[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


                                 _____

                 U.S. GOVERNMENT PRINTING OFFICE

30-124 PDF              WASHINGTON : 2006
_________________________________________________________________
For sale by the Superintendent of Documents, U.S. Government 
Printing  Office Internet: bookstore.gpo.gov  Phone: toll free 
(866) 512-1800; DC area (202) 512-1800 Fax: (202) 512-2250 Mail:
Stop SSOP, Washington, DC 20402-0001

























           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

                              ----------                              
                                                                   Page

Hearing(s):

Regional Farm Bill Field Hearing: Lubbock, Texas.................     1

                              ----------                              

                       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
                              ----------                              

                                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

                              ----------                              


                           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.]
      
=======================================================================


                            A P P E N D I X

                           September 8, 2006



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

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]



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


                         QUESTIONS AND ANSWERS

                           September 8, 2006



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

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]


                                 
