[Senate Hearing 109-645]
[From the U.S. Government Publishing Office]
S. Hrg. 109-645
REGIONAL FARM BILL FIELD HEARING:
LUBBOCK, TEXAS
=======================================================================
HEARING
before the
COMMITTEE ON AGRICULTURE,
NUTRITION, AND FORESTRY
UNITED STATES SENATE
ONE HUNDRED NINTH CONGRESS
SECOND SESSION
__________
SEPTEMBER 8, 2006
__________
Printed for the use of the
Committee on Agriculture, Nutrition, and Forestry
Available via the World Wide Web: http://www.agriculture.senate.gov
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COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY
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
Vernie Hubert, Majority Deputy Chief 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):
Regional Farm Bill Field Hearing: Lubbock, Texas................. 1
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Friday, September 8, 2006
STATEMENTS PRESENTED BY SENATORS
Chambliss, Hon. Saxby, U.S.Senator from Georgia, Chairman,
Committee on Agriculture, Nutrition, and Forestry.............. 1
Conaway, Hon. Michael K., U.S. Representative from Texas......... 4
Neugebauer, Hon. Randy, U.S. Representative from Texas........... 3
Panel I
Bearden, Ricky, National Cotton Council and Texas Cotton
Producers, Plains, Texas....................................... 9
Skarke, Troy, National Sorghum Producers, Claude, Texas.......... 7
Wedel, Jimmy, Corn Producers Association of Texas, Muleshoe,
Texas.......................................................... 8
Womack, Tommy, Past-President, National Association of Wheat
Growers, Tulia, Texas.......................................... 6
Panel II
Higginbottom, Ted, Western Peanut Growers Association, Seminole,
Texas.......................................................... 21
Holbrook, Dennis, Texas Produce Association and Texas Citrus
Mutual, Mission, Texas......................................... 20
Murden, Dale, Rio Grande Valley Sugar Growers, Monte Alto, Texas. 18
Raun, L.G., U.S. Rice Producers Association and USA Rice
Federation, El Campo, Texas.................................... 19
Panel III
Battle, Bill, Catfish Farmers of America, Tunica, Mississippi.... 31
Berger, Mike, Association of State Wildlife Agencies, Austin,
Texas.......................................................... 27
Broumley, Keith, Dairy Farmers of America, Hico, Texas........... 30
Mahler, Barry, Association of Texas Soil and Water Conservation
Districts and the National Association of Conservation
Districts, Iowa Park, Texas.................................... 26
Smith, Dale, Texas and Southwestern Cattle Raisers Association
and Texas Cattle Feeders Association, Amarillo, Texas.......... 29
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APPENDIX
Prepared Statements:
Battle, Bill................................................. 42
Bearden, Ricky............................................... 47
Berger, Mike................................................. 53
Broumley, Keith.............................................. 56
Higginbottom, Ted............................................ 63
Holbrook, Dennis............................................. 68
Mahler, Barry................................................ 72
Murden, Dale................................................. 77
Raun, L.G.................................................... 82
Skarke, Troy................................................. 94
Smith, Dale.................................................. 103
Wedel, Jimmy................................................. 107
Womack, Tommy................................................ 112
Questions and Answers:
Berger, Mike:
Written response to questions from Hon. Saxby Chambliss...... 116
REGIONAL FARM BILL FIELD HEARING:
LUBBOCK, TEXAS
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SEPTEMBER 8, 2006
U.S. Senate,
Committee on Agriculture, Nutrition and Forestry,
Lubbock, Texas
The committee met, pursuant to notice, at 9:03 a.m. in the
Helen DeVitt Jones Auditorium, at Texas Tech University,
Lubbock, Texas, Hon. Saxby Chambliss, chairman of the
committee, presiding.
OPENING STATEMENT OF HON. SAXBY CHAMBLISS, U.S.
SENATOR FROM GEORGIA, CHAIRMAN, COMMITTEE ON
AGRICULTURE, NUTRITION, AND FORESTRY
The Chairman. This hearing will now come to order.
Good morning and welcome to the Senate Agriculture
Committee's eighth and final farm bill field hearing. The
Committee has travelled to Georgia, Missouri, Pennsylvania,
Iowa, Oregon, Nebraska and Montana to hear directly from
producers on the next farm bill. And I can't tell you how
pleased we are to have our final hearing today in Lubbock,
Texas. And I am particularly pleased to be back in Lubbock. I
kind of like the way you people talk out here. I don't have to
bring my interpreter with me when I come to Lubbock. And this
is not my first visit here and won't be my last. And frankly,
it's not by coincidence that we are here or by accident that
we're here in Lubbock. And I've had the opportunity to visit
with any number of folks from this area relative to agriculture
over my years in the House and in my years in the Senate; and
of course, one of my dearest friends in the world is Larry
Combest and his wife Sharon. Where is Larry? Larry, wave at us.
There they are, right here. Larry and Sharon are truly two
great Americans, and Larry and Sharon have always been a great
inspiration to me in their personal lives, but particularly
professionally. Larry has been somebody that I not only have
had the opportunity to work very closely with and have had the
opportunity to look up to as a mentor, but he's somebody that
taught me what principle is all about early in my career in the
U.S. House, and cast a very tough vote for me as a freshman
member of the U.S. House of Representatives. Along with Larry,
we made sure that farmers and ranchers not just in Lubbock,
Texas but in the State of Georgia were also protected in the
1996 farm bill. And Larry was not only a great friend, but as I
say, a great mentor through that process and through all of my
years in the House and the Senate. So I'm pleased to be in his
hometown. I also am in the hometown of one of my staff members.
When Keith Williams says ``I'm from Lubbock, Texas,'' he
means I am really from Lubbock, Texas, born, raised and
schooled here from elementary school all the way through Texas
Tech. Where is Keith? He's right down front here also. Keith
does a great job in running my press shop on the AG Committee.
And I asked him 1 day why he went to Texas Tech, and he said
``Well, I couldn't get into the University of Georgia.'' But
he's a great Texan, and we're sure pleased to have him on our
staff on the AG Committee. I'm also pleased to be with my good
friends Randy Neugebauer and Mike Conaway. These two guys truly
know what agriculture is all about and truly have a great
appreciation for what agriculture is about. I know we're in
Randy's district this morning, and I am very proud of the way
that he represents you folks here from this part of the state.
And he and I have had the opportunity to dialog on any number
of issues, both related to agriculture and otherwise, and I'm
just very pleased, as I say, to be in this district.
Mike Conaway has been gracious enough to come from next
door over to be with us. Again, both these gentleman were with
us back in February when we were here. And again, Mike Conaway
just truly has a great appreciation for the problems in
agriculture and for what we need in the next farm bill. So I'm
pleased that both these gentlemen could join us here this
morning.
And when I say I'm glad to be in Lubbock, I truly mean that
because I know that I'm in the heart of ag country, not just
cattle and cotton, but in the heart of ag country. When I pick
up a newspaper normally and read about agriculture, I see
criticism of the farm bill and constant criticism of farm
programs. When I get up this morning, I pick up the Lubbock
paper, I don't know who your editor is, but I want to put him
on my regular list. I want to quote from his editorial here
this morning because I've never seen an editorial in any paper
in any part of the United States that summed it up better than
what your editor--the way your editor summed it up this
morning. He says in part: Farm subsidy payments could better be
described as consumer subsidy payments. Keeping our farmers and
ranchers in business means keeping the U.S. cornucopia
overflowing. Our farm policy accounts for little more than one
half of 1 percent of the 1U.S. budget but allows American
shoppers to spend only 11 percent of their income for food, far
less than consumers in any other country.
You know, that is what farm bills are all about, and I'm
very pleased with the way the current farm bill is working to
do exactly what he describes in the editorial this morning.
Though Congress has some challenges ahead as we approach the
reauthorization of the farm bill, for a time it appeared
Congress would have to adjust our domestic programs to respond
to the new trade agreement. But now that the Doha rounds has
been suspended, the debate has shifted and Congress must now
decide how far to go to ensure our existing domestic programs
are consistent with our trade obligations. We also face new and
growing concerns about the distribution of farm program
benefits and how programs and policies interact with each
other. One example is what the increased use of grain for
energy production of ethanol or biodiesel will need for
livestock producers.
Of course, one of the biggest challenges is the influence
of the budget deficits on--deficit on farm program spending.
Unlike 2002, it is highly unlikely that we will have the
additional funding available for our farm bill programs. A more
likely scenario is one where we will have to aggressively
defend what we already have. I expect to face these attacks
even though the 2000 farm bill has spent 12.9 billion dollars
less than was originally estimated by CBO.
My goal as always is to develop a farm program that
provides a safety net for producers. It should help them manage
the inherent risks of farming while being responsible with the
taxpayers' money, conserving our natural resources and
complying with our trade obligations.
One immediate concern for most of the witnesses here today
is the drought situation across the South and Midwest. I
understand the drought losses in Texas alone have been
estimated at more than $4 billion, and the good portions of
Texas are rated extreme to exceptional on the U.S. drought
monitor.
I understand Texas has gone through a multiyear drought
planning process to assess water needs for the next 50 years
and that this process is admired around the Nation for its
focus on local solutions. Given the long-term nature of drought
cycles and the need to be prepared, a question that Congress
needs to address should be: If the authorizing committee should
restructure existing farm programs to fund a permanent disaster
program.
I would appreciate thoughts from the witnesses this morning
and anybody else, for that matter, on this particular concept.
I would like to thank the witnesses for being here today to
provide testimony and to the audience for your interest in farm
policy. I want to particularly thank President John Whitmore
and Texas Tech University for allowing us to use this very nice
facility that we're in this morning.
In Addition, Pat Burns and Ronald Phillips deserve special
recognition for their assistance in arranging the hearing.
Thank you for hosting the Senate Agriculture Committee in the
Lone Star State today.
And now I'd like to turn to my colleagues Congressman
Neugebauer and Congressman Conaway for any comments they'd like
to make. Randy.
STATEMENT OF HON. RANDY NEUGEBAUER, A U.S. CONGRESSMAN FROM
TEXAS
Mr. Neugebauer. Thank you, Chairman Chambliss, for having
your eighth and final hearing here. I think that's a real honor
for our folks. I want to thank the producer groups and the
panelists that are here today. I think one of the things that
I'm most proud about is during this process, both as we begin
to sit down and write the next farm bill, we've had both now of
the House agriculture and the Senate agriculture committees to
have hearings in this region.
We've also had Secretary Joe Hins who's here, and so I
think one of the things that you're going to hear today is
there's a very consistent message that all of these folks have
heard, and that is that many of the producer groups in this
area believe that the 2002 farm bill has performed just exactly
the way it was designed, and I've seen those numbers that
you've seen this week, Senator, about that it actually not only
provided a safety net but it also was a fiscally responsible
farm program and that it actually cost less than what was
originally projected.
And so I'm pleased to have you here. I appreciate that. I
told the Chairman last night when he got off the plane that
he's been here twice now within nearly a 6-month period, one
more visit in this year and he has to start talking to a
realtor about buying a house in this--in our community. So
we're glad to have you here.
I'm also particularly glad to hear you talk about the
drought assistance and the problems that we've had with weather
patterns over the last few years and whether we should look at
the next farm bill should have some kind of a permanent
disaster program, and whether it's a permanent disaster
program, I have been a strong proponent, Senator, of having--
improving our crop insurance programs so that producers know
exactly when they actually incur a loss that they're going to
be able to know that, in fact, they're going to have the
proceeds to pay for those losses and to reimburse them for
their costs and not have to wait on whether the policies and
the politics of Washington are going to shine favorably upon
them.
And so I think as we begin to look at the next farm bill, I
think particularly either improving the crop insurance program
or looking at some kind of permanent drought or permanent
disaster program is certainly in some dialog that we would
have.
Again, thank you for being here. I'm appreciative of my
neighbor Congressman Conaway being here today. One of the
things we kind of, Mike and I, understand we cover a lot of
real estate, and when you look at agriculture in Texas, we
primarily represent the major part of agriculture in this
state. And Mac and Mike and I continue to work together as a
team when it comes to agriculture, and really in any other
issues because there's just not many of us out here, but we do
have a strong relationship. And so I'm proud to have Mike here
with us. And again, Senator, thanks for having your eighth and
final hearing here in Lubbock, Texas, and we welcome you and
look forward to hearing from these producer groups today.
The Chairman. Thank you, Randy. Mike.
STATEMENT OF HON. MICHAEL K. CONAWAY, A U.S. CONGRESSMAN FROM
TEXAS
Mr. Conaway. Thank you, Senator. I appreciate your kind
words earlier. Thank you very much.
Thanks for coming to West Texas, and in particular Lubbock,
and Randy, thank you for your hospitality as always. There's an
old adage in politics that everything has been said, just not
everybody has said it, so I'm going to avoid the temptation to
repeat things that the Senator said and
Randy said, because as I agree with them, and look forward
to the testimony. This issue--or the hearing today is just
that, and so I'll once again thank everybody, and I'll shut up
so we can get to the hearing part of this and allow the folks
who know the most about agriculture and feed their families and
take those risks day in and day out to share with us what their
concerns are, and hopefully their solutions and ideas on how we
can go forward collectively in a better manner than we
currently have. So Senator, again, thank you for coming to West
Texas. Thank you for your kind words. Randy, thank you for
being here. And I look forward to hearing from the producer
groups this morning. Thank you.
The Chairman. Well said. Short speeches are the way to get
re-elected. I said that, in my comments, that we certainly
welcome comments not just from our witnesses today but anybody
who has an interest in agriculture. And the way you can do that
is to go to our Web site, and our Web site on the Senate Ag
Committee is www.agriculture.senate.gov. Don't worry about
writing that down. If you'll see any of these staff members
afterwards, they'll be happy to give it to you, and we would
welcome your comments coming over the internet.
I have a couple of other folks on our staff that are Texans
that I want to make sure that we introduce this morning. First,
Vernie Hubert. Vernie, raise your hand. Vernie is a gentleman
that I have gotten to known--gotten to know since my original
election of Congress. He worked for former chairman of the AG
Committee, Kiki DelaGarza for a while for my first 2 years
there and then he worked for Charlie Stenholm after that.
Charlie was also a very dear friend of mine as well as
agriculture, and I got to know Vernie then and I recognized his
talent. So when we became--I became chairman of the Ag
Committee, he was one of our first hires. And Vernie is from
Riviera, Texas and does a tremendous job of helping us out on
the staff.
And Dawn Stump, where is Dawn? Right behind me here from
Oilton, Texas. Dawn also is one that we have known for a long
time. She's a former Combest staff, and anybody that worked for
Larry knows everything in the world there is to know about
agriculture. And Dawn has just come back to the Hill, as we
refer in Washington. She was downtown making a lot of money and
decided to come back to the Hill because she's committed to
agriculture, and make a lot less money. And that says a lot
about her. But she is a very bright young lady and does a
terrific job on our staff.
On our first panel this morning is a group of very
distinguished gentlemen, some of whom I've had the opportunity
of knowing for a long time and working with for a long time. So
I'm particularly pleased to see you gentlemen here. We have Mr.
Tommy Womack of Tulia, Texas who is speaking on behalf of the
National Association of Wheat Growers, Mr. Troy Skarke of
Claude, Texas on behalf of the National Sorghum Producers, Mr.
Jimmy Wedel, I guess that is, Jimmy, I hope I got that right,
of Muleshoe, Texas on behalf of Corn Producers Association of
Texas, and Mr. Rickey Bearden of Plains, Texas on behalf of the
Texas Cotton Producers and the National Cotton Counsel.
Gentlemen, we welcome you. We will certainly submit your
entire statement for the record, but we look forward to any
opening comments you might have to make. And Tommy, we'll start
with you.
STATEMENT OF TOMMY WOMACK, PAST-PRESIDENT, NATIONAL ASSOCIATION
OF WHEAT GROWERS, TULIA, TEXAS
Mr. Womack. Thank you, sir.
Mr. Chairman, thank you for coming to West Texas, rest of
the members of the committee. My name is Tommy Womack. I'm the
past president of the National Association of Wheat Growers. I
am a wheat farmer in Tulia, Texas, and represent the Texas
Wheat Growers. I think the main thing is I like the way you
talk. Agriculture needs somebody like you three gentlemen that
stand up. I know you have the battle scars to prove it, but
just to let you know that I thank you very much for that. USDA
has had some 50 plus meetings such as this, the House and
Senate has had some 20 plus meetings such as this over the
period of this farm bill. And with a resounding yes, most all
the commodities testify that they would like to keep this farm
bill intact as it is with only minor critiques within it. I
think that's a must for us.
I think the second thing would be, as you boys mentioned, a
disaster program. The last 2 years has been devastating. The
United States tries to help people all over the world when
natural disasters occur. These two disasters that we've had
last year and this year have really been devastating to the
farmers across the United States, and so we would ask that you
would work on some type of a disaster package to let the
farmers either choose the year 1905 or 1906 to participate in
some type of disaster package.
I think I would like to mention a little bit about wheat
straw for ethanol. I know that's one thing you spoke highly
about. I think that's really on the right track, and we
appreciate your thoughts holding up agriculture today but not
only in the future, an energy that would certainly be one that
we could help grow and keep from buying so much oil from
overseas. I think the last thing that I would say, and I'm just
kind of talking to you from my heart here, I turned in a paper,
but I just wanted to--really wanted to let you know would be a
type of insurance program. Congressman Neugebauer has worked on
that and mentioned some of that. The insurance program is
working as a whole, but when you have a place that you buy 65
percent, that leaves 35 percent uncovered when you have a loss.
The diminimous yield is something that a farmer cannot
recover even though it's charged against him within that
insurance package. To maybe get us out of asking for a disaster
package every year, we might somehow want to raise where we
could afford to buy insurance at a higher level and not have 35
percent out there, maybe 10 or 15 percent of it, and buy
insurance to cover us at a fuller rate than what we have in
that crop that way.
I think the last thing that I would like to say to you is
that I've been farming 35 years, and the last 2 years has been
the toughest that have been involved in farming, and that's
primarily because of fuel adjustment and the high cost of
equipment that we need to buy. But that aside, those people
need to make a job and work as well. But the American farmer
agrees to jobs for 27 other people and through that turnover of
the money, that's what helps the government payments keep us in
business and keeps us going so that other companies could share
in that as well.
Thank you for inviting me to come today. You have a nice
day, and God bless you.
[The prepared statement of Mr. Womack can be found in the
appendix on page 112.]
The Chairman. Thank you, Tommy. Troy.
STATEMENT OF TROY SKARKE, NATIONAL SORGHUM PRODUCERS, CLAUDE,
TEXAS
Mr. Skarke. Gentlemen, thank you for this opportunity to
present my views for the next farm bill consideration. My name
is Troy Skarke. I farm in Claude, Texas and the Texas
Panhandle. I raise dry land sorghum and dry land wheat and I
run 50 cow-calf pairs on my grassland.
This has been a very trying year in my area of the country.
From January to August we had less than six inches of rain, and
that's 15 inches below the 21 inch average. The second week in
August, 2 months late, we received two inches of rain which
germinated the sorghum I had planted earlier in the year.
Normally, I can count on sorghum for a crop, but not this year.
Assuming the good Lord changes the weather pattern and gets us
out of this drought, I have no doubt that we producers have the
ability to grow the crops needed to feed and fuel the world,
given the fair market access.
As a family farmer, there are four topics of interest that
will affect my profitability in farming for the future. The
four issues are: Farm policy, water, energy and technology. Let
me address the farm programs first. I strongly support the 2002
farm bill. Currently direct payments and marketing loan
programs provide our operation with the most protection. If
Congress is to change our current programs, I would ask that
the committee preserve the equity relationship between all
commodities.
On conservation programs, the Ogallala Aquifer is slowly
being depleted by irrigation, and I'm concerned about the water
supply for future generations. I have made the choice to
implement farming practices that conserve underground water.
Grain sorghum works very well in my crop rotation practice
because of its water sipping qualities. Generally I can make a
good yield without much rain during the growing season using
sorghum in my fallow rotation which builds up the soil moisture
profile during the winter months.
The Conservation Security Program is a good fit for my
farming practices and for grain sorghum. Although I believe the
program should focus more on quantity measures instead of just
water quality measures. The program directs conservation funds
for good stewardship practices while allowing me to continue to
produce a crop. I realize that many of my fellow producers have
not had the opportunity to participate in this program and may
not share my feelings.
On the energy issue, private industry is investing millions
in my region on ethanol plants. 15 percent of the sorghum crop
is currently going to ethanol. That's about the same percentage
as the corn crop. I believe the next farm bill needs to
continue to invest in alternative energy to reduce our
dependence on fossil fuel. Sorghum will play a very important
role in grain, sugar, and biomass ethanol industry as it's
developed in order to meet the goal of 25 percent renewables by
2025. Just the increased ethanol demand alone for my grain
should increase my price 15 to 20 cents per bushel.
My last priority deals with technology. Gentlemen, the
increased cost of fertilizer, fuel, equipment, repairs continue
to skyrocket. Producers must keep pace and adapt to better
farming practices with more effective and efficient cropping
systems. The initiative to adapt does not come cheaply for
producers, and I'd emphasize that now would not be the time to
weaken the safety net that's in place. Strong farm programs are
critical when the agriculture economy slows. You have a
challenge to re-write the nation's farm policy. The sorghum
industry will work with you, Mr. Chairman, as you develop a new
farm program. Thank you.
[The prepared statement of Mr. Skarke can be found in the
appendix on page 94.]
The Chairman. Thank you. Jimmy.
STATEMENT OF JIMMY WEDEL, CORN PRODUCERS ASSOCIATION OF TEXAS,
MULESHOE, TEXAS
Mr. Wedel. Good morning, Chairman Chambliss and
Congressmen. Welcome to Texas. Thank you for holding the
hearing today to allow those of us involved in Texas
agriculture an opportunity to offer our views on U.S. farm
policy. My farm is located about 70 miles northwest of Lubbock
in Bailey County. My main crop is corn, but I, like many Texas
producers grow multiple crops. I produce cotton, wheat,
soybeans, peas and peanuts.
The 2002 farm bill is very popular with farmers. I believe
it has lived up to what it was designed to do and what farmers
must have, a safety net during times of low prices. I support
extending the 2002 farm bill and its budget baseline.
If it is necessary to re-write the farm bill I hope that
many of the basic concepts of the 2002 farm bill will be
included. The system of direct payments and counter-cyclical
payments, combined with the marketing loan, has provided the
level of support that growers need during times of low prices
while saving taxpayers' money when prices are adequate. But
again, rather than write a new farm bill, an extension of the
current farm bill with a few minor revisions might better serve
the farming community.
The 2002 farm bill however does not address the significant
challenge of rapidly inflating energy prices and other expenses
of production. Since 2001 we have seen the cost of irrigation
double, the cost of diesel and gasoline triple, and the price
of nitrogen fertilizer more than double. Obtaining even a
modest direct payment in the form of disaster legislation to
help farmers recoup a small percentage of their increased
financial outlay has not yet been possible. The farm bill or
crop insurance should look at the production expense risk
associated with modern agriculture.
The commodity title has the most effect on the farmer's
bottom line, but I do not want to imply that I am not
interested in other titles. Growers need conservation programs
that help them to resolve environmental problems on working
lands. The EQIP program was expanded in the 2002 farm bill and
those results have been very positive, not only for
agriculture, but for all of society.
The CSP program has been a disappointment in that too few
watersheds have been allowed into the program and rules have
made entry into the program very complicated. Some have argued
that the CSP and similar programs will replace the commodity
title as a means of complying with future WTO agreements. Most
farmers, including myself, are very suspicious of this plan
because it will not be a program that responds to low prices.
Most producers believe the conservation programs should remain
a cost share rather than income producing or supporting
program.
I believe the Research Title must be structured and funded
to levels to ensure the continuation of basic and applied
agriculture research. With global competition increasing, now
is not the time to cut back on research. The 2002 farm bill for
the first time included an Energy Title. I believe that this
title should be expanded to encourage faster development of
renewable energy from crops and bio-mass. We are dependent on
the world for our energy; only sound agriculture policy will
prevent us from following the same road in food and fiber.
Thank you for this opportunity to comment.
[The prepared statement of Mr. Wedel can be found in the
appendix on page 107.]
The Chairman. Thank you. Rickey.
STATEMENT OF RICKY BEARDEN, NATIONAL COTTON COUNCIL AND TEXAS
COTTON PRODUCERS, PLAINS, TEXAS
Mr. Bearden. Mr. Chairman and Congress, welcome to Lubbock.
Thank you for this opportunity to talk to you. I'm Rickey
Bearden, a third generation farmer from Plains, Texas. I grow
cotton, peanuts, milo, wheat and black-eyed peas. My income is
completely dependent on the success of my farm. Production
agriculture is what drives our small rural economies. The
current safety net provides a delicate balance between coupled
and decoupled payments. As a producer, this is very important
to me because I do not want farm programs to become welfare
programs.
Unfavorable weather cut ag production dramatically this
year in Texas. For effective producers, emergency disaster for
2006 and 2005 will be critical. We should--we would also wish
you to consider developing a permanent disaster program and
improve crop insurance programs to address similar situations
in the future. The financial safety net provided by our farm
policy has never been more critical. The combination of direct
and counter-cyclical payments along with marketing loan
provides an effective safety net. It is important to maintain
the current balance between these three mechanisms.
The marketing loan is extremely important to cotton
producers. It is especially important that all production
remains eligible to loan. Contrary to popular belief, these do
not guarantee a profit. Sound farm policy is of little value if
the cotton industry has unworkable payment limitations placed
on it. With the natural consolidation of agriculture, it's
inevitable that the majority of the program benefits will go to
the farmers who account for the majority of the production,
just as it should be. We also believe that conservation
programs will continue to be an important part, but they will
not be a substitute for the safety net provided for by
commodity programs.
Mr. Chairman, we understand you and your colleagues will
face significant challenges in designing and maintaining farm
policy. Cotton producers and the majority of our industry would
be satisfied with the extension of the current law. An
extension provides a level of certainty to both growers and
those financing growers. It is also a great job to fill here in
the United States.
Regarding the trade negotiations, I commend you and our
negotiators for continuing to demand an ambitious result in
negotiations and refusing to allow unwanted pressure or
deadlines to undermine the U.S. position. We also appreciate
your insistence that agriculture negotiations be conducted as a
single undertaking and that cotton not be singled out. But
improved trade alone will not provide an adequate safety net
for U.S. cotton producers. U.S. Congressional AG Committees in
Washington D.C., not international trade negotiators from
around the world, must write U.S. farm policy. This is very,
very important to us.
I assure you this committee and that the cotton--I assure
this committee that the cotton industry is prepared to work
with you to interest and develop and support continuation of
the balanced farm policy. We look forward to working with you.
Again, thank you for you the opportunity to testify today
for this industry that I so dearly love. I would be glad to
respond to any questions later. Thank you, sir.
[The prepared statement of Mr. Bearden can be found in the
appendix on page 47.]
The Chairman. Gentlemen, thank you all very much. And I'm
going to start off the questioning by asking a series of
questions here that I've asked every commodity panel that we've
had all across the country because we want to make sure that we
understand where people are on certain issues with respect to
the current farm bill.
Tommy, let me start with you and then we'll go right down
the row. How would you prioritize farm bill programs generally
and the commodity title specifically? How would you rank the
relative importance of the direct payment program, the
marketing loan program and the counter-cyclical payment
program?
Mr. Womack. I would think the direct program should be No.
1, the counter-cyclical program would be No. 2, then the market
alone would be No. 3. And the reason that I would place them
that way is because the direct payment is budgetary, it's WTO
compliance, and it's something that farmers can count on.
The Chairman. Okay Troy.
Mr. Skarke. I believe the direct payment is most important,
it will give cash-flow when there's no crop, you know, disaster
year, it helps. And also the LDT payment will be very critical
during low prices; and of course, the counter-cyclical payment
least.
The Chairman. Jimmy.
Mr. Wedel. Pretty much the same. I think the direct payment
is very important. And here again, it is WTO compliance so you
have a little bit of--a little bit of freedom to move around in
that area. And then probably the counter-cyclical and marketing
loan I think are probably a toss-up from the farmer's
standpoint, although probably the counter-cyclical I think
would come first and marketing second on direct payment.
The Chairman. Rickey.
Mr. Bearden. Well, I'm going to differ, I guess, a little
bit, which people that know me shouldn't find that too unusual.
The marketing alone is the most important thing a producer can
have, and I say that because I am a producer of a commodity.
And without that base price, I have no promise of any type of
price.
Production is what drives these small rural economies, as I
said while ago. And if you give these other two payments, you
don't have to produce. But that is what drives these economies,
and we need to remember that this is a bill that's for rural,
and I don't think there's anything that drives rural economies
better than the production of those commodities.
Next would be the direct because it is something to base
what you do, are able to operate on. Your lender knows that is
a guaranteed payment. And last is counter-cyclical. And all of
these are very important, but counter-cyclical I'd put last
because it affects--when prices are low, it kicks in. But
that's also very important. But as I said, once again,
marketing loan is the most important one.
The Chairman. Second question: We can expect an effort to
further reduce payment limits in the next farm bill. Do payment
limits need to be modified? Tommy.
Mr. Womack. You know, I would say yes, but I think they
should be increased because they are the same or have went down
over the past years, and our cost of production has increased
drastically, and so it costs a guy that raises 100 acres the
same as it costs 1,000 per acre to raise that commodity. So I
would say yes, it needs to be changed, but I would say it needs
to be raised.
The Chairman. Tommy, we need next to bring you the floor of
the Senate. Troy.
Mr. Skarke. Mr. Chairman, I may have to differ with Tommy a
little bit. Small farmer, dry land, wheat and sorghum, I've
never had to worry about a payment limit. So I just think the
payment limit needs to go to the people with the greatest risk.
Mr. Wedel. I don't know, I tend to agree with Tommy a
little bit. As farmers who have to consolidate, as you well
know, we're getting basically the same price for our
commodities as we have the last 10, 20, 30, 40 years, yet our
production prices keep going up every year. The only way we're
able to stay in business is to increase our acreage to become
more efficient. And of course, as you do, then you begin to you
hit those pay limits. So in this day's farming climate and
business climate, you have to be--I'm not saying you have to be
a large producer, but most people have to continue to get
larger to stay at the same income level and then you begin to
hit those pay limits. So I agree with Tommy, they really need
to be increased. I know that's a very unpopular idea in
Congress, but at the very least, they need to be frozen where
they're at, and hopefully increased.
The Chairman. Rickey.
Mr. Bearden. Payment limits is a problem, and I look at it
simply from the fact of what I just said before, that there
needs to be no limit on the marketing loan. And I say that
because of last year, I'll give you a prime example. I had a
bumper crop, and the year before I didn't have any, I didn't
collect any marketing loan on cotton on my dry land acres, and
last year I--it gave me a base price on that, and there's no
way for me to be able to do that. My marketing loan gains would
be all over the floor. But I tend to agree is that it needs to
be raised, but I understand that's probably not politically
feasible for us to do, so we have to learn to do that. But the
main thing is we have to allow the marketing loan to not be
capped, and I think we've accomplished that with the fact that
we can get certificates, and I think that's worked very well.
And it also has not--it has worked well for producers in the
fact that it gives us the flexibility that we need to go from
commodity to commodity. As it's been mentioned, several of us
go from one commodity to the other. And I think that's very
important and I think it needs to be addressed.
The Chairman. Doha round negotiations have sought to
provide additional market access for U.S. agriculture goods in
exchange for cuts in domestic farm payments. Is this a
reasonable exchange for farmers? Tommy.
Mr. Womack. Yes, sir, I think that it is. As a wheat
grower, we need to rely on, and what we need to do is to export
at least 50 percent of our product every year, and that
certainly helps us in the export of business to help feed the
world. But also I think what would help us along the same line
is to lift some sanctions on the countries that would trade
with us, such as Cuba.
The Chairman. Troy.
Mr. Skarke. Almost half of our crop, Mr. Chairman, is
exported. I had the opportunity to go to Africa to watch my
grain sorghum feed 80,000 refugees from Angola and Zambia. I
still contend we need fair market access, and until we get fair
market access, no matter what happens, people will starve in
this area, so we have to continue to work on that.
The Chairman. Jimmy.
Mr. Wedel. Well, I agree that we do need fair market
access, but I'm a little bit troubled that we would base our
whole farm program on the perception that with these free trade
agreements that we have that we're actually going to export
more of everything, because I know typically there have been a
lot of agreements signed in the last several years. But corn
exports have been relatively flat for the last 10 years, even
really going back 20 years, they've been relatively flat.
So there is no guarantee that we will be able to get a
higher commodity price or we will sell our commodities at a
higher price just because we have a certain amount of WTO
agreements. I do agree that a reasonable trade would be good
for all us. But as far as a tradeoff for safety net for farm
support, I don't think I'm in favor of that.
The Chairman. OK.
Mr. Bearden. Mr. Chairman, I started farming in 1975, and
I've heard my whole life that we're going to export our way out
of this program of cheap prices, and so far it hasn't worked.
Cotton prices are flat over the last 20 years, some spiked. But
I do not think that we should give away our safety net, our
safety net that's been in place with the same price, the loan
price and target price for cotton since 1981 with no cost of
living adjustment. It's very, very important that that safety
net stay in place and that we--we do need to have trade, don't
get me wrong, and we do need to help other countries, but we
don't need to do it that way. One way would be very good, I
think we could ask the people in this room if they would be
willing to give 30 cents more for a
T-shirt. That would double the price of cotton. That would
help producers all around the world much more than us giving up
our safety net that is in place to ensure us a way of life and
a safe and good source of food for the U.S. public.
The Chairman. Some organizations have explored the
possibility of a revenue based approach for the commodity
titles. What do you think of a revenue based approach to the
safety net as a replacement for the current commodity programs?
Mr. Womack. We have wheat growers that have really kicked
that around a lot, but I really feel like that if we done a
little adjusting within the counter-cyclical program of the
original farm bill that we're living with now, we would be
better suited. And I think that through WTO compliance rules
that would only cover 70 percent of our crop, and the insurance
would not cover that either. So we'd have a cap at 70 percent
and we'd have a 30 percent loss. So I would not be in favor of
that.
The Chairman. Troy.
Mr. Skarke. I think the key to a revenue based approach is
the crops still have to be produced by the farmer. And zero
percent of nothing--or anything is still zero. So I don't--I
really think in my semi arid region of the country where the--
and especially after the last 2 years of drought, the yields
are so low I don't see that being explored.
The Chairman. Okay.
Mr. Wedel. Probably from--as a Texas corn producer, I would
probably not be in favor of the revenue assistance--or
assistance revenue program that I have seen. The devil's in the
details. It sounds good on the surface, but when you look at
the details and how the program works, it's going to reward
inefficient producers. I don't think that's a good idea. And
there are some problems with the method of calculation. I know
some of the data that we looked at on that program. I have one
farmer--one farm in one county that would have paid me maybe
$100 an acre and the farm in the adjacent county would have
paid me zero dollars an acre under the past farm program. So
there's a lot of discrepancies, a lot of details would have to
be looked at on that. But I still think I agree with the other
two gentlemen, I think if you take the existing farm program
and maybe tweak it a little bit in some certain areas, I think
we'll come out with a better program.
Mr. Bearden. A revenue guaranteed program, personally I do
not like, and I don't think it's any type of substitute. As I
visited with a guy the other day, I think it would make a great
disaster program, a permanent disaster program, but I don't
think it would be worth anything as far as production. And I go
back to my statement: This is production agriculture. It's not
a way of sustaining life. We don't want to end up, like Jimmy
said, talking to people and finding out ways to scam the
policies.
I think what--this is a farm policy, this has been the
basis of our farm policy for a long time. I think it's worked
great through the years. I think we've--the 2002 farm bill is
probably the best attempt at giving us a safety net that's ever
been, and I think we should continue it. And I don't--I think
we can tweak it around the edges, but we have to remember that
production is what drives these economies, and that's the part
that I see in all these programs is it likes the ability to
drive production. And I'm not saying overproduction, as the
rest of the world would say, but this is--this is production
that gives all these people and myself the ability to help this
U.S. economy and allows agriculture to be about 15 to 17
percent of the gross national product, and I think we should
continue with stuff that rewards us, that doesn't make us turn
into welfare.
The Chairman. Last, should an increase in conservation or
energy programs come at the expense of commodity programs?
Tommy.
Mr. Womack. Mr. Chairman, I would say no, but I would also
add hastily that the energy program is very important in the
food and fiber industry. Renewable fuels are here on the
forefront using wheat straw to make ethanol and such as that.
But I think they should be funded out of an energy type program
somewhere else, but not out of the commodity entitlement.
The Chairman. Troy.
Mr. Skarke. I tend to agree. I don't believe we should--
energy should remain a national security issue, and I don't
believe we should make food a national security issue. On the
conservation program, it has not been as friendly to sorghum,
my sorghum crop, as it has been to other crops.
Mr. Wedel. I too agree, and I think that probably as more
and more corn and sorghum goes into ethanol production under
the current farm bill system, as prices go up, then actually it
will save some money from the taxpayers from the counter-
cyclical standpoint and also from the marketing loan as well.
So that is already in place in the current farm program as far
as those--the savings that will come about as a result of the
strong energy policy. But I too agree any funding for energy
programs should come out of an energy policy, not be taken away
from a conservation title--or I'm sorry, a commodity title.
The Chairman. Thank you.
Mr. Bearden. I think the commodity title should remain the
center point. I think conservation is very, very important. I
think all of us as producers on this panel would agree that we
want to be able to pass down a better farming area than we
inherited. We all--I have a son-in-law that wants to farm, and
I want him to be able to produce--be a good producer. I think
we are conservationists. We know what needs to be done, and I
think that it shouldn't be the center point. As far as the
energy bill, whatever the U.S. agriculture industry can do to
help us become less dependent on foreign oil, I think we should
try to do. If that's--if that's doing some things different
than what we've done in the past--I don't think it should be
taken out of the commodity title though. We're argued as an
easy target, but agriculture has something to offer to this
U.S. economy, and if that's helping us get through tough times
and high energy prices and us help do that in some way through
whatever it may be, through vital fuels, I think we should do
it but, I think it should come out of an energy title.
The Chairman. Thank you very much, gentlemen.
Is there any comments you want to make or any questions you
have that we haven't covered?
Mr. Neugebauer. Just one question I would have is some
discussion about the disaster. If you look back over your
operation for say the last five or 6 years, if you had a good
crop insurance program, would you--would you have made any
change then to the commodity titles moving forward? We have had
some disaster programs. One of the things I hear about disaster
programs, though, is sometimes there's inequity in that for
folks that really didn't get a--have a disaster, you know, may
have gotten payments, where people that did have a disaster
didn't get as much payment or as much reimbursement as they,
you know, thought was necessary.
So if you look back over there, we've had a price safety
net with the farm bill, but you've not had really a production
safety net, how would that have impacted your operation?
Mr. Womack. So Congressman Neugebauer, you're asking me if
I always planted wheat and there was a different insurance
program, would I change to corn or some other crop?
Mr. Neugebauer. Well, no really, I--obviously we don't want
to--we don't want to have policy that encourages you to farm to
a program, but I mean, yeah, I guess, Tommy, that would be part
of the question. Would you have been able to stick with a
particular commodity, or how important would a good crop
insurance program be in your continuing operation in allowing
you to have flexibility?
Mr. Womack. Oh, it would be fantastic. As I said, I farmed
a long time, and so I think each farmer kind of finds its niche
with its own piece of land and makes it work with the different
crops and the weather and the water that he has. And so to
exist, he finds that special niche, so there would be no
changes there.
But a good insurance program where we could sit down with
our banker and discuss: Can I afford to lose 15 percent if I
have a tremendous disaster this year? Could I afford to lose
10? And be able to pick and choose rather than--because the
Federal Government has kind of honed in on us buying 65 percent
coverage because of the premium, and then with the diminimous
yield involved, if I go out there and I have 100 pounds of
cotton left, then that comes off even though it's not feasible
for me to harvest that. So that's kind of a double loss, and I
would kind of explain that this way: If I went out and bought a
new car and I insured it at $1,000 loss and I had a wreck in
it, then I would stand the first--I would know exactly. And the
insurance company wouldn't come back and say ``This right front
tire is still real good, so I've got to deduct that.'' And
that's what happens with crop insurance.
Thank you for the question.
Mr. Skarke. I have to agree with Tommy. A farmer or
producer, it takes a while to learn how to grow that crop, and
when you have something, sorghum, wheat, no matter what it is,
corn, cotton, you know how to produce that crop. And I'm afraid
we're in today--a lot of people are looking at ``Well, let's
see what the crop insurance will pay me and then I'll decide
what I'll plant.'' And I believe we're headed in the wrong
direction right now.
Mr. Wedel. Congressman, I too agree with Tommy. I think
that if we'd had a better insurance program over the last few
years, what little I received from disaster assistance, I think
it would have been much more--handled much more efficiently
through some type of insurance program. And the problem lies
with we're only able to insure basically 65 percent of our
production which leaves you with huge a risk on top, and no--I
don't think any person would feel comfortable, any businessman
would feel comfortable insuring their car or their building or
whatever at only 65 percent value. That is a huge deductible
that you have to stand, as well as taking the diminimous yield
loss. If you've got a small yield on the bottom end, you've got
to deduct that right off of it. So definitely a better
insurance program would be much better than a disaster program.
Mr. Bearden. An improved crop insurance program is
something that we all strive for. I think this is something
that's been going on since the mid-80's trying to figure out
how to solve the problem, Randy. And, you know, I don't know if
we can. I think we should always be looking for new approaches.
It's got to where agriculture operates on such a slim margin
that we have to figure out a way to do that.
My--the other thought of a totally crop insurance program
that I see is that: Is it going to be affordable to producers,
something that we have to pay for? I don't know how we're going
to do it, but that would be one concern that I would have. I
wonder, though, if we shouldn't take a look at crop insurance
as a total product. What we've been doing in ad hoc disasters
the last two or three--or last--every 2 years for the last
couple of years, put that pool of money together and find out
what is the best option for a safety net, a production safety
net for the U.S. producers. And I think that's probably where
we need to go and really look and study at that. And I know
you've been willing to look at it, and I appreciate your help
on that.
Mr. Conaway. I don't have a specific question. Is there--
after having gone through the testimony and thought about what
you wanted to say or wish you would have said or could have
said, do you want to run back through it one more time and just
add any final comments that you might have missed on your first
round through, Tommy?
Mr. Womack. Thank you for the opportunity.
And you know, I probably missed a lot. I think the
important thing that I would just want to reiterate would be
that people like you boys are here to listen to the farmers who
get the dirt under their fingernails and truly have a heart for
agriculture. You boys kind of remind me of a good old country
creature, he knows what to say to help you for today, and yet
he's helping you if you'll listen to him for the future. And
that's what you boys are doing, you're trying to help us for
today to feed the United States people and yet looking into the
future to be sure there's a good food and fiber program there
in place so that the farmers can do a good productive job of
that and that we can also help export overseas. Thank you again
for the opportunity.
Mr. Conaway. Troy.
Mr. Skarke. Again, thank you. Producers have been taking a
pretty strong hit by a lot of special interest groups the past
few years talking about the farm program. I appreciate you guys
standing by our sides. You know what it's all about. Thank you.
Mr. Wedel. Thank you again for coming and thank you for
listening to us. I think we pretty much have a consensus among
this group. I think you've heard that and I think you've heard
that through all the hearings that have gone on through the
House side and also the Senate side. Most farmers are pretty
much happy with the current farm bill the way it's
administered. The way it runs, it does provide us with a safety
net and at a very minimal cost to the taxpayer.
And I would like to hand over that message. Thank you.
Mr. Conaway. Rickey.
Mr. Bearden. I guess the one thing I'd like to say is I
appreciate you all coming. And the other thing is, it's been
mentioned, you three gentlemen have the weight of this industry
to help uphold, and you are a part of this industry. When you
signed on, you became part of this industry. But we look for
you to look to us for ways to make this industry better.
As I mentioned while ago, I have a son-in-law that's
farming and he's got a whole career in front of him, and I want
to make sure that the farm policy that we make right now helps
him and gives him the tools to succeed and to become a farmer
if he so chooses. Many of the people in this audience, their
children or grandchildren may want to farm. I want us to make
sure as we go forth we think about things all the way from
trade deals to all the things that we have in front of us that
have an impact on our industry, and we make sure that we make
good, intelligent decisions that will allow agriculture to
still be an industry when I'm getting around on a--in a
wheelchair, but my grand kids can, if they so want to.
I want to leave you with one thought: Cotton prices since
1985 have declined 17 percent. Average yields have gone up 39
percent. That gives you a plus 15 percent. It's not the
responsibility of the government to make sure that I get a
profitable price, it is responsible for us to make sure that we
have a safety net. U.S. minimum wage has gone up 54 percent
during that time period compared to 15. That's the plight that
our young people face. We need to make sure, not only through a
good safety net, but through good trade deals, that we leave an
agricultural industry that will give our children and our
grandchildren a chance to succeed like those before us have
given me. Thank you.
Mr. Neugebauer. I want to thank each one of your for your
testimony. At this time we're going to dismiss this panel. And
thank you again. And turn back over to the chairman and bring
on a new panel.
The Chairman. Thanks very much, gentlemen. We appreciate
you being here, and we look forward to staying in touch and
continuing the dialog. We now ask--we're going to take about a
10 minute break right now before we move to our second panel.
(Break.)
The Chairman. We'll continue now with our second panel.
We're pleased to have Mr. Dale Murden of Monte Alto, Texas who
is here on behalf of the Rio Grande Valley Sugar Growers, Mr.
L.G. Raun of El Campo, Texas on behalf of the U.S. Rice
Producers Association and USA Rice Federation, Mr. Ted
Higginbottom of Seminole, Texas on behalf of the Western Peanut
Growers Association, and Mr. Dennis Holbrook of Mission, Texas
on behalf of the Texas Produce Association and Texas Citrus
Mutual.
Gentlemen, thank you all very much for being here.
Again, we will submit your entire statement for the record,
but we look forward to any opening comments you might have.
Dale, we'll start with you and go right down the row.
STATEMENT OF DALE MURDEN, RIO GRANDE VALLEY SUGAR GROWERS,
MONTE ALTO, TEXAS
Mr. Murden. Good morning, Mr. Chairman. I want to thank you
for taking the time to come back to Texas today and listen and
speak to those of us who are producers and truly depend on the
farm bill. My family raise sugarcane and my son wonders what
the future really holds for agriculture. We also produce
cotton, sorghum, corn, citrus and vegetables.
Being a farmer for 25 years, I've been active in several
farm organizations and currently sit on the board of the Rio
Grande Valley Sugar Growers, Incorporated, the sugarcane
cooperative that's fully owned by the growers. Why is sugar
policy so important to Texas? Simply put, stability. Farming is
kinda like bull riding. It's a lot of fun, but a whole lot can
go wrong. Just like that rider can't control that bull, farmers
can't control Mother Nature, commodity markets, or subsidized
foreign competitors.
The U.S. sugar program works even under the most
uncontrollable of situations. Look no further than last year.
Hurricanes, flooding and drought challenged us like never
before. But this country's sugar farmers passed that test, and
our no-cost sugar program is one of the main reasons why.
Immediately following Katrina, sugar policy gave USDA the
flexibility it needed to address supply interruptions.
Domestic stocks were quickly made available and USDA was
able to increase imports to address domestic shortfalls. Other
countries aren't so lucky and don't have this kind of
flexibility when disaster strikes. Thailand and Australia both
have experienced weather disasters that have led to short
supply. Much of Brazil's cane crop has been diverted into
ethanol in the face of high oil prices. It doesn't take an
economist to figure out that these events have had a dramatic
effect on the world sugar market.
And it doesn't take a genius to see that America cannot
become dependent on such unreliable foreign sugar supplies.
This country needs homegrown sugar, and America's sugar farmers
need a strong sugar policy. We are gravely concerned about
talks of buying out the U.S. sugar program and converting it to
a traditional row crop program. Such talks are illogical and
ill informed. In times of tight Federal budgets, should
Congress really ask the taxpayers to take on the extra burden
of converting the current no-cost program to a taxpayer-funded
subsidy program? The yearly cost of such a conversion would be
in addition to the billions of dollars that a buy-out itself
would cost.
We are also looking at the Congressional Budget Office's
sugar program score of up to $300 million per year by 2013. We
do not know what assumptions they are using but we are
skeptical that amount of sugar would be forfeited to the
government. We hope to meet with CBO to discuss the methodology
they used to determine those numbers.
I also need to point out that the recent tariff rate quota
announcement by USDA has many of us concerned because this
allows too much sugar to be imported into the United States.
The Department is allowing more sugar into the U.S. than needed
and we producers are concerned that this could create
considerable market uncertainty and the danger of a disorderly
transition to free trade with Mexico in 2008. The current sugar
program is working well. It has kept prices low and stable for
grocery shoppers in times of a national emergency. It is not
costing America's taxpayers anything. It makes sure that we're
not dependent on foreign supplies. And, it helps support
thousands of sugar farmers and factory workers across the
country.
As Congress looks to re-authorize a new farm bill, we
humbly ask that the current program be extended.
[The prepared statement of Mr. Murden can be found in the
appendix on page 77.]
The Chairman. Thank you.
STATEMENT OF L.G. RAUN, US RICE PRODUCERS ASSOCIATION AND USA
RICE FEDERATION, EL CAMPO, TEXAS
Mr. Raun. Thank you, Chairman Chambliss.
Howdy and welcome to Texas. And thank you, staff, for also
being here today. My name is L.G. Raun. I'm a rice farmer from
El Campo, Texas, and my family has farmed rice for over 90
years, covering four generations. I am a third generation rice
farmer, I have been farming for over 30 years. I'm a board
member of the U.S. Rice Producers Association, chairman of the
Texas Rice Producers Legislative Group. In addition to these
groups, I'm speaking on behalf of the USA Rice Federation.
Briefly I will highlight some of the key points from my written
testimony.
Preservation of the 2002 farm act's safety net is the
industry's top issue. There are clear benefits to extending the
farm bill until a multilateral WTO agreement is approved by
Congress. No. 1, unilateral disarmament of U.S. policy, is
prevented. Second, a new farm bill is written only once after
WTO negotiations are concluded and the new trade rules are
known. And third, the safety net that provides farmers and
their lenders with predictability and stability as maintained.
We would also note that farm programs continue to operate in a
fiscally responsible counter-cyclical manner.
Mr. Chairman, as you mentioned earlier, the fiscal year
2005 commodity program costs were actually $19 billion lower
than projected when the 2002 farm bill was passed. In Texas,
the decoupling of payments from production in the 1996 farm
bill has had a serious impact on tenant rice farmers, rice
acres, and in turn, our rural economies of rice growing areas
here in Texas. Although the
Washington Post article on July the 2nd was misleading on
the number of residential areas that were collecting program
payments, the fact remains many tenant farmers were ousted from
rice lands so landowners could take 100 percent of the program
payments.
The rice industry would like the opportunity to work with
the committee on options to make sure we have equitable
administration of the farm program between landlords and
tenants.
The U.S. rice industry opposes any further reduction in
payment levels provided in the current farm bill. Direct
payments were reduced 20 percent in the 1996 farm bill without
an increase in the rice loan rates then or since. Pay limits
today restrict many Texas rice farmers to planting only 500
acres of rice. Just one tractor or combine today costs us
between $200,000 and $300,000. Any further restrictions of pay
limits or limiting access to the marketing loan program will
force farm size down to an uneconomical size.
On the environmental side, rice farmers are proud of our
history of releasing cleaner water from our fields than we put
on them, of releasing water during critical periods, for in
stream bay and estuary needs and providing wildlife habitat in
rice fields second to no other crop grown. Mr. Chairman, we
urge you to support an extension of one of the most popular
farm bills ever. It is good for farmers and good for America. I
thank you for this opportunity to speak today and for your
service to America, and I'm ready to answer questions at the
appropriate time.
[The prepared statement of Mr. Raun can be found in the
appendix on page 82.]
The Chairman. Thank you.
Mr. Holbrook.
STATEMENT OF DENNIS HOLBROOK, TEXAS PRODUCE ASSOCIATION AND
TEXAS CITRUS MUTUAL, MISSION, TEXAS
Mr. Holbrook. Good morning, Senator Chambliss and members
of the Committee. We're grateful that you're here today in
Lubbock for this hearing. I'm Dennis Holbrook, owner of South
Texas Organics. I'm also the current chairman of Texas Citrus
Mutual, a trade association of citrus growers and allied
industries. Today I'm representing the Texas Citrus Mutual and
the Texas Produce Association. These two associations have been
working with other specialty crop groups, as well as the United
Fresh Fruit and Vegetable Association on recommendations for
the next farm bill.
Our proposals are based on the growing importance of the
specialty crop industry and the need for fair treatment of this
sector in the next farm bill. U.S. fruit and vegetable
production accounts for 30 percent of cash receipts for crops,
and with the addition of nursery and greenhouse production, the
figure rises to 44 percent. The value to the Texas economy from
fruits, vegetable and tree nuts is approximately $635 million.
I will focus on the basic principles that provide the
foundation for our recommendation. One, the specialty crop
industry is a critical and growing part of U.S. agriculture,
deserving of full and equal consideration in the farm bill.
Dietary guidelines for 2005 call for the doubling of fruit and
vegetable consumption to address issues of obesity and overall
health. Strong support for the fruit and vegetable industry in
the farm bill will be necessary to achieve this goal. Four,
specialty crops face threats from pests, diseases, and bio-
terrorism that can destroy an entire crop industries.
I am a citrus grower in the Rio Grande Valley of Texas. The
very survival of that industry is now threatened by several
citrus pests in Florida and Mexico. We are talking specifically
about citrus greening, citrus canker and citrus tristeza virus.
The latter two diseases can result in the removal of very large
numbers of trees to stop the spread of these diseases.
We are calling on Congress to support an effort by APHIS to
prioritize foreign pest threats to domestic production of
specialty crops, including bio-terrorism. By the way, citrus
greening is on the Select Agent list for bio-terrorism. When
disease exclusion is not successful and eradication is
necessary, we urge Congress to make Commodity Credit
Corporation funds available to the Secretary of Agriculture,
without encumbrances, to conduct the emergency eradication.
We are recommending mandatory funding of $200 million per
year or 1 billion over 5 years for the Federal School Fruit and
Vegetable Snack Program, including in that is the 100 million
to the selected 50 schools per state in the current program an
addition of another 100 million to be distributed based on the
population of each state.
Currently the most discussed thing about the farm bill is
whether there should be an extension with limited modifications
or a brand new farm bill. I realize my point of view may not be
shared by all in this particular audience today, but the
specialty crop industry is opposed to an extension of the farm
bill. The specialty crop industry does not receive benefits
equal to our part of the agriculture economy. As the face of
the American agriculture has changed and specialty crops have
become more important, we believe it is time for our farm
policy to reflect that change.
Thank you for the opportunity to present this testimony
before you today.
[The prepared statement of Mr. Holbrook can be found in the
appendix on page 68.]
The Chairman. Thank you very much. Now, Ted, before you
present your comments, you see what we've got up here?
Mr. Higginbottom. I saw that.
The Chairman. We've got these great Georgia peanuts. Now,
as you know, I am a big fan of Texas red skin peanuts also. We
grow runners, we don't grow any Spanish peanuts at home. And I
know you've heard my story about I constantly used to go to
Larry's office and carry his staff some Georgia peanuts and
exchange them for Texas peanuts. I'm going to be disappointed
if I leave Lubbock today without some red skin peanuts, now,
let me tell you. My friend Ted Higginbottom. Ted.
STATEMENT OF TED HIGGINBOTTOM, WESTERN PEANUT GROWERS
ASSOCIATION, SEMINOLE, TEXAS
Mr. Higginbottom. Good morning,
Mr. Chairman, and we won't disappoint you. We'll fix you up
with some peanuts. Good morning Congressman Neugebauer and
Conaway. I'm Ted Higginbottom, president of Western Peanut
Growers Association. I would like to welcome you to West Texas.
We appreciate your time and willingness to travel to our rural
farming region. I started out as a small farmer and had to grow
in size to make a living out of farming.
I want to thank this committee for crafting a farm bill in
2002 that makes it possible for producers like me to maintain
my livelihood from farming. I would like to make it clear that
we do support the current farm bill and the peanut program law.
During the first few years of the new program we experienced a
significant increase in the consumption and production of
peanuts. This growing region also experienced an economic boom
with the construction of new peanut handling facilities.
Unfortunately USDA's implementation of the law has changed this
initial success to a near disastrous situation for our growers
as well as our industry. The 2006 crop year should be proof
that the method used by USDA to administer the repayment rate
does not work for our growers. Depressed prices caused by the
buildup in peanut stocks have forced the farmer stock price of
peanuts down. Due to these low prices, U.S. peanut growers have
reduced plantings in the current year. As an example, the
planted acreage for the State of Texas is down by 44 percent.
We ask that this committee mandate that USDA set the peanut
loan repayment rate at a market clearing level. I would like to
bring to the attention a couple of other issues that are
important to us and the rest of the peanut industry. Another
issue that receives a great deal of attention in the national
media is payment limitations. I am shocked at how misleading
this information usually is. I appreciate the Committee coming
to West Texas because we are a prime example of an area that
would be devastated if some of the payment limitation issues or
amendments being considered by Congress were adopted. More
restrictive payment limitations would wreck the farm economy of
West Texas.
One last issue that I want to mention, we do still strongly
support the extension of the peanut storage and handling
payment. We do believe this committee did a great job in
writing the farm bill, including the peanut program in 2002.
Respectfully, this committee only needs to make a couple of
minor tweaks in order for the peanut program to regain its
initial success and to carry out the intent of Congress when
this program was written in 2002. Thank you for conducting this
hearing in Lubbock, Texas. And we look forward to working with
you.
[The prepared statement of Mr. Higginbottom can be found in
the appendix on page 63.]
The Chairman. Thank you. Dale, let me start with you. On
January 1, 2008 United States is set to drop the tier two
tariff allowing duty-free imports on sugar from Mexico. How
will this affect the current sugar program and how will
domestic demand be able to absorb the extra sugar while
preserving the basic structure of the program?
Mr. Murden. That's a great question. I wish I knew. A whole
lot of assumptions, a whole lot of unknowns. I hear the
administration makes assumptions based on unknowns. I've lived
on the Border my whole life and I've dealt with Mexico my whole
life, and my fellow cotton farmers out there will probably tell
you the same thing, it's probably like knowing really how much
cotton is in China. Do you ever really know? I don't think we
know what Mexico is going to do to us.
I know I can compete with them and I know the door swings
both ways. I hope I can sell them my higher quality, lower
price sugar.
The Chairman. What's the industry's outlook for commercial
production of ethanol from sugar, and do you ever envision a
market for ethanol from sugar in this part of the country?
Mr. Murden. You know, Brazil is doing it widespread, but
there's a lot of reasons Brazil's doing it, government
incentive probably being the largest. Sucrose ethanol, probably
might work in the future. My particular sugar mill is in the
midst of a feasibility study regarding ethanol, but for us in
the Valley, you know, we run a pretty green friendly co-op, we
manufacture our own electricity, and so there's benefits of
probably teaming up with say grain sorghum in our area for
ethanol production.
The Chairman. Is all of your sugar in this region generated
from cane?
Mr. Murden. Yes, sir, all ours is sugarcane in South Texas.
The Chairman. L.G., how would you prioritize farm bill
programs generally and the commodity titles specifically? How
would you rank the relative importance of the direct payment
program, marketing loan program and counter-cyclical payment
program? Let me address this to you and Ted, which is obviously
the same question we had of the previous panel.
Mr. Raun. Mr. Chairman, the commodity title is by far the
most important program of the farm bill. It's what keeps U.S.
agriculture operating so that all Americans can benefit from
both the conservation and the nutrition titles. Within the
commodity program, the marketing loan program is the most
important. The nonrecourse loan provision continues to be the
bedrock of our farm program safety net.
It's a major factor that's looked at by bankers and farmers
both on the repayment ability of farm operating loans.
Following the marketing loan program then would be the direct
payment program and then the counter-cyclical payment program.
The Chairman. Ted.
Mr. Higginbottom. I agree with L.G.. The commodity title is
very, very important. The peanut program seems to revolve
around the loan program, so I would have to put it No. 1; the
direct payment being No. 2; and counter-cyclical No. 3. But I'd
also like to reiterate really all three of them work hand-in-
hand. And if one of them is tinkered with a whole lot, I think
it would hurt all three.
The Chairman. L.G., some organizations have explored the
possibility of a revenue based approach for the commodity
title. What do you think of a revenue based approach to the
safety net as a replacement for the current commodity programs?
Mr. Raun. The rice industry has looked at some of those
proposals, and right now we don't see how a revenue based
product would work for rice in the way that would even
minimally replace the current commodity programs that we have.
There may be a role for revenue insurance or a revenue product
that plays a role as a supplement to commodity programs, but we
still don't feel like it could be a replacement for our current
farm safety net.
To a large extent in the rice industry, we self-insure by
irrigating 100 percent of the rice that's grown in the United
States. So we're taking away the drought risk component a lot
of other crops have and revenue insurance is based on large
drops in yields that we don't have in rice farming. We also do
a lot of precision leveling of our fields to self-insure
against lower yields on our crops. So our higher risk areas are
not on the yield side but they're on the price component and
the input cost side. That's where our risks are in rice
farming. But we'd be pleased to work with you and the committee
if you would like more information from us in this regard.
The Chairman. We recently had a variety of genetically
engineered long grain rice grains which have not been
deregulated and were found in commercial samples of long grain
rice. Even though this genetically engineered rice is safe for
human consumption, what needs to be done in the private sector
to reassure markets so the supply and export chain can remain
open, product flowing and prices stable?
Mr. Raun. That announcement on August the 18th, Mr.
Chairman, came as a real surprise to us when they found that
trace amounts of the GM rice had been found in samples of long
grain U.S. grown rice. And the reason being that we've never
grown commercially GM rice. GM rice, genetically engineered
rice has only been grown in some research trials. The LL-601
protein found in that long grain rice was--has been analyzed
previously by both USDA and FDA and both of them agree it
imposes no human health, food or food safety or environmental
concern and is safe for consumption.
The price of rice has dropped 15 percent since that
announcement on August the 18th, so it's certainly a huge issue
in the rice industry. More specific to your question, I made a
list of a few things that I think we need to do to reassure the
markets.
We need to develop a standardized, affordable, verifiable
testing procedure that would be used by the whole U.S. rice
industry and also a standardized reporting method. We need
USDA, GIPSA or the appropriate US agency to issue a
standardized certificate once we have this rice tested that can
be viewed by the markets. Some key sensitive markets may not
accept tests unless the government signs off on them.
Obviously we're going to IP any tested rice once we find if
it is contaminated or not. We need to better communicate the
fact that the LL-601 is safe and that all U.S. rice is safe.
We're in the process of--regulatory process of getting the LL-
601 deregulated. We expect deregulation in the next 40 or 50
days. We think that will help the situation a lot. We need--the
people that designed and were researching this product, to step
forward and provide the necessary commercial assurance
agreements, similar to what they did in the BT 10 corn
situation, to ensure that exports continue to flow in all of
our markets. But we will continue to keep this committee up to
date as we proceed, and we look forward to working with you and
your staff as we process through this issue.
The Chairman. Dennis, there are proposals such as state
block grants, additional research funding and counter-cyclical
payments which have been made to provide more money to the
specialty crop industry. Which of these ideas would benefit the
industry most and how do you find--how do you propose we fund
such proposals?
Mr. Holbrook. Well, I would say that the grant proposals
for additional research is something that's been badly needed
in our particular sector of agriculture. We've got issues with,
as I indicated in my comments, of pests and diseases that are
constantly coming into the country with greening is the most
recent one in Florida. We need to learn how to be able to
combat those. You know, that's a $64,000 question, is how you
come up with funds. You know, I'm not sure that I have a magic
bullet for that answer today because I think it's something
that we need to look at and perhaps, you know, there's ways to
come up with that additional revenue.
The Chairman. Brazilian cotton case has raised questions
regarding the classification of direct payments as the green
box because of the planting flexibility provisions restricting
fruit and vegetable production on base acres. Do you have any
thoughts about whether or not we ought to relax this provision
on base acres?
Mr. Holbrook. Well, our particular position on that, Mr.
Chairman, is the fact that provides an unfair advantage to
those who are receiving those payments that currently the
specialty crop industry does not receive. So by having people
who are--have that flexibility to go in and out could create
some real commodity oversupplies, cause some real market issues
in the specialty crop industry.
The Chairman. You may or may not know that my son-in-law is
a special crop grower. He's a vegetable grower, and he has
always told me that ``What we want is you all just to leave us
alone.'' But at the same time, if we change this planning
flexibility, it puts the specialty crops in an entirely
different atmosphere within the farm bill. And we have had
requests as we've been around the country from specialty crop
growers that some say exactly what Joe says, and that's ``Do
nothing. Leave us alone. Don't change it.'' We've also had
comments from folks who, as a specialty crop grower, would like
to have the ability to take base acres, not receive payment on
those base acres but to grow under contract specialty crop
products. Do you have any thoughts on whether or not that would
work and what impact that might have on your industry?
Mr. Holbrook. I guess the best way to address that is that
specialty crops, they're very sensitive to price fluctuations
being the fact that if there's oversupply then, you know,
you've got some problems with the fact that prices are going to
be reduced. You know, we have kind of--in our industry we've
basically survived on--without the support, financial support
in most respects in government payments and so forth. I think
that, you know, we probably are better off if we can just
continue on with the way we're going as we've been going with,
you know, perhaps some areas that are like research, some of
those.
You know, crop insurance is another issue that needs to be
looked at that could be greatly improved to assist us in our
particular area of the agricultural sector.
The Chairman. Gentlemen, do you have questions, comments?
Mr. Neugebauer. (No audible response.)
Mr. Conaway. (No audible response.)
The Chairman. All right. Well, gentlemen, thank you all
very much for your input. We appreciate your comments, your
testimony, and I really appreciate your taking the time to come
to be with us this morning. And we look forward again to
continue to dialog with all of you. Thank you.
We will now move to our third panel. I'll ask them to come
forward. Mr. Barry Mahler of Iowa Park, Texas on behalf of the
Association of Texas Soil and Water Conservation Districts and
the National Association of Conservation Districts, Mr. Mike
Berger of Austin, Texas on behalf of the Association of State
Wildlife Agencies, Mr. Dale Smith of Amarillo, Texas on behalf
of Texas and Southwestern Cattle Raisers Association and Texas
Cattle Feeders Association, Mr. Keith Broumley of Hico, Texas
on behalf of Dairy Farmers of America, Mr. Bill Battle of
Tunica, Mississippi on behalf of Catfish Farmers of America.
Gentlemen, thank you very much for being here.
You have heard the process that we use. We will certainly
take your full statement and put it in the record, but we look
forward to your opening comments.
Mr. Mahler, we'll start with you.
STATEMENT OF BARRY MAHLER, ASSOCIATION OF TEXAS SOIL AND WATER
CONSERVATION DISTRICTS AND THE
NATIONAL ASSOCIATION OF CONSERVATION DISTRICTS, IOWA PARK,
TEXAS
Mr. Mahler. Thank you, Mr. Chairman. My name is Barry
Mahler. I am a producer from Iowa Park, Texas, the 1Rolling
Plains where it's been quite dry the last year or two.
And certainly we're getting some change now and we're
optimistic about that, but it's been tough. And one of the
things that's been extremely tough for us, of course, is
increased input cost. And any time you have crop losses and a
tremendous run-up in our input cost, it creates problems.
Mr. Chairman, I'm at a little bit of a disadvantage because
I do a little farm broadcasting work along with my farming
operation, and where I work when the red light comes on that's
when you start. So I'm going to have to reverse that thought
here this morning, and I'll try to behave. I would love to talk
about commodity programs, entitlements, I'd love to talk about
crop insurance, I'd love to talk about maybe an ad hoc disaster
program or some ways we could make this work. But my goal here
today is to talk about soil and water conservation. I do
represent soil and water conservation district directors from
across the State of Texas and actually across the United
States. It's a tremendous effort to protect both the public and
private lands, and I certainly am privileged to represent them
here today.
But the one comment I will make up front is that we know
very well that there will be no conservation in the country
without ag profits. It is absolutely imperative that we have a
strong economic base for agriculture to enhance soil and water
conservation. They work hand-in-hand. We won't have long-term
profits without it, we won't have conservation without ag
profits, and so the two work hand-in-hand, and we appreciate
you for inviting me to be on this panel today.
Just a few comments on some things that I pointed out in my
written testimony that I think we should really take a look at,
and one of them is technical assistance. And certainly
technical assistance is literally the glue that joins our
conservation efforts together in these great United States. And
of course, that is the ability of the NRCS and USDA to bring
that great engineering expertise and application expertise to
the country to work with local soil and water conservation
districts to make soil and water conservation happen in this
country. It's absolutely important, it's going to be one of the
goals, I think, of our National Association
Conservation Districts to point out how important that's
going to be. EQIP program, Environmental Quality Incentive
Program did fantastic in the 2002 bill. We've had great
increases. We think we've done a great job putting that money
to use, and we would like to see that extended in either an
extension of the 2002 bill or new legislation in 2007. The
great thing about EQIP, locally led, we've got our work groups,
it's a voluntary program and it has been very well received by
producers across the country and there's been some great work
done, and we need to do more of it.
The CSP program designed by the 2002 bill, mixed reactions.
The big problem has been funding. If we could fund it totally,
it would be fantastic. We've not been able to do it. Let's look
at some different ways to fund it. Maybe some tax incentives
instead of direct payments for doing great conservation work.
May be something there that we can work out. The main thing is
we need to make it available to producers all across the
country and not leave it as a have or have not.
Soil and water conservation districts are vital to soil and
water conservation in the United States. They're these
individuals that give up their time and volunteer to work
together with state funds, Federal funds, state organizations,
the Federal, of course NRCS, our sister agency, and soil and
water conservation to put soil and water conservation on the
ground. They do a tremendous job. It's a tremendous service to
agriculture, and they help guarantee not only the present of
good production agriculture in the United States but good
production agriculture for the future of this great country,
and we think it's great.
Strong conservation districts across the country, vitally
important in my opinion to making this--this agricultural
industry to continue to be productive. And with that, I see the
red light and I will yield my time. Thank you very much.
[The prepared statement of Mr. Mahler can be found in the
appendix on page 72.]
The Chairman. Thank you very much. Mike.
STATEMENT OF MIKE BERGER, ASSOCIATION OF STATE WILDLIFE
AGENCIES, AUSTIN, TEXAS
Mr. Berger. Good morning Mr. Chairman, and Representatives.
I'm Mike Berger. I am the Director of the Wildlife Division of
the Texas Parks and Wildlife Department. Today, I represent
that department as well as the Association of Fish and Wildlife
Agencies that represents all the state wildlife agencies around
the country. I want to thank you particularly for your support
of those agencies and for support of the Fish and Wildlife
Conservation Programs in the conservation title.
We support the current farm bill, and we have, as you won't
be surprised, a suggestion or two that we think might make it
better. These include better incorporation of local guidance,
improved integration with local and regional resource
initiatives and expanded delivery of technical assistance. The
current agriculture issues of complexity, diversity and
interaction defy the one size fits all model. Incorporating
local guidance and integrating regional resource initiatives
directed toward solving multiple resource management concerns
will ensure the most cost effective means of delivering
conservation programs that meet local producers' needs. To this
end, we have some suggestions.
Establish Habitat Technical Teams made up of state and
Federal conservation agency staff. These teams would seek to
integrate state farm bill conservation program delivery into
existing state and regional fish and wildlife conservation
plans and programs. Create state-level conservation, producer
and business advisory groups charged with establishing
guidelines for farm bill energy programs which ensure the long-
term financial health of farm and ranch families, energy
production and the environment.
Institute the associations suggested CRP, EBI scoring
system that provides equal weight to soil, water and wildlife
issues. Consider the creation of regional EBIs that fairly
balance landscape differences, areas of ecological significance
and state and regional conservation priorities. Decouple the
continuous CRP and Wetland Reserve
Program from the CRP county acreage caps. Local playa
wetlands in this area are vital to the Ogallala Aquifer
recharge, but because they're in capped counties, they're
currently excluded from receiving needed protection and
restoration under CRP or WRP.
Restore EQIP'S original cost effective whole farm resource
system approach. Expand this system so that it integrates
local, state and federal resource goals, including water, soil,
air and wildlife.
Increase WHIP funding and focus it on local issues through
the use of having the technical teams that I mentioned earlier.
Simplify the contracting for Farm and Ranch Protection Program,
Grasslands Reserve and Wetland Reserve by using a single
easement deed contract, preferably the current Wetland Reserve
Program contract.
Expand the Grassland Reserve Program, targeting areas with
the highest land fragmentation rates while emphasizing
conservation and restoration of native habitats. Create
priority areas using state wildlife action plans. Ensure the
Forest Land Enhancement Program funding is used for its
original purpose of providing technical conservation assistance
to Texas' 300,000 non-industrial private forest owners. I have
some other remarks, but I see that red light is on and I'll
pass those up and answer any questions you have at the proper
time. Thank you.
[The prepared statement of Mr. Berger can be found in the
appendix on page 53.]
The Chairman. Thank you very much. Dale.
STATEMENT OF DALE SMITH, TEXAS AND SOUTHWESTERN CATTLE RAISERS
ASSOCIATION AND TEXAS CATTLE FEEDERS ASSOCIATION, AMARILLO,
TEXAS
Mr. Smith. Chairman Chambliss, Representative
Neugebauer and Representative Conaway, thank you for
allowing me to appear before you today and provide the Texas
cattle industry's perspective on the upcoming 2007 farm bill.
My name is Dale Smith. I am a cow-calf producer, stocker
cattle operator, and cattle feeder from Amarillo, Texas. I'm
also a member of Texas and Southwestern Cattle Raisers
Association, Texas Cattle Feeders Association, Panhandle
Livestock, and the National Cattleman's Beef Association.
Before I get into the farm bill, I'd like to touch on an
extremely important issue that is currently affecting many
cattlemen. The Southwest is dealing with a drought of historic
proportions. Estimated livestock related losses are $1.6
billion in Texas alone and 77 percent of the state's hay
production has been lost. This is in addition to the millions
of acres and miles of fence that were destroyed by wildfires
that ravaged through the region, especially the Texas
Panhandle, earlier this year. As such, I respectfully ask this
committee and Congress to act quickly and pass an agricultural
disaster package.
As the nation's largest segment of agriculture, the cattle
industry is focusing on continuing to work toward agricultural
policy that preserves the right of individual choice and the
management of land, water, and other resources; provides an
opportunity to compete in foreign markets; and does not favor
one producer or commodity over another. As a cattle producer,
my livelihood is tied to many other agriculture commodities.
Livestock consume three out of four bushels of the major feed
grains harvested in the U.S., and beef cattle account for
nearly 30 percent of the consumption. As such, cattlemen
support the continuation of reasonable, market-oriented
programs for crops, but strongly oppose government supply
programs. It is not in the farmers' or ranchers' best interests
for the government to implement policy that sets prices;
underwrites inefficient production; manipulates domestic
supply, demand, cost or price.
Likewise, conservation programs and environmental
regulations must be based on common sense and sound science.
One such program that achieves this is EQIP. Cattle producers
across the country participate in this program, but arbitrarily
setting numerical caps that render some producers ineligible
limits the success to the program. Addressing environmental--
addressing environmental problems is not a large versus small
issue. All producers have a responsibility to take care of the
environment and their land and should have the ability to
participate in the programs that establish and attain
environmental goals. Therefore we work very closely with the
NRCS office to administer the NRCS program and hopefully they
will maintain fully staffed to provide technical assistance.
We support efforts to increase our nation's renewable fuel
supplies; however, I reiterate that livestock consume three out
of four bushels of the major feed grains harvested. And
governmental incentives to expand ethanol and other alternative
fuel supplies should not function to the detriment of livestock
producers.
U.S. cattlemen have been and continue to be strong
believers in international trade. We support aggressive
negotiating positions to open markets and to remove unfair
trade barriers to our product. Cattlemen also support
Congressional and regulatory action to address unfair
international trade barriers that hinder the exportation of
U.S. beef, and I appreciate the Committee's efforts to reopen
foreign markets that were closed to U.S. beef after the
discovery of BSE. As you all know, foreign markets are key to
success in most, if not all, segments of production
agriculture.
Last, I want to touch on a few issues that are not
addressed in the farm bill; namely country of origin labelling,
and in other proposals that limit the cattlemens' ability to
mark their cattle or restrict ownership on cattle. But in
saying that, we're also very much for the enforcement of the
Packers and Stockyards Act.
Thank you very much for allowing me to be here today, and
I'd like to answer any questions.
[The prepared statement of Mr. Smith can be found in the
appendix on page 103.]
The Chairman. Thank you. Keith.
STATEMENT OF KEITH BROUMLEY, DAIRY FARMERS OF AMERICA, HICO,
TEXAS
Mr. Broumley. I'm Keith Broumley, a dairy farmer from
Central Texas representing Dairy Farmers of America. Thank you
for the opportunity to address this hearing. And because we
don't think there's going to be any radical shifts in the
policy direction as a result of the 1907 farm bill, we support
the view of an extension of the current farm bill which will
work well for most of the nation's dairy farm families. We feel
the next farm bill should maintain some form of an economic
safety net for dairy farmers. Safety nets prevent prices from
falling so low that businesses become unviable. And hope
Congress will maintain these policies.
The most important safety net provision we have in the
dairy--is the dairy price support program. We favor continued
operation of the dairy price support program at a targeted 9.90
U.S. average manufactured price. We would oppose granting the
Secretary any discretion, which would reorient its intended
purpose away from supporting the income to dairy farmers just
to result in minimizing government costs.
Additionally, I would request that the CCC take action and
adjust the support program purchase price levels for cheese,
butter and nonfat dry milk to reflect significant additional
costs manufacturers face when selling products to the CCC. The
second safety net is the Milk Income Loss Compensation Program,
which DFA supports as long as there are no caps limiting access
to the benefits. This program puts cash in the hands of
producers at the very point it is needed, at the lowest part of
the price cycle.
In general, the guidelines for a safety net program should
be programs that do not discriminate between farmers of
different sizes; does not discriminate between farmers in
different regions of the country, and it should not be high
enough to encourage additional production. We support
continual--continuation of the Federal
Milk Marketing Orders program. Marketing orders are
important to us as they undergird all of our marketing and
pricing efforts all over this country. Another reason we
support extending the current farm bill is so that we can have
a more clear view of the WTO--WTO trade talks. We can see no
reason to change our programs until we know what the World
Trade Rules will be and more importantly perhaps who will--who
will play by them.
We support the Dairy Export Incentive Program and would
appreciate the Secretary's use of it. Finally, we support the
Senate Bill 1417 offered by Senator Craig that imposes tariff
rate quotas on certain casein and milk protein concentrate
products. Current tariff rate quota schedules for dairy
products were written before these products were mainstream
dairy ingredients. Like all other policy areas, this section
needs to be reviewed and updated to reflect today's economic
realities.
Thank you for your time.
[The prepared statement of Mr. Broumley can be found in the
appendix on page 56.]
The Chairman. Thank you very much. Bill.
STATEMENT OF BILL BATTLE, CATFISH FARMERS OF AMERICA, TUNICA,
MISSISSIPPI
Mr. Battle. Chairman Chambliss, members of the committee.
My name is Bill Battle. I'm currently president of the Catfish
Farmers of America, an association representing catfish farmers
across the nation. Thank you for this opportunity.
The U.S. catfish industry is a true American success story.
20 years ago, it had limited demand and name brand recognition
outside of Mississippi, Alabama, Arkansas, and Louisiana. Since
then, U.S. catfish farms have literally built the industry pond
by pond making catfish farming the largest agriculture industry
in the U.S. today. At the same time, through an innovative and
expensive marketing program we successfully developed a
significant national market for domestically farm-raised
catfish making it the fifth most popular seafood in America.
The catfish industry accounts for significant shares of
economic output in jobs in catfish farming and processing
areas. The economic health in these regions depends on the
health of the industry. If the farmer cannot sell their food
size fish, the processors cannot in turn go elsewhere on
supply. If the processors cannot sell their products, farmers
cannot sell their fish. One of the most serious challenges
facing our industry in recent years has been imports,
particularly those from Vietnam. The Vietnam fish known as
``basa'' and ``tra'' are different species than U.S. catfish.
They are able to establish a foothold in the U.S. market by
bootstrapping their product to our successful market program
using names and labels suggesting that their product is the
same as U.S. catfish. Worst yet, they took a significant share
of the market by unfairly pricing their product at levels below
the cost of our most efficient farmers and processors. By 2002,
the sale prices had been depressed to their lowest point in 20
years. A lot of catfish farmers didn't survive during this
period and the industry fell on the brink of collapse.
Congress enacted legislation requiring that the different
Vietnamese species of fish be labelled properly as to avoid
confusion with domestic catfish, but this alone could not
remedy the problem of unfair pricing. In 2003, the Commerce
Department imposed anti-dumping duties on Vietnamese fish
imports which would have provided the necessary relief, however
widespread mislabeling of Vietnamese ``basa'' and ``tra'' as
those species such as Grouper has allowed a large share of
import to side step--side step the payment of duties.
The government has been actively investigating these
practices and several Federal criminal indictments have already
been brought.
However, mislabeling remains a serious problem. American
consumers must be allowed to reliably choose the product they
prefer to eat. Another important issue is the presence of
banned and dangerous substances, including one known carcinogen
that had been found in Vietnamese imports. These expose
consumers to serious health risks and undermine consumer
confidence in seafood products.
The U.S. catfish industry supports free trade and supports
establishing permanent, normal relations with Vietnam. Having
Vietnam subject to the same rules as many other exporting
countries will be a step in the right direction. At the same
time, we must continue to address unfair trade, mislabeling
practices, safety concerns and other issues that have hindered
our industry's ability to grow.
On behalf of the U.S. catfish industry, I respectfully
request this committee take all appropriate steps in the 2007
farm bill to ensure that our agriculture industry is afforded
the full benefits of the trade laws.
Thank you for this opportunity.
[The prepared statement of Mr. Battle can be found in the
appendix on page 42.]
The Chairman. Thank all of you gentlemen.
Mr. Mahler, given the budget constraints, where should the
committee focus its resources which are going to be available
for conservation?
Mr. Mahler. We've been very pleased with the
EQIP program because we think it's put a lot of
conservation work on the ground nationwide. And obviously
there's some considerations that need to be taken to make it
even a better program. Of course, your EQIP program only
functions because you've got great technical assistance in your
local soil and water conservation districts. So those two would
have to almost go hand-in-hand. It's hard to be as strongly
supportive of the Conservation Security Program, although we
think it's a great concept. I think it's long overdo to realize
that there's some people out there doing a great job and they
should be rewarded for that. We also realize that it leans
toward being WTO friendly, which is excellent. The problem has
been though is that we have not had the level of funding to
make it available to producers nationwide. We've got haves and
have nots.
In my own district, I've got a neighbor right across the
fence that's in and I'm not because more of my land falls in
another watershed than the one that had been approved in our
area. We're both doing comparable jobs of conservation, but
he's receiving the payment and I'm not right across the barbed
wire fence just because of locale. So that's been the big
problem with it. Once again, we think it's a great concept,
we'd love to see it. But we realize budget constraints on it
are going to be tremendous.
So to answer your question: The EQIP program we think has
functioned well. With some minor tweaking and adjusting a bit,
we think we can continue to do a great job managing both the
public and private lands in the United States, certainly here
in Texas. And along with that, great technical assistance from
the NRCS is tremendous. They do such a great job in not only
the engineering practices that we need but overseeing it and
seeing it through it is a very unique situation that they have,
and they do a great job for us.
The Chairman. We have had some conversation from folks in
other parts of the country as we've been around our hearings
about possible reduction in authorized acres of CRP. We've got
about 44 million acres authorized. I think the most that we've
ever had in the program is around 40. Do you have any thoughts
relative to what we might do with CRP, particularly as we look
toward expanding the energy title?
Mr. Mahler. Mr. Chairman, as you--as you know and we've
mentioned here throughout the morning, we've been in a
tremendous drought across the Plains. One of the things that I
always think about is that even though we've been in drought
that is certainly as bad as what we had back in the dust bowl
days, which is when the organized conservation effort in this
country really got started was because of the problems we had
then, even though we're that dry and drier, we have not had
those old red sky days when that dust has moved by. And we
always joke in our part of the country ``We saw Lubbock come by
yesterday,'' we haven't had that. And the reason we haven't had
that is due to great conservation efforts by our producers out
there in the country. Not only through EQIP programs and other
things, but through CSP. There were so many acres that were so
fragile that were covered with permanent grass and other means
that protected that it has literally kept us from having
another dust bowl in this part of the country. I firmly believe
that. So to give that up would be very, very hard indeed. Plus,
one of the things I really like about CSP is it----
The Chairman. Are you talking about CSP or CRP?
Mr. Mahler. Yeah, CRP. I'm sorry, CRP, I'm sorry. Thank
you. The CRP deal actually is a reserve program. Think about
where we would be in this country today if we would have had a
similar program for energy some 20, 30 years ago and actually
had that capability in reserve. We're talking about a
tremendous amount of acres out here that are lying idle, under
covered, protected. If we got into some kind of national
security problem or if we got into some kind of a food problem,
we could literally have a lot of that land back in production
in, say, eight to 9 months. That's a tremendous reserve for
this country. Wouldn't we love to be in that shape in our
industry situation today. So it's got some benefits other than
just being there to take care of the conservation issues.
Now, how do we pay for it? That's always the big question.
We're obviously going to have to have some changes, because I
feel like it would be a budget buster if we continued to add to
it. Actually, there's some land out there that needs to be
added to it.
The commodity programs are telling us right now the
markets, we don't need the production. We obviously don't need
that extended production to bring it back into production. So
we need to find some way that maybe we can keep it idle, keep
it protected and utilize it in some other way. But it's been a
fantastic program both in conservation and also from supply
management. It's been a--it's been a successful program.
The Chairman. Mr. Berger, let me just say that
I have a great appreciation for what you all are doing with
wildlife in Texas. I am--I am a big quail hunter. That is my
passion, and I'm fortunate enough to live in part of the
country where it is sort of the king of our hunting operations
in Southwest Georgia. But I also have had the opportunity over
the last several years, and I'm coming back again this year, to
Roberts County, Texas to hunt. So I really do appreciate you
all continuing to have the hatches of quail that you have
managed to have up here, and we're going to continue to try to
make the supply and demand issue important in quail hunting as
well as in production agriculture.
Mr. Berger. Very good. We're proud to have you back. The
drought that we--that's been spoken of so much here has cost
our quail production some this year, but I think there's going
to be some birds around for you. We're glad to have a good
population of wild birds, and we'll welcome you to come here.
The Chairman. How should Congress balance agriculture's
potential and renewable energy production with wildlife,
environmental and feed stock concerns?
Mr. Berger. As Mr. Mahler said, there's lots of CRP out
there, and it is a tremendous reserve. That's probably our
largest, it's one of the oldest, one of the original CRPs along
with grassland reserve and wetland reserve, and they are great
stories items. I think that's one way of balancing the
wildlife. And there are other benefits that are associated with
that CRP as the storehouse and as ready land.
Regarding CRP, one of the things that has happened here in
parts of this country is there are many counties, quite a few,
that are overenrolled, they're over that 25 percent cap, and
they're not easily converted into farming or ranching at this
time without considerable investment and especially on areas
that need to be protected from soil and wind erosion. They have
already been incorporated into the economy of those counties. I
think it would be a real shame, not only for wildlife but for
the local people and local businesses if those counties were to
come out of CRP in order to meet a 25 percent county by county
cap that would be strictly enforced.
But we'd like to see those lands stay in conservation,
particularly for some species like lesser prairie chickens
which are--up in this part of the country we're trying to save
them from becoming on the endangered species list which would
be an outcome that would really be damaging for agricultural
producers throughout this region.
The Chairman. The programs you mentioned are all related to
cover for wildlife and they work very well. But with the
drought situation, and you alluded to that in talking about the
quail hatch, we've got the same problem, we've had a lot of
drought this year in Southwest Georgia and it has affected our
wildlife production. And I'm curious as to whether or not you
have any thoughts about the conservation programs that we have
in effect from a water supply standpoint as it might affect
wildlife. With so many farmers now getting additional income
from rental to hunters for various types of wildlife, are there
any things that we may need to put more emphasis on from a
conservation standpoint to ensure not only we've got cover but
we've got water for wildlife also in these draught stricken
times?
Mr. Berger. As you probably know, one of the best and most
cost efficient ways of keeping water in underground aquifers
and in ponds and streams is to have proper land management all
around--around that area. Good land management is good water
management and incorporates that water into the--into the soil
and it makes it available for wildlife and for people too to
use.
The market in much of this part of the world and the
Rolling Plains and throughout Texas it seems to be driven these
days by the recreational buyer who's coming in and the
fragmentation that is created by that is a concern. But I think
if we consider the soil, the water and the wildlife when we're
constructing the EBI, consider those factors when we're talking
about EQIP payments and CRP and all that is the way to keep
that in. Keep water and wildlife as integral components of all
programs when we consider payments we're making under various
conservation programs.
The Chairman. OK. Mr. Smith, I have to tell you that as
we've been around the country, we've kind of had this little
rating game going because I'm a big beef consumer. I try to
help your industry as much as I can.
Mr. Smith. I like to hear that.
The Chairman. So everywhere we go, we have to have an
opportunity to have a steak. And as we've compared steaks
around the country, I'm going to have to tell you that Nebraska
is at the top right now, and that has hurt Vernie's feelings
dramatically.
Mr. Smith. They're probably buying cattle out of Texas.
The Chairman. As we left the steakhouse in Nebraska the
other day--other night, he told us, he said ``Well now, you all
have not seen anything until you get to Texas.'' Unfortunately
we got in about 11 o'clock last night and we didn't have an
opportunity to do our Texas comparison. So I've already told
everybody how much I love Lubbock, so I've got one more reason
to come back to Lubbock because we've got to have this
comparison of Texas beef, and I have no doubt that Vernie is
going to find the cow and make sure the steak we get here is
the best steak around the country that we've seen.
What effect would bans on packer ownership and forward
contracting of cattle and mandatory country of origin labelling
have on livestock producers?
Mr. Smith. No. 1, it would just--it would be just
government interference in free trade. I don't see why the
government should come in and say who can own cattle and who
can't own cattle. And I know we--plus, it hinders cattle
producers' ability to forward market their cattle which is an
excellent risk management tool. I'd rather have that option
available to me than some type of a livestock price insurance
that's subsidized by the government. I'd rather be able to make
my decisions on how I want to market my cattle and who I want
to do business with. But in saying that, I also want there to
be, through the Packers and Stockyards Administration, to be of
strict enforcement of the antitrust laws and make sure that
there's no collusion or price fixing or anything like that. And
we are down to four to five major packers right now, and that
is a fear that you could have that. But I think with adequate
government oversight that should be alleviated.
In regards to country of origin labelling, I see that too
is--to me, that's a market program. If Tyson or Cargill want to
label their beef that I produce and it's from Texas as compared
to Nebraska and that it's--it's that much better, then I'm all
for that. To force--for the Congress to force the industry to
use country of origin labelling on our imports of cattle from
Canada or Mexico and segregate those cattle all throughout the
whole production system, you're basically just adding a cost
with very little benefit. If there is a benefit, let's let the
market decide and let's let the market--let's let the market
take advantage of that, including myself.
The Chairman. We've had this issue of reauthorization of
mandatory price reporting law and we've had some conflict
between the House Ag Committee and the Senate Ag Committee.
It's primarily been whether we do it for 1 year or 5 years. And
we've go two census from Iowa who have been firm that that
effect ought to be 1 year versus five. So unfortunately we're
at loggerheads and we have not been able to get that bill
reauthorized, but as you know, we're operating on a voluntary
basis right now and I am doing my best to try to figure out
some common ground here that we can get this thing done. But
how important is mandatory price reporting to the cattle
industry?
Mr. Smith. With more and more trades being made on a
formula basis where we're using USDA data that's being
published on a weekly basis to market your cattle, and it does
help very much that cattle producers use that information to
market their cattle the best they can. So it has--it has been
important.
The Chairman. What's your most pressing environmental or
conservation concern, and do existing conservation programs
help you address them? And any thoughts you have relative to
improvements that we might make from a cattle perspective in a
conservation programs?
Mr. Smith. OK. EQIP is an excellent program in a lot of
different ways. On a rangeland perspective, it helps us with
our brush management, it helps us with water development and
properly grazing our rangeland. It helps us recover from the
wild fires that we had in the Texas Panhandle. And then from a
feed yard perspective or for a dairy perspective, it helps
producers be able to build lagoons or sprinkler systems so they
can comply with environmental regulations. So EQIP has been a
very, very good program and I've been very active in several
different EQIP contracts. The Conservation Security Program is
also very good.
What I like about it is that unlike a lot of these programs
in the past, and this at some point to me was a criticism of
when EQIP first came out, is that you got--the worse your
rangeland condition was, the higher your score was, or the
worse--in other words, if you did--or the worse your brush
problem was, the higher your score was and therefore, it
penalized good producers and it made--gave poor producers at an
unfair advantage when it was applying for EQIP funds. So that's
one thing I like about CSP, is it does reward good
environmental stewardship. And my family's ranch is in a CSP
contract and it has been very good. And I'm proud to say that
I'm in it because we've earned it, I feel, through good
stewardship.
Some of the old programs basically were rewarded,
inefficient producers or in bad stewardship to some degree.
Granted their goal was to try to get them from becoming bad
stewards to convert them over to being much better stewards of
the land.
The Chairman. Mr. Broumley, we had your DFA folks in
Washington this week. I visited with a number of them, my long-
time, good friend Gary Hamblin and other executives and
directors were in town, and I was very pleased to have a chance
to visit with them.
The reported aggregate measure report the dairy is 4.5
billion. And although current WTO negotiations are suspended,
if the United States' latest proposal was accepted, the U.S.
would be restricted to 7.6 billion in the Amber box.
These reductions will require proportional cuts in all
commodities, including dairy. How do you envision dairy
adjusting to a scenario of paying your fair share of the
reduction in the Amber box?
Mr. Broumley. I'm going to have to get back with you on
that. I'm sorry.
The Chairman. Currently only dairy producer cooperatives
have the ability to forward contract with their members. Does
forward contracting provide producers with an additional risk
management tool to manage price and income volatility in the
marketplace, and should this option remain available only to
dairy producer cooperatives, or should processors and non
cooperative dairy producers also be able to utilize this risk
management tool?
Mr. Broumley. As of now, I haven't used that risk
management tool. I--and there are others around this country
that have. And to my knowledge, those that have utilized this
tool, there's been more losses in the situations than there has
been gains. Understand that a lot of people are using that to
set a bottom on their prices so that they're not--so they are
protected on the bottom side. And I have not used that tool
today as far as it being able to be used by others in the
industry. At this point in time I'd like to see it remain as
is.
The Chairman. OK. Mr. Battle, I've been to Tunica,
Mississippi, and I'm glad to know that there are catfish raised
there, because just like beef, I'm a big consumer of fried
catfish. That's a great southern tradition as you know, and you
guys do a great job. But what I didn't know, as I say, is that
you grew catfish in Tunica because when I was there, we were
playing golf and attending a little facility down the road
probably from your catfish farm that probably keeps your
catfish awake at night because of all the lights of the casino
and all the noise that's made there, and I would much rather
made a deposit eating catfish than the deposit I left at the
casino that night. What types of consumer marketing strategies
have the
Catfish Farmers of America been able to develop to promote
U.S. farm-raised catfish as a superior product of the
alternatives that you discussed in your testimony?
Mr. Battle. Well, the alternatives are not really catfish,
is our problem. We can compete with anybody, but a ``basa'' and
a ``tra,'' how many times have you gone to the store to buy
``basa''? If they'll label their product what it is, we don't
have a problem competing. We spend about $25 million a year
that comes off of a feed checkoff to promote U.S. farm-raised
catfish. But when they come in here and put it in a box that
looks like farm-raised catfish and can raise it for nothing
because of labor costs and several other reasons, we can't
compete with that. If they don't cheat, we can compete.
The Chairman. I'll have to admit I didn't know what
``basa'' and ``tra'' was. In fact, in looking over these
questions I got my staff up here, and I said ``What in the
world is that? Is that right?''
But we're in the midst of final negotiations now with the
Vietnamese on a bilateral trade agreement, and I'm assuming
that the Catfish Association has been apprised of what's in
there relative to country of origin labelling or whatever. Are
you familiar with that enough to know as to whether or not your
association is satisfied with the terms of that agreement, and
are we putting the right kind of restrictions on them?
Mr. Battle. We're putting the right restrictions and
everything, if it applies and if it's enforced, is going in the
right direction. But enforcement and circumvention is our major
concern. They are--the Vietnamese sending their fish to
Cambodia now to be processed can circumvent the avenues and the
tariffs, and they call it ``Grouper,'' they call it whatever
they want to get it into the United States, and it's hard to
compete with people that are not honest.
The Chairman. So irrespective of what we've got in the
agreement there, do you think there are current laws in place
right now to prevent that mislabeling is just a matter of
enforcement rather than requirement?
Mr. Battle. Inspection and enforcement.
The Chairman. Yeah. Is all of that USDA or is FDA involved
in that also?
Mr. Battle. FDA, USDA, USDC, to some extent, and there have
been some arrests and some seizures made, but
I'm not sure by who.
The Chairman. Randy, Mike, any comments?
Mr. Conaway. No.
Mr. Neugebauer. Dale, I wanted to just--as I've travelled
the last month of August really through the entire district
and, you know, looked at row crop conditions and then the
grazing conditions and as we begin to try to formulate some
kind of appropriate response to that, kind of assess for me
the--where the cattle industry needs--where the needs are for
assistance and what form of assistance does that need to be in?
Because, you know, we've gotten some rains recently in parts of
the district, so that may help our wheat crop. But we did have
those fires. We hurt a lot--we had a lot of grass, grazing,
burned up that we weren't probably able to utilize this summer
on top of that. So as we look at the appropriate response, can
you kind of give me a feeling of where you think that response
needs to be and what form it needs to be in?
Mr. Smith. OK. The response that we had on the country that
was burned up by the wild fires that we had in
March that burned over a million acres in the Texas
Panhandle, we entered into an EQIP contract. The NRCS was very
nimble, especially for a government agency, and they had extra
funds and they rolled it into a--they paid $5 an acre to defer
grazing from May 15th to October 15th on year one on the
effected rangeland and then for May 15th--or for the first part
of the growing season for the year two, and that was a very
large help. And it helped, one, alleviate, or at least helped
some on the financial cost of having, you know, an entire ranch
burn up, and then it--but it also helped in an environmental
standpoint that it was an incentive to--it paid you on a per
acre basis, but you had to remove the cattle so they're not
sitting there nubbing down that grass when it needs to be
rested and allowed time to recover. So it had two different
benefits. It helped in the financial hardships, but also helped
on the environmental side, for the rangeland health side. So I
thought it was very good.
Mr. Neugebauer. Did the emergency grazing and some of that
CRP, did that accrue some----
Mr. Smith. That did help. Yeah, it kind of gave you a
place, especially in the extreme fires--I'm glad you mentioned
that. When the fires were so bad, you just didn't have any
options, I mean, besides buying hay, which is very inefficient
to just sit there and feed hay to cows while they're in a dry
lot. So it helped producers go to that CRP, I give them some
time to make--either find some outside pasture or make some
marketing decisions. They weren't forced to sell at the, you
know, next county sale. It helped.
The Chairman. Gentleman, thank you all very much. Again, as
I've said to all the other panelists, I can't tell you how much
I appreciate you taking time from what I know is a very busy
schedule to come here today and to give us very valuable
information. As we move forward with ultimately developing the
policy and writing the farm bill, we certainly look forward to
continuing the dialog with you and making sure that your views
are well represented in this next farm bill. So thank you very
much.
I want to again thank all of our witnesses for being here
today and assure them that their interests, their thoughts on
the next farm bill are very important to all of us as we move
forward in both the House and the Senate relative to writing
the next farm bill.
And I would like to again remind anyone who is interested
in submitting a written statement for the record that you may
do so for up to five business days following this hearing. Our
Web site again is agriculture--let me see, have I got that
right? It's www.agriculture.senate.gov for additional details
on how you submit that statement for the record. And I've
introduced several of our staff members here today. I want to
make sure that you know who these other folks are. First of
all, my staff director, and I would say she is the first female
chief of staff of the Senate Agriculture Committee, but she
does one heck of a job. She's been with me off and on for my 12
years in Congress, and that's Martha Scott Poindexter. Raise
your hand, Martha Scott.
We also have from the democratic staff, Adella Romas.
Adella, we're pleased that you're here. And also Betsy Coker
who has been have a very valuable member of our staff. And the
reason I'd like for you all to know these staff members is that
we are a U.S. Senate committee, we're not a Georgia committee
or a Texas committee. And any time you have a question
regarding ag policy, we want you to know that you can not only
call your Member of Congress or your Senator, but certainly you
have the right to contact the Senate Ag Committee at any time.
And when you call them, these are the folks that you're likely
to be talking to. So if you have any questions relative to
policy, just feel free to call on us at any time because that
is what we're for.
So I think all of you witnesses. I thank all of you folks
for coming out to listen to us today, and we look forward to
continuing to dialog with you also as we move forward in
writing this farm bill. With that, our hearing will be
concluded.
[Whereupon the hearing was adjourned.]
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A P P E N D I X
September 8, 2006
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QUESTIONS AND ANSWERS
September 8, 2006
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