck, thank you very much for that fine
    opening statement.
        [The prepared statement of Mr. Conner can be found in the
    appendix on page XX.]
        The Chairman. Traditionally, the Deputy Secretary has acted
    as the day-to-day Chief Operating Officer of the Department.
    What management skills area would you bring to that aspect of
    the Deputy's job?
        Mr. Conner. Mr. Chairman, one of the responsibilities that
    came upon us in the late 1980's and early 1990's was
    legislation that was proposed by this committee to actually do
    what was regarded as probably the most comprehensive
    reorganization of the management structure of the Department of
    Agriculture. This, as you can imagine, was a very controversial
    piece of legislation. Any time you are talking about changes,
    changes in offices, perhaps even relocating or collocating
    offices, as was the case, these are very controversial matters.
        Over the course of a long period of time, we successfully
    produced legislation that both Senator Lugar and Senator Leahy
    championed, had broad bipartisan support, and really is the
    framework of the existing Department of Agriculture as we know
    it today. Certainly, that was a big training ground, if you
    will, for my understanding of the structure of the Department
    of Agriculture, how the management system works within that
    agency.
        Just generally over the years, many, many experiences have
    prepared me for this job. Most of all, Mr. Chairman, what
    prepares me for this job is the heart that I have for the
    American farmer and rancher, and that is basically what the
    agency has, as well, and whether it is career people, political
    people, they serve at USDA because they want to promote the
    welfare and interest of the farmers and ranchers.
        We are going to get along well. There are many, many fine
    professional people over at USDA whom I have worked with for
    many years. I look forward to working with them, as well, in
    this capacity.
        The Chairman. One frustrating area for this member has been
    the lack of communication with the administration relative to
    agricultural issues, and no greater point on this can be made
    than the recent issue relative to the budget. I don't know of
    any member of this committee who had any dialog of any sort
    with the administration prior to that budget coming out, and
    that is very frustrating to us because it has to be a team
    effort, particularly on something as sensitive as the budget.
        What level of communication do you think is necessary, and
    if we are going to improve that dialog, how do you intend to
    improve the relationship from a communications standpoint
    between the Hill and the administration?
        Mr. Conner. This is an area, Mr. Chairman, that I know Mike
    Johanns and I want to focus upon a great deal, and the current
    Secretary has already done a great deal to promote that
    increase in communication. The Secretary is quick to pick up
    the phone to call. I certainly know that he is quick to respond
    to your requests and is eager to do so, and certainly, Mr.
    Chairman, I am going to be that way, as well.
        I want to work with this committee, obviously. If it is not
    clear from my opening statement, I regard this committee as my
    home in many ways, professionally speaking, and it would give
    me no greater pleasure than to have a very close working
    relationship with this committee, with the House Agriculture
    Committee, where I have many colleagues whom I have worked with
    for many years. I just can't imagine attempting to run the
    Department without that close working relationship.
        The Chairman. You alluded to this in your opening
    statement, but let me just ask you again. We live in a country
    that is very large and very diverse and we are blessed with a
    variety of soil and climatic conditions that allows us to
    produce a wide range of food and fiber products. Different
    parts of the country face different challenges and have
    different histories and needs. New England dairy farmers face
    issues that are different from Midwestern corn and soybean
    farmers or Western cattlemen or Southern cotton producers.
        Do you agree that there are regional differences in
    American agriculture and that the government programs should
    not attempt to penalize any region of the country?
        Mr. Conner. I agree with that statement, Mr. Chairman. I
    will openly acknowledge to you that perhaps my knowledge of the
    agricultural commodities in this country outside of what I grew
    up with, which were corn, soybeans, wheat, cattle, hogs, those
    kinds of issues, my knowledge of those perhaps came the hard
    way, sitting around this committee. It probably began in 1985
    when I actually became a professional staff member on this
    committee and Senator Jesse Helms was chairman of this
    committee at that particular time and I had to learn in a hurry
    about tobacco----
        [Laughter.]
        Mr. Conner [continuing]. Peanuts and issues like that. I
    believe I have done so. Obviously, when Senator Leahy, and the
    relationship we had with him during all of those years, Vermont
    agriculture was very, very unique, as well, in that situation.
    I may have a few lumps and bruises over the years, but I
    believe my 24 years has given me a hearty understanding of just
    how broad and diverse American agriculture really is.
        The Chairman. From personal experience, having a keen
    interest in tobacco and peanuts myself----
        [Laughter.]
        The Chairman [continuing]. You learned well, Mr. Conner.
        Mr. Conner. Thank you, Mr. Chairman.
        The Chairman. You have always been very knowledgeable and
    very helpful to this member as a member of the House as well as
    over here.
        With that, I will turn to Senator Harkin.
        Senator Harkin. Thank you very much, Mr. Chairman.
        Again, Chuck, congratulations on this appointment. I look
    forward to working with you. I just have a couple of things I
    want to cover with you.
        Back in 2001 and 2002, when you were representing the White
    House, you were engaged in the Farm bill negotiations quite
    intimately. One that I know that you were engaged in was the
    energy title because we came up with a new energy title for the
    first time. We discussed this at length and it received pretty
    broad bipartisan support, to put an energy title in the Farm
    bill.
        In that title, as you will recall, there is a provision,
    Section 9002, that requires all Federal agencies and
    departments to purchase bio-based products identified by USDA
    as long as they are reasonably equivalent in price,
    performance, and availability. It is a very simple title, 9002,
    but this is a very vital but often unheralded provision that
    will greatly benefit American agriculture, help drive rural
    economic development, wean our country off foreign sources of
    oil, and provide tangible environmental benefits.
        Now, that is in the bill. That doesn't just say the
    Department of Agriculture. It says all Federal departments and
    agencies, from the Department of Defense to Department of
    Interior to everything else shall--it doesn't say may--shall
    give a preference to bio-based products in their purchasing as
    long as they are equivalent in price, performance, and
    availability.
        Well, not much has happened. Last year, I asked GAO for a
    study on this to see what had happened. About a year ago, it
    came out with a pretty scathing, I thought, indictment of the
    USDA for not doing anything on this. Still to this date, we
    still don't have any action from USDA. Not one product has been
    designated for purchase after all this time, and yet the
    language is very clear. It says, ``shall give a preference.''
    This wasn't something slipped in. This was discussed. People
    thought this was a great way to start getting the Federal
    Government to be a purchaser of these products.
        Now, about a year ago about this time, President Bush was
    in Iowa and I had the privilege of riding in the car with him
    and I talked about this with him and he became quite intrigued.
    I didn't expect him, obviously, to know about it. He doesn't
    know about all these little things in the bill. He called a
    staff person over, whose name I don't know, and said, ``Talk to
    Harkin here about this.'' He talked about it and he took some
    notes, but not much has happened.
        It has been very frustrating for some of us who worked hard
    on the energy title to see that provision there, to see the
    great purchasing power of the Federal Government. I remember I
    told President Bush, he said, ``Well,'' he said, ``we are for
    ethanol.'' I said, ``It has nothing to do with ethanol.'' He
    said, ``What are you talking about?''
        He was drinking water out of one of these little plastic
    cups. I said, ``Mr. Chairman, how many of those plastic cups do
    you think the Department of Defense buys every year, just the
    Department of Defense?'' He said, ``Obviously a lot.'' I said,
    ``Well, that is what we are talking about. There is a plant
    right north of Omaha, Nebraska, right now, Dow Cargill, makes
    these cups out of biodegradable starch. McDonald's is buying
    them. If McDonald's can buy them, certainly the Department of
    Defense could buy them.'' Well, that got his interest. That is
    when he called the staff guy over and had him talk to me.
        I just want your thoughts as Deputy Secretary, since you
    will be operating the day-to-day operations, to make this
    program a high priority. Specifically, will you work to get the
    first rules designating items for purchase published in the
    Federal Register and effective as soon as possible?
        Mr. Conner. I will, Mr. Chairman, or Senator Harkin. I
    acknowledge to you this is a mandate in the Farm bill, and I
    will also acknowledge to you that it has probably taken us too
    long to get this in place. I can't recall the precise
    timeframe, Senator Harkin, but we are moving and getting closer
    on this----
        Senator Harkin. Good.
        Mr. Conner [continuing]. We can expect some action on this
    relatively soon.
        Senator Harkin. Great.
        Mr. Conner. I can assure you, though, that if confirmed and
    I get over there, that we will get this done because it is a
    mandate of the Farm bill and it should be done.
        Senator Harkin. I appreciate that very much. You can see
    why I am a fan of Chuck Conner's. He is straightforward. He
    just says it right the way it is.
        [Laughter.]
        The Chairman. He said what you wanted.
        Senator Harkin. He is just straightforward. He doesn't beat
    around the bush.
        The second thing, with your indulgence, and you knew I was
    going to ask about this, the Conservation Security Program.
        Mr. Conner. I did know that.
        Senator Harkin. You knew I was going to get to that, right?
        [Laughter.]
        Senator Harkin. Participation in the first CSP sign-up was
    much lower than NRC has expected. This year, with 220
    watersheds, there will be much less money per watershed from
    the contracts, and the President has proposed even less money
    for new contracts next year. Again, I am concerned that the
    Conservation Security Program as enacted in the 2002 Farm bill
    is being eroded by restrictive rules and limited funds. Again,
    we designed a program. It was supported across the board. We
    walked into this with eyes open and we knew what we were doing.
    Compromises were made. Agreements were made in the Farm bill.
    The President, when he signed the Farm bill, Chuck, as you
    remember, touted loudly the conservation provisions in that
    Farm bill when he signed it. This program was intended to be
    attractive to producers that would generate significant and
    lasting conservation benefits from widespread participation.
        I would just, again, like your commitment that USDA will
    help achieve the original program objectives of the
    Conservation Security Program.
        Mr. Conner. Senator Harkin, you are correct. I did
    anticipate this question a little bit, and you and I have had a
    few conversations about this since the Farm bill. I recall,
    Senator Hark, I believe it was actually the very first meeting
    that I had when I came to the White House was with you early in
    that Farm bill stage and you, for the first time, shared with
    me some of the thoughts that you were looking at with regard to
    the Conservation Security Program.
        As I told you then and I continue to feel, Senator Harkin,
    I am intrigued by this concept. I believe we--this is something
    we need to give full attention to, because I believe the notion
    of providing some financial help to producers, but at the same
    time, too, making that help based upon the conservation
    activities that they are putting in place on that farm, is a
    long-term sustainable, if you will, farm program that I have a
    lot of personal interest in.
        Now, having said that, I know that the first sign-up did
    not go as well as the Senator would expect. I guess I was
    pleased that we were able to go forward with the sign-up,
    because as I have told you before, it probably took us too long
    to get to the stage of that first sign-up because it does seem
    like we passed the Farm bill quite some time ago, and I
    recognize that as I told the Senator when we met several months
    ago.
        Some of that reason for delay, in this case, I won't put
    all of that upon the backs of the people at USDA because there
    have been a lot of legislative changes to the Farm bill since
    its enactment dealing with this particular program, and I know
    the Senator would have preferred those changes not happen, but
    nevertheless, there are--those are significant changes that
    were more than just dollar changes. They did, in order to
    achieve the amount of money that Congress had allocated, they
    required a different type of program, perhaps, than had we not
    had those kind of budget limits.
        Now, we are working very, very aggressively on this,
    Senator Harkin, and I know Mike Johanns has jump-started this
    again after his process. We do have another rule out for
    comment. I can't really go into the details, obviously, of that
    comment, but I will just say we are improving our outreach as
    reflected in this rule and getting input from the
    organizations, the farm organizations and the conservation
    community to make this a better program and perhaps do better
    than we did in that first sign-up for you.
        Senator Harkin. I appreciate that, Chuck----
        Mr. Conner. It is, again, our full intent to get this thing
    up and running well.
        Senator Harkin. I appreciate that very much.
        Again, Mr. Chairman, it was not right that the Congress pay
    for disaster assistance by invading the Farm bill. Disasters
    are emergencies. I have said that many times on the floor and I
    continue to say that. We shouldn't penalize Florida because a
    hurricane hit, or Georgia. Sometimes hurricanes hit Georgia,
    too, I guess. We shouldn't penalize Kansas because a tornado
    has hit or something like that. These are natural disasters and
    emergencies.
        We have never before ever invaded the Farm bill to pay for
    a disaster until, what, 2 years ago? Until 2 years ago, the
    first time. It was a mistake then. It was a mistake last year
    to do it again. Those of us on Agriculture have really got to
    pull together and just not allow this to happen again. It is
    wrong and it should have never been allowed to happen, and that
    is what you are referring to Mr. Conner, in terms of the
    changes legislatively that caused this program to be disrupted.
        Hopefully, it will not be happening in the future and we
    can restore the program again to what it was in the Farm bill.
    Both the former chairman, Senator Cochran, and others have
    stated on the floor, it is in the record, that this program
    should be reinstated to operate as was intended in the Farm
    bill for the duration at least of this farm bill. Now, if the
    committee wants to change it when the next Farm bill comes up,
    well, then that is fine, but it shouldn't be changed in between
    that.
        Thanks very much, Mr. Conner. Thanks for your indulgence,
    Mr. Chairman.
        Mr. Conner. Thank you, Senator Harkin.
        The Chairman. Senator Conrad.
        Senator Conrad. Thank you, Mr. Chairman. It is good to see
    you back here in this room, Chuck.
        Mr. Conner. Likewise, Senator Conrad.
        Senator Conrad. I first of all want to say I am delighted
    at this appointment. Chuck Conner is a pro. Chuck Conner's word
    is good. We dealt with a lot of issues in this committee. We
    didn't always agree, but it was never disagreeable. I know
    Chuck will bring that same attitude to USDA. I would say the
    only thing that would have been better, if they had made you
    the Secretary.
        Mr. Conner. No, thank you. No, thank you.
        [Laughter.]
        Senator Conrad. I hope that word goes out.
        Now, I want to just visit with you, and I see somebody else
    in this audience that would have made an outstanding Secretary,
    too, Congressman Combest. Senator Harkin and I and Congressman
    Combest and Congressman Stenholm spent a lot of time
    negotiating the last Farm bill. They were outstanding
    individuals with terrific staff assistants, as you always
    provided, Chuck.
        Let me just go to the larger question here. According to
    OECD, the international scorekeeper, Europe is providing $277
    an acre of support per year to their producers--$277 an acre of
    support in Europe. The comparable figure here is $48. They are
    outgunning us more than five-to-one.
        On export subsidy, Europe accounts for 87 percent of all
    the world's agricultural export subsidy. We account for 1
    percent. They are outgunning us there 87-to-one.
        We are now entering negotiations to attempt to level the
    playing field, and as we enter the negotiations, the
    administration sends a budget up here that says, cut
    agriculture, that is 1 percent of the budget, the budget that
    passed the U.S. Senate, cut agriculture 16 percent. In my
    State, that means the average farmer is going to lose about
    $5,000 of income. On top of that, the administration says, cut
    from crop insurance another $538 million, putting that at risk.
        I just want to say, I don't see the rationale for these
    cuts. I don't see the rationale for cutting the farm program in
    the middle of it. I certainly don't see it being done as we
    enter into trade discussions to try to level the playing field
    for our producers. If we look at the trend lines, they are
    ominous, because we have moved from a dramatic trade balance,
    trade surplus in agriculture, and now they are telling us this
    year we may actually have net imports of food and food stuffs
    into the United States.
        Could you tell us how it makes any sense to you that in the
    context of Europe providing much more support to their
    producers than we provide to ours, why we cut support from our
    producers?
        Mr. Conner. Well, Senator Conrad, you might be surprised
    that I anticipated this question, as well, and I appreciate the
    context in which you are raising it. You have always been a
    gentleman in these debates and I admire that in you.
        Let me just say, I don't believe you have ever heard me
    apologize for the $19.1 billion, I believe, dollar level,
    aggregate level of support that the U.S. has authorized under
    our trade laws versus, as you have noted, the sizably higher
    amount that our European counterparts are allowed to have. If I
    am not mistaken, I believe their agriculture and our
    agriculture are comparable on a total basis, yet their
    aggregate level of support is some three times, almost four
    times, perhaps, higher than our level. You certainly will never
    hear me apologize for that.
        Now, with regard to the budget situation, let me just say,
    Senator Conrad, first of all, that we feel like we have turned
    the corner on the agricultural economy in the last couple of
    years. That is in no way a reflection, a statement upon
    absolutely every region of the country because we have a big
    and diverse agricultural system and there are always pockets.
    In general, I don't think you can dispute the record net farm
    income that we have seen in the last 2 years, the record low
    level of debt-asset ratios that we have seen, record amount of
    production, record amount of exports this past year----
        Senator Conrad. It sounds like a pretty good endorsement of
    the last Farm bill.
        [Laughter.]
        Mr. Conner. Well----
        Senator Conrad. Would you want to endorse the last Farm
    bill?
        Mr. Conner. Senator Conrad, as you know, I was a strong
    advocate of the last Farm bill, as was the President.
    Continuing on that, though, obviously----
        Senator Conrad. If we could have only had the Secretary on
    board.
        Mr. Conner. Our challenge is obviously to sustain that
    recovery in American agriculture so that it is not a hiatus but
    something that is continuing over time.
        I believe firmly, and I believe the President and the
    administration believe firmly, that one of the key elements of
    sustaining that recovery in agriculture as well as the
    remainder of the economy in terms of job growth is getting our
    arms around this Federal budget deficit, and----
        Senator Conrad. Well, I understand you have to be up here
    and be a good soldier. I just wanted to make the point. Look,
    it makes absolutely no sense to be cutting agriculture when
    Europe is providing much more support than we are, and when we
    are right at the dawn of negotiations to try to level the
    playing field.
        One other question, if I could, on a parochial basis, in
    Devil's Lake, you are familiar with--you have heard me talk
    about this before--we have this lake that has risen 26 feet.
    The lake is now three times the size of the District of
    Columbia and it is flooding more and more land. When you were
    still here, Chuck, you saw me put up a number of charts then
    about how this lake had risen dramatically.
        We have now got an additional 100,000 acres of crop and
    grazing land that have been flooded by the overflow of this
    lake and it continues to rise, threatening another 200,000
    acres. Many of these producers are suffering very, very
    significant losses. Will you be willing to work with these
    producers to explore existing USDA programs that they might
    utilize to reduce these losses or offset them?
        Mr. Conner. I will, Senator Conrad. You know me, and one of
    my trademarks is I am accessible to not only farm
    organizations, but individual farmers who call. My direct line
    is generally readily available and it rings a lot. I am
    accessible to these producers. Obviously, we will talk to any
    group of them that you send my direction, but let us continue
    to take a look at this and see what we can do for them.
        Senator Conrad. I look forward to working with you, Chuck.
        Mr. Conner. I appreciate that.
        Senator Conrad. We really are delighted at your
    appointment.
        Mr. Conner. Thank you, Senator.
        The Chairman. Senator Nelson.
        Senator Nelson. Thank you, Mr. Chairman.
        Let me add my congratulations and appreciation, also, for
    your nomination, Chuck. In our brief time together, we have had
    more than one opportunity to work together, and that has always
    been a very positive experience for me.
        Senator Conrad, if you have that excess water and could
    channel it to Western Nebraska where the drought continues, we
    will be glad to take our share.
        [Laughter.]
        Senator Nelson. I am concerned about the future of trade as
    it relates to agriculture. I am more concerned about it from
    the standpoint that at the end of the day, with many of the
    trade agreements, you would have to say that they are stronger
    on imports than perhaps they have been on exports, and I don't
    know if we are now a net importer of food, but I have heard
    such suggestions. Do you know, are we now importing more food
    than we are actually exporting in terms of agricultural
    products?
        Mr. Conner. I don't have the precise numbers in front of
    me, Senator Nelson. I believe there was a quarter in which we
    were. I am not aware that for a given marketing year for
    agricultural products that we are importing more for that given
    year than what we are exporting, again, because we have seen
    record exports this past year.
        Senator Nelson. As it relates to importation of
    agricultural products, we have to be very concerned that we not
    become a net importer on any extended period of time. If we
    like importing 60 to 70 percent of our fuel, we will love
    importing 60 to 70 percent of our food, which brings me to the
    question about trade agreements.
        I know you are not going to the USTR, but my sugar farmers
    in Western Nebraska and the panhandle are very concerned, and I
    have spoken to other sugar interests around the country about
    the CAFTA agreement because of the importation of more sugar,
    and I wanted to bounce an idea off you for consideration in the
    future. If we can divide--you mentioned food and fiber, but
    also an agricultural program, a Farm bill which I hope we will
    talk about in the future is the Food Security Act, could also
    have another ``F'', and that is ``fuel'' because of what we are
    doing today in growing our own fuel.
        I wonder if there is a thought about how we might import
    virtually unlimited amounts of sugar if they go to fuel as
    opposed to food so that we can continue to grow our own food.
    Almost every country that produces its own rice is very
    reluctant to import much rice because they never want to be
    dependent on anyone else. It seems to me that sugar may fall
    into that category, but on a very different basis. Recognizing
    that sugar can also be fuel, I wonder if you have any thoughts
    about what that might entail if we were to consider CAFTA and
    other future trade agreements that might involve sugar or other
    commodities in requiring those to go to the production of our
    own fuel.
        Mr. Conner. Senator, I appreciate the comment and the
    question. Your idea about--I believe sugar-to-ethanol would be
    a simple way to sum that up--is an intriguing one. Certainly
    from my past work at the Corn Refiners Association, where we
    were heavily involved in the ethanol question, sugar is a
    carbohydrate. It is a starch. Obviously, those starches can be
    readily converted into fuels with the technology that we have
    today, much as we do with corn and other biomasses. The
    technology is there.
        I am not certain, Senator, and perhaps some of your folks
    at the University of Nebraska and others could help us to know
    just what the economics would be and just how much it would
    involve to make that conversion relative to using other
    feedstuffs, but it is an intriguing idea that we would be happy
    to talk with you further about that.
        Senator Nelson. I appreciate that, and I can say from my
    experience of having been to Brazil on a few occasions and
    checking out their ethanol industry, which is based largely, if
    not entirely, on sugar, where they have referred to it as
    ``drink the best and burn the rest''----
        [Laughter.]
        Senator Nelson [continuing]. That it does make some sense
    to consider how we might channel that sort of importation so
    that it doesn't disrupt food production in the United States. A
    good deal of our effort for protection of our own production is
    referred to as subsidy. There is no question about it. We also
    deal with imports that are under-priced coming into the United
    States because of larger subsidies in other countries.
        Let me add my comments to Senator Conrad's about the cuts
    to agriculture. I don't think that they are well thought
    through at the present time and I hope that in your new
    position, you will spend a great deal of time working with us
    to see how we can even out some of this potential disruption to
    our agriculture production.
        Mr. Conner. You have that commitment, Senator.
        Senator Nelson. Thank you, and good luck.
        Mr. Conner. Thank you.
        Senator Nelson. Thank you, Mr. Chairman.
        The Chairman. Senator Talent.
        Senator Talent. Thank you, Mr. Chairman, and I will
    restrict myself to one area because I know we have a vote on.
        Mr. Conner, thanks for being here. Congratulations.
        Mr. Conner. Thank you.
        Senator Talent. I agree you are going to do a great job.
        Let me just bring up the issue of locks and dams with you.
    We are trying to compete internationally. We are demanding that
    our ag community accept--a lot of people are pressuring them to
    accept less and less in terms of domestic support,
    notwithstanding what the foreigners are getting, and then we
    are not keeping the promises that we made regarding, among
    other things, the transportation system. We have the
    Mississippi River system. Two-thirds of our grain goes down
    that system. We have locks and dams 600 feet when they should
    be 1,200 feet wide, built 70 years ago for paddle boats.
        I would like you to tell me that you are going to assist
    the Secretary in being an advocate within the administration
    for rebuilding this system, for making these locks and dams
    wider, fixing this infrastructure so that we can get our
    product to market. The only people benefiting from this current
    system are the Brazilians, and we really need the Department of
    Agriculture to make that clear within the administration. I
    just hope you will do it. That is my only question and comment.
        Mr. Conner. Well, I will, Senator. Let me assure you,
    growing up in the Midwest, I fully understand the impact that
    the Mississippi River has on commerce coming out of that region
    of the country. It is not important, Senator, it is absolutely
    essential and I recognize that. What has been going on in terms
    of the last couple of decades with the efforts to stop one
    dollar's worth of rehab, renovation from going on in that
    region is very, very unhealthy for American agriculture. We
    flat out have to be able to get our bulk agricultural
    commodities out of that portion of the Midwest and down to New
    Orleans to a point of export or we are absolutely dead in the
    water.
        I will be an advocate of that, I can assure you, and look
    forward to working with you on that.
        Senator Talent. Thank you. We need to stitch together the
    old brick-and-mortar coalition in both parties. We have some
    people who are opposed to this from an environmental
    standpoint, which is ridiculous. These barges--one of these
    barges replaces 800 to 900 trucks. It is the best thing we
    could do for the environment, to make this river system work
    better. It is like a one-lane highway now with no shoulders and
    it is carrying so much of the nation's commerce.
        I know you believe that. I wanted to give you a chance to
    say that on the record. I really hope you will go in there and
    fight the short-sighted people at the Office of Management and
    Budget on this issue. I thank you, Mr. Chairman.
        The Chairman. Thank you. We do have a vote open, but I have
    told the floor that we need to finish this hearing, so we will
    continue. We are going to go to the Capitol at 10:30, so I
    think we are OK.
        Senator Lincoln.
        Senator Lincoln. Thank you, Mr. Chairman, and certainly
    thank you for your leadership in this committee. We are
    grateful to you for all that you do. Certainly to Mr. Conner,
    we do welcome you back home to the Agriculture Committee.
        Mr. Conner. Thank you.
        Senator Lincoln. You have done a tremendous amount here and
    we are all very, very proud and congratulate you on your
    nomination----
        Mr. Conner. Thank you, Senator.
        Senator Lincoln [continuing]. Know that you will be a hard
    worker.
        I also share your respect for Senator Lugar. He is a
    devoted member of this body, and having helped to start the
    Senate Hunger Caucus last year, I have found no other member as
    dedicated and as compassionate and passionate about those
    issues, so I share your respect for Senator Lugar.
        Your background and your willingness to serve are certainly
    an indication of your commitment and your dedication to
    agriculture and I thank you for that. I, too, grew up on a
    farm. My dad was a farmer. I watched as my father agonized over
    the drought, the floods, the markets, all of the conditions and
    all of the circumstances which he had absolutely no control
    over.
        I also grew up with a man who was very proud of his
    country, very patriotic. He was the only man I ever met that
    loved to pay his taxes.
        [Laughter.]
        Senator Lincoln. He loved to pay his taxes because he loved
    his country and he said, ``You know, for what I pay in taxes, I
    get a tremendous amount, the honor and the privilege to be a
    part of this country, to serve in its armed forces, to be able
    to be something that I have always dreamed of being, and that
    is a farmer, to get my hands dirty every day and to be able to
    do the best job I can in producing the safest, most abundant
    and affordable food supply.'' I share your pride in that,
    coming from a farm family.
        I know he believed in his government, and I know he
    believed that when his government made a contract with him,
    that he felt strongly that his government would not back out on
    him. I guess that is one of the biggest disappointments that I
    have had in all of the efforts you and many, many others put
    into the 2002 Farm bill. I see Chairman Combest in the audience
    there. He provided tremendous leadership there, as well as many
    of the other members of this committee.
        I guess, knowing how proud your family is today sitting
    there with you, I remember this morning dropping my children
    off at school and each of them had a little Ziplock bag of
    change. Their school and student body, each of the students
    were collecting money to find a cure for cancer, and they were
    distraught in that they felt like they should have more. I
    said, you have cleaned out your piggy banks. You have cleaned
    out my pocketbook. We have gathered up all the change and you
    have given, and that is important. It is important to know that
    each of us gives what we can.
        For Southern agriculture and the rural communities of the
    South, we do desperately want to be good Americans and we want
    to give and we want to participate in the historic debt that we
    have in this nation, in bringing it in line. We want to
    participate in providing the safest, most abundant and
    affordable food supply in the world.
        I guess my biggest concern is that much more is being asked
    in terms of sacrifice for producers as well as the rural
    communities of this country in the South when you look at all
    of the decisions coming out of this administration, whether it
    is the decisions through the Department of Treasury and the
    OFAC Office in limiting our rice trade, whether it is--and many
    on this committee may agree with--the payment limitations for
    the crops that we grow and that we are suited for, the fact
    that we are different and the diversity that exists.
        I would just say that, both in recognizing my
    responsibility to raising my children but also the
    responsibility I have to the people I represent in the Senate,
    consistency is critical. It is critical in the trust that we
    develop and the important element of making sure that
    government is a positive part of who we are and what we can do
    in the global community.
        I would just ask of you, as a part of the Department of
    Agriculture, that we can really look at these long-term
    commitments that are being made to our farmers. I know last
    week I was with my farmers and their bankers and the folks that
    they do business with in rural America who are not just seeing
    cuts in agriculture programs, but seeing cuts in their COPS
    programs and their Medicaid dollars and their health care
    providers are up against the wall. I guess it is just making
    sure that we can provide for them, in the diversity that exists
    in this country, the peace of mind that their government is
    going to support them just as it does the other regions of the
    nation. That is something that is going to be really, really
    critical for us in the coming years and we hope that you will
    be there with us.
        I guess, in closing, my comments would be that I hope that
    you will provide us here on the committee the assurances that
    you will be an advocate for the current law that we negotiated
    out in good faith that recognizes the regional differences,
    where everyone came to the table and gave a little bit to come
    up with a compromise.
        I hope that you will also reassure us, or at least explain
    to us what kind of a message we give to the rest of the world
    when we say that we are ready to lower our supports to our
    producers before we get a commitment from our trading
    competition to help level the global disparities. If what we
    are going to do is ask our producers to be competitive in a
    global marketplace, let us help frame the environment they are
    in in a reasonable way.
        I guess, Mr. Conner, I am asking for your help, because I
    can't explain to my farmers any more than what I have done, and
    I hope that you will join me and that you will bring the
    Secretary with you as we come, and perhaps travel to Arkansas
    so that you can help me explain what it is we are asking of our
    producers, particularly in that region of the nation, to
    contribute to what this great country is all about.
        Is there some way I can get an assurance from you on a
    couple of those things?
        Mr. Conner. Well, let me--Senator, I appreciate your
    comments and I know they come from deep within your heart, as
    mine do, as well, and I appreciate that.
        In terms of assurance, let me just share a couple of
    thoughts with you and perhaps we can talk more about this if
    you want in subsequent questions. We are willing to work with
    you on these issues. In the President's budget, you are at a
    little bit of a disadvantage in that if the budget process were
    a poker game, you probably wouldn't want to bet on the
    President because he has to show his hand early in that
    process, and we have done that. We have put the issues out
    there on the table----
        Senator Lincoln. Well, if he is bluffing me, I am OK, but--
    --
        [Laughter.]
        Senator Lincoln. Let me know now.
        [Laughter.]
        Mr. Conner. It is a pretty poor bluff if he is, Senator.
        [Laughter.]
        Mr. Conner. Again, let me just say, and if there has been a
    theme this morning perhaps of who I am, it is the fact that we
    are dealing with issues here that are very controversial, not
    just between the administration and you, Senator, but between
    members of this committee, and there are extremely wide and
    diverse opinions on this committee over the issues that you
    raised, payment limits being a very, very obvious one, and
    there is sharp, sharp division here in this committee.
        My point is simply I want to help you play a role of being
    the--a bad word, I guess, in these kind of times, but the
    reconciliation person in those differences. It is a role that I
    have played in the past for a long, long time. I hope some of
    the testimony given here this morning says that it is a role
    that I played successfully and I certainly see no reason that
    that is going to change when I--if I am confirmed and become
    the Deputy Secretary of Agriculture. It is the role that I
    played when I was with the President in the 2002 Farm bill.
    Former Chairman Combest can speak for himself, but I believe he
    would tell you that that is the role that I played with him
    coming in a little bit late in the game, but immediately tried
    to move us into a constructive position. We want to be
    constructive in this process and I commit that to you.
        Senator Lincoln. I appreciate that. There are many people
    around that table. There are not just these here that may
    disagree in the Congress, but there are international elements
    involved, as well, that are a huge part of this global
    marketplace that we find ourselves ever more in a competitive
    nature.
        I hope you won't ask me to fold, because I don't want to
    have to fold at this poker game----
        Mr. Conner. Indeed.
        [Laughter.]
        Senator Lincoln [continuing]. On behalf of my farmers. I
    would very much like to ask you and the Secretary to travel to
    our part of the country and to answer the questions of my
    farmers and see the capital-intensive investment they have to
    make in the crops that they are best-suited to grow to compete
    on the world marketplace. I hope I at least have that
    commitment from you.
        Mr. Conner. You do have that commitment from me, Senator. I
    can assure you that there are things in the works that are
    going to take us to your great State, and frankly, many others
    as the Secretary--I know his passion is to get on the road and
    to get some views of the farmers out on the local level.
        Senator Lincoln. Well, I hope that will be sooner than
    later, because as I said, the answers that I have are exhausted
    in terms of what we need to do.
        Mr. Conner. I will just tell you, Senator, the last time I
    was in your State on an agricultural matter, I was in a Tyson
    chicken plant. That was an experience beyond description, to be
    inside that plant----
        Senator Lincoln. Yes, it is. I have been there, too.
        Mr. Conner [continuing]. I look forward to a different
    view, perhaps, when I come down.
        [Laughter.]
        Senator Lincoln. Good luck.
        The Chairman. I am told by the floor that they are going to
    keep the vote open until 10:30, which means we have 9 minutes
    left.
        Senator Salazar.
        Senator Salazar. Thank you very much, Mr. Chairman, and
    congratulations, Mr. Conner, to you and to your wonderful
    family. I wish you the very best of success in this new
    position.
        Mr. Conner. Thank you.
        Senator Salazar. Let me be brief and just make three quick
    points. One, I would request of you, and you don't have to
    comment today, but to get a response from Secretary Johanns on
    a letter that I sent to him on March 10 concerning the ban on
    Canadian beef imports. I believe that we need to move forward
    with a process that makes sure that we are protecting consumers
    and ranchers here in our nation, and it is incumbent upon the
    Secretary, given where we are, to at least lay out where we are
    and where we are going, and I made that request of him, so if
    you would look into that for me, I would very much appreciate
    it.
        Mr. Conner. I will.
        Senator Salazar. Second, I wanted to just echo the concerns
    that you have heard here from my colleagues this morning in
    terms of investment to rural America and to agriculture.
    Talking about farmers and ranchers is sometimes like talking
    about motherhood and apple pie. It is very different when we
    ask our government to work with farmers and ranchers to walk
    the talk. It is easy to do the talk on supporting farmers and
    ranchers. I know that from a statistical point of view, you can
    make an argument that some things are improving in the
    agricultural economy.
        Well, at least in my State, when I travel through the
    Eastern plains of Colorado and down to the San Luis Valley and
    places that are some of the poorest counties in the United
    States of America, I can tell you that these family farmers and
    ranchers are suffering and many of our agricultural communities
    continue to wither on the vine. I will just join the chorus of
    concerns that you heard here from my colleagues about the
    President's budget.
        It is easy to say you support farmers and ranchers in
    America. It is another thing to actually do it. From my point
    of view, Mr. Conner, the budget that the President has proposed
    does not do the job. It leaves out a small portion of our
    overall population out in the cold because they don't have the
    same kind of opportunities in my State, for example, that
    people would have in Denver, Colorado, or in the larger cities.
    I would hope that part of the commitment that we see from you
    in your new position is to help us make sure that we are
    prioritizing what I call the forgotten America.
        With that, Mr. Chairman, given our time limits, I don't
    need a response. I will just go yield to you so you can
    conclude.
        Mr. Conner. I appreciate your comments, Senator Salazar.
        The Chairman. Thank you very much. Senator Baucus.
        Senator Baucus. Thank you, Mr. Chairman.
        I would also like to chime in on the point that Senator
    Salazar made. You responded to Senator Conrad's question about
    why are we cutting our budget now. We have to negotiate. Your
    basic response was, well, gee, the farmers are doing pretty
    well. You cited some numbers, farm income is up and so forth. I
    don't know about those numbers, but whatever they are, as you
    know as well as anyone, it is the tyranny of averages. Average
    numbers don't really mean a lot. We are such a large country
    with so many pockets of income that is low. There are pockets
    of farmers where income is low. Senator Salazar mentioned parts
    of Colorado. The same is true in, I would say, most of Montana.
        Those numbers you used, I don't know, again, what all was
    in it, and I know you know this, but I just wish the USDA
    would, on a proportionate basis, stand up a little more for the
    producer, because the industry can pretty well take care of
    itself. They have different means, different ways of doing
    things. The producers don't have any other ways. As you know,
    they are at the mercy of price, the mercy of the weather, and
    all that. The big boys, they can take care of themselves. The
    big boys also, unfortunately, have much better access to you
    because they are in Washington. They have people working for
    them in Washington. The farmers don't. The farmers depend upon
    us.
        What I would like to know is your telephone number. You
    mentioned that you had an open line to everybody, and I want my
    Montana farmers to give you a telephone call.
        Mr. Conner. Well----
        Senator Baucus. Would you give me a number, please?
        Mr. Conner. Senator Baucus, I am not over at USDA yet, but
    I----
        Senator Baucus. Well, give me your number that you have.
    What is the number to reach you at right now?
        Mr. Conner. At right now?
        Senator Baucus. Yes.
        Mr. Conner. It is 202-456-7804----
        Senator Baucus. Four-56-7804.
        Mr. Conner [continuing]. As some of the people in this room
    can tell you, that rings at my desk. One thing you learn at the
    White House is it is a lean operation, so there is nobody there
    to pick it up but me.
        Senator Baucus. Right. I appreciate that, because in
    Montana, I take all calls from all Montanans unscreened. I
    don't care who it is. I take the telephone call.
        Mr. Conner. That is my policy.
        Senator Baucus. I give my personal e-mail, not the office
    e-mail, my personal, private e-mail to all Montanans. I know
    that it helps.
        Mr. Conner. Yes.
        Senator Baucus. I applaud you for having the same policy.
    You gave us your number, thank you, so people have an
    opportunity to talk to you, too.
        Mr. Conner. Absolutely.
        Senator Baucus. I appreciate that. When I was home during
    the break, I ran into a lot of anger, frankly, from farmers who
    were wondering when will they be able to sign up for the
    Agriculture Disaster Assistance Program. We were promised first
    of the year. That was promised by USDA. Now we are told it is
    March. There is no software at the offices in Montana. Now we
    are told we won't get checks until maybe October.
        Mr. Conner. Right.
        Senator Baucus. That is inexcusable, and you will agree.
    There is not much----
        Mr. Conner. I will----
        Senator Baucus [continuing]. I called Secretary Johanns
    about this. As things work, you have to, to some degree, and he
    said he would look into it and try to help. My office followed
    up with people at the USDA just getting the run around. The
    follow-up calls that my office is making on this are just run-
    around telephone calls. It is a stone wall. I am asking you now
    to follow up if you could, please, and see what in the world is
    going on here. We have to get that software out there. We have
    to get these offices up and running and we have to get those
    checks out earlier than October.
        Mr. Conner. Senator, I will assure you I can do that. There
    was the software. It was out and it was up and was running for
    several hours. Then they figured out that there was some kind
    of a glitch in it and they had to shut it back down. They
    tried--and it's no explanation other than to say we know that
    this is not the kind of performance we expect, and I can assure
    you we will push on this issue.
        Senator Baucus. Can you get back to--you are going to be
    confirmed, and you will be a very good Deputy Secretary, but
    within a week of your confirmation, if you personally could
    give me a telephone call and give me an update----
        Mr. Conner. Yes. I would be happy to do that, Senator,
    absolutely.
        Senator Baucus. Do you want my telephone number?
        [Laughter.]
        Mr. Conner. They know how to get hold of you.
        [Laughter.]
        Senator Baucus. Thank you. Thank you very much.
        Mr. Conner. Thank you.
        Senator Baucus. Thank you, Mr. Chairman.
        The Chairman. Mr. Conner, you will find that every farmer
    in America is listening to this over C-SPAN today and your
    voice mail will be full----
        [Laughter.]
        The Chairman [continuing]. By the time you get back.
        Mr. Conner. Well----
        The Chairman. Senator Coleman, Senator Baucus and I are
    going to go vote before the vote was ended close this down, so
    I am going to turn this over to you to wind up and let you have
    all the time you need for questions for Mr. Conner.
        Senator Coleman. This is a rare opportunity, Mr. Chairman.
        [Laughter.]
        The Chairman. He is under oath, so----
        Mr. Conner. They said you were my friend, Mr. Chairman.
        [Laughter.]
        The Chairman. Let me just announce that the record will be
    left open until Friday, April 8. Mr. Conner, there may be
    written questions that will be submitted to you. I would urge
    you to get those back very quickly because it is my intention
    to bring your nomination to a vote as soon as possible next
    week. If you could get those right back to us, if there are any
    questions----
        Mr. Conner. We will do that, Mr. Chairman.
        The Chairman. All right. Senator Coleman.
        Senator Coleman [presiding]. Thank you, Mr. Chairman.
        Mr. Conner, it is a great pleasure to be with you today. I
    am looking forward, obviously, to supporting this nomination,
    looking forward to working with you. I appreciate the time you
    spent with us in Minnesota. I know you had some family
    conflicts there and figured out a way to make it happen and I
    am appreciative for that.
        I have just two questions and a statement. We had a chance
    in my office yesterday to raise some concerns and we don't have
    to go over that again today. We did talk a little bit about the
    manner in which the quality loss provisions of the current
    disaster program for my wheat farmers is being implemented.
        Mr. Conner. Yes.
        Senator Coleman. We have concerns under the new disaster
    program. The farmers are just out of luck if national
    adjustments are out of whack, which is what is happening in the
    local market. I just have some real concerns there. Can you
    give me some reassurance? Law should trump regulation. That is
    a pretty fair comment. I hope the USDA will carry out what is
    clear Congressional intent. Can you talk to me a little bit
    about this issue?
        Mr. Conner. Senator Coleman, since our meeting yesterday, I
    have had a chance to very briefly, and I will say a little bit
    superficially, review this issue. What I have found is it is my
    understanding that the problem in Minnesota can be resolved if
    we provide some flexibility back to the State committees, to
    the Farm Service Agency State committee. In the case of--there
    is a similar problem in North Dakota, is what I understand, and
    I noted that there was a communication from Under Secretary
    Gebler to the North Dakota delegation in which some of that
    flexibility was granted in their particular case.
        I need a little bit further time to just review why
    additional flexibility would not be appropriate, as well, in
    the State of Minnesota, which again, is my understanding, would
    probably solve your issues there.
        Senator Coleman. I believe under the old disaster program,
    if quality adjustments nationally weren't reflecting what was
    happening in the local markets, that the State FSAs had that
    kind of discretion.
        Mr. Conner. That is my understanding, as well, Senator.
        Senator Coleman. That would go a long way to helping our
    problem.
        Mr. Conner. We are on it, and I can assure you we will
    figure out what is going on there.
        Senator Coleman. The other issue I want to raise is I
    appreciate the President's strong support for the MILC program.
    I am very appreciative of that and just want a clear sense of a
    commitment to helping us get this important program extended
    for 2007.
        Mr. Conner. Yes. Senator, as you know, the President on
    multiple occasions indicated that he was strongly in favor of
    working with you and other members of this committee and the
    House side in extending that program. Certainly, that
    commitment remains good today and was reflected in the
    President's budget and we look forward to that.
        Senator Coleman. Great. Just a last more of a statement
    rather than a question, two observations. One, standing behind
    a farm bill that still has a couple more years to go without,
    and this is not just to you, but we all have to stand behind
    the Farm bill. I am concerned in some of the budget discussions
    about the impact on growers and producers who have made
    commitments, saying these are the rules of the game. It is a
    little discouraging at times when there are budget proposals on
    the table that appear to put us in a position of changing those
    rules. It is hard for folks who have made commitments and work
    with their bankers and others with an expectation of what the
    lay of the land is to all of a sudden have a sense that land
    may be shifting. It is a little disconcerting. I just hope we
    continue to have great sensitivity to that and stand firm
    behind the bill that we have as we look forward to working on a
    new one.
        Then the last observation is on the issue of trade, that as
    we move forward on the WTO discussions, that again we stand
    behind this farm bill. That is important. It is important that
    our growers and producers are the great beneficiaries of trade.
    I understand that. On the other hand, as we negotiate bilateral
    and regional agreements, it sometimes pits one set of growers
    against another and that concerns me, deeply concerns me.
        If we can do the things we can to look at things and see
    that they are handled in a global context--sugar, for
    instance--we all would be better off. It is a little, I don't
    know if the word is ``dangerous,'' but it is certainly a
    concern to me if we seem to be pitting one group of growers and
    producers against the other. Hopefully we will keep that in
    mind.
        I look forward to working with you. It is a great
    opportunity. The President has been tremendously supportive of
    agriculture, tremendously supportive, and the key to that is
    surrounding himself with great talent. Secretary Johanns was a
    friend of mine when he was the Mayor of Lincoln, Nebraska, and
    I was the Mayor of St. Paul, Minnesota, two capital cities. He
    is an extraordinary man and I said he is a really smart guy
    because he was educated, he and his wife, in Minnesota, so
    clearly that is a----
        [Laughter.]
        Senator Coleman [continuing]. I know how smart he is. With
    that, I look forward to working with you.
        Mr. Conner. Likewise, Senator Coleman. Thank you.
        Senator Coleman. This hearing is now adjourned.
        [Whereupon, at 10:36 a.m., the committee was adjourned.]

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                                A P P E N D I X

                                 April 6, 2005

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                       DOCUMENTS SUBMITTED FOR THE RECORD

                                 April 6, 2005

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                             QUESTIONS AND ANSWERS

                                 April 6, 2005

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