[Senate Hearing 109-824]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 109-824
 
                    REGIONAL FARM BILL FIELD HEARING

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

                             FIELD HEARING

                               before the

                       COMMITTEE ON AGRICULTURE,
                        NUTRITION, AND FORESTRY

                          UNITED STATES SENATE


                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION


                               __________

                             JUNE 23, 2006

                               __________

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


  Available via the World Wide Web: http://www.agriculture.senate.gov




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           COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY



                   SAXBY CHAMBLISS, Georgia, Chairman

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

            Martha Scott Poindexter, Majority Staff Director

                David L. Johnson, Majority Chief Counsel

              Vernie Hubert, Majority Deputy Chief Counsel

                      Robert E. Sturm, Chief Clerk

                Mark Halverson, Minority Staff Director

                                  (ii)


                            C O N T E N T S

                              ----------                              
                                                                   Page

Hearing(s):

Regional Farm Bill Field Hearing.................................     1

                              ----------                              

                        Wednesday, June 23, 2006
                                Panel I

Cobb, Douglas R., President, Georgia Corn Growers Association....    12
Coley, Chuck, of Vienna, Georgia.................................    11
Detweiler, Mark, President, Georgia/Florida Soybean Association 
  Board of Directors, American Soybean Association...............     9
Morris, Armond, Chairman, Georgia Peanut Commission Southern 
  Peanut Farmers Federation......................................    13

                                Panel II

Brim, Bill, Lewis Taylor Farms, Tifton, Georgia..................    28
Campbell, Murray, Chairman, First United Ethanol, LLC............    32
Perry, Carl, Farmer of sugarcane, beans, citrus and cattle 
  Albany, Georgia................................................    29
Thompson, Tom, President, Georgia Milk Producers, Inc............    30

                               Panel III

Strickland, James E., DVM President, Georgia Cattlemen's 
  Association Member, National Cattlemen's Beef Association......    44
Hunt, R. C., Pork Producer, Wilson, North Carolina President of 
  the North Carolina Pork Council................................    45
Giles, Mike, Senior Vice President Georgia Poultry Federation 
  Gainesville, Georgia...........................................    47
Dreelin, Elizabeth Desportes.....................................    49
Ham, Jim, Georgia Association of Conservation District 
  Supervisors and the National Association of Conservation 
  Districts......................................................    50
                              ----------                              

                                APPENDIX

Prepared Statements:
    Brim, Bill...................................................    60
    Campbell, Murray.............................................    64
    Cobb, Douglas R..............................................    67
    Coley, Chuck.................................................    69
    Detweiler, Mark..............................................    75
    Dreelin, Elizabeth Desportes.................................    78
    Giles, Mike..................................................    84
    Ham, Jim.....................................................    91
    Hunt, R. C...................................................    96
    Morris, Armond...............................................   111
    Perry, Carl..................................................   118
    Strickland, James E..........................................   124
    Thompson, Tom................................................   133
Documents Submitted for the Record:
Florida Conservation Coalition, prepared statement...............   138
Georgia Agricultural Land Trust, prepared statement..............   139
Georgia Farm Bureau, prepared statement..........................   141
Georgia Milk Producers, Inc., prepared statement.................   145
Ranchers-Cattlemen Action Legal Fund, prepared statement.........   157
Southeast Milk, prepared statement...............................   167
Southwest Georgia Farm Credit, prepared statement................   185
Winegrowers Association of Georgia, prepared statement...........   187


                    REGIONAL FARM BILL FIELD HEARING

                              ----------                              


                        Wednesday, June 23, 2006

                                U.S. Senate
                          Committee on Agriculture,
                                     Nutrition and Forestry
                                                    Albany, Georgia
    Hearing on 2007 Farm Bill, held before Committee Chairman 
Senator Saxby Chambliss, Chairman, and Senator Pat Roberts, 
reported by Debbie Paulk Mixon, CCR, RPR, CRR, at Albany State 
University Academic Building Auditorium, Albany, Georgia, on 
the 23rd day of June 2006.
    Senator Chambliss. Good morning. This hearing of the Senate 
Committee on Agriculture, Nutrition & Forestry will now come to 
order. As Chairman of the Committee and Senator from this great 
state, I welcome each of you and thank you all for joining us 
this morning to hear each of our witnesses testify. I know many 
of you drove a long way to get here, and I appreciate you 
taking the time to travel to this hearing. What a great crowd 
we have this morning. And I see a lot of familiar faces out 
there. And this is going to be a critical year for agriculture. 
Your participation in this today and as we move toward the 
rewriting of the Farm Bill next year is critically important. 
So to all of you I say, on behalf of Senator Roberts and myself 
personally, thank you for you being here.
    I want to thank Albany State University for hosting us this 
morning. Dr. Everette Freeman is out of town this morning, 
could not be here. But Dr. Freeman and his staff have been most 
gracious in having us here this morning.
    We have a couple of our good friends who are strong 
supporters of agriculture in the audience this morning that I 
want to recognize. First of all is my longtime dear friend and 
neighbor from Mitchell County, Representative Richard Royal. 
Richard, where are you? Right here. Richard, thank you very 
much for being here, and thanks for the great work you do for 
our state.
    Also, I saw him outside, Representative Gene Maddox from 
Cairo. Gene, right here in the middle. Thanks to both of you 
guys for the great work you're doing in the Legislature and for 
what you do for agriculture as well as otherwise in our state.
    Also, my longtime dear friend former Congressman Mac 
Collins. I saw Mac outside. Mac's back here in the back. Mac, 
thank you very much for being here, and thanks for your 
continued interest in what's going on in the world of 
agriculture.
    I also want to thank my longtime dear friend, my colleague, 
my former House Agriculture Chairman, Senator Pat Roberts from 
Kansas, for being here today. Pat and I go back a long ways 
when it comes to dealing with farm bills and trying to make 
sure that we look after farmers and ranchers all across 
America. And there's nobody who has their heart in agriculture 
more so than Pat Roberts. He's my dear friend. We serve on 
several different committees together. And, Pat, I want to 
welcome you to the state of Georgia.
    I want to tell everybody here something you already know, 
and that is that we're blessed in the Southeast to have a very 
diverse agricultural economy. And I'm pleased to host our 
Committee's first Farm Bill field hearing right here in the 
southwest part of our state in Albany.
    This is the first in a series of regional field hearings 
that we will hold in preparation for the next Farm Bill. The 
next scheduled hearings will take place next month in July in 
Pennsylvania, Iowa, and Missouri. We will also hold others in 
western states. During these hearings, we hope producers will 
express their thoughts on what the next Farm Bill will look 
like. It will be important for us to know what has worked in 
the 2002 Farm Bill and specifically how we might improve farm 
policy for producers in a manner consistent with our trade 
obligations and budget needs.
    It's interesting in agriculture to see things change over 
time. We no longer live in an era of mules pulling plows. 
Technology has moved us into a time where GPS tractors can 
assess the specific needs of soils in order to maximum yields. 
We no longer farm in a time in which the government dictates 
what you should or shouldn't plant. Thanks to planting 
flexibility provided in the 1996 Farm Bill under the direction 
of then Chairman of the House Ag Committee Pat Roberts and 
retained in the 2000 Farm Bill, you can choose what is best for 
your farm and your bottom line.
    The environment in which we write the next Farm Bill will 
be considerably different than when we wrote the 2002 Farm 
Bill, especially with respect to trade and the budget. As a 
Subcommittee Chairman in the House and a conferee on the 2002 
Farm Bill, I was one of many who believed that our commodity 
programs were compliant with the World Trade Organization 
rules.
    Having dealt with the outcome of the case brought forth by 
Brazil against U.S. cotton, I'm not as confident now as I was 
back then. As a conferee on the 2002 Farm Bill, I was pleased 
to help write the Farm Bill in a time of budget surpluses. 
That, of course, has changed, and we are unsure of what the 
future will hold with respect to the budget.
    While times have changed, one thing is for certain: This 
Committee will be a strong advocate for American agriculture. 
Through our trade negotiators, we will continue to affirm our 
role as authors of the Farm Bill, and we will continue to 
implore the need for trade agreements benefiting, not 
sacrificing, our producers.
    As we did during the budget reconciliation proceedings of 
last year, we will continue to argue that the Federal farm 
policy is not only good for rural America, it's good for the 
American taxpayer. And I think that has been proven over the 
course of this current Farm Bill. Federal farm programs provide 
this nation an abundant affordable food supply at a cost of 
$12.9 billion less than originally projected through the fiscal 
year 2005.
    Agriculture accounts for only 3.7 percent of the Federal 
budget, and the majority of this, 57 percent of the total ag 
spending, is not for commodity programs, as some believe, but 
for nutritional programs that are valuable and viable and are 
critically important to America.
    As policymakers, we have an obligation to provide producers 
a safety net into open markets. We have an obligation to 
promote land stewardship. We have an obligation to provide 
nutritious meals in schools and assist in providing food to 
needy families. While nutrition programs will be discussed in 
depth at a later date, we look forward to hearing from our 
witnesses today about how we can achieve these producer-
oriented goals in the next Farm Bill.
    Before I turn to our witnesses, I want to turn to Senator 
Roberts and any comments he has in an opening statement.
    Senator Roberts. Well, thank you, Mr. Chairman. And good 
morning, ladies and gentlemen.
    Audience. Good Morning.
    Senator Roberts. That's just a mumbled good morning. I'm 
sure you can do a little better than that. Let's try it again. 
Good morning.
    Audience. Good Morning.
    Senator Roberts. That's a good Georgia welcome.
    I want to thank you for the opportunity to join you here 
today for this first hearing on what's going to be a very 
aggressive schedule of Farm Bill hearings as we prepare to 
write the next Farm Bill in 2007. I noticed you mentioned 
Missouri. If you go to Missouri, you've got to come to Kansas.
    I do not envy the task you are in charge of as you work to 
put together this very important legislation, with everybody in 
the audience as partners, while making every effort to address 
the needs and complexities of agricultural production all 
throughout this nation. I think you're exactly right in regards 
to the challenge that you face. During the previous years, I 
think many farm groups and many agricultural organizations, 
many commodity groups, I told them at the time, when I said 
show me the policy, they said show me the money. And I 
understand that.
    And I certainly understand it with the energy costs that 
we're going through and some of the crop losses we're going 
through. We're about 25 percent down in our wheat crop in 
Kansas with about a 75 percent increase in energy costs. So we 
really have a tight vice, and a lot of farmers are really 
considering whether or not they ought to sell while the farm 
has value. And that's not a good thing, not a good thing for 
them, not a good thing for the next generation of farmers.
    As indicated by Saxby, I have served as the Chairman. I 
have put together a Farm Bill. It's a lot like pushing a rope. 
And there's been six Farm Bills I've been associated with. I 
don't know; that might be a record for some of us. And it is 
not an easy task, by any means.
    And with the budget pressures that we face and with the 
trade talks looming over us--and that's not exactly fair play 
or a two-way street--you have my commitment to work with you, 
to work with the Chairman, and all the members of the Committee 
to write the very best bill possible that we can to provide you 
stability, consistency, and to keep production of agriculture 
in a healthy situation. That's not only for our benefit but 
also the benefit of the country.
    Mr. Chairman, I want to thank you for holding the field 
hearings all throughout the nation. I've always believed the 
most important thing we can do when crafting agriculture policy 
is to get out of Washington, travel out in the countryside, sit 
on the wagon tongue with our farmers and listen, and basically 
find out exactly what they need to keep their operations on the 
profit side and to allow the next generation of producers to 
enter the business. And that's probably the most important 
question that we face in agriculture today: Where is the next 
generation of farmers going to come from?
    This is exactly what we're doing here today. I look forward 
to the testimony from our witnesses. I want to thank you again 
for taking us out of Washington and actually bringing us to 
speak firsthand with producers that feed and clothe not only 
this country but a troubled and hungry world.
    Finally, Mr. Chairman, I want to thank you for your strong 
and active leadership of this Committee. He won't say this. I 
will. I keep referring to him as the new sheriff in town in 
charge of the powerful Senate Agriculture Committee. I used to 
be the Chairman of the sometimes powerful House Agriculture 
Committee. And I want the farmers and people in rural 
communities of Georgia to know that they can have no stronger 
champion in Washington than Saxby Chambliss.
    Senator Roberts. That applause would also occur in Dodge 
City, where I'm from, Dodge City, Kansas. And they would be 
giving the same kind of applause because of your efforts on 
behalf of not only Georgia's producers but Kansas's producers 
or, for that matter, somebody out in California in the fruit 
and nut section of the world. In behalf of all America's 
producers, he's second to none.
    Now, I've got to tell you a little story about this fellow. 
We do serve together. We have the privilege of serving together 
on the Intelligence Committee. I happen to have the obligation 
or the responsibility and privilege to be the Chairman of the 
Senate Select Committee on Intelligence, right in the middle of 
the war against terrorism.
    And I've got a point guard sitting to my left who has 
served on the Intelligence Committee in the House, hit the 
ground running, hit the ground running at a gallop when he hit 
the Senate. And I don't know what I would do without Saxby's 
common sense and his support as we try to keep America safe.
    We also serve together on the Armed Services Committee. And 
both Saxby and I know that healthcare, education, agriculture, 
all the things that affect our daily lives and pocketbooks are 
terribly important. But the first obligation that we have as 
Members of Congress is to do what we can to guarantee our 
national security and our individual freedoms.
    This man is a stalwart on the Armed Services Committee and 
the Intelligence Committee and on the Agriculture Committee. He 
may get a little sick of me. I won't with him. But at any rate, 
in regards to those three committees that we serve on. Just the 
other day, he won a vote in the U.S. Senate--I think it was 
over 70 votes--to have a 3-year purchase agreement to save 
taxpayers money for something called the F-22, which is our 
most modern fighter and brings us up to date with what the 
Russians have.
    Now, that's tough, because some people want to buy it on an 
annual basis, 60 planes. But if you do it that way, you're 
going to cost the taxpayer one heck of a lot more. And at the 
same time, we're finally moving ahead in terms of the 
production of that airplane that we sort of need for our 
national defense. The author of that amendment, Saxby 
Chambliss. The vote, over 70 votes. It shows you the respect 
that the Senate has for your Senator.
    Second thing that he did that I didn't know until I was 
riding on the plane when we came down and I was asking about 
the health of the peanut program and a little thing about 
paying the peanut producers for their storage and things of 
this nature. And I thought that that was not in the Bill. As a 
matter of fact, they fuss about it over in the House. And he 
just got it done.
    I didn't know about that. That was below the radar. That 
was covert, man. And so here's a guy who got an amendment in 
behalf of the peanut producer in Georgia and got an amendment 
on the Senate floor with over 70 votes. And so he is doing an 
amazing job in your behalf.
    Let me just say that we have a coalition of my legislative 
director, who is sitting to my left, and I will not embarrass 
him, and his wife, who is from Georgia, and their new baby. Is 
that baby half Kansas and half Georgia? I don't know quite how 
that works out. But Mike is down here visiting his in-laws. And 
we're just delighted with both of them. And I would say, being 
a Kansas wheat, corn, soybeans, livestock producers fellow, I 
have learned a whole different world from his wife in peanuts 
and rice and cotton and everything else. So we're very happy 
about that, that combination and that partnership.
    There, I've gone on longer than the Chairman has by 2 
minutes. And, you know, you're not supposed to do that in 
Washington. So I'm eagerly awaiting your testimony. And thank 
you, Mr. Chairman, for the opportunity to be in Georgia. Thank 
you.
    Senator Chambliss. Well, if you're going to say good things 
about me: Pat's right, we work very closely together on the 
Armed Services Committee and the Intelligence Committee. And 
I'm pleased to ride shotgun with him. And you talking about 
having a point guard on agriculture on any issue, there's no 
better point guard for me to have than Pat Roberts.
    We're in the Second Congressional District this morning. 
And the Congressman from the Second Congressional District has 
been a dear friend of mine for many years, since before I 
became an elected official. Sanford Bishop does a great job in 
representing the Second District of Georgia in the U.S. House 
of Representatives. He brings not only a common sense opinion 
of issues, but he works hard to make sure that the interests of 
the Second District are put before the U.S. House of 
Representatives in a very positive way.
    He is my great friend. And he and I served on the 
Agriculture Committee in the House under Pat for several years. 
And he now is an appropriator, which means that he's the one 
that signs the checks that come out of Washington. So anytime 
you're running low on funds, Sanford is the one that you need 
to talk to.
    But Sanford Bishop is a great American, a great member of 
the U.S. House of Representatives. I'm pleased to have you 
here. And I'm going to ask Sanford to come forward at this time 
and make some comments and introduce a very special guest.
    Representative Bishop. Good morning. And thank you very 
much, Saxby and Pat. Thanks so much to you for bringing the Ag 
Committee to Albany, Georgia, to the Second Congressional 
District. And I certainly want to welcome all of the people who 
have come, and especially our witnesses, to this event. It's so 
vitally important. Agriculture is so important.
    And I'm not going to take my time, because I want to 
introduce a special person, Niki Newberry, who is a University 
of Georgia agriculture intern. We have a joint program with the 
University of Georgia and our Congressional offices, along with 
the Georgia Agribusiness Council, to provide special 
agricultural training experiences for ag majors at the 
University.
    And we have Niki Newberry, and I want to yield my time to 
Niki at this point. Niki, would you come forth? And she will be 
speaking for me and for our office.
    Ms. Newberry. Good morning. Like the Congressman said, I'm 
Niki Newberry, an agricultural intern from the University of 
Georgia's College of Agriculture & Environmental Sciences.
    First, I would like to thank Senator Chambliss and the 
Senate Agriculture Committee for holding this field hearing in 
Albany, the heart of Georgia's Second Congressional District. I 
would also like to thank all the witnesses who came to speak on 
behalf of American farmers and agribusiness owners. With help 
from people like you, the 2007 Farm Bill has the potential to 
improve upon the 2002 Farm Bill. Also, thank you, Congressman 
Bishop, for the opportunity to speak about the importance of 
the Farm Bill for rural Georgia and the agrarian way of life.
    Agriculture has been the most important issue in my life. I 
grew up on a farm only about 50 miles from here, and I grew to 
love and appreciate this experience. My father is still a 
farmer in Wilcox County, and I'm honored he is in the audience 
here today. Because of my upbringing, I chose to major in 
agricultural communications.
    Agriculture is the most vital component of the Southwest 
Georgia economy. According to the Georgia Farm Gate Value 
Report, the total 2004 farm gate value for Georgia was over 
$10.2 billion. For Georgia's Second Congressional District, it 
was over $90 million. One in six jobs in the state are in the 
agricultural sector. The 2007 Farm Bill will have a dramatic 
effect on communities in rural Georgia.
    Although the state of Georgia remains a proven leader in 
the production of cotton, peanuts, poultry, and timber, farmers 
and agribusiness owners are facing economic hardships. 
Operating a farm requires scores of workers, and many producers 
support a reformed H2A guest worker program which, when it is 
properly administered, will help improve efficiency. The 
success of the seasonal fruit and vegetable harvest in the 
Second Congressional District would not be possible without 
those workers who participate in the H2A program.
    The rising cost of fuel and other input costs is one of our 
greatest concerns. Because of challenges like fuel costs, farm 
programs instituted by the Farm Bill are extremely important 
for the livelihood of farmers and agribusiness owners. The 
emergence of alternative fuels such as ethanol and biodiesel 
has created a potentially limitless market for agricultural 
products. In the future, our farmers will not only feed America 
but fuel her as well. The new Farm Bill should contain 
provisions and support for biofuel development.
    The farmers of south Georgia are resilient. They're willing 
to change and adapt their farming practices to become more 
efficient and environmentally friendly. They use conservation 
tillage practices and variable rate irrigation systems to 
reduce the impact of farming on the land, made possible by the 
current Farm Bill. Agriculturalists are stewards of the land, 
stewards who want the land they cultivate and the natural 
resources on their land preserved. Please continue the strong 
conservation programs that are provided for in the current Farm 
Bill.
    The technology of farming is advancing. Researchers at land 
grant institutions like the University of Georgia have found 
ways to produce higher yields while lessening farming's impact 
on the environment. It is crucial that funding for these 
research centers, like the National Peanut Laboratory and 
others, continue to further develop ways for America to stay 
competitive in the world market.
    Although the heart of the Farm Bill is the farmer, 
surrounding the farmer are the rural communities whose 
economies rely on success of their local farmers. Programs that 
support rural economic development are important to the lives 
of the people who live and work in these communities. Whether 
it's broadband technology or local medical centers, we owe it 
to rural Americans to invest in the places they work and call 
home.
    It is our goal to secure a Farm Bill which will serve all 
aspects of agriculture, from livestock and poultry producers to 
row crop and vegetable farmers covering south Georgia to 
California and all in between. The next Farm Bill should ensure 
that the agrarian way of life that this country was founded 
upon is preserved. We must protect America's farmers. They 
protect us by satisfying our most basic needs: food, clothing, 
shelter, and jobs. We must make sure to give them a Farm Bill 
that will enable them to compete on a level playing field in 
the global marketplace.
    Thank you for your time today and for holding this 
important hearing here in Albany. We all look forward to 
working with you to draft the best Farm Bill possible.
    Senator Chambliss. Niki, thank you very much for that fine 
presentation. I assure you your boss could not have said it 
that well. And he doesn't look nearly as good as you do. So the 
audience particularly enjoyed that.
    Speaking of that, Niki being Sanford's Georgia agricultural 
intern, I guess most of the House members now have a program 
like this. Let me just quickly tell you what we do. We started 
this program modeled after a program that Thad Cochran has. And 
we work with the University of Georgia and the Georgia 
Agribusiness Council to bring an intern from the University of 
Georgia College of Agricultural Sciences to Washington every 
summer and to stay with us the whole summer.
    And the idea is that we want to let folks, young folks, who 
want to be involved in agriculture figure out what goes on in 
Washington and how Washington works and bring that knowledge 
back to Georgia, because if they're involved in agriculture, 
they need to know how agricultural policy is set. And by the 
same token, we try to create a pool of young people that we can 
hopefully bring to Washington and get them to work on our 
staffs up there and bring the knowledge of southeastern crops 
to the Ag Committee or to our personal offices, whatever it may 
be.
    The very first person that I had as my ag intern from the 
University of Georgia was a young lady named Christy Crumley. 
Christy is from Brooklet, Georgia. She is the daughter of Chap 
and Barbara Crumley. And Christy worked for me that first 
summer, and she came back and graduated. And just so happened 
that my ag LA, who now directs my Senate Ag Committee, left me 
to go make money somewhere else. And we immediately brought 
Christy back to Washington. And now Christy is on my Ag 
Committee staff. And she is the one that put together this 
hearing this morning. Christy, stand up so everybody can see 
you.
    Senator Chambliss. I am very proud of Christy. If you don't 
like your crop insurance program, you can blame Christy, 
because during the writing of that reform package, Christy 
headed up my shop that helped write that.
    Now, the end of this story is that I was told by Barbara, 
when Christy came back to Washington to work for me, she said, 
``It's OK, Saxby, for Christy to come back and work with you, 
because we want her involved in agriculture. But,'' she said, 
``don't let her marry somebody from outside of Georgia that she 
meets in Washington.''
    Well, lo and behold, a year or so later, I hear she's 
dating this guy. And I happen to know this guy she's dating 
because he works for my good friend Pat Roberts. Well, lo and 
behold, another six or 8 months later, I hear that they're 
getting married. And I said, ``Oh, my God. I'm in trouble with 
Chap and Martha.''
    But Mike Seyfert, who is also here this morning--stand up, 
Mike. We're going to introduce the whole crowd. Mike has worked 
for Pat for a long time and is in charge of his ag policy on 
his staff and is a terrific young man. And I got to see this 
morning the little Seyfert. They have a brand new daughter. And 
grandmama couldn't be here. I don't know whether Chap is here 
or not. But grandmama is baby-sitting this morning, and she's 
having a ball. She said she was really going to miss hearing a 
bunch of farmers talk this morning but she would rather opt to 
go be with that little granddaughter.
    But this is a great example of what happens with this 
program that Sanford and I both have, Jack Kingston has, I 
know. And it's a great program. And we appreciate the 
participation of the University of Georgia and the Agribusiness 
Council with us.
    Now, we're going to get down to what everybody's here for. 
We've got three panels this morning, and we're going to ask 
these presenters this morning to take about 3 minutes each to 
make a presentation relative to their particular expertise. And 
then Pat and I will be asking questions to the panel.
    First panel this morning consists of Mr. Mark Detweiler 
from Rome, Georgia, who represents the American Soybean 
Association. We have Mr. Chuck Coley, whose son Matt was also 
one of my ag interns from the University of Georgia and who we 
also brought back to Washington. And Matt is with us this 
morning. Matt is now a member of my Ag Committee staff, and I'm 
very proud of that. Chuck is from Vienna, Georgia, represents 
the National Cotton Council. Mr. Ray Cobb is from Davisboro, 
Georgia, and he represents the Georgia Corn Growers 
Association. And my longtime good friend, Armond Morris, from 
Ocilla, represents the Southern Peanut Farmers Federation.
    Gentlemen, thank you all for being here. Mark, we're going 
to start with you, and we'll just go right down the line. And 
if you all will make your presentation into the microphone 
where everybody can hear, we look forward to hearing your 
comments.

STATEMENT OF MARK DETWEILER PRESIDENT, GEORGIA/FLORIDA SOYBEAN 
  ASSOCIATION BOARD OF DIRECTORS, AMERICAN SOYBEAN ASSOCIATION

    Mr. Detweiler. Good morning, Mr. Chairman and members of 
the Committee. I am Mark Detweiler. I am a farmer, diversified 
farmer, from Rome, Georgia, growing corn, soybeans, small 
grains, and livestock cattle. I appreciate very much the 
opportunity to speak to you today. I am president of the 
Georgia/Florida Soybean Growers Association and serve on the 
Board of Directors of the American Soybean Association.
    Mr. Chairman, soybean producers in the Southeast, as well 
as other regions of the country, support the safety net we now 
have under the 2002 Farm Bill. Most soybean farmers would also 
support extending the current farm programs when Congress 
considers new farm legislation next year. Unfortunately, 
current budget baseline for farm program spending declines over 
the next 10 years and will probably not accommodate expected 
outlays based on current support levels. We would need 
additional funding as was done in 2001 for the 1902 Farm Bill. 
Given the outlook for the Federal deficit, in coming years we 
will be fortunate to keep the level of spending that we 
currently have now. After facing budget cuts in the agriculture 
budget last year, we can expect Congress to consider further 
reductions in spending after the election occurs this fall.
    A second reason we need to look at alternatives to the 
current farm program is the potential additional WTO challenges 
of current farm programs. We are familiar with the results of 
Brazil's case against cotton. In order to avoid sanctions, the 
U.S. will need to change the direct payment program to 
eliminate planting restrictions on fruits and vegetable crops. 
But, also, the marketing loan and counter-cyclical programs 
were found to cause serious prejudice and could be subject to 
other cases for other crops, including soybeans.
    We're also watching the WTO negotiation agreement, which 
entered in with the Administration last October, when the 
Administration has made an offer for 60 percent reduction in 
outlays permitted under the most production and trade-
distorting programs, including the marketing loan and dairy and 
sugar price support programs. ASA and other farm organizations 
are insisting that importing countries make equally aggressive 
reductions in their tariffs, including on soybean and livestock 
products. If an agreement is reached and approved by Congress 
next year, we will need to make major changes in current farm 
programs.
    Given these uncertainties, ASA's policy on the 2007 Farm 
Bill is that there will be no further cuts in CCC budget 
baseline for agriculture spending, that farm programs not 
distort planting decisions between crops, and future programs 
be WTO compliant to avoid challenges like the cotton case. To 
explore the alternatives, ASA organized a Farm Bill Task Force 
last year, which has been working with other farm organizations 
to look at the so-called green box that would be considered 
non-trade distorting under the WTO.
    The results of this analysis indicate a variety of options 
that would guarantee 70 percent of historical income and still 
be WTO compliant. These options include basing the current 
guarantee on whole farm versus specific commodity income, 
looking at either using a net or a gross income, and 
guaranteeing income for only program commodities, for program 
crops plus horticultural crops, or for all crops and livestock. 
The cost of these options varies considerably, from 3.3 billion 
per year to guarantee 70 percent gross income on whole farm 
basis for only program crops to over 10 billion per year to 
guarantee 70 percent net income for specific commodities of all 
crops and livestock.
    Neither ASA nor any other farm organization involved in 
this Task Force has endorsed a revenue guarantee concept at 
this time. Instead we are now working with other groups to see 
how a revenue guarantee could be combined with one or several 
other farm programs to create a more effective safety net for 
producers. These include crop insurance, permanent disaster 
assistance, the three main components of the current Farm Bill, 
which is the marketing loan, counter-cyclical payments, and 
direct payments. We are working to have recommendations to put 
forward to the Committee sometime this Fall.
    We're also very supportive of the conservation, energy, 
research, and trade titles in the 2002 Farm Bill. We're 
particularly interested in looking at programs that would 
support soybeans as a biodiesel alternative, renewable energy 
source, and to promote biodiesel production in the United 
States. The CCC has operated a bioenergy program since 2001. It 
is providing payments to biodiesel producers who utilize 
feedstocks that are domestically produced, such as soybean oil. 
This program has facilitated expansion of domestic biodiesel 
production, but the program sunsets after 2006. Therefore, we 
are asking Congress to extend that provision.
    Also, the CCC program is justified because imports already 
have subsidized biodiesel programs coming in that will 
undermine the U.S. industry since they're eligible for a tax 
incentive, too, also in our current law. Higher premiums should 
be placed on domestic biodiesel production and expansion. The 
prospective cost of a biodiesel program could be offset by 
reduced CCC outlays under the soybean marketing loan and 
counter-cyclical programs.
    With regard to conservation and research, we are concerned 
by recent actions that have depleted funding for these programs 
in order to pay for disaster assistance and to cover budget 
reduction commitments. ASA supports increased funding for 
conservation payments to producers on working lands such as 
through the Conservation Security Program. We also believe that 
a significant number of acres currently locked up in the 
Conservation Reserve Program could be farmed in an 
environmentally sustainable manner given the enormous increase 
in no-till farming practices that have been implemented over 
the past 10 to 15 years. Finally, we strongly support 
maintaining funding for promotion activities under the foreign 
market development and market access programs and for 
international food aid.
    Thank you, Mr. Chairman, for allowing me to appear before 
you.
    Senator Chambliss. Thank you very much. Chuck?
    [The prepared statement of Mr. Detweiler can be found on 
page 75 in the appendix.]

          STATEMENT OF CHUCK COLEY OF VIENNA, GEORGIA

    Mr. Coley. Mr. Chairman and members of the Committee, 
welcome to Georgia. And thank you for holding this hearing and 
providing me an opportunity to present testimony on current and 
future farm policy.
    My name is Chuck Coley. I'm a third-generation cotton and 
peanut farmer from Vienna, Georgia, and I currently serve as 
vice chairman of the American Cotton Producers. Mr. Chairman, 
thank you for your positive efforts to develop and maintain 
sound agricultural policy, which is so important to this area 
and to this nation.
    Georgia is the third largest cotton producing state. The 
principle reasons for the resurgence in cotton production in 
Georgia are the eradication of the boll weevil and an effective 
and stable farm program. Cotton farmers are deeply concerned 
with the loss of our manufacturing customer base and have 
committed to continue to work with them. The manufacturers have 
indicated strong interest in making revisions to our Step 3 
import policy and in developing a possible WTO compliant 
replacement for Step 2.
    While the cotton fiber is our principal product, we also 
continue to seek ways to enhance the value of cottonseed and 
its products, which account for 12 percent of the value of the 
crop at the farm gate. As ethanol production increases, one of 
the byproducts--dried distillers' grain--has depressed the 
value of cottonseed.
    We believe the current farm law has and continues to 
provide a stable and effective national farm policy for our 
country. The combination of direct and counter-cyclical 
payments provide an effective means of income support, 
especially when prices are low, without distorting planting 
decisions. The direct payment provides financial stability 
required by our lenders and suppliers.
    I would caution that those who promote replacement of the 
counter-cyclical payment with higher direct payments risk 
taking the land out of the producers' hand, so it is important 
to continue to maintain a balance. It is also important to 
recognize the difference in regional impacts that can occur due 
to program changes. In the Southeast, payment yields for direct 
payments are lower than other regions, so a rebalancing toward 
direct payments would be a competitive disadvantage for the 
Southeast.
    We strongly support continuation of the marketing loan. The 
marketing loan responds to low prices; it does not cause low 
prices. It ensures that U.S. cotton farmers are not residual 
suppliers in world markets because they are unable to compete 
with the treasuries of foreign governments.
    It is also critical that all production remain eligible for 
the marketing loan. Sound farm policy is of little value to the 
cotton industry if we have arbitrary, unworkable limitations 
placed on our benefits. We believe limitations should be 
eliminated and, at the very least, limitations in future law 
should not be more restrictive or disruptive than current law.
    Frankly, Mr. Chairman, most cotton farmers and a majority 
of the industry would be satisfied with an extension of the 
current farm law. We are increasingly concerned that the Doha 
negotiations are turning against U.S. agriculture in general 
and against U.S. cotton in particular. They want more U.S. 
concessions while refusing to provide adequate market access. 
Worse, China, the largest cotton market in the world, wants to 
be exempt from any further market access commitments. If other 
countries cannot match the U.S. level of ambition for market 
access, we should either withdraw or reduce our offer on 
domestic support. I also want to emphasize that an agreement 
that singles out U.S. cotton for additional inequitable 
treatment will not be accepted by U.S. cotton producers.
    Finally, we are deeply disturbed by claims that 80 percent 
of all program benefits go to fewer than 20 percent of the 
producers and that only the so-called program crops receive 
direct benefits from farm law. Virtually every commodity 
receives some type of support, whether through direct income 
payments, price support programs, or barriers to import. 
Favorable tax laws are used to provide support for certain 
products, but the benefits are not directly attributed to the 
individual farmers. Today's payments are an important safety 
net and not a windfall of profit.
    I am pleased to assure you and your colleagues that the 
cotton industry is prepared to continue to work with all 
interests to develop and support continuation of a balanced and 
effective policy for all of U.S. agriculture. Thank you for the 
opportunity to testify.
    Senator Chambliss. Thank you, Chuck. Ray?
    [The prepared statement of Mr. Coley can be found on page 
69 in the appendix.]

 STATEMENT OF DOUGLAS R. COBB, PRESIDENT, GEORGIA CORN GROWERS 
                          ASSOCIATION

    Mr. Cobb. Good morning, Chairman Chambliss and other 
members of the Committee. It's an honor to be here before you 
as president of the Georgia Corn Growers Association. We 
appreciate your efforts to gather input to help with the 
development of the new Farm Bill. I do not envy the monumental 
task that you have before you, and I pray that God will give 
you wisdom to do so.
    Agriculture has always been and will be the backbone of a 
strong United States economy. With the recent terroristic 
activities both here and abroad, I do not believe it is 
possible to overemphasize the need to keep a strong domestic 
supply of food and fiber. This is a must for the health and 
well-being of our nation.
    Southern farmers need a bill that favors diversification. 
Crop diversity is important for the economy of our rural 
communities. Diversity helps us control pests and keep our 
yields up. Corn fits well in this rotation. In general, the 
1902 Farm Bill has worked well, and I believe we can use our 
current bill as a foundation to develop an even better Farm 
Bill.
    First, farmers need some kind of safety net at a level that 
will allow them to survive. Depressed commodity prices, 
tremendous increases in input costs, unfair competition from 
world markets, and natural disasters, such as droughts, floods, 
insects, create severe financial problems for farm operations 
whose profit margins are very small even in good years. A 
combination of good crop insurance programs, counter-cyclical 
payments, and loan deficiency payments could be worked in 
combination to create a safety net. Crop insurance should be 
amended so that disaster years do not erode the farmers' 
protection levels.
    Payment limitations should not penalize farmers. With the 
necessities of economics of scale, we have had to get larger 
and larger just to stay in business. Therefore, with smaller 
profits per acre, it is taking more and more acres just to 
survive.
    Conservation is important to everyone, especially farmers. 
The farmers who have survived in agriculture know the best 
conservation practices for their operation and are using these 
practices. We should continue to receive credits for our 
efforts and leeway in the conservation practices that we 
implement.
    There has been a tremendous effort in the development of 
biofuels. We have led the way with corn/ethanol production. And 
there is a concern that an orchestrated drop in world oil 
prices could undermine these endeavors. This would disrupt not 
only the corn and ethanol production efforts but the 
development of other biofuels as well. We need protection as we 
build the technology and infrastructure to become independent 
of other countries' energy sources.
    It is imperative that we continue to provide funding for 
agricultural research, extension, and educational endeavors. 
Without the contributions from these important people, United 
States agriculture would be years behind where we are now and 
many of us would be out of business. Thank you.
    Senator Chambliss. Thank you, Ray. Armond?
    [The prepared statement of Mr. Cobb can be found on page 67 
in the appendix.]

STATEMENT OF ARMOND MORRIS CHAIRMAN, GEORGIA PEANUT COMMISSION 
               SOUTHERN PEANUT FARMERS FEDERATION

    Mr. Morris. Good morning, Chairman Chambliss and Senator 
Roberts. It's great to have you in the state of Georgia here 
with us today. Thank you all for having this hearing here in 
Albany.
    I'm Armond Morris. I'm a peanut producer from Irwin County, 
Georgia. I am chairman of the Georgia Peanut Commission. I am 
here today representing the Southern Peanut Farmers Federation. 
The Federation is comprised of Alabama Peanut Producers, 
Georgia Peanut Commission, Florida Peanut Producers 
Association, and also, within the last month, the Mississippi 
Peanut Growers has voted to join the Federation. So we're 
excited to be here representing three-fourths of the nations 
peanuts. So I'm here to testify for them this morning.
    First, I want to thank you, Mr. Chairman, for bringing the 
Senate Agriculture Committee to South Georgia, for the 
Committee's leadership in moving the U.S. peanut program from a 
supply management program to a more market-oriented program.
    The new peanut program has encouraged peanut product 
manufacturers to develop new products and spend more money on 
marketing these products. And the domestic demand has increased 
like 25 to 30 percent since the new program has been 
implemented. The 2005 peanut crop was valued at $370 million, 
pushing about 50,000 jobs into Georgia's economy.
    The Southern Peanut Farmers Federation has met with other 
segments of the industry, including buying points, shellers, 
manufacturers, and each having indicated they are pleased with 
the 2002 Farm Bill. While Congress has passed a very 
respectable peanut program in 2002, the administration of the 
peanut program by the Department of Agriculture has not been as 
successful. While the domestic marketplace has seen a healthy 
increase in demand from consumers and production growth for 
producers, this has not been the case for the peanut export 
market.
    The USDA continues to set the loan repayment rate for 
peanuts too high. Despite language to the contrary in the 2002 
Farm Bill, the Department has relied far too much on data 
unrelated to the price other export nations are marketing 
peanuts for in the world.
    We are encouraged by a recent meeting in Washington with 
the USDA Farm Service Agency economists. At this meeting, the 
peanut producers offered options for achieving a more accurate 
posted price. I have included these detailed options in my 
written statement. The Southern Peanut Farmers Federation will 
continue to work with our industry partners to develop more 
specific suggestions for the next Farm Bill and refer that to 
your Committee.
    When the 2002 Farm Bill was drafted, peanut producers did 
not envision record high energy prices that impacted our major 
crop inputs, including fuel, fertilizer, and chemicals. The 
2006 peanut crop will feel the impact of these increases. In 
Georgia we anticipate a 30 percent reduction in peanut planting 
for the 2006 crop year. High energy costs and weak contract 
offers are the primary variables for the less acreage. Weak 
contract offers are a direct result of the loan repayment rate 
being set too high. With a declining export market, peanuts are 
not moving out of the loan quickly enough, resulting in a 
buyers' market.
    As the Committee is aware, the storage and handling fees 
provided in the 2002 Farm Bill, they are to be eliminated for 
the 2007 crop. Producers consider this an integral part of the 
peanut program. Without these fees, the marketing loan will be 
produced for the producers in excess of probably $50 per ton. 
With a projected 30 percent reduction in Georgia production in 
2006, peanut planting could fall below pre-2002 levels in the 
2007 crop year if these fees are not restored. The $355 per ton 
marketing loan rate in the 2002 Farm Bill would then be reduced 
to approximately $300 per ton.
    Producers in the Southeast will not plant peanuts at these 
levels. If the storage and handling fees are eliminated in the 
next Farm Bill, the Federation requests that the Committee 
consider options for replacing these fees through an increase 
in marketing loan rate or other options.
    And, Mr. Chairman, we appreciate the Committee is concerned 
about the Doha Round negotiations to the Administration, 
conveying that message, and Congress should set the ag policy 
and not our trade negotiators. And I'm grateful for the 
opportunity to be here today representing the Southeastern 
peanut farmer/growers.
    [The prepared statement of Mr. Morris can be found on page 
111 in the appendix.]
    Senator Chambliss. Well, thanks to each one of you for 
those presentations. I've got a series of five questions that 
I'm going to ask at every field hearing we have this year. And 
I'd like to address it to all four of you and have you respond 
to it.
    As we approach the 2007 Farm Bill, the budget situation is 
much different than when we wrote the 2002 Farm Bill. If the 
World Trade Organization agriculture negotiations are 
successful, the commodity title will require changes in order 
to comply with the new commitments. How would you prioritize 
the programs of the Farm Bill generally and the commodity title 
specifically? How would you write the relative importance of 
the direct payment program, the marketing loan program, and the 
counter-cyclical payment program? Mark?
    Mr. Detweiler. That's a loaded question.
    Senator Chambliss. Intended to be.
    Mr. Detweiler. In my opinion, we're going to have to look 
more toward an insurance-based formula to sustain our safety 
nets versus the counter-cyclical direct and marketing loan 
payment programs we now have currently in place. That may or 
may not cause more financial outlay to Congress, depending on 
the year, depending on the insurance payment programs that 
would be used or utilized, considering whether it be net farm 
income based or gross farm income based or crops-specific 
based. There's many options in that insurance scheme that we're 
currently looking at. But I personally believe we're going to 
have to look closer toward an insurance program to solve or to 
ensure our safety net than our current programs that we have 
now in place.
    Senator Chambliss. OK. Chuck?
    Mr. Coley. I think the marketing loan program is vitally 
important to the crop industry. I think it's one of the most 
forward-thinking laws that have came back to help us market our 
crops when they're low. I think the safety net of the counter-
cyclical is very important. And like I said in my statement, 
the balancing of direct and counter-cyclical is vitally 
important to the whole cotton industry.
    Senator Chambliss. Ray?
    Mr. Cobb. Like Mark says, that's a loaded question. But I 
think what we have is working, has worked well. And as Chuck 
said, you know, I think the counter-cyclical payments are most 
important. And I also agree with Mark, insurance. I don't know 
the answer. I know that's what you're looking for. But it's 
very important that we do something for the American farmer and 
keep the American farmer, the true American farmer, in 
business.
    Senator Chambliss. OK. Thank you.
    Mr. Morris. Mr. Chairman, we in peanuts, we've tried to 
conform like other commodities. Back in 1996, I believe, you 
reminded us of the fact that you couldn't get us another Farm 
Bill similar to what we had with the quota system. So we've 
tried to transition to conform to the other commodities and to 
make our program work and work well. And you've done a great 
job of orchestrating that and helping us to do that.
    I think the marketing loan is very important to us in 
peanuts and, of course, the counter-cyclical, also. I realize 
that the legislation that you all brought forward in setting up 
our Farm Bill, last Farm Bill, that USDA has faltered in some 
of the ways. I feel that had they set the prices right, we'd 
have been able to move our peanuts forward.
    But to answer your question, basically, the program has 
worked well and we would like to see it continue to work in 
that effort. And, of course, we want to make it better in any 
way that we can.
    But another thing that concerns me, when we look at other 
countries around the world and look at what their food cost is 
related back to their income, I think in America we're like 
9.4, 9.5, somewhere around 9-1/2 spendable income of the 
American people for food. And in France, I believe it's like 
18, 18-1/2. If the American consumer was paying 18-1/2 percent 
of their income for food, I don't think we'd have a problem 
with what the farmer receives for his commodity. We wouldn't be 
facing the chaos and the low prices and the problems that we 
have. We'd probably be able to pay for our fuel, even though 
it's high.
    Maybe I'm wrong. But I'm a consumer. I want us to get the 
best quality food that we can on the American consumers' table 
at the cheapest possible price. So that's very important. And 
you gentlemen, in writing a new Farm Bill, I know that that's 
you all's goal.
    Senator Chambliss. Second, we can expect an effort to 
further reduce payment limits in the next Farm Bill. In fact, 
in its recently released Risk Management Farm Bill Theme Paper, 
USDA suggests that an alternative to the current farm program 
could be to better target farm programs to producers in 
greatest need of assistance, that is, target payments toward 
smaller and mid-sized farms. Do you believe this would be a 
good idea, or do you believe that farm programs should support 
those with a greater risk to a greater degree? Do payment 
limits need to be modified in the next Farm Bill? Mark?
    Mr. Detweiler. I'm going to get in trouble no matter what I 
say on this one. I believe the greatest risk factor on the 
larger farmer needs to be the one insured. Generally, looking 
from a smaller farm--and I would be considered a smaller 
farmer--you're going to look at assistance from off-farm 
income, supporting your income farm--family, live-farm income, 
from off-source farm income, a net. And I believe it would be 
better targeted toward the larger and more risk-factored 
farmer.
    Mr. Coley. I definitely don't believe we need any more 
payment limitations. We were talking about the marketing loan. 
We need to have all our crop eligible for marketing loan in 
order for it to work properly. We also have to remember the 
definition of small and medium-sized farms. Years ago, when I 
was a little boy, if you had 250 acres, it was a large farm. 
Now, with the consolidation of farms and the expense it takes 
to run a farm and the amount of investment, you have to have a 
lot larger farming operations than you did in the past. And 
they're the ones out there taking the risk. And, you know, we 
got into people hollering about 20 percent of the people 
getting 80 percent of the payments. Well, those 20 percent of 
the people are producing over 80 percent of the crops.
    Senator Chambliss. Ray?
    Mr. Cobb. Chairman Chambliss, I don't think we need to cut 
payments to farmers. As Chuck said, you know, we've been forced 
to produce more and more. And the inputs that we're putting 
into farming, it's tremendous. And the income, we're getting 
1950 prices. So I think the country's got to make a decision: 
You want to cut the backbone of the nation, or you want to look 
at some other things?
    Mr. Morris. Mr. Chairman, I don't feel like we need to 
reduce the payment. The limitation probably even needs to be 
raised because the size of the farms have increased. And why 
should we penalize someone that wants to expand to stay in 
business?
    And if you are a true family farmer now, it's hard for you 
to exist on 300 acres or less land. You have to have larger 
farms. For instance, fuel prices, look how it has increased in 
the last 24 months, fertilizer prices. So all these prices has 
increased, too. So you've had to increase your farming 
operation. So I think it's important that we look at that.
    And, second, we want to be sure that we've got the best 
quality food in the nation. We want to be sure that we have an 
adequate supply. So all these things play an integral part of 
the farming operation.
    Senator Chambliss. As we speak, there are conversations 
going on in Geneva relative to the Doha Round. And agriculture 
has finally achieved the profile that folks like Pat and I have 
long believed it should, and that is that we're not going to 
have an agreement coming out of Doha without a strong 
agricultural agreement that's going to be beneficial not just 
for American farmers but it should be beneficial for other 
folks around the world. But, frankly, I'm a lot more concerned 
about a farmer in Paris, Texas, than I am one in Paris, France. 
So, naturally, we are determined to make sure that the American 
farmer comes out in the best shape possible.
    We also have a trade negotiator in Susan Schwab who 
understands the importance of agriculture to America. And she 
understands that we're not going to unilaterally disarm. If 
we're going to get any trade agreement through the U.S. 
Congress, it's going to have to be fair and equitable, it's 
going to have to be balanced, it's going to have to provide our 
farmers with true market access, real market access, if we're 
going to have a reduction in domestic support.
    With that being said, the Doha Round of negotiations seeks 
to provide additional market access for U.S. agricultural goods 
in exchange for reductions in trade-distorting domestic support 
programs. How dependent are your farm operations on exports? 
And to what extent do you believe your future profitability 
will depend on exports rather than domestic markets? Armond, 
let's start with you this time.
    Mr. Morris. Well, I think that, Mr. Chairman, definitely 
exports are very important. I know it's very important to the 
peanut industry. And we was hoping the new Farm Bill would 
address that, and it did. You and legislation addressed it, but 
then USDA has not implemented it right.
    And we're spending probably a million and a half dollars, 
or the USDA is spending a million and a half dollars, for 
peanuts to develop the export market. Our exports has went down 
300,000 tons since the 2002 Farm Bill. Had we set our prices 
right, we would have been able to retain that 300,000 ton 
market, probably wouldn't have a surplus today of peanuts in 
the warehouse.
    But I think it's very important. I think it's very 
important. And as we've moved into the new era that you all 
have helped to write legislation for, it's been directed toward 
the export markets. And I think that we need to be able to fit 
into those markets. But I think that we're an industrialized 
nation, and I think that it's going to take involvement from 
you all and through USDA to help the farmer to be able to fit 
into that market and for us to keep the cheap food here on the 
American table, too.
    Senator Chambliss. Ray?
    Mr. Cobb. I think exports are very important. I don't know 
to what percent. But farmers need to have--our competition, 
they're able to use a lot of things we're not able to at 
cheaper cost. So the exports, again, are very important. And I 
don't know how--I'd like to get back to you on that in writing, 
maybe.
    Senator Chambliss. OK. That would be fine. Chuck?
    Mr. Coley. Well, Mr. Chairman, you know it's vitally 
important to the cotton industry for exports. Three out of four 
bales now are exported. Of course, there's the demise of our 
domestic industry, which has hurt the cotton industry as a 
whole, where just a few years ago was spinning 11 million 
bales, is only spinning a little over 5 million bales now. 
We're exporting some 16 million bales. As I mentioned in my 
oral statement, the access to China is vitally important for 
the cotton industry, and China trying to go behind the scenes 
and limit cotton's access to their market would not fare well 
for the cotton industry.
    Senator Chambliss. Mark?
    Mr. Detweiler. Mr. Chairman, I would say that exports are 
extremely important to us in soybeans. In the Southwest, we are 
a protein-deficit area, which means we consume the majority of 
our soybeans here domestically for our broiler production and 
livestock production facilities. But if you look toward the 
Midwest, Illinois, Iowa, Missouri, they are totally dependent 
on export beans out of the country, through the Mississippi. 
And that would directly affect us and our market price for 
soybeans if that export market dries up. It's also critically 
important for us, in balance of trade, increasing export market 
availability for us in all products.
    Senator Chambliss. In its recently released Risk Management 
Farm Bill Theme Paper, USDA suggests replacing marketing 
assistant loans and counter-cyclical payments with a program 
that pays producers based on revenue shortfalls as an 
alternative to the current farm program. What do you think 
about a revenue-based approach to a safety net as a replacement 
for the current commodity programs? Armond?
    Mr. Morris. Of course, Mr. Chairman, we would have to, I 
reckon, review that and look at it. But it could work. But we 
do have to have the revenues that would repay the loans that we 
have with the banks and also support any expansions and new 
development and support the farmer himself.
    So I couldn't answer that question until, I reckon, we 
studied it a little bit more. I know the program we've got now 
is working. With all the increase in cost of production, it 
would be hard for the farmer to take any decrease in his 
commodity prices. And I do like to see the commodity prices be 
high enough that the farmer be paid on what he produces, 
production. And that's a good incentive, if he's getting a good 
price for his commodity.
    Senator Chambliss. Ray?
    Mr. Cobb. Well, we don't need to increase the payments 
again. And you sure do ask some good questions. Like Armond, 
I'd have to do some studying on that. I think it would work, 
but it doesn't need to be decreased, as far as what we're 
getting.
    Senator Chambliss. OK. Chuck?
    Mr. Coley. I think, you know, there could be a possibility 
for the revenue-based. I think, as the others agree, I think 
what we have is working well. I think when you look into a 
revenue-based program, I think each section of the country has 
to be considered. The Southeast has some crops that require 
pretty intensive management, plus high capital outlay, such as 
cotton and peanuts. And they would have to be designed in an 
equitable manner so certain regions would not be behind other 
regions in the country.
    Senator Chambliss. Mark, you addressed this in your opening 
statement, but you might want to expand on it a little bit.
    Mr. Detweiler. I will try to, Mr. Chairman. We have had an 
analysis done on revenue options and future farm program design 
by two companies, Risk Management and DTB Associates. And I've 
not had time to thoroughly go through the 64-page report since 
the other night.
    But it is a possibility. Of course, WTO is linking us not 
to yield but to income to be compliant. In that case, an 
insurance program is going to be based on your expected loss, 
financial loss, not in a yield-per-acre gain or loss in bushels 
or pounds. It is possible.
    There's several different scenarios, as I said, to look at. 
There's many options through that, through gross farm income, 
through crops-specific income. And these two are--the gross 
farm income level, using that, using a farm basis as taking all 
the products you have--and, you know, I have a diversified 
farm--but taking all those products and having a gross income 
level. And basing it off that loss, you would have to get to 
over a 30 percent loss before it would be triggered for an 
insurance payment and up to 70 percent.
    And the situation that I think would be hard for us to 
swallow in the agricultural industry is that we've been used to 
direct payments. Going to an insurance-revenue option would 
eliminate most of those payments. That would be a hard thing 
for us to comprehend. A larger operation, the more dependent we 
are on these direct payment programs. I think that would be a 
way we're going to have to rethink, refinance, the way we do 
farming operations if we go with that option.
    Senator Chambliss. Last, should an increase in conservation 
or bioenergy resources come at the expense of commodity 
programs? Can you envision conservation or bioenergy incentive 
programs providing an adequate safety net for production 
agriculture? Armond?
    Mr. Morris. I don't think it should come at the expense of 
the commodity programs, because the commodity programs relate 
right back directly to the producer himself. So, you know, I'd 
rather it come from other revenues. But I think it would be 
good. I think we need to study. And I think that we need to 
develop other methods of using our commodities. I think it's 
very important, yes, sir, Mr. Chairman.
    Senator Chambliss. Ray?
    Mr. Cobb. Would you repeat that question again, please?
    Senator Chambliss. Should an increase in conservation or 
bioenergy resources come at the expense of the commodity 
program? Chairman Roberts says no, and I agree.
    Mr. Cobb. No.
    Senator Chambliss. Can you envision conservation or 
bioenergy incentive programs providing an adequate safety net 
for production agriculture?
    Mr. Cobb. I agree, no, it shouldn't come at the expense. 
You know, you mentioned it in your statement to start with: 
Who's going to be farming, the next generation? In all this, 
we've got to promote agriculture. And there's very few young 
farmers in my community. So again, we don't need to--stick with 
the 1902 program, better it, and don't decrease, but still 
promote the biofuels. And I think this is a place we can--you 
know, maybe 1 day a farmer can produce his own fuel and promote 
things like that, rather than decrease.
    Senator Chambliss. OK.
    Mr. Coley. The answer to the question would be no. I think 
the conservation program is an important component of an 
effective farm policy. I don't think it could replace what we 
have now. I think it could--should be continued like that on a 
voluntary cost-share basis like we do now.
    I farm. I'm in the CSP and EQIP programs, familiar with 
those. And they are a complement to the commodity programs, I 
think.
    As far as bioenergy, I don't think any bioenergy money 
should come from the commodity programs, specifically. I think 
they should add to the commodity programs from the energy 
department area.
    Mr. Detweiler. My personal opinion is no. The situation 
with the bioenergy, I believe we should look at the situation 
with our dependency on foreign oil, foreign energy. We have got 
to start looking at how we can fund ourselves in energy in this 
nation without being dependent on foreign suppliers. Ethanol/
biodiesel are a component that would be an aid. It would not be 
a solution to the whole energy crisis, but it would be a 
solution to a partial fulfillment of that. It would help the 
farmer in the long run of moving excess product. Also, it would 
be utilized or the money would be turned around in the United 
States instead of given to foreign countries. This situation 
would also be a renewable resource versus a finite resource. 
And these are, I believe, alternatives that we need to look at 
of renewable bioenergy resources to be utilized by our country.
    Senator Chambliss. Senator Roberts?
    Senator Roberts. Thank you, Mr. Chairman. Since I have been 
a chairman before, it took us about 18 months to write a Farm 
Bill. It was vetoed twice by President Clinton. And then we 
finally got it done, whereupon President Clinton personally 
congratulated me for helping to pass our Farm Bill. Asked if I 
wanted my picture taken with him. And I said I sure would and 
had a picture taken. I was sort of overawed there in the 
Presidential Oval Office. And I walked out there, and I said, 
``Wait a minute. He's the one that vetoed that bill twice.''
    But what this man to my right has to put up with is what I 
call the Dutch uncle people or the green eyeshade gang or the 
people from the Office of Management & Budget or the people 
from the Congressional Budget Office or people who don't know 
anything about farm programs and, quite frankly, think their 
food comes from grocery stores.
    I am reminded of my great conversation with Congressman Gus 
Savage, who came from Chicago. As usual in Chicago, Mr. Savage 
served several terms and then had some problems and then left. 
So I went up to Gus, and I was trying to appeal to the other 
side of the aisle. I was trying to get as many votes for the 
Farm Bill as I possibly could, because it was tough. We were 
trying to fit it under budget. The forty-year farm bills of the 
past were not fitting into the budget, wouldn't work. So we 
settled for the 1996 rubric of the Farm Bill at that particular 
time.
    And I asked Gus, I said, ``Can you help me on the Farm 
Bill? We need your vote. Everybody in Chicago, more especially 
those who are very disadvantaged, are only spending 10 
cents''--now it's 9 cents--``out of their disposable income 
dollar for the market-basket food. You know, could you help us? 
Because, you know, the Farm Bill really does that.''
    And he says, ``Now, what are you talking about?''
    And I said, ``The Farm Bill.''
    He said, ``Hell, just pay it.'' I marked him down as 
undecided.
    So I may give you sort of Dutch uncle kind of questions 
here. And some of them are going to be repetitive of what the 
Chairman has asked. But they're on his behalf, because he's got 
to answer to these folks. It's easy for all the rest of us on 
the Committee. I'm his wing man, so I'm a little more, I guess, 
serious or responsible. But at any rate, here's what you get. 
So this is not in order.
    But Mr. Cobb, Ray, you're prepared comments discuss the 
need for a strong combination of crop insurance and the 
counter-cyclical payments and the LDP's. And you also discussed 
the need to modify crop insurance so that your disaster years 
don't count against your APH. Everything has to be an acronym 
in Washington. That's your average production history. And I 
have a two-part question.
    First, we put in place a plug for crop insurance that can 
be used for years of significant crop loss. We did that, we 
meaning Bob Kerry and myself, a former senator from Nebraska. 
Other than the increase in the premium subsidies in the 2000 
crop insurance bill, the plug was the most costly provision of 
this bill. It cost money. So during these times of budget 
deficits, the budget people are sitting over the shoulder of 
Saxby saying, ``If you're going to increase this one, you've 
got to decrease that one within the parameters of your bill.'' 
So do you have any recommendation for modification or 
reductions to other programs that could be used to pay for this 
change?
    Mr. Cobb. Another loaded question. No, sir.
    Senator Roberts. OK. That's not a bad thing. That's, you 
know, for us to deal with. You know, that's reality. You know, 
that's what we're facing.
    We also know that our counter-cyclical program is faced 
with some challenges from a WTO perspective. The Chairman's 
already gone over that, you've already gone over that. Do you 
have any recommendations on ways that we might develop a 
counter-cyclical program that might be better withstanding the 
challenges through the WTO?
    Now, this Chairman has just met with Pasqual Lamy. I guess 
that's how you pronounce that. I've met with him on several 
occasions. And he's right, we want market access, we want an 
end to the state trading enterprises, we want a two-way street. 
We've already lost Step 2. We've lost export credit programs. 
They're after our food aid programs. They're after the Dole-
McGovern school lunch program, which is one of the biggest 
tools we have to fight terrorism. I'm not very happy about 
that.
    Is there anything that you have thought about that we might 
be able to develop a counter-cyclical program that might better 
withstand these challenges? You know, we're into green and 
amber and I guess it's red. What's the other one, red? Blue. We 
want to be in green, by the way, in the green box.
    Mr. Cobb. No, sir, not right here, right now. I'd have to 
think on it some more.
    Senator Roberts. Put your mind to it. Chuck?
    Mr. Coley. Yes, sir.
    Senator Roberts. American Cotton Producers, President of 
Coley Gin & Fertilizer, did you know that Kansas is one of the 
fastest growing cotton producing states in the United States? 
You probably didn't.
    Mr. Coley. Yes, I did.
    Senator Roberts. You do?
    Mr. Coley. Yes, sir.
    Senator Roberts. Good. Briefed by my staff, huh? Cotton is 
one of the largest crops in production in Kansas. We now have 
over 100,000 acres of cotton planted in Kansas. I just want you 
all to know down in this country that when Stephen Foster wrote 
that song ``The Old Cotton Fields Back Home,'' he was talking 
about Kansas. It's the most cost-efficient cotton in America 
because it's so damn cold it kills the bugs and we don't have 
to use insecticides and everything else. Also helps when we get 
rain.
    Chuck, in your prepared testimony, you mentioned the 
concessions that have occurred in the cotton program, i.e., the 
elimination of Step 2 as a result of our good friends in Brazil 
and last year's budget reconciliation bill. You mentioned the 
possible interest by the industry in restructuring Step 2 in a 
WTO-compliant manner. So again, in light of the deficit changes 
we face today, any such changes are going to require funding 
cuts from another program area. What are we going to cut?
    Mr. Coley. That's why we elected Senator Chambliss, sir.
    Senator Roberts. I see. I tell you what we have cut: the 
CSP program, the conservation program, which was huge. God 
knows how many billions of dollars we gave to that. But you had 
to have a U-Haul trailer to fill out all the paperwork to sign 
up in regards to all the environmental requirements. But when 
push came to shove and farmers going broke and farmers having a 
tough time, which seems to happen more often today because of 
the higher risk of it, the CSP program became a bank. I'm not 
advocating that, but that's what happens, and also rural 
development, also research, which I don't think we can cut back 
on in regards to keeping our technological advantage.
    All right. In your prepared testimony, you discuss the 
importance of the counter-cyclical program. This is one area of 
the current program where we have had some of the WTO 
challenges, most notably from Brazil, in regards to cotton. 
However, the other commodities, all of our commodities, could 
very well be in the bull's eye. Do you have any recommendations 
we might be able to consider that would allow us to continue 
the counter-cyclical program while making it more WTO 
compliant?
    Mr. Coley. Sir, whenever I think about being WTO 
compliant--and I'm not a politician, and I don't intend to 
answer this question like a politician. But seems like to me 
every time the U.S. is challenged in WTO or WTO negotiations, 
the American farmer, American agriculture, and American Farm 
Bill is sitting up there and everybody's shooting at it. I 
think--I don't know what you do. We've got to maintain the 
counter-cyclical payment. We feel like the counter-cyclical 
payment is WTO compliant. And you all may feel that way, but 
we've got to convince WTO of that. And when you have people 
deciding your fate that's from Yugoslavia or Croatia or where 
that committee came from, they're prejudiced against the U.S., 
I feel.
    Senator Roberts. Well, I would agree with all that. We do 
get into a real jam where they appeal it, then the ruling is in 
their favor, then we have to fight through that. I think the 
bloom is off the lily in regards to the trade talks. I think 
trade talks are always oversold. I think they're always 
overcriticized. But my farmers that I visit with in Kansas, 
that's not the Number 1 issue they're talking about. And so I 
would agree with your comment that we do have to take that into 
consideration.
    Your prepared testimony recommends some adjustments that 
may be needed for the calculation of a loan rate schedule and 
the world price. I am not familiar with the function of the 
LDP's for cotton as I am for some of our other crops. Could you 
expand a little on what you think those changes should be?
    Mr. Coley. Yes, sir. I think they ought to take into 
consideration more of the cost associated when they're 
delivering the export. We're exporting three out of four bales. 
And adjusted AWP, adjusted world price, is highest determinant 
of the LDP on cotton. And I think that some of the cost of 
delivering this cotton overseas should be in that, too.
    Senator Roberts. Should be factored in?
    Mr. Coley. Yes, sir.
    Senator Roberts. Mr. Morris, I understand you're going to 
tell every consumer representative in America that they ought 
to increase their food cost by 100 percent.
    Mr. Morris. Well, no, sir, I wouldn't----
    Senator Roberts. Why don't you come with me to New York and 
we'll walk the streets? I tell you what: Come up with me and 
Hillary and Schumer and we'll make that pitch.
    Mr. Morris. Well, what I was really trying to point out 
there, I think, is this, that American consumer is getting a 
bargain.
    Senator Roberts. He's getting a hell of a bargain.
    Mr. Morris. That's exactly right.
    Senator Roberts. It is the best quality food at the most 
inexpensive price, not cheap, the most inexpensive price in the 
history of the world. It is one of the greatest success stories 
that you can imagine.
    I told Saxby this the other day. When I was toting the 1996 
bill and had to go through security up in New York--they 
figured out that we should have security in New York at that 
time. But at any rate, we went to the Wall Street Journal. And 
some guy with a neck tie with stripes on it and he came from 
some Ivy League school, he said, ``Well, if we had a company 
that made widgets, why would you not subsidize widgets as 
opposed to agriculture?''
    I said, ``Have you ever put a widget between two slices of 
bread and tried to eat it?''
    Mr. Morris. Correct.
    Senator Roberts. And what are you going to do with that 
disadvantaged youth that unfortunately lives in unfortunate 
housing in a part of New York that's in pretty bad shape, that 
youngster still gets, i.e., food stamps and a lot of other 
support, but they still only pay 10 cents or less out of their 
disposable income dollar? So I'm sympathetic, but I don't think 
that's going to work, to say we're going to have you pay 18 
percent, plus the fact I don't know if it will ever go to the 
farmer. So it's just a thought.
    Mr. Morris. Yes, sir.
    Senator Roberts. In your prepared testimony, you identified 
several concerns with the way the USDA is currently 
administering the loan program for peanuts. You have several 
suggestions. I'm going to skip right over that because this man 
took care of you covertly. So everybody is classified top 
secret. I'm the Chairman. And if you go out of there and say 
that, you're going to be taken to Dodge City and hung by the 
neck until you're dead. So, at any rate, I think I'll probably 
skip that one. And I understand that on the storage business.
    But we had hard white wheat incentive payments--hard to 
say--that expired at the same time as the peanut handling and 
storage assistance. At the time, I told our wheat industry that 
during this time of budget deficits, I needed suggestions on 
where we should take the money out of the wheat program--OK?--
in order to pay for an extension of the incentive. So my 
question to you is for the same guidance. If we were to fund 
this provision, from what other peanut or Farm Bill program 
should we shift the funding for that purpose? Now, the miracle 
worker here did it. See what I'm saying?
    Mr. Morris. Yes, sir.
    Senator Roberts. Each one of our commodities has this same 
problem.
    Mr. Morris. Yes, sir.
    Senator Roberts. And we've either got to hang together or 
hang separately, so----
    Mr. Morris. Well, we want you to be able to do that for the 
wheat farmers, also, because we want to keep that cheap bread 
on our table, also. And I grow some wheat, too, about 500 acres 
of wheat.
    Senator Roberts. Well, you shouldn't do that, but that's 
all right.
    Mark, you responded to the payment limit. And my staff's 
going to go nuts over here behind me. But this man prevented--
along with trying to convince Chuck Grassley, who's a hard man 
to convince, from Iowa, who's on the payment limit posse. Every 
time you have an ag appropriation bill, this damn thing comes 
up and we should consider that in the Farm Bill in the context 
of what's going on with agriculture and moving to larger and 
larger farms.
    Now, you know, my typical farmer out there in western 
Kansas, probably, when I started off back there in the Dark 
Ages, was about 2,000 acres. That's 10,000 now, that's 15,000 
now. It isn't the farmer with two sons and a daughter. It's a 
farmer with one son and a daughter that's in Denver and the 
other son's in Kansas City, maybe involved in agriculture, but 
that's what we're into, high risk agriculture, make a hell of a 
crop 1 year, loose it in the next two, and we're dry, 25 
percent less in terms of our crop, and, as I indicated earlier, 
75 percent increase in energy costs. And so we have people that 
say we're going to have to limit payments.
    Ken Cook, through the FOIA Act--you know, God bless Ken--
basically has indicated that all those payments end up on the 
front page. So you don't go into town for coffee for a month. 
And that's where we are. And so, basically, if you reduce those 
payment, I do have a problem with it in that why can't we talk 
about, instead of farmers, why can't we talk about production 
agriculture, as opposed to the hobby farmer? Nothing wrong with 
being a hobby farmer. Don't misunderstand me. A lot of us exist 
because of the off-farm income.
    But a lot of folks in Congress say small family farm. I 
used to argue with Tim Penny of Minnesota all the time. Small 
family farmer defined by Washington is somebody about 5 foot 4 
and he comes from Vermont and he has an orchard with about six 
trees and a farm pond, sits on the front porch, he's a retired 
airline pilot, he subscribes to Gentlemen's Quarterly, his wife 
works downtown as a stock broker, and he has a three-legged dog 
named Lucky. But he ain't into production agriculture. That 
isn't the same fellow.
    So somehow we have to change this around to get out of this 
nostalgic Saturday Evening Post on what is a family farmer, 
what I call Walden Pond agriculture. OK? So if you could pick 
that up, you could help us. And again, this fellow was 
responsible for delaying that and going through that laborious 
exercise. And it's not that we're trying to shut Chuck Grassley 
out. Every morning Saxby Chambliss, Pat Roberts, and Chuck 
Grassley sits down, we have a peanut butter sandwich to honor 
Georgia, and then we have a glass of ethanol. And it just warms 
you right up.
    Senator Roberts. Mark, have I got to you, or did I just do 
you?
    Mr. Detweiler. I think you said it for me.
    Senator Roberts. You say that ASA's still working to 
develop its final Farm Bill recommendations. Did you mention 
you're looking at the possibility of a counter-cyclical 
program--you did--on the revenue triggers?
    Mr. Detweiler. Yes.
    Senator Roberts. We're really thinking a lot about this out 
in Kansas. It's a concept. I know that. You did expand on some 
of the ideas that you are considering. But the thing that I 
haven't been able to get my hands around: Is this national, is 
it state, is there individual triggers, crop specific, whole 
farm? I'm intrigued by the idea. Do you have a preference?
    Mr. Detweiler. Do I have a preference?
    Senator Roberts. Yes. Is it by region or what?
    Mr. Detweiler. It is by state and it is by local farm, 
depending on the farm production history, the income history. 
We've looked at every option you can think of. But we're 
looking at varying state by state, also county by county, down 
to individual farm net income or gross income in that area. To 
be honest with you, I don't know if I can really answer your 
question because we're still trying to compile everything and 
look at it.
    Senator Roberts. I know. You're trying to put the pieces 
together, just like we are in Kansas.
    Mr. Detweiler. Right. The problems we see is being able to 
provide a safety net for the farmer, which is the bottom line, 
is to provide a safety net for the farmer that will be 
economical for the United States in a financial situation but 
would also be WTO compliant, would not be in a legality system, 
having to change a farm program somewhere through the middle of 
its course of life.
    This situation with the counter-cyclical payments, it's 
difficult. We may not be able to work out a feasible solution 
for that--I do not know personally right now whether we can or 
not--and still be WTO compliant to a green box situation. We're 
already in an amber. And the problem in triggering that has 
been--and, really, with the cotton case, the trigger was not 
because of counter-cyclical or market loan but it was because 
they added in the direct payment because it was coupled with 
the restriction on food and vegetable production.
    Senator Roberts. Right.
    Mr. Detweiler. So that's what really triggered that 
situation. So I haven't answered your question, really.
    Senator Roberts. Well, no. But there isn't an easy answer 
for this. But all four of you said we ought to continue this 
program under the banner of consistency and predictability. 
It's like one old boy told me in Hutchinson, Kansas, at the 
State Fair. He said, ``Pat, I don't care what you do to me. 
Just let me know.''
    If we were to simply extend the Farm Bill, as some have 
suggested--and I'm not for that--how serious do you think the 
threat is both to the soybean program and the overall commodity 
title of the Farm Bill as a whole? Somewhat, very?
    Mr. Detweiler. Very.
    Senator Roberts. I agree with you. Now, 2002, there's the 
Cochran Roberts alternative. Didn't get too far. You've got to 
have a Farm Bill. So I waited until the last minute. I'd never 
voted against a Farm Bill. Some of them I sort of had to hold 
my nose. You never get the best possible Farm Bill. You get the 
best bill possible.
    But on this time around, my studious staff over here noted 
that under the counter-cyclical program that was being 
proposed, seven out of the last 10 years prior to 2002, when we 
had some of our worst years, we'd never get a payment. Now, it 
works damn fine if you have a crop. If you don't have a crop, 
you're out of luck.
    Now, why would I want to vote for that in Kansas when we're 
25 percent down with our wheat crop and you folks sit here and 
tell me, ``We want to continue the counter-cyclical payment,'' 
when we haven't got a payment in many of the years that we 
have? And we have to rely on crop insurance as best we can. And 
there's a small direct payment. Why wouldn't we think about 
going more to more direct payments. Which is green. Help me out 
on this.
    Mr. Coley. Well, from the cotton standpoint in the 
Southeast, more direct payments would hurt producers in Georgia 
because we have a lower direct payment yield than we do 
counter-cyclical yield.
    Senator Roberts. I see. Well, I just thought I'd let you 
know what we're thinking about from the Kansas perspective. 
Thank you, Mr. Chairman.
    Senator Chambliss. Well, thank you, Pat. And, gentlemen, 
thank you all very much. You understand now why I serve on 
three committees with Pat. He's always this entertaining. 
Usually his comments are directed at Hillary or Diane Feinstein 
or somebody just as conservative as he is.
    Pat was very generous in his comments to me starting off, 
relative to looking after agriculture across the country. And I 
want you to know why I do that. And the way I'm going to tell 
you about why I do that is I learned a lesson from Pat Roberts 
when he was Chairman of the House Agriculture Committee and I 
was a lowly freshman Member of Congress, sat in the next to the 
last seat on the House Agriculture Committee, right next to Ray 
LaHood, who was last.
    And we had a heck of a battle my first year in Congress 
during the appropriation process. And the battle was over the 
total elimination of the peanut program. Well, you all know how 
many peanuts they grow in Kansas. He doesn't want Armond 
growing wheat because we don't want him growing peanuts in 
Kansas. He has none.
    But in the battle over the peanut program that year, which 
was 1995, we won that vote by two votes. The man who secured 
the last two votes to get us over the hump was Pat Roberts. So 
I learned a great and valuable lesson from him, and I'll always 
be indebted to him for working hard for American agriculture 
while he was Chairman. And we're going to continue to work hard 
for American agriculture while I'm Chairman.
    Gentlemen, thank you all very much for your testimony, for 
your comments. And we look forward to staying in touch and 
continuing our dialog. Our next panel--
    We're going to take about a 5-minute break--and I literally 
mean that--as we bring our next panel forward. That's Mr. Bill 
Brim, Mr. Carl Perry, Mr. Tom Thompson, and Mr. Murray 
Campbell.
    (BREAK)
    Senator Chambliss. We're going to move ahead with our 
second panel. Our second panel consists of Mr. Bill Brim of 
Tifton, Georgia, representing the Georgia Fruit & Vegetable 
Growers Association; Mr. Carl Perry of Moore Haven, Florida, 
representing the Florida Sugar Cane League; Mr. Tom Thompson of 
Eatonton, Georgia, representing the Georgia Milk Producers; Mr. 
Murray Campbell of Camilla, Georgia, representing the First 
United Ethanol LLC.
    Gentlemen, thank all of you all for being here. We will 
submit your full statement for the record. But we will turn to 
you now for any opening comments you wish to make. Bill, we'll 
start with you.

   STATEMENT OF BILL BRIM LEWIS TAYLOR FARMS, TIFTON, GEORGIA

    Mr. Brim. Good morning, Chairman Chambliss and members of 
the Committee. My name is Bill Brim. I'm a vegetable grower 
from Tift County, Georgia. Our farm is a diversified operation 
of 352,000 square feet of greenhouse production space and 4,000 
acres of vegetable production. Our fruit and vegetable industry 
is growing at a rapid pace, but this growth is not limited to 
just Georgia. We also have to include those people from the 
land of fruits and nuts. Specialty crop growers produce 
approximately 50 percent of the farm gate value of total plant 
agricultural production in the United States.
    Despite the impact of the U.S. economy, specialty crop 
growers receive a very small percentage of Federal resources 
aimed at promoting and sustaining agricultural production. We 
hope the Committee will take a hard look at a balanced Farm 
Bill that will include an increased emphasis on specialty crop 
producers.
    In addition to growers, consumers also benefit in the 
Federal investment of specialty crops. By expanding access and 
availability to safe, wholesome, and healthy fruit and 
vegetables, the Farm Bill is a critical component to reaching 
the 2005 Food Pyramid goal of doubling fruit and vegetable 
consumption in the United States.
    I am not here today to tell you that we want or need a new 
Farm Bill for fruit and vegetables; however, there are several 
areas in the Farm Bill that should address issues of concern to 
our specialty crop industry. A written testimony I've filed 
with the Committee may fully discuss the details of the issues.
    Number 1, as a matter of fair competition, we support 
continuation of the restrictions on planting flexibilities.
    Number 2, we support a thorough review of all farm programs 
to ensure that specialty crop producers have access to benefits 
comparable to other farmers rather than being excluded or 
limited simply due to a higher cost of production.
    Due to the wide diversity and localized needs in specialty 
crop production, we support an expansion of the state block 
grants for specialty crops. Georgia producers believe this is 
the most important component to be considered in the 2007 Farm 
Bill debate.
    Number 4, increased funding for specialty crop research is 
critical. Fruit and vegetable growers need assistance and 
support from USDA researchers to find practical production 
solutions for problems such as methyl bromide alternatives, 
pest management, production practices, water conservation, and 
plant variety improvements.
    And Number 5, nutrition, we support a strong new focus 
within the new Farm Bill for increasing the access of 
availability of fruits and vegetables, particularly in 
children. We appreciate the recent inclusion of Georgia in the 
Senate ag approach markup. We hope this program can be expanded 
nationwide in the 2007 Farm Bill.
    Most fruits and vegetables are not covered by a crop 
insurance program. We would like to see the increase in pilot 
projects and studies that determine the feasibility of 
specialty crop coverage. Our pecan growers have a specific need 
that should be addressed in the new crop insurance policy such 
as 10 percent cup, tree thinning, and exclusion of the tree due 
to disasters and loss.
    I want to thank the Committee for giving us, the 
organization, an opportunity to testify. And, Mr. Chairman, as 
you know, my farm is located just east of here. And I would be 
remiss if I didn't mention something about immigration and the 
debate that's going on here and in Washington, too. And I just 
wanted to let you know how much we appreciate what you've done 
for immigration and border security and hopefully what we can 
get accomplished in this coming year. Thank you very much.
    Senator Chambliss. Thank you, Bill. And that's an issue we 
could have a whole hearing about. And you and I have worked 
very closely on this for all of my 12 years in Congress. And I 
appreciate your input, your patience, and your expert advice in 
counseling me personally, as well as to the Committee, on the 
issue of immigration. I will be a Conferee on the immigration 
bill. And we're going to continue to work very closely with you 
to make sure we craft good, sound policy there.
    Mr. Brim. Thank you, sir.
    [The prepared statement of Mr. Brim can be found on page 60 
in the appendix.]
    Senator Chambliss. Carl?

STATEMENT OF CARL PERRY FARMER OF SUGARCANE, BEANS, CITRUS AND 
                     CATTLE ALBANY, GEORGIA

    Mr. Perry. Good morning, Mr. Chairman and Senator Roberts. 
Thank you for deciding to hold one of your Committee farm 
policy hearings in the southeast U.S., for agriculture is the 
backbone of our states' and rural communities' economics. I'm a 
fourth generation farmer. My family and I grow sugarcane, 
cattle, citrus, and beans. Florida is an extremely 
agriculturally diverse state but has few program crops compared 
to most other states. Although Florida is the ninth largest 
agricultural state in the U.S., only 4 percent of Florida crops 
are row crops.
    The Florida sugar industry has a $3.1 billion economic 
impact on the state. It provides 25,000 direct jobs. The U.S. 
sugar policy, is it working? I can enthusiastically say that 
like most of the provisions in the 2002 Farm Bill, absolutely. 
The program operates at a no-net cost to taxpayers and provides 
a fair price to farmers and consumers alike. Look no further 
than this year to see how effective the program performs. 
Hurricanes devastated the sugar crops in Florida and Louisiana. 
We had a loss of nearly 30 percent, which is unprecedent to our 
industry. Immediately following Hurricane Katrina, the sugar 
policy gave the USDA the flexibility it needed to address 
supply interruptions. Domestic stocks were quickly made 
available, and USDA increased the imports to address the 
domestic shortfalls.
    Other countries aren't quite so lucky. They don't have that 
type of flexibility when disaster strikes. Thailand and 
Australia both have experienced weather disasters that left 
them with short supply. It doesn't take an economist to figure 
out that this had and are continuing to have a dramatic effect 
on the world sugar market. America cannot become dependent on 
such unreliable foreign sugar supplies. This country needs 
homegrown sugar, and American sugar farmers need a strong sugar 
policy.
    Many people believe that sucrose ethanol may be a great 
opportunity for sugar producers. While this has intrigued us 
and we are researching this issue, we do not want to lose focus 
on maintaining a sound sugar policy like the one found in the 
current Farm Bill. This is our No. 1 priority.
    We are gravely concerned about talks of buying the U.S. 
sugar program and converting it to a traditional row crop 
program, especially in times of tightening Federal budgets. The 
yearly cost of a conventional program possibly as high as $1.3 
billion would be in addition to the billions of dollars that 
the buyout itself would cost.
    I can't go without noting that the sugar is the single most 
distorted commodity in the world. Because so many countries' 
treasuries are involved in sugar policy, the WTO is the only 
forum where true and fair reform of the world sugar market can 
take place.
    In addition to discussing sugar policy, I feel I would be 
remiss if I did not take the time to thank you, the Senator, 
for leading the charge to provide needed disaster relief for 
the Gulf coast producers in the wake of the hurricanes. On 
behalf of the sugar farmers in Florida, I'd like to thank you.
    The current sugar program is working well. It keeps prices 
low and stable for grocery shoppers in times of national 
emergencies. It is not costing taxpayers anything. It makes 
sure that we are not dependent on foreign supplies, and it 
helps support thousands of sugar farmers and factory workers 
across the country. As Congress looks to reauthorize the new 
Farm Bill, we humbly ask that the current sugar program be 
extended. Thank you.
    Senator Chambliss. Thank you. Tom?
    [The prepared statement of Mr. Perry can be found on page 
118 in the appendix.]

 STATEMENT OF TOM THOMPSON PRESIDENT, GEORGIA MILK PRODUCERS, 
                              INC.

    Mr. Thompson. Thank you, Senator Chambliss and members of 
the Ag Committee, Senator Roberts. I'm Tom Thompson. I am a 
dairyman from Eatonton, Georgia. I'm also president of the 
Georgia Milk Producers, who represent all Georgia dairy 
producers.
    Georgia dairymen and indeed dairymen located in the 
Southeast are in danger of extinction. According to trend lines 
from the Federal Milk Market Administrator's office in Atlanta, 
without a change in the rules, the present trend lines would 
indicate that virtually no dairies will exist in the Southeast 
in the next 10 years. And it is not drought, heat, and high 
humidity that are the culprits, although all of those certainly 
make dairying in the Southeast a challenge.
    In an area where population growth is one of the fastest in 
the United States and our deficit grows greater each year--by 
the way, Georgia is now importing 1,000 tanker loads of milk 
per month--we find that the system is taking a lot of the sales 
dollars paid by these local plants that should be going to 
dairymen who are supplying those plants on a daily basis. 
Through pooling and touch base provisions, these dollars are 
then redistributed to producers who in many cases may be riding 
the pool.
    A look back at the history of milk marketing in Georgia 
will be informative. In the late 1960's, the Georgia Milk 
Commission was ruled unconstitutional and Georgia subsequently 
got its own Georgia Federal order. Co-ops were local and 
represented Georgia dairymen, and the Georgia Federal Order 
served the industry well. It included a base excess plan that 
rewarded dairymen who supplied milk when the market needed it 
and penalized those who produced excess when it was not needed. 
Class I utilization was normally in the high eighties and the 
low nineties. Subsequent years added a state here and a state 
there to the order that originally was the Georgia order. 
Plants merged. Co-ops merged. Each geographical increase in the 
former Georgia Federal Order, now called the Southeast Federal 
Order, resulted in small declines in Class I utilization, 
primarily because the states added had a higher ratio of milk 
to their population than did Georgia.
    Disaster struck first in 1995 when Congress failed to 
reauthorize the base excess plan that had been in existence for 
almost 30 years. Now there was no incentive to produce milk 
when the market needed the milk, and the door was open for 
producers to ride the order, dumping excess milk on the order 
when it was not needed.
    Disaster struck a second and even deadlier blow on January 
the 1st, 2000, when USDA added a huge geographical area to the 
Southeast Order, extending it to include a portion of Missouri. 
It is interesting to note that this was done without any public 
discussion, and it is probably just coincidental that a 
national co-op with a small minority of its members in the 
Southeast is headquartered in Missouri. The drop in utilization 
from pre-January 2000 to the subsequent months shows a dramatic 
Class I utilization decline of 15 to 20 points on a month-to-
month comparison. This has been widely viewed as a $1.50 to 
$2.00 per hundred pounds of cost to Georgia and other 
geographical Southeast producers. The combination of these two 
disasters have cost Southeast producers untold millions of 
dollars.
    Which brings us to the issue of: How could this happen? 
Don't co-ops operate in a Democratic manner and represent their 
producers in Federal Order hearings and on Capitol Hill? 
Absolutely. Just as plants have merged, co-ops have also merged 
due to economic pressures. The problem is that the majority of 
milk in the Southeast is controlled by co-ops whose majority 
membership and directors live outside the Southeast and whose 
farms are in less populous areas with subsequently lower 
utilization. You can be sure that they understand that working 
the system to get their milk pooled on a higher utilization 
market puts money in their pockets.
    Management is only too happy to oblige working the system 
to accomplish that, for that is their job security. They 
understand only too well the importance of representing the 
majority interest of their boards. The problem is compounded by 
the move by some co-ops to lock up supply contracts with major 
processors, thus locking out other producers and their co-ops.
    The present system of using a formula that locks Class I 
pricing to manufactured pricing is adversely affecting markets 
that are primarily Class I. The expansion of milk production 
west of the Rockies propelled by the explosion of megadairies 
results in an adverse impact on dairymen producing for fluid 
markets. A system needs to be developed that would partially 
decouple Class I.
    Our nation is rightfully concerned with our dependence on 
foreign oil, air pollution, highway congestion, and 
biosecurity. I would submit that the current system of milk 
pricing and marketing is increasing our dependence on foreign 
oil, increasing air pollution and highway congestion, and 
placing our nation at greater risk of biosecurity. Locally 
produced fluid milk for local consumption just makes good, 
common sense.
    In summary, we recommend: Number 1, Geographical reduction 
in the Southeast Order, restoring the relationship between 
plant utilization and production in the geographical proximity 
to those plants; 2, Tightening of touch base provisions and a 
review of order rules that would discourage riding the pool; 3, 
Congressional restoration of the authorization of base-excess 
plans in the Federal Order system that was omitted in the 1995 
Farm Bill; and 4, Development of a plan to partially decouple 
Class I.
    Thank you for the opportunity to submit our plea for help 
and a call for drastic change, both for the survival of Georgia 
and Southeast dairymen as well as for the ultimate benefit to 
our consumers, our region, and our nation. Thank you, Mr. 
Chairman.
    [The prepared statement of Mr. Thompson can be found on 
page 133 in the appendix.]
    Senator Chambliss. Thank you very much, Tom.
    Murray Campbell is, again, as are all of these gentlemen, a 
longtime good friend of mine. And Murray is a producer in 
Mitchell County, Georgia. He grows a variety of crops there and 
has for many years, comes from a longtime farm family. Murray 
has embarked on a new project that is novel to the Southeastern 
part of the United States. And we asked Murray to come today to 
talk about this new project rather than talking about row crop 
production. So, Murray, welcome to the panel, and we look 
forward to hearing your comments.

 STATEMENT OF MURRAY CAMPBELL CHAIRMAN, FIRST UNITED ETHANOL, 
                              LLC

    Mr. Campbell. Thank you, Chairman Chambliss. And we really 
do appreciate the invitation. I'm here today on behalf of the 
33 founding Board members, representing 13 counties, of First 
United Ethanol LLC, which we like to call by the acronym 
F.U.E.L. Our company, which is based in nearby Camilla, is one 
of the first in the Southeast to embrace ethanol production. 
Our friends in the Midwest have been focused on renewable fuels 
for several years. Fortunately, the economics have finally 
aligned for other regions of the country to contribute toward 
our nation's energy independence.
    As Congress considers various policy initiatives regarding 
renewable fuels, it is important to note that the incentives in 
current law are working. Some will argue that the industry has 
moved beyond the need for Federal assistance; however, this 
line of thinking is premature. The United States remains 
dependent on foreign oil, and companies such as ours are in the 
beginning stages in various regions around the country. Bankers 
and investors that are financing the industry need a certain 
amount of stability as they expand this homegrown industry.
    The passage of the 2005 Energy Policy Act provided new 
incentives for renewable fuels through the renewable fuels 
standard. These incentives, coupled with the growing consumer 
demand for domestically grown energy, lead us to believe that 
ethanol and renewable fuels have a great future. Although most 
of the current ethanol plants in the country are located in the 
Midwest, opportunities are emerging for other regions.
    It stands to reason that demand for ethanol will track 
large population centers across the Nation and the Southeast 
will offer numerous marketing opportunities. I'd like to 
caution Congress to avoid the rush in investing in every new 
renewable fuel technology that comes along at the expense of 
the existing industry.
    Do not misunderstand me on this: We firmly support new 
technologies and welcome opportunities for more efficiency. 
However, many of the new renewable fuel technologies often 
discussed in the press are far from commercially viable. And if 
and when new options are available and prove commercially 
viable, F.U.E.L. tends to embrace and implement them. We are 
currently investigating a biomass gasification component of our 
project that will be fired by juvenile pine tops. For now, 
we're focused on the traditional conversion of corn to fuel and 
urge Congress to continue to support this industry.
    Many myths have been spread about ethanol increasing in the 
country. And what I'd like to tell you today is that corn 
yields are increasing and ethanol production leaves a 
substantial portion of that corn as a feed byproduct that goes 
back into the animal feed markets. Even though our facility is 
not in the Corn Belt, we have a viable plan to meet our supply 
needs to operate a 100 million gallon facility by bringing in 
corn on rail shipments and hoping over time to encourage local 
production. And we think within five to 7 years we'll be able 
to meet our goal, and this will be a huge benefit to our row 
crop farmers in southwest Georgia. The continued trend in 
increased ethanol efficiency, coupled with increased corn 
yields, and new genetics for highly fermentable corns is 
leading to tremendous gains in ethanol per acre.
    By including a new energy renewable fuels title in the next 
Farm Bill, Congress is sending the appropriate signal to the 
agriculture community and the nation. Farmers can and should be 
supportive in their efforts to provide energy independence for 
America. We are ready to answer the nation's call.
    For now I encourage Congress to stay the course on RFS and 
tax incentives. I also encourage Congress and the Committee to 
resist the push to lift the tariff on imported ethanol. Such a 
move is shortsighted and sets back the domestic industry at a 
time when we are finally turning the corner on success. 
Instead, the Federal Government should be enhancing the support 
of the domestic industry by working with the industry to solve 
the distribution problems that have occurred and to get over 
some of the hurdles that we have to overcome to accomplish 
energy independence.
    According to the Renewable Fuels Association, the 
industry's positive impact on world communities is huge. And 
that is a part of my written testimony. And, Mr. Chairman, I 
think, knowing Southwest Georgia as well as you do, you would 
understand the importance of those kind of numbers and what it 
would mean for our rural economy down here. With that, I thank 
you all for coming to southwest Georgia to hear about it. Thank 
you.
    [The prepared statement of Mr. Campbell can be found on 
page 64 in the appendix.]
    Senator Chambliss. Thank you very much, Murray. Bill Brim, 
in the Brazil cotton case, a ruling panel found that direct 
payments are not green box because the planning and flexibility 
provisions restricted fruit and vegetable production on base 
acres. This provision affords market protection to producers of 
fruits and vegetables. And if we move toward Farm Bill 
reauthorization, I expect considerable discussion will occur 
around this provision of the Farm Bill and the finding from the 
Brazil case.
    Do you have any thoughts about relaxing or eliminating the 
planning restriction or to reduce the likelihood of future WTO 
challenge? What would be the impact of relaxing or eliminating 
this provision? And how does this provision benefit the fruit 
and vegetable growers.
    Mr. Brim. No, sir, I wouldn't relax it at all. Basically, 
what it would do is destroy the fruit and vegetable industry if 
it's relaxed and just an open market. We're open market based 
already as supply and demand. And, of course, we have too much 
supply as it is already, because you've heard about the pricing 
we received this spring on all of our production. It's been 
devastating. It's probably been the worst spring we've ever had 
as far as the cost of production being high and our sales being 
cheap. So I would say flexibility, if you open the door for 
everybody and still be able to receive their payments, then it 
would devastate the fruit and vegetable industry.
    Senator Chambliss. Proposals have been made to provide more 
money to the specialty crop industry. These proposals range 
from state block grants to research money to counter-cyclical 
programs. Which of these ideas or others would benefit the 
industry the most? And what ideas do you have for funding such 
proposals?
    Mr. Brim. We'd like the money to come from you. Basically, 
I think the state block grant gives us a little bit more 
flexibility as far as what we do our research on in Georgia, 
whether it be California, North Carolina, South Carolina, 
Florida, or whatever. With the state block grants, it gives you 
that flexibility, if you have different problems, to be able to 
work on marketing problems or disease problems in specific 
vegetables. Of course, all research is very important to us in 
the vegetable industry. And, unfortunately, we have a lot more 
disease pressure and more problems than most of the cotton and 
row crop people because of humidities and variability in rain 
and so forth and all. So I would think that the state block 
grant would give us a little more flexibility. And as far as 
where the money comes from, I'll let you work that one out.
    Senator Chambliss. To you, Mr. Perry and Mr. Thompson, 
both, with respect to trade, the reported aggregate measure of 
support for both dairy and sugar total 5.5 billion. If the WTO 
negotiations are successful, the United States will be 
restricted to 7.6 billion in what we call the amber box or the 
most trade-distorting domestic support. The 60 percent proposed 
reduction will require proportional cuts in all commodities 
requiring structural changes to the traditional program crops 
of dairy and sugar. How would dairy and sugar producers adjust 
to such a new scenario? Mr. Perry, we'll start with you.
    Mr. Perry. Well, as noted, we do not grow enough sugar in 
this country to sustain us already, so we are importing sugar. 
The program operates at a no net cost to the government. We 
have to have the program in place to continue farming like we 
are.
    Senator Chambliss. Tom?
    Mr. Thompson. Senator Chambliss, the support program, of 
course, is a safety net for the United States dairy industry. 
The program has worked well. It works at a level way below the 
cost of production, so it basically does not stimulate 
production. Milk production, as you know, is a perishable 
product. We cannot store fluid milk, which the Southeast and 
especially Georgia is focused on.
    And the program certainly needs to be compliant, but at the 
same time we have to provide a safety net for the volatility in 
the market. Not many people understand that if we have a 2 
percent national surplus, the price at the farm drops 30 
percent. And that 30 percent takes us below the cost of 
production because we don't normally have a margin above just a 
few percent. So we would have to be compliant, but at the same 
time, we have to be respective of the fact that there can be a 
devastating effect without a safety net.
    The industry has come forward through the National Milk 
Producers Co-op, which represents about 70 percent of the milk 
in the United States. We have a producer-funded program called 
the CWT, Cooperatives Working Together, that is very, very 
efficient in promoting the exporting of products. And it does 
it in a world trade framework that is compliant and is legal. 
Our problem there is that there is 30 percent of the milk in 
the country that does not support that, that are not members of 
the co-ops, and, therefore, get a free ride. Nevertheless, the 
program is working well, and hopefully we can expand it.
    As far as the government program is concerned, the primary 
program, I think, that is a safety net, especially to small 
producers, is the MILC program, which is direct payment when 
prices drop below a certain level. We don't think that, from 
Georgia's perspective, that we need to have a few megadairies 
across the country producing milk. It's good for the land, good 
for the people, and good for our nation to have small dairy 
farms scattered across the country. And as I said in my 
prepared remarks, it's especially important to have local milk 
for local consumption. And all this is inextricably tied 
together.
    Senator Chambliss. So are you in support of an extension of 
the milk program in the next Farm Bill?
    Mr. Thompson. Yes, we would be.
    Senator Chambliss. Mr. Perry, what's the sugar industry's 
outlook for commercial production of ethanol from sugar? And do 
you envision a market for ethanol from sugar ever, particularly 
in this part of the country?
    Mr. Perry. Well, the sugar industry is looking into that; 
however, they have not decided whether it is a viable option 
for them. Therefore, we need the current Farm Bill as is for us 
to survive long enough for us to look into the ethanol.
    Senator Chambliss. Mr. Thompson, currently only dairy 
producer cooperatives have the ability to forward contract with 
their members. In 2000, USDA established a pilot project to 
examine forward contracting. This voluntary program, as you 
know, ended in 2004; however, there has been continued interest 
in the making of forward contracting a permanent option for 
producers and processors.
    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 producing cooperatives, or should 
processors and non-cooperative dairy producers also be able to 
utilize this risk management tool?
    Mr. Thompson. Senator Chambliss, I have some personal 
experience with the forward contracting. Our dairy used it on 
two different occasions. On the first occasion, I think we came 
out with a net of a few thousand dollars. And on the last 
occasion that we used it, we, along with most everyone else 
that I know, had substantial losses in it. That could have been 
a timing issue. But it's a tool that probably should be made 
available, but at the same time, we don't think that it should 
undermine the basic pricing system that exists. And under the 
minimum pricing of the Federal Order system, that can be used 
to subvert and negate the effect of that. So it does have its 
drawbacks.
    Senator Chambliss. Mr. Campbell, there is significant 
potential for all segments of agriculture to help supply this 
nation's energy needs. Where should Congress focus its efforts 
and limited resources in the Farm Belt to try to help farmers 
across the Nation participate in this potential growth?
    Mr. Campbell. Senator Chambliss, I think that we need to 
sort of follow along the lines of recommendations of former CIA 
Director Jim Woolsey, who says that this is an integral part of 
national defense and the war on terror that we have in dealing 
with our energy independence. So agriculture is ready and is 
poised on many different levels. We can make biodiesels out of 
cottonseeds. We can make biodiesels out of soybeans. We can 
make corn-based ethanols now. In the future, we hope to be able 
to make cellulose-based ethanols. We have a lot of different 
opportunities that we can focus on.
    I think what most people would be concerned about is that 
we don't approach it as a whole and that we try to, you know, 
promote one technology over another. I can grow soybeans. I 
grow other things. I can grow corn. I can grow cotton. I have 
timber. Senator Roberts, we don't have any switchgrass in the 
area on the prairies, but the prairie and the switchgrass is a 
viable alternative at some point in the future.
    Our project grew out of a Mitchell County Development 
Authority project about what we could do now. And we focused on 
the corn-based, and I think that's the proper thing to do at 
this time. But I think we need to look at it as a whole and 
just do it as an entire agricultural industry, as a challenge.
    Senator Chambliss. How should we balance agriculture's 
potential in renewable energy production with wildlife, 
environmental, and feedstock concerns? And I emphasize the last 
issue as the most important.
    Mr. Campbell. Yes, sir, I understand. I read an article 
just this week on some of the potential if CRP lands come out 
or switchgrass goes into more production and we have a 
reduction in some of the, you know, wildlife habitats. That's a 
real issue. It becomes something that you all gentlemen are 
more eminently qualified than I am because that's a political 
issue where we have to make the hard choices as to what's 
important to our country. We certainly don't want to be 
decimating our wildlife. I have 300 acres of timber. I want to 
have a market for it. But I also hunt that timber. And I want 
to be able to take advantage of it.
    So it becomes somewhat of a national decision as to how we 
want to pursue it as a balancing act. I think that we've had 
these type of challenges in this country before, and I think we 
can balance it and move through our agricultural land base 
toward more energy independence.
    Senator Chambliss. Senator Roberts?
    Senator Roberts. What CIA director was that?
    Mr. Campbell. Sir? Jim Woolsey.
    Senator Roberts. Oh, Jim Woolsey. He's from Kansas, by the 
way. Well, basically, he had troubles, you know, gaining access 
to the White House. And there was always that story that when 
that little plane, you know, flew into the White House, that 
was Woolsey trying to get in. Saxby and I have had damn near 
intimate relationships with the last CIA directors here for the 
last several years. But at any rate, your point is well taken. 
Bill?
    Mr. Brim. Sir?
    Senator Roberts. You have voiced your support for 
establishing crop insurance for the products. My question in 
regard to this is twofold: What risk management tools do you 
currently employ? And, furthermore, crops currently using crop 
insurance are involved in some very significant conservation 
and land management practices that are mandatory. Could you 
elaborate on how the fruit and vegetable industry might take 
similar steps to improve management practices--I'm saying sort 
of beware what you ask for, be careful what you ask for--in 
working toward a participation in a crop insurance program?
    Mr. Brim. Yes, sir. Well, as far as conservation, there are 
some growers--my particular operation doesn't. We do 
conservation as far as doing cover crops and so forth. But 
we're on plastic with drip irrigation. It's kind of hard to do 
conservation with that. We do have watermelon growers that do 
no-till watermelons and other crops that tried no-till. But 
with the pressure, disease pressure, with no-till, it's too 
hard to grow and too costly to grow fruits and vegetables, or 
especially vegetables, with no-till.
    We would like something from RMA. I've worked with RMA in 
the past, and we've tried to ask them to see if they could 
define some kind of cost of production coverage, just to cover 
our cost of production, not any profit in our production but 
just the cost of covering our losses of what our cost of 
production is. And that's what we've been working on in the 
last few years.
    Senator Roberts. What's been their response?
    Mr. Brim. We haven't gotten much.
    Senator Roberts. Well, we fired the guy that was there for 
a long time. Or fired. We asked that he perhaps seek other 
employment.
    Mr. Brim. That was a good idea.
    Senator Roberts. And we've got a new fellow in there now, 
so I urge you to go in there. And that would be basically just 
your basic coverage as opposed to buyouts that we have in other 
programs.
    This sort of gets into the farm program in the field. And I 
always hear from the Senators and Representatives who represent 
specialty crops, ``Hey, how about us? We don't have any farm 
program payments.''
    And I always say, ``Are you willing to go through all the 
regulations and paperwork at the FSA office''--thank goodness 
we don't have as much as we use to--``and conservation 
compliance?'' And that's the other--you know, that's the rest 
of the story, as Paul Harvey says. So be a little careful in 
terms of what you're asking for. But I do think that you have a 
good concept in there for basic coverage.
    Carl, we've gone over the WTO business here, I think, 
enough. I think the Chairman covered that. I've got to tell 
you: I'm a little concerned with the posture of farm country 
when it comes to these free trade agreements. And it used to be 
we either, you know, hung together or hang separately or swam 
together or sank together. But there is a growing trend toward 
singling out one industry and asking for exceptions. And I'm 
talking about the Australian trade agreement and then CAFTA.
    And I can tell you that when sugar was exempted--and I 
understand why you want it to be exempt--our cowboys and our 
corn producers and our wheat producers said, ``Whoa, wait a 
minute. I thought we were in this all together.''
    So I guess my question is: If you come to Kansas and 
testify there in Dodge City--I won't drag you out there. But at 
any rate, I think the question would be: What is your industry 
doing to really try to collaborate a little better with the 
other commodity groups within the agricultural community to 
work together?
    Mr. Perry. Well, the sugar----
    Senator Roberts. You seem like a reasonable fellow. I think 
you can do that.
    Mr. Perry. Yes, sir. Some of the other commodities aren't 
quite as distorted as sugar is. Sugar seems to be--well, as I 
said earlier, it is the most distorted commodity in the world, 
I believe. And, therefore, we do need special consideration 
when it comes to trade agreements with other countries that are 
distorting it. We are a very fragile commodity.
    Senator Roberts. All right. I'm not going to press you on 
it.
    Let's see here. I'm ready for Tom. Tom, I like your suit, I 
like your shirt, and I like your haircut.
    Mr. Thompson. We make a good team, sir.
    Senator Roberts. You show eminent taste and great wisdom. 
You, in your prepared remarks, are discussing some potential 
changes to the existing dairy programs, including the 
modifications of Federal milk marketing orders. And I can 
certainly understand your frustration with the distribution, 
the pricing, the challenges associated with the current dairy 
program. I am concerned about making some significant changes 
like modifying the geographic size of the price functions 
within our current set of programs through legislative action 
rather than running through the typical course of hearings at 
the USDA.
    Legislative action in dairy are an oxymoron. I've been 
through six Farm Bills. At the 11th hour and 59th minute, we 
have to sit down with Pat Leahy and make a deal. He's from 
Vermont. He's got that little three-legged dog named Lucky. He 
doesn't even come to the rest of the farm hearings. He just 
shows up with dairy. We stayed in Washington, in 1996, over the 
weekend for 3 days, Friday, Saturday, Sunday. That's back when 
Newt Gingrich and Khmer Rouge were part of the revolution. And 
we were trying to settle dairy. And the balanced budget and 
saving Western Civilization and everything else took second 
place to dairy, especially with New York.
    And I finally just said to Newt--he says, ``Roberts, you've 
been in this business a long time. How do we solve dairy?''
    I said, ``You don't. You punt.'' And we did. We punted to 
the Senate.
    And at the 11th hour and 59th minute, here came Leahy with 
a deal. He said, ``I've got a compact. It's really not a 
compact. But if you pass it, it's OK because I can say it's a 
compact.'' And then you have a revolution in the industry, 
where you have dairy factories. You don't have dairy farms. You 
have dairy factories. Some people have farms, and they have a 
damn tough time making it.
    Mr. Chairman, I don't do dairy anymore. There's a lot of 
things I don't do at my age, but one of the things that I don't 
do is dairy. It is very, very, difficult to do, very difficult 
to get all the sections of the dairy industry to get together. 
And you face some of the most complex regulations of any of the 
commodity programs--makes my head hurt--in regards to the Farm 
Bill. So I'm going to suggest that the answer to some of the 
issues you've raised is not a matter of making modifications to 
the existing structure but rather to try to streamline the 
programs, workforce, and limits on the regulation of your 
industry, which I know are very counterproductive.
    So what are your thoughts about such an effort to reduce 
rather than to change regulation?
    One other story: Herb Kohl, Pat Leahy, dairy, we're on the 
floor. I think you were there then. We couldn't get out. We 
couldn't adjourn based on dairy.
    Trent Lott came to me and said, ``You've got to come in 
here.''
    I said, ``OK. What do you want me to do?''
    He said, ``How do I get out? How do we adjourn? How do I 
fix dairy?''
    I said, ``Punt, put it off, do something, because, you 
know, you're just not going to get, you know, that put 
together.'' And he did, finally punted and we finally worked 
out something down the road. But, boy, is that difficult. And I 
don't want to put the industry through that. And I don't want 
to put the declining dairy industry in Kansas, who are having a 
real tough time, through that ever.
    So what do you think about my suggestion, streamline, less 
regulation, do a USDA expositive plan, don't toss that in 
Saxby's lap?
    Mr. Thompson. Senator Roberts, I totally understand where 
you're coming from. I was also involved in that 1996 Farm Bill 
and the frustrations that were involved in that. In fact, we 
had a subcommittee chairman from Wisconsin who had a plan to 
pool all the revenues of all the Class I sales across the 
country and divide it up evenly. And we were very concerned 
with that.
    Senator Roberts. Yes, I remember that. And he's no longer 
there. And he made that ultimate sacrifice, and he ended up on 
the altar of not being in public service.
    Mr. Thompson. As far as Congressional action, I think we're 
the victims of a couple of things that happened in that 1996 
Farm Bill. One was the Congressional mandate to reduce the 
number of Federal Orders, which gave USDA a license to 
basically extend the geographical area of the Southeast Order, 
which costs the producers in the Southeast--in the geography 
that I learned as a fifth grader, there was a Southeast--tens 
of millions of dollars. That was, I think, probably an 
unintended result. But, nevertheless, it gave the license for 
that to happen. I think Congress can perhaps rectify that as 
well.
    There was also an oversight, either intentional or by 
omission, of not including the authorization for USDA to 
include base excess in the orders. That still has to go back to 
USDA to have the hearings, to gather the evidence, to 
substantiate whether or not that is needed. And we would 
certainly beg you to reauthorize that so that it could go to 
USDA for the hearing. USDA tells us that that cannot be done 
without Congress acting. And it was just a one-liner that was 
left out. And Congressman Solomon realized that after the bill 
had been done, gave me a call and said that it would be 
corrected, but unfortunately he had health problems and it was 
not done.
    Senator Roberts. Yes, he did. I appreciate that.
    Murray, thank you for your efforts in regards to 
alternative fuels. We have seven operating ethanol plants. 
We've got probably two or three more coming on board. We have 
an outfit that wants to do the same thing with sorghum. We have 
a university, Pittsburgh State University, which is probably, I 
think, on the cutting edge of what we call polymer science with 
soybeans. You're right, the President is into switchgrass big 
time, came out to Kansas State. Saxby, that's the home of the 
ever optimistic and fighting Wildcats. But at any rate, he was 
very impressed with all the prairie grass. And he's into 
cellulose and all that. So I think we've got a lot of 
opportunities for some biodiesel plants. I said it was going to 
be the biggest thing to hit our country since the railroad.
    Kansans are facing sticker shock at the pumps. E-85, 
equipped stations are selling E-85 as much as 60 cents a gallon 
higher than regular unleaded gasoline. Many stations are 
struggling to get any supply at all. Much of the ethanol that 
is produced is going to California. In states that have ethanol 
mandates, because there is a limited supply of ethanol, states 
that must use it are willing to pay a higher premium. That's 
understandable. Our Kansas ethanol producers can sell ethanol 
for $2.50 in Kansas or $4.50 in California.
    Who is going to buy ethanol when it's more expensive than 
gasoline? I realize that in the long run, increased production 
and additional infrastructure will solve the problem. This 
Chairman brought in all the automobile manufacturers and 
brought in all the retailers and said, ``How can we get this 
infrastructure working together? How fast can you bring these 
automobiles online that are hybrids?'' Then to the convenience 
stores, ``How can you set up these pumps so that people can get 
fuel?'' I think Saxby told me that these convenience stores 
said, ``Well, costs $100,000 a pump.'' Oops. So I'm a little 
concerned about that.
    What is the incentive for folks to pay up to 60 cents a 
gallon for E-85? What efforts can be made to promote the 
consumption in face of higher prices? And then what can this 
discrepancy do to undermine some advances we've made in getting 
consumers to accept the ethanol land fuels finally? And do you 
share these concerns?
    Mr. Campbell. Well, Senator, I respect your understanding 
and agree with you as far as the prices we have now. A lot of 
that is a disruption in the market. We're suffering from 
somewhat of a bubble that was caused by the oil industry 
deciding to drop the MTBE's. They had hoped to get the MTBE 
liability protection in the Energy Policy Act and they did not. 
And I don't think anyone anticipated that they would just all 
of a sudden say, ``OK, we're not going use any more.'' That 
took about 4 billion gallons of MTBE out of the mobile fuel 
molecules that are used within this country.
    And it's really a little bit unrealistic to expect that the 
ethanol industry could move fast enough to be able to take up 
that much slack. The industry at that time was only producing 
about 4 billion gallons of ethanol. And so it was, you know, 
basically saying that we need to double our production 
overnight. And it really is not practical, is not doable.
    I think as we begin to move some of the new plants online 
and as we move forward and have more ethanol available, this 
bubble will come down. That's why our numbers are based off 
historical averages. We're certainly not making any business 
decisions based off the price of ethanol right now. To quote 
Alan Greenspan, the irrational exuberance in the tech bubble, 
we think it is going to pull back and fully anticipate it to 
pull back. But we think it will still remain a problem.
    This country is using about 142 billion gallons of gasoline 
a year. It's a mobile fuel molecule. We think that over time 
ethanol is going to pull back, but we think as long as oil 
prices stay high, we can go out on the futures markets. 
December 1909 crude oil futures are trading at around $69 a 
barrel. So you're not anticipating any immediate--the 
Department of Industry is saying we're going to stay around 
those prices for at least five or 6 years, not expecting any 
immediate pullbacks.
    I think that as we produce more ethanol, it will move back 
toward the price of gasoline. And as it moves back toward the 
price of gasoline, the E-85 will once again begin to have a 
premium, as far as being cheaper, you know, to the consumer. 
And I think then you'll see people choose it because it will be 
a preference. That's what they've had happen in Brazil.
    Senator Roberts. I appreciate that answer. And I certainly 
hope you're right. And I don't mean to be Mr. Doom & Gloom in 
regards to alternative fuels. I think it's an exciting field, 
and I think it's going to have a big economic impact.
    Audience, I want you to raise your hand: If you're growing 
corn, OK, what's the primary mission of you or what's the 
primary goal? Why are you growing corn? And I want you to list 
it. Is it because of, in terms of priorities, human 
consumption, feed stuff, or fuel? Who believes our No. 1 
priority is for human consumption? Gee, nobody raised their 
hand. Eat any corn on the cob around this country? OK. Feed 
stuff? Some cowboys in here, are you? Fuel? Still no hands.
    Well, my cowboys are going to be really happy. What happens 
if we have droughts? Actually, in Iowa and Illinois, they don't 
happen very often. They just put the seed in the ground and 
farm. Now, out in Kansas, we have to farm because of the 
moisture we take in. But what would happen if we had a drought 
in Illinois and Iowa? Would we import from Brazil? What do you 
think?
    Senator Chambliss. I think we would.
    Senator Roberts. That ain't going to be very popular.
    Senator Chambliss. No.
    Senator Roberts. I'm glad that's your deal, not mine. I 
just think we have to stop and think a minute and hope, as the 
gentleman has indicated, that the infrastructure catches up 
with this exciting new concept. And I'm all for it. I just 
don't want to be back in the 1970's when the Alcohol Fuels 
Commission and a lot of farmers got burned. So let's do it step 
by step, and I think you're right on the money.
    Mr. Campbell. Could I comment on that?
    Senator Roberts. Certainly.
    Mr. Campbell. Thank you, Senator Roberts. We have certainly 
looked, as far as risk management, in dealing with those 
issues. And eternally we've been dealing with it through a 
hedging program. But as a farmer, we're also looking at 
downhill we may begin to grow more corn. December 1907 corn 
futures traded as high as 3.13, a 50 cent positive basis. That 
would put us in the 3.50 range. And I would think we might have 
more acres of corn that would be devoted to this, you know, 
effort of the country to have more corn.
    We have an awful lot of interest in our area from our 
vegetable producers about putting grain sorghums, which can be 
used to make ethanol, behind sweet corn and such and, you know, 
having more production through that. A lot of the companies are 
developing more drought-resistant varieties now. And you're 
seeing more of the corns move back into some more arid regions, 
areas that have not been the No. 1 corn producing areas but 
they have the capability to produce quite a bit of corn, with 
good varieties and if the price dictates it.
    So it's going to be market driven as far as the price, 
because on my farm, I'm going to grow on my acre what I can 
make the most money for my farm. And that's just the way every 
farmer in this country thinks about it. And we love the 
flexibility of being able to do that.
    But there's some opportunities for us to increase corn 
production in this country. We were talking about conservation 
a while ago. I understand there's 344,000 acres, I think, comes 
out of CRP next year, about 16 million acres. I know all of 
those are not suitable lands, and we certainly don't want to do 
away with any of our highly erodible lands and our conservation 
gains. But there is a great reserve of land out there that 
could go back into production if this country needs it to. And 
so I think we can begin to grow more corn that could be used as 
a fuel.
    And as one last point, it seems to always be lost in the 
equation that 18 pounds of a bushel of corn will be returned 
into the feed markets as a distillers' market. It can be used--
we've had dairymen already contact our economic developer in 
Mitchell County about the possibility of locating some large 
dairies in southwest Georgia because of the availability of a 
modified wet grain that can be used as a feed ingredient.
    So it's not a tit for tat. You don't use up every bushel of 
corn in producing fuel. You are going to return at least a 
third of it back into the feed markets. And I think that's 
important. Thank you.
    Senator Roberts. Thank you for great confidence in this. I 
think that pretty well does it for me, other than to say I do 
recognize that Georgia is a premier producer of cattle and 
poultry and I'm not surprised by the hand raising. Thank you.
    Senator Chambliss. Well, thank you. And, gentlemen, thank 
you very much. Before we switch panels out, there are a couple 
more introductions I'd like to make. First of all, a longtime 
good friend of mine, the president of the Georgia Agribusiness 
Council is here, Gary Black. Gary, if you'll stand up. Where is 
Gary? Somewhere in the back there.
    Unidentified Speaker. He had to leave.
    Senator Chambliss. He had to leave. All right. Well, I 
mentioned the Agribusiness Council earlier when I was talking 
about our ag intern program. They have been vitally important 
to us, have been a very good partner in that.
    Two other folks I want to introduce: First of all, a lady 
who has been with me since I first got elected to Congress. She 
was my ag LD back in my original years in Congress, Martha 
Scott Poindexter. She now is the staff director, might add the 
first female staff director, of the Senate Ag Committee. Martha 
Scott, stand up.
    Senator Chambliss. The Ag Committee has always been very 
bipartisan. We have to be. We work very closely with members on 
the other side of the aisle because agriculture is one of those 
industries that if you don't stick together, you're going to 
really see the demise of agricultural programs. And it's 
certainly true with my ranking member, Tom Harkin, and myself. 
Tom is from Iowa. I'm from Georgia. We have different 
interests, but he is very supportive of programs that I 
desperately believe in from a parochial standpoint, as am I of 
his. His minority staff director, Mark Halverson, is down with 
us. Mark, stand up and let us recognize you.
    Senator Chambliss. All right. Gentlemen, again, thank you 
all very much. We appreciate you being here, and we look 
forward to staying in touch with you.
    We're now going to call our third panel, Dr. Jim 
Strickland, Mr. R.C. Hunt, Mr. Mike Giles, Dr. Elizabeth 
DesPortes Dreelin, and Mr. Jim Ham, if you all will please come 
forward.
    We'll continue with our next panel. First of all, Dr. Jim 
Strickland from Glennville, Georgia, representing the Georgia 
Cattlemen's Association; Mr. R.C. Hunt from Bailey, North 
Carolina, representing the National Pork Producers Council; Mr. 
Mike Giles from Gainesville, Georgia, representing the Georgia 
Poultry Federation; Dr. Elizabeth DesPortes Dreelin from 
Columbus, Georgia, representing The Nature Conservancy; and Mr. 
Jim Ham from Smarr, Georgia, representing the Georgia 
Association of Conservation District Supervisors and the 
National Association of Conservation Districts.
    So welcome to each of you for being here today. Again, 
we'll take your whole statement for the record, but we look 
forward to any opening comments you wish to make. Dr. 
Strickland, we'll start with you, and we'll move right down the 
row. Thank you.

   STATEMENT OF JAMES E. STRICKLAND, DVM PRESIDENT, GEORGIA 
   CATTLEMEN'S ASSOCIATION MEMBER, NATIONAL CATTLEMEN'S BEEF 
                          ASSOCIATION

    Dr. Strickland. Thank you, Chairman Chambliss and Senator 
Roberson for being here. Thanks, Senator Roberson, for feeding 
our cattle. So we appreciate you holding hearings and allowing 
us to be a part of it. I am----
    Senator Roberts. I think you said Roberson, now. That's Pat 
Roberson.
    Dr. Strickland. Yes. OK. It's Roberts.
    Senator Roberts. Yeah. He's the preacher. I'm the Senator.
    Dr. Strickland. OK.
    Senator Roberts. But if you all want to tithe in a brown 
paper bag up here for Saxby Chambliss, I'd sure be happy to 
hold it. And God bless you, sir.
    Dr. Strickland. Thank you. We'll try not to turn this into 
a 500 Club. But I am Jim Strickland. I have been a practicing 
veterinarian and then served 15 years with the University of 
Georgia as a beef cattle specialist. And, of course, back in 
semiretirement doing some food animal practice and, of course, 
have the honor now of being a cattleman and severing as the GCA 
president and also an opportunity to be in other agricultural 
enterprises, a member of NCBA Georgia Farm Bureau. So I thank 
you for this opportunity.
    And as cattle and beef producers, our livelihood is tied to 
many other agricultural commodities. And we stress the 
organized and united effort as we try to produce the food for 
the people of the world. And livestock consumes three out of 
about four bushels of the major feed grains that are produced. 
And cattle in feed lots account for one-fourth of the total 
grain-consuming animal units, and all beef cattle count for 
about 30 percent of this. So cash receipts from cattle and 
calves in 2005 almost went to $50 billion. And these sales 
account for nearly 40 percent of livestock sales and, of 
course, almost half of farm receipts.
    In Georgia alone, there are about 1.2 million head of 
cattle on about 21,000 operations. Of that group, roughly two-
thirds of them operate herds of less than 50 cattle and 17 
percent have between 50 and 100. So a lot of ours are made up 
of small operators. It's the largest diversified enterprise for 
Georgia, and cattle are found in almost every county in the 
state in conjunction with the other enterprises that we have. 
And, of course, we feel like cattle are not only a farming 
operation but there are areas where they can be used as an 
agricultural operation and keep this opportunity before our 
young people as they carry out their projects in this urbanized 
society that we live in and looks like is increasing.
    As cattlemen and beef producers, we understand and embrace 
the fact that open and free market is powerful and it's 
necessary and we can survive on that. But cyclical ups and 
downs of this market can be harsh. But the system works and we 
remain steadfastly committed to this as a free, private 
enterprise and competitive marketing system. It's not in the 
nation's farmers' or cattlemen's best interest for the 
government to implement policies that set prices, that dictate 
or manipulate our domestic supply or demand and cost or prices, 
and underwrites inefficient production in other areas that 
affect our marketing area.
    In the conservation and environment area, we see two areas 
there in the CRP program and also in the EQIP. In the animal 
ID, we are aggressively engaged in an issue of working with the 
southeastern area marketing. And, of course, we want to be sure 
that the data's held in an area there where it's confidential 
and the producers are assured that that's so. And, of course, 
we can use it in times of disease in other areas.
    Research, we want to be sure that we continue research, 
especially in the animal area, where we can keep down any 
health emergencies that might occur and see a need to keep a 
strong research component--and this could relate into zoonotic 
diseases--and, of course, especially ensure the safety of our 
food supply. Property rights, that has been spoken there.
    So in concluding, we are continuing to see pressure from 
economics on ours and want to be assured in the Farm Bill that 
we can be a part of the U.S. agricultural enterprise and work 
with the others. Thank you.
    [The prepared statement of Mr. Strickland can be found on 
page 124 in the appendix.]
    Senator Chambliss. Thank you, Dr. Strickland. Mr. Hunt?

 STATEMENT OF R. C. HUNT PORK PRODUCER, WILSON, NORTH CAROLINA 
          PRESIDENT OF THE NORTH CAROLINA PORK COUNCIL

    Mr. Hunt. Thank you, Chairman Chambliss and Senator 
Roberts. I am R.C. Hunt, a pork producer from Bailey, North 
Carolina. My family and I operate Andrew Hunt Farms, raising 
cattle, swine, and tilapia fish. My operation produces feeder 
pigs and finishes market hogs.
    I am currently the president of the North Carolina Pork 
Producers Council, and I'm here this morning testifying on 
behalf of the National Pork Producers Council. We are very 
grateful for you for holding this field hearing and for the 
opportunity to provide you with the pork industry's views on 
what is working and what we need to do to improve as we 
consider reauthorization of the 1902 Farm Bill.
    Pork producers have been actively engaged in discussions 
relating to the 1907 Farm Bill. We have organized an 1907 Farm 
Bill policy task force that is in the process of reviewing and 
evaluating many of the Farm Bill issues that will affect our 
industry. As pork producers, our livelihood is tied to many 
other agricultural commodities.
    This morning I would like to share some general comments 
and thoughts of the nation's pork producers and what we have 
for the 1907 Farm Bill. Pork producers make an investment in 
the industry to maintain a competitive edge domestically and 
globally. The 1907 Farm Bill should make that same investment 
in allowing us to stay competitive. Taking these important 
steps will maintain a vibrant agricultural sector that provides 
a safe and secure food supply, innovative fuel options using 
our natural resources, and a continued abundant feed for our 
animals.
    We know the members of this Committee understand better 
than anyone, you know, the significance of the economic 
contribution that pork producers make to the U.S. agricultural 
sector and how important it is to grow our international 
markets and maintain our global competitiveness. The U.S. pork 
industry enjoyed its 15th consecutive year of record exports in 
1905. We exported 905 million metric tons of pork and pork 
products that were valued at over $2.28 billion. In addition, 
we exported 164,000 metric tons of pork and variety meats. 
These shipments amounted to approximately $25 per head 
processed.
    Pork producers, along with other livestock and poultry 
producers, are the single biggest customers of the U.S. feed 
grain producers. Our single largest expense by far is the feed 
that we purchase for our animals. USDA estimates that the 
livestock feed will account for 6 billion bushels, 54 percent 
of the total corn usage this year. While USDA does not have a 
specific estimate on the soybean meal used for livestock feed, 
we suffice it to say that the livestock will use the vast 
majority. Of the total, pigs consumed just over 1 billion 
bushels of corn and meal from nearly 418 million bushels of 
soybeans in 1905. Pork producers are strong and vital 
contributors to the value-added agricultural economy in the 
U.S., and we're deeply committed to the economic health and 
vitality of our business and communities their livelihoods help 
support.
    Pork production has changed dramatically in this country 
since the early 1990's. Technology advances and new business 
models changed operational sizes, production systems, 
geographic distribution, and marketing practices. The demand 
for meat protein is on the rise in much of the world. Global 
competitiveness is a function of production economics, 
environmental regulation, labor costs, and productivity. The 
United States must continue to be a leader in food production 
to meet the increased consumer demands.
    As the U.S. pork industry evaluates reauthorization of the 
1902 Farm Bill, we have formulated some guiding principles for 
consideration: Principle Number 1, We must maintain a 
competitive advantage; Principle Number 2, We must strengthen 
our competitiveness; and Principle Number 3, We must prevent 
harm from our industry.
    The next Farm Bill should help U.S. pork industries 
maintain current points of competitive advantages. These 
include low production costs, unparalleled food safety, and 
further advancements in animal health. In addition to 
maintaining our competitive advantage, the next Farm Bill 
should strengthen that position by expanding and including such 
elements as trade assistance, research, risk management tools, 
and science-based conservation programs and environmental 
regulations.
    Finally, the next Farm Bill should not harm the competitive 
position of the U.S. pork industry by imposing costs on the 
industry by restricting the ability to meet consumer demands in 
an economical manner. Government intervention must not stand in 
the way of market-based demands.
    Mr. Chairman and members of the Committee, we must be 
cautious of allowing activist groups which do not represent the 
best interests of our livestock sector to push their particular 
agenda by adding regulations to our business practices. This 
will severely alter the intent of the Farm Bill, a piece of 
legislation that has worked for the past 50 years.
    In conclusion, Mr. Chairman, members of the Committee, 
while my comments today have been preliminary, together I 
believe we can craft an 1907 Farm Bill that meets our objective 
by remaining competitive both domestic and in the world. And on 
behalf of the National Pork Producers Council and many pork 
producers around the country, we thank you for the day.
    [The prepared statement of Mr. Hunt can be found on page 96 
in the appendix.]
    Senator Chambliss. Thank you. Mr. Giles?

STATEMENT OF MIKE GILES SENIOR VICE PRESIDENT, GEORGIA POULTRY 
                FEDERATION GAINESVILLE, GEORGIA

    Mr. Giles. Thank you, Chairman Chambliss, Senator Roberts, 
Committee staff for the opportunity to present the views and 
recommendations of the Georgia Poultry Federation regarding 
reauthorization of the Farm Bill.
    My name is Mike Giles, and I am senior vice president of 
the Georgia Poultry Federation. The Federation's primary 
mission is to advance the position of poultry producers in 
Georgia by advocating the interests of poultry growers, 
companies, and allied industries.
    Georgia is the top producer of broilers in the United 
States, last year producing more than 1.3 billion broilers 
weighing over 6.7 billion pounds. These figures translate into 
farming opportunities for approximately 4,000 poultry growers 
throughout the state. We are hopeful that the next Farm Bill 
will set the foundation for expanded opportunities for existing 
and future poultry growers.
    We have been pleased with the focus on conservation 
programs over the life of the current Farm Bill. The most 
common direct connection with the Farm Bill for many poultry 
growers is through conservation programs such as the 
Environmental Quality Incentive Program (EQIP) through USDA 
NRCS. Well-managed farms, we believe, are our best hope to 
ensure clean air and water for generations to come. Cost-share 
programs such as EQIP allow poultry producers to be proactive 
in practices that have a benefit to the public.
    Access to exports are vital for Georgia poultry growers and 
companies. Competing in international markets is becoming more 
intense, especially for U.S. poultry producers who see lower 
cost countries, like Brazil, gaining in the world market. At 
the same time, meeting international obligations and 
responsibilities of being a leader in the World Trade 
Organization will be even greater in the future.
    Given these factors and other concerns, such as energy and 
the environment, we think it is time to think broadly about 
crafting a new Farm Bill that provides a different approach to 
helping protect a farmer's income while expanding agriculture's 
ability to meet new marketing opportunities. A farm policy that 
is more compatible with World Trade Organization rules and 
obligations, while very challenging, as we discussed and 
acknowledge, is prudent and necessary.
    A critical component to help ensure cost competitiveness of 
U.S. animal agriculture is encouraging sufficient cropland to 
meet feed grains and oil seed users' needs for domestic demand 
and export sales, especially considering increased demand for 
grains and oil seeds due to biofuel production. With continuing 
loss of land to urbanization around major cities and the large 
amount of farmland currently enrolled in the Conservation 
Reserve Program, the ability of U.S. agriculture to expand crop 
acreage is limited. We think the use of land enrolled in the 
Conservation Reserve Program should be an option available in 
the event the market signals for more production. Deciding 
between crops for fuel and crops for animal feed is not a 
decision that needs to be made in a time of crisis.
    With regard to the Federal crop insurance program, we think 
it is appropriate to build on the evaluations already begun by 
USDA's Risk Management Agency in the area of insurance products 
for animal agriculture. Various hazards, such as weather and 
disease, pose a risk for animal agriculture producers. We 
believe that insurance products designed to protect against 
these risks would be helpful to poultry growers and other 
animal producers.
    Underpinning these recommendations and considerations is 
the ongoing need to adequately fund USDA's critical 
responsibilities, including the Foreign Agricultural Service's 
role in enhancing farm exports and the Animal and Plant Health 
Inspection Service's role in responding to animal disease 
threats and foreign governments which use non-science based 
veterinary provisions to slow or halt U.S. agricultural 
exports.
    Thank you again for the opportunity to share the thoughts 
and recommendations of the Georgia Poultry Federation. We look 
forward to working with the Committee to assist in crafting a 
new Farm Bill that not only meets the current challenges and 
opportunities but helps set the foundation for generations of 
American farmers to thrive and enjoy the success of an 
expanding world demand for food and fiber. Thank you.
    [The prepared statement of Mr. Giles can be found on page 
84 in the appendix.]
    Senator Chambliss. Thank you very much. Dr. Dreelin?

            STATEMENT OF ELIZABETH DESPORTES DREELIN

    Dr. Dreelin. Mr. Chairman, Senator Roberts, and members of 
the Committee, thank you for the opportunity to testify before 
the Committee today. My name is Beth Dreelin. I'm a private 
forest landowner, one of about 650,000 here in Georgia where my 
family has been growing trees for several generations. Together 
these individual families own about 60 percent of Georgia's 
forests.
    Georgia's forests produce our highest valued crop, timber, 
supporting over 68,000 jobs and generating nearly $23 billion 
for our state's economy. However, today the owners of our 
forests are facing a crisis. It is becoming increasingly 
difficult to remain in business and to keep our forest land 
forested. This is because we no longer have adequate markets 
for our products to sustain ourselves along the way to growing 
a full rotation of saw timber for which we still have a market.
    Growth, which I consider a good thing for Georgia, is 
driving land values up. And, hence, we're paying much higher 
property taxes than ever better. Therefore, it costs us more to 
grow our timber and we have fewer products that we can sell, 
resulting in many private forest landowners being forced to 
sell their forested land for development usage. This is 
occurring at the rate of about a million acres per year 
throughout the South. Certainly, for some forest owners, 
selling their land is the right choice. But I fear that we're 
rapidly traveling down a road that will lead to no other option 
than to sell out.
    Only forest land and growing trees is a deeply ingrained 
family tradition and one that I personally love. However, I 
think most of us private forest landowners are asking 
ourselves: How long can we keep doing what we are doing? We 
need to know that every acre of timber that we plant will be 
worth something some day.
    I have a great deal of hope for the future of our forests 
in Georgia, and much of this hope is riding on the 2007 Farm 
Bill. The 2007 Farm Bill will critically impact if not 
determine this future. Our current crisis can be resolved, I 
believe. Let me suggest four broad strategies.
    First, forest landowners should earn a return for all of 
the products they produce, not just the ones that we can chip 
or saw. We desperately need to create and facilitate real 
markets for ecosystems services, ranging from carbon to clean 
water. It is only right and responsible that the public help 
support the benefits they enjoy. We need robust cost-share 
programs that both assist and reward forest owners who make 
investments to improve water quality, protect wetlands, and 
provide wildlife habitat. Many Silva-culture practices, such as 
planting longleaf pine, are a great ecological benefit, 
providing important wildlife habitat as well as hunting and 
other recreational opportunities. But asking forest landowners 
to provide these benefits for free while they wait 80 to 100 
years for any return is simply unrealistic.
    Second we need to do a better job coordinating the alphabet 
soup of Federal programs. We need to identify and prioritize 
critical forest resources and make sure programs support each 
other and don't duplicate each other. These programs need to be 
aimed at the highest priority conservation goals and need to 
mesh well with the state and local levels.
    Third, I hope the 2007 Farm Bill will re-energize existing 
vehicles and spur development of new and creative delivery 
systems for outreach, education, and technical assistance. A 
well-funded forest stewardship program will be critical, along 
with new approaches to knitting together the work done by the 
Forest Service, NRCS, Extension Service, and the various State 
agencies that connect with family forest owners. This will help 
us sustain our forest and conservation practices.
    Fourth, we need to take a hard look at what is working and 
what is not, making certain that every dollar we invest in 
public for family forests does at least a dollars worth of work 
where it counts, in the woods, for the good of us all. We hope 
Congress will seek ways to assess the impact of programs based 
on outcomes, not just number of acres or contracts. It is the 
only way to see where we're doing the best job and where we 
might have unnecessary duplication.
    I am a realist. I know this is going to come down to money 
and there's not much of it, if any, to spare. But I also know 
that investing in Georgia's forests is not a zero sum game. It 
benefits everyone who cares about strong and robust rural 
communities, a growing economy, and a healthy environment. I 
cannot think of a more important goal for the 2007 Farm Bill. 
Thank you.
    [The prepared statement of Ms. Dreelin can be found on page 
78 in the appendix.]
    Senator Chambliss. Thank you. Mr. Ham?

   STATEMENT OF JIM HAM, GEORGIA ASSOCIATION OF CONSERVATION 
     DISTRICT SUPERVISORS AND THE NATIONAL ASSOCIATION OF 
                     CONSERVATION DISTRICTS

    Mr. Ham. Good morning. I'm Jim Ham. I'm a middle Georgia 
farmer, Monroe County commissioner, and president of the 
Georgia Association of Conservation District Supervisors. I'm 
pleased to be here today representing not only Georgia 
conservation districts but also the 3,000 districts nationwide.
    For over 60 years, conservation districts have played an 
important role making sure local leaders help make decisions 
regarding the use of natural resources. Districts across the 
country just like mine are active in the delivery of Federal, 
State, and local conservation policies and programs.
    Mr. Chairman, I want to personally thank you for holding 
this hearing today in Albany and for including conservation 
issues on the agenda. I fully understand much of today has been 
and should be focused on the farm programs and the Farm Bill. 
However, I'm pleased you and the Committee understand the value 
and importance of the conservation title.
    The conservation title has grown over the last decade to 
now represent significant funding and meaningful technical 
assistance to farmers and ranchers across this country. This 
commitment allows farmers like me to not only protect my soil 
and water but also be a better neighbor and citizen. The 2002 
Farm Bill has also resulted in new participants coming to the 
conservation table and has created new partnerships both at the 
local and national level.
    I farm in an area that is changing. My friends from the 
city are moving out to enjoy our open spaces, fresh air, and 
wildlife. While most do want to live in the country, many are 
not ready to be neighbors with a chicken farmer. Applying 
nutrients on my farm, it can be a little interesting at times, 
a not-so-pleasant activity for some of my new friends. My 
neighbors understand this but are also pleased that I use the 
latest technologies and most current and best management 
practices to complete the application process as well as other 
activities such as spraying.
    I have an EQIP conservation contract that has allowed me to 
cross-fence pastures to better utilize my grass, fence out 
ponds and streams to protect water quality, install stream 
crossings, renovate heavy use areas to prevent soil erosion, 
and manage animal waste. Row crop producers in Georgia have 
benefited from such practices such as conservation tillage, 
pest management, and irrigation management plans under the EQIP 
program, resulting in better management of land and other 
resources.
    The conservation programs and policies in many ways help 
keep me on the farm. While I get other support from the 
commodity programs, the conservation tools, both technical and 
financial, have helped me and many others avoid regulation and 
continue to be able to farm in an ever changing environment.
    I know my time is limited here today, and there is much 
more to say on the conservation. So with the Chairman's 
permission, I'll submit more details in March for the record. 
But I do want to leave you and the Committee with several 
thoughts regarding the conservation provisions in the Farm 
Bill, because they are critical to the success and productivity 
of agriculture.
    First, there must be a continued commitment by Congress to 
provide much needed and much used technical and financial 
assistance to farmers and ranchers. We appreciate the 
increasing awareness that there needs to be a balance of 
programs that both address lands that are in active production 
of food and fiber as well as lands that are retired and 
protected. Lands need and use both, and we hope Congress will 
continue to recognize that no one program meets the needs of 
all farmers and ranchers.
    The Committee should also remember Federal conservation 
programs that allow local and state conservation groups and 
governments to multiply the benefits. Program dollars are 
leveraged many times over. For example, the state of Georgia's 
investment in agricultural water metering is being leveraged 
with Federal funds to provide farmers with cost-share 
opportunities to upgrade their irrigation systems, properly 
schedule application of irrigation water, and construct 
offstream reservoirs to provide supplemental irrigation. We 
also have an initiative working with State government providing 
an increased commitment to farmland protection.
    Also, Mr. Chairman, we hear a lot of talk that the next 
Farm Bill will include a strong renewable energy title. We, 
too, recognize the needs and benefits of energy production in 
the U.S. on our lands. However, we just caution the Committee 
not to minimize the conservation gains in all programs we've 
achieved over the last 20 to 25 years. We see potential for 
renewable energy production in Georgia through our forestry 
resources that could be a valuable source of cellulosic energy 
production with available biomass. We support continued 
research and development on the viability of these renewable 
resources.
    And, Mr. Chairman, while conservation Farm Bill programs 
have often been championed by your colleagues in the Midwest 
and other parts of the country, I want you to know that we in 
Georgia see you as the next leader on these issues. I know you 
love the land just like I do and so many others here today. I 
know that you are committed to make sure the conservation title 
stays strong and vital in the 2007 Farm Bill. So I thank you in 
advance.
    We all have a great opportunity in the 2007 Farm Bill to 
build on the good programs and policies that were advanced in 
2002. I pledge to you that the Georgia conservation districts 
and those of us around the country, too, want to do and be an 
active player in this next Farm Bill process. We want to work 
with you to make sure the next conservation titles provide some 
meaningful assistance to producers and results the taxpayers 
can appreciate and enjoy. Thank you. I'm sorry I went over.
    [The prepared statement of Mr. Ham can be found on page 91 
in the appendix.]
    Senator Chambliss. That's all right. Good stuff, Jim.
    Let me direct this first question to Mr. Strickland, Mr. 
Hunt, and Mr. Giles. What's your most pressing environmental or 
conservation concern, such as soil erosion, air emission, or 
manure management. Do the existing conservation programs help 
you address your concerns? And how could they be improved to 
help you? Dr. Strickland, we'll start off with you.
    Dr. Strickland. One of the most pressing we had was the 
recent conflict between Arkansas and, I think, Oklahoma, when 
they were trying to sue one another. And maybe this didn't have 
much effect on the Farm Bill, but I think it shows us the 
extent that the between-state standoffs can be a problem. And 
we need to put something maybe in the Farm Bill that will 
address this, where this is covered and won't be thrown in the 
hands of other people that maybe interpret our laws.
    Senator Chambliss. Mr. Hunt?
    Mr. Hunt. Specific to the pork industry, I think our 
pressing issue environmentally would be manure management 
today. We've made a lot of strides in that area, making 
tremendous improvements, but that still is a pressing issue for 
our industry.
    Senator Chambliss. OK. Mr. Giles, farmers in Georgia have 
seen a huge increase in poultry production. And folks like Mr. 
Ham have been utilizing some of your excess material there. And 
that's a growing problem, I know, around the state. Is that 
your most pressing problem or one of these others?
    Mr. Giles. I think it would probably be. For the last five 
or 10 years, it has been an issue that we've addressed and it 
is pressing. We all know that chicken litter, manure, is a 
valuable fertilizer. It's a great organic fertilizer. Sometimes 
it's not produced in the state exactly where it needs to be. So 
one thing that the NRCS State Technical Committee has developed 
a pilot project last year through EQIP to develop a program 
that provides incentives for moving the litter from an area 
where it's high production to an area where it's in greater 
need. And this has been, I think, good timing because of energy 
costs and commercial fertilizer costs. It has provided another 
option for manure transfer for farmers in south Georgia.
    Another emerging area there are also in terms of manure 
management, innovative ways to address and utilize manure 
energy production, which there is a plant in north Georgia 
which has announced that they will use chicken litter to 
produce energy. And we have some other opportunities in that 
way, so research is important.
    I think an issue that is growing in importance and on the 
horizon for us is ammonia. As you know, there was an air 
emissions agreement that was proposed by EPA. And that process 
is ongoing. There will be a study that will be looking at risks 
associated with ammonia emissions and what are the actual risks 
and what are the actual emissions. So that's an issue that we 
think is something we really need to keep an eye on. And 
research, again, is going to be important there.
    And third, I'll just echo what Dr. Strickland said about 
the manure, the court case in Texas and Oklahoma and Arkansas 
which characterizes manure as a hazardous substance. I realize 
this may not be a Farm Bill issue particularly, but it is a 
very important issue, not only for our animal agriculture but 
also for any farmer who uses manure as a fertilizer. The risks 
associated with Superfund laws, we think, are tremendous, and 
we don't think it was initially intended to cover manure.
    Senator Chambliss. To Dr. Strickland and Mr. Hunt, during 
the last Farm Bill debate, there was considerable discussion on 
competition in the livestock marketplace, and this included 
marketing issues such as bans on packer ownership of cattle and 
forward contracting as well as mandatory country of origin 
labeling. What effect would these sorts of restrictions or 
mandates on marketing have on cattlemen and pork producers? 
Should Congress reauthorize the livestock mandatory price 
supporting program? And if so, are there any needed changes to 
that program?
    Dr. Strickland. Well, we believe in a free market system. 
And there's been some suits on some of those. And, of course, 
some of those might have been settled. But we feel like that 
right now, there's not really anything that needs to be in the 
farm program as far as the market controls there.
    Senator Chambliss. How about the mandatory price support 
issue, though? Do we need to reauthorize that, in your opinion?
    Dr. Strickland. Well, I don't know as we necessarily do. We 
have a marketing reporting system that gives us information. 
That might be more important in some of the feed lot areas, you 
know, than maybe it would be with ours.
    Mr. Chambliss. OK. Mr. Hunt?
    Mr. Hunt. Your question on the concentrated livestock with 
packer bans, you know, just look back over the years and look 
at the evolution that our industry has taken. It didn't happen 
by choice. It just was predicated on different issues dealing 
with our antitrust laws. Every industry that I know of today, 
there's just a tremendous amount of consolidation, 
unfortunately.
    In our business today, I think food safety is our No. 1 
priority. And what we see is a company or a packer out there 
producing pork products, their goal is to ensure the quality 
all the way from the bottom line, from the farm. And that's, I 
think, been a major contributor to our consolidation, having 
that product produced, having a hands-on impact through the 
whole step of production all the way to the table.
    So it's certainly an interesting structure that we have in 
our country today, and it would be detrimental to change that 
at the current times. Specific to mandatory pricing, we would 
not be in favor of that, just simply because of the economics 
and expense involved in that process.
    Senator Chambliss. OK. Dr. Dreelin, everybody's going to 
have to keep in mind that any new program efforts will most 
likely take away from existing programs, given the fact that 
the Federal deficit obviously continues to be a problem. You 
alluded to that. But given these budget constraints, what can 
we do, in your opinion, that's going to be most helpful for 
landowners? Is there any kind of new concept, new idea, that we 
should look at as far as developing or take some of our 
existing programs and do a better job with those programs?
    Dr. Dreelin. In terms of incentives?
    Senator Chambliss. Yes.
    Dr. Dreelin. I like the programs that are there. I think do 
a better job in coordinating what's there that so we know 
they're being used efficiently and not being duplicating and 
coordinating with the other agencies. I think, also, there are 
other organizations, for example, The Nature Conservancy, that 
has been extremely helpful in coordinating these types of 
programs.
    Senator Chambliss. Do you use CRP at all in your personal 
family operation?
    Dr. Dreelin. We have received incentives to plant longleafs 
and prescribed burning through the conservation program, yes, 
sir.
    Senator Chambliss. Mr. Ham, what's the right balance 
between land retirement programs like the Conservation Reserve 
program and working land programs like EQIP? How do we need to 
look at this both financially as well as otherwise in the next 
Farm Bill?
    Mr. Ham. I think we're pretty close to the right balance 
now. Most of our land in my part of the county is already in 
CRP and will remain in CRP. I don't think it will ever come 
back out. You're dealing with mostly beef cattle in my area of 
the state and poultry producers who can take advantage of EQIP 
real easy, in-fence and outstreams and trying to help the water 
quality. So I think you have the balance in my area of the 
state. I'm not as sure nationwide, but I'd be glad to get that 
information to you.
    Senator Chambliss. OK. Senator Roberts?
    Senator Roberts. Jim and I want everybody in the audience 
and all members of the panel to know that Saxby Chambliss has 
been leading the way to convince the Japanese, from a sound 
science standpoint, that they should reopen their markets to 
the American beef industry. And that applies as well to other 
countries in Asia, not only Japan but China and also Korea. And 
we've got a problem. You have the Japanese government--is he a 
prime minister or premier? I can't remember which. But at any 
rate, Koisumi, is going to be stepping down. They've got an 
election in September. And they've got two outfits. One is very 
similar to the USDA and AFIS and FDA but looks at it from a 
sound science standpoint. And then you've got this other outfit 
that runs around the countryside and holds town hall meetings 
and basically says do you want zero risk or do people want zero 
risk and there isn't such a thing as zero risk in the talks on 
trade technology.
    They've had--what, Saxby?--23, 26, 28 cases of BSE. They 
import their cattle from China, and you know that's really 
safe. And we've inspected 700,000 critters, and we're headed 
for 800,000 and possibly a million. So he's been meeting with 
the Ambassador and working overtime to open up those markets. 
That's cost us $3.2 billion----
    Senator Chambliss. Right.
    Senator Roberts [continuing]. A year. That's just really 
not satisfactory. And then you get back to the trade talks on a 
level playing field, and you take a look at that and you really 
scratch your head and say, ``Wait a minute here. This just 
isn't right.''
    And I'm going to make this quick. But Saxby even went over 
to Russia and dragged me along. And I'm his Doberman. I can't 
say anything on the Intelligence Committee. And I get very 
frustrated. So he has a chain and he has it around my neck, and 
I'm the Doberman. And so when he needs somebody to get 
obstreperous, then he just takes the chain off.
    And he was in St. Petersburg. And we were talking to the 
oligarch and the guy in the Armani suit who intelligence 
indicated was not a friend of the United States. And he wasn't. 
He was a hot dog, and he was rather sort of a jerk. And he was 
in charge of the export-import licenses. And he was going on 
and on. And we're helping them. We're helping them with AFIS to 
clear up their BSE problem. They import the same kind of cattle 
from other countries that have not been inspected, but we can't 
seem to break through with Russia.
    And so the Chairman was being very gracious and, like you 
are supposed to do on a Code L, said, ``What can we do to help 
you in regards to BSE, and how can we resolve this issue?''
    And this oligarch stood up and said that basically he had a 
lot of problems with the United States because of the recent 
infestation of BSE. And I said, ``Why? We've only had one 
Canadian cow out of 700,000.''
    And he said, ``Well, in 1998, several mink''--mink, you 
know, fury animals, coats--``had, you know, BSE.''
    And I was a little stunned by that. And I had read the 
intelligence report. And I didn't much care for him, anyway. So 
I just said, ``Are you feeling all right.''
    And he said, ``Well, of course.''
    And I said, ``Are you sure? Is your eyesight OK?''
    And he said, ``Well, yes.'' And he was getting a little 
perturbed with me.
    And I said, ``Well, I just wondered. I didn't know if you 
could tell the difference between a mink and a cow.''
    And Saxby gave me a fast look and tried to kick me 
underneath the table. And that didn't work. And so I said, 
``Moreover, Mr. Chairman, I've heard an awful lot of this. And 
you've given our position. And, Mr. Minister, I don't think 
you've been really cooperative at all. I just have other things 
I can do with my time, so I'm leaving.'' And I just got up and 
left. And just before I slammed the door, I said, ``By the way, 
I'll send you a picture of a mink and a cow so you can know the 
difference.''
    I slammed the door. And I turned the wrong way. And I had 
on a pass. And I was walking down a hallway with an awful lot 
of Russian women who had red hair--they dye their hair--and 
other people who certainly wintered well. And I was trying to 
get out. And I said, ``How do I get out? Who speaks English?''
    And finally somebody said, ``Try the staircase.'' So I went 
down the staircase and got out, finally.
    And I looked way down the way, and I had gone way too long. 
And there was the white van. And then by the time I got there, 
out came the Chairman and our whole delegation. And they looked 
at me, and Saxby said, ``Look, OK. You're the Doberman. But the 
next time you go off the chain, let me know.''
    And that just sort of indicates our efforts to try to get 
some fair trade there. You know, there's a process announced 
here just yesterday with Japan. But some of us felt that we 
should be introducing sanctions legislation. And we did. And we 
said, ``OK. Through the U.S. trade representative, if not by 
September 21, if we don't have an agreement here and if the 
beef is not moving, we want sanctions across the board to cover 
the 3.2 billion.''
    So if that's what we have to do in order to get tough and 
play fair for the farmer, that's what we're going to do. That 
was a speech, not a question. Jim, thank you. I'll make this 
quick.
    Dr. Strickland. Let me take this opportunity to thank the 
entire Committee and also, of course, the secretary. I think he 
mentioned those sanctions when we were up there early in 
Washington. But the autos, we know, have flaws, and one of them 
can't seem to stop the import of others. So----
    Senator Roberts. I'm going to pass on some of the questions 
that the Chairman has already answered, with the exception 
that, Mr. Giles, you indicated and all of you indicated that 
you want to tap into the Conservation Reserve Program. Kansas 
has more CRP acres than any other state. We have a working 
relationship with hunters and with conservationists and with 
environmentalists. And it's not productive land. And there is 
concern in many counties where you have a lot of acreage that 
is tied up, some of which could come back into production. That 
is not an instant answer, but it is a possible answer. And I 
just wanted to put that caveat in there. Let me see if there's 
anything else.
    Dr. Dreelin, you mentioned The Nature Conservancy. I don't 
know what we'd have done without your help in regards to the 
Cheyenne Bottom, which is over by Gray Branch, Kansas, and one 
of the largest migratory waterfowl bus stops coming from the 
north to the south. And it's worked out, you know, very well.
    Do you have any criteria by which you can measure carbon 
sequestration, more especially along the forest ground that you 
have?
    Dr. Dreelin. I don't have a good answer for that, but I'd 
be happy to research it and convey that information to you.
    Senator Roberts. We've got a guy name Dr. Jim Rice out of K 
State. And I went down to the South Pole with Ted Stevens, 
which was quite a trip. And I looked at all the ice corridors. 
And, yes, we are going through global warming and, yes, it's a 
challenge and, yes, agriculture can be part of the answer.
    And one of the things you want to think about is you can't 
explain carbon sequestration much to anybody expect carbon in 
the air, bad, carbon in the soil, good. And if you go through 
certain cropping practices that you ought to go through anyway, 
you can achieve that. And I never thought about it in terms of 
the forest land. But if you could quantify that in any way, 
that could be part of the farm program and part of the energy 
section of the farm program. We've done a lot of research on 
that, but we haven't been able to quite quantify it to justify 
it to the taxpayers. But it's something you ought to think 
about. Let's see if there's anything else.
    Jim, your testimony mentions the problems that gross income 
restrictions have on conservation program participation caused 
since the 2002 Farm Bill in Georgia. I assume this has been a 
major issue for your poultry producers. In Kansas this has 
restricted the ability of our cattle feed lots to use the 
program and our cattle feeders to use the program. Any 
suggestions on any modifications we could make to those limits 
that would allow these producers to make the conservation steps 
they desire to make and they should make with their operations?
    Mr. Ham. Well, I think if they're going to play, they're 
going to have to play by your rules. I think it needs to be 
more flexible and it needs to be more driven from the locals. 
If there's a way to move some of the control down locally, then 
I think that would help tremendously. That would let the 
participants know that they're being judged by their peers and 
not so much being judged by people from outside the area. I 
think that would help.
    Senator Roberts. Well, that works pretty well for the whole 
damn Federal Government.
    Mr. Ham. I didn't mean that in the sense of everything 
else, but I think you get the gist of it.
    Senator Roberts. Well, yeah. You know, we're means testing 
these programs, and the people who really could make use of 
them and really make a difference are means tested out of the 
program. I know that's always a tough thing to fight because, 
you know, people look at the amount and people say you have a 
large operation, obviously you can afford it.
    Senator Roberts. Mr. Chairman, I've enjoyed this a ton. I 
think we're probably a little late. But I want to thank the 
witnesses for taking the time, thank all you folks for taking 
the time out of your valuable schedule to come and listen. It's 
been very educational for me, and we'll work very hard for you. 
And, obviously, I'm going to work very hard with your 
outstanding Chairman.
    Senator Chambliss. Well, Pat, thank you very much. Thanks 
to all members of this panel for being here. Again, your 
insight has been very helpful. We look forward to dialoguing 
with you as we move toward next spring and the physical writing 
of this Farm Bill. And we'll be calling on you folks, I'm sure, 
from time to time.
    I, too, want to again thank all of you all for being here 
today. We've had a great crowd, and for the most part everybody 
has stuck around for the entire hearing. And we appreciate that 
very much.
    Sanford, thank you, my good friend. We appreciate Vivian 
letting you off today to come spend the morning with us. And I 
thank you for all your good work. Thanks for your friendship.
    Mac Collins, Mac, thanks for your being here and sitting 
and listening to these folks that are the hardest working folks 
in Georgia. And they're great people, men and women.
    I'm not sure whether Richard's still here or Gene is still 
here. Yeah, Gene, there we go. Thank you guys, again. Thanks 
for your hard work in Atlanta and thanks for being here to pay 
attention to an issue that is critical to all of America but 
particularly critical to our state.
    To all the witnesses, I want to thank each panel again. 
Your testimony has been very valuable to us. I want to 
encourage anyone, and that's anyone here today or if you know 
of anybody who has an interest in what's going to be written in 
the next Farm Bill, that you can submit a written statement to 
the record. All you have to do is visit the Committee's Web 
site, agriculture.senate.gov. And you can get the details on 
how you submit that statement. We can accept a written 
statement that will be included in this hearing for up to five 
business days. We'll keep the record open for 5 days for the 
submission of that.
    Just looking out there, I hadn't seen him before, but I see 
Jody Redding out there. Jody is the representative for this 
part of the state for my close personal friend, good friend of 
Pat's, Senator Johnny Isakson. Jody, thank you for being here, 
buddy. Johnny is a great friend of agriculture, and what a 
terrific guy to have to work with.
    Thank all of you for your interest in agricultural policy. 
We look forward to, again, staying in touch with all of you as 
we go through the preparation for the next Farm Bill. And this 
hearing is now adjourned.
    [Hearing Adjourned]
      
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                            A P P E N D I X

                             June 23, 2006



      
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                   DOCUMENTS SUBMITTED FOR THE RECORD

                             June 23, 2006



      
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