[Senate Hearing 109-820]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 109-820

                   AGRICULTURAL CONSERVATION PROGRAMS

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

                                HEARING

                               before the

                       COMMITTEE ON AGRICULTURE,
                        NUTRITION, AND FORESTRY

                          UNITED STATES SENATE


                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION


                               __________

                              JUNE 7, 2006

                               __________

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


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




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           COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY



                   SAXBY CHAMBLISS, Georgia, Chairman

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

            Martha Scott Poindexter, Majority Staff Director
                David L. Johnson, Majority Chief Counsel
              Vernie Hubert, Majority Deputy Chief Counsel
                      Robert E. Sturm, Chief Clerk
                Mark Halverson, Minority Staff Director

                                  (ii)

  





























                            C O N T E N T S

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                                                                   Page

Hearing(s):

Agricultural Conservation Programs...............................     1

                              ----------                              

                        Wednesday, June 7, 2006
                                Panel I

Johnson, John, Deputy Administrator for Farm Programs, Farm 
  Service Agency, U.S. Department of Agriculture, Washington, DC.     4
Knight, Bruce, Chief, Natural Resources Conservation Service U.S. 
  Department of Agriculture, Washington, DC......................     3

                                Panel II

Andrew, James O., Andrew Farms, on behalf of the Iowa Soybean 
  Association, Jefferson, Iowa...................................    33
Kennamer, Dr. James Earl, Senior Vice President for Conservation 
  Programs National Wildlife Federation, Edgefield, South 
  Carolina.......................................................    28
Sims, Olin, President Elect, National Association of Conservation 
  Districts, McFadden, Wyoming...................................    31
Spronk, Randall, Spronk Brothers III, Chair, National Pork 
  Producers Council Environmental Policy Committee, Edgerton, 
  Minnesota......................................................    35
                              ----------                              

                                APPENDIX

Prepared Statements:
    Harkin, Hon. Tom.............................................    50
    Leahy, Hon. Patrick J........................................    55
    Lincoln, Hon. Blanche L......................................    57
    Salazar, Hon. Ken............................................    59
    Andrew, James O..............................................   117
    Johnson, John................................................    85
    Kennamer, James Earl.........................................    97
    Knight, Bruce................................................    60
    Sims, Olin...................................................   108
    Spronk, Randall..............................................   120
Question(s) and Answer(s):
Kennamer, James Earl:
    Written response to questions from Hon. Blanche Lincoln......   136


































 
                   AGRICULTURAL CONSERVATION PROGRAMS

                              ----------                              


                        Wednesday, June 7, 2006

                                U.S. Senate
                          Committee on Agriculture,
                                     Nutrition and Forestry
                                                   Washington, D.C.
    The committee met at 9 a.m., in room SR-328A of the Russell 
Senate Office Building, the Honorable Saxby Chambliss, chairman 
of the committee, presiding.
    Senators present. Senators Chambliss, Coleman, Thomas, 
Talent, Crapo, Harkin, Nelson, Salazar, Baucus.
    Chairman Chambliss. Good morning. Our hearing will come to 
order this morning.
    Let me just make a quick announcement. We've got some 
scheduling issues this morning that we're going to have to deal 
with. First of all, let me say to our witnesses, thank you for 
being here, No. 1, but thank you for also being willing to 
rearrange from a 9:30 or 10 hearing back to 9.
    We have the president of Latvia speaking this morning to a 
joint session. We also have a vote at 10 that we have got to 
deal with. What my intention is that we will start this 
morning. I'm going to ask all members to submit their 
statements for the record.
    Senator Thomas and all of our witnesses, if you will, 
please limit your statement to 5 minutes. We're going to go as 
long as we can, right up to the 10 vote. We'll take that vote 
to go vote.
    Some members will move on to the joint session with the 
president of Latvia. I'm going to come back here to conclude 
this. This hearing is too important not to have it concluded 
this morning. So to our witnesses, that's kind of our tentative 
schedule. Again, we thank you for being here.
    Over the past 20 years, Congress has increased the nation's 
investment in agricultural conservation. In the 1980's there 
were just a few programs. Today, there are 20. Producers now 
have a wide variety of programs to address their conservation 
wildlife and environmental concerns. Over the same time period, 
we have seen the support for farm and private late conservation 
grown in Congress and with the public.
    Many have noted the 2002 Farm Bill was the single most 
significant commitment of resources toward conservation on 
private lands in the nation's history. Even with the annual 
limitations imposed by the appropriations process, conservation 
funding increased about $720 million from fiscal year 2002 to 
fiscal year 2006.
    With this new funding, the U.S. Department of Agriculture 
has enrolled about 750,000 acres in the Wetlands Reserve 
Program, and now has oversight responsibility for more than 2 
million acres under easement and WRP and other programs. The 
Department is managing nearly 40 million acres in the 
Conservation Reserve Program, and it has signed about 182,000 
Environmental Quality Incentive Program contracts.
    There are some good and exciting things happening in 
conservation. For example, late last month, Secretary Johanns 
announced the total soil erosion on cropland decreased 43 
percent from 1982 to 2003.
    The Natural Resources Conservation Service reports that it 
has helped 1 million producers with their conservation needs 
since 2002. Producers are enthusiastic about conservation and 
want to participate as can be seen by the enormous backlogs to 
the programs.
    However, in anticipation of beginning conservation hearings 
on the reauthorization of the 2002 Farm Bill, there are some 
questions that this Committee, which has oversight, needs to 
ask: Are conservation programs really helping producers solve 
problems and improve environmental quality? How do we measure 
conservation?
    Does USDA have the right infrastructure in place to deliver 
and monitor the programs? Is there a way we can better utilize 
conservation programs to enhance alternative energy production?
    Are we managing the land that we have under contract and 
easement? Is our conservation policy achieving the goals that 
we think and want it to achieve, and are there things that we 
could do better?
    These are not easy questions to answer, but by establishing 
where we are today we will be better able to look forward and 
plan for the future. There has been a good deal of discussion 
about the Doha round and what it will mean for our existing 
conservation and commodity programs.
    There are a lot of misconceptions or misperceptions about 
what qualifies as an acceptable ``Green Box'' program and what 
does not, particularly in regard to conservation programs. I 
challenge the entire conservation community to think about 
those questions, especially as this Committee begins to prepare 
for the next farm bill.
    We have seen the Federal investment in conservation grow in 
the past, and I expect we will continue to see it grow. Just as 
producers want to be good stewards of their land, we need to 
ensure that we are good stewards of the taxpayers' money. This 
means Congress must put in place the right conservation 
policies and programs.
    I look forward to today's testimony and working with you to 
build upon our success in conservation and ensuring that we are 
on the right path in the future.
    We will be hearing from, first of all, on the first panel 
Mr. Bruce Knight, chief of the Natural Resources Conservation 
Service, U.S. Department of Agriculture, here in Washington; 
and Mr. John Johnson, deputy administrator for Farm Programs 
from the Farm Service Agency, also at the U.S. Department of 
Agriculture here in Washington.
    Gentlemen, we welcome you to the panel this morning. Thank 
you for coming, and we look forward to your testimony.
    Mr. Knight, we will start with you.

      STATEMENT OF BRUCE KNIGHT, CHIEF, NATURAL RESOURCES 
     CONSERVATION SERVICE, U.S. DEPARTMENT OF AGRICULTURE, 
                WASHINGTON, DISTRICT OF COLUMBIA

    Mr. Knight. Thank you. Mr. Chairman and members of the 
committee, thank you for the opportunity to appear here today 
to discuss conservation programs in Title II of the farm bill. 
The 2002 Farm Bill pledged more than $17 billion over 10 years 
for conservation. It emphatically demonstrates your commitment 
to locally led cooperative conservation on working agricultural 
lanes. To put it simply, our job at the Natural Resources 
Conservation Service is helping people help the land.
    Working lands conservation programs are unique among 
agricultural programs in that they are specifically designed to 
produce multiple benefits. First, farmers or ranchers who 
install conservation practices improve their land and enhance 
their natural resources. Second, the public also receives many 
benefits: a better, cleaner environment; increased biological 
diversity; and a scenic landscape, to name just a few.
    Conservation investments also lead to stronger rural 
economies. Since 2002, NRCS has provided assistance to 1 
million farmers and ranchers. Working with our partners, we 
have applied conservation on more than 130 million acres of 
working farm and ranchland under the EQIP Program alone. We 
have also helped farmers apply more than 14,000 comprehensive 
nutrient management plan.
    Over the past 4 years, we have invested $6.6 billion 
directly with farmers and ranchers. Those same landowners and 
partners have added an additional $2.8 billion, for a total 
investment of more than $9.4 billion in conservation through 
2005.
    The 2002 Farm Bill brought us new programs and new 
opportunities, and we have responded with new tools and 
streamlined the Agency management to serve farmers and ranchers 
more effectively as well as more efficiently.
    For example, from 2003 to 2006, we have worked with more 
than 2,500-plus technical service providers. These are our own 
conservation outside consultants who are providing the 
equivalent of nearly 520 staff years to supplement our staff in 
serving our customers.
    Let me, briefly, review our achievements from the four 
major farm bill programs. First, the Conservation Security 
Program in an effort to reward the best and motivate the rest 
began with 18 pioneer watersheds in 2004, and with yesterday's 
release of the 2006 accomplishments we have accepted another 
4,404 contracts of the over 8,500 offers that were offered last 
year or this year in 60 watersheds. This program now spans 280 
watersheds nationwide, covering 14.6 million acres, investing 
in the management of over 19,000 land stewards to achieve even 
greater environmental progress.
    The Wildlife Habitat Incentives Program, $165 million 
invested, 9,500 agreements covering 1.4 million acres of 
improved wildlife habitat, a portfolio of easement programs 
designed to protect and preserve prairie, grassland, and 
wetland ecosystems and preserve working farms and ranches.
    First, the Grassland Reserve Program has nearly 380,000 
acres enrolled in easements. The Wetlands Reserve Program, 
nearly 750,000 acres have been contributed toward the 
president's goal of 3 million acres of wetlands restored, 
protected, or preserved by 2009 with an inventory now 
approaching 2 million acres.
    The Farm and Ranchlands Protection Program, more than 
449,000 acres now preserved in perpetuity from future 
development. And, of course, our biggest program, EQIP, the 
``Environmental Quality Incentives Program,'' where we have 
invested nearly $3.1 billion, benefiting close to $185,000 
participants from fiscal year 2002 to 2006 alone.
    NRCS has also worked to help livestock producers meet their 
environmental challenges, applying more than 14,000 
Comprehensive Nutrient Management Plans since 2002. 
Undergirding all of this is our mainstay program that provides 
planning assistance and conservation technical assistance.
    I want to touch on some management reforms that have either 
increased our efficiency or helped us direct more dollars in a 
better service to our customers. First and foremost is 
increased transparency, resulting in greater accountability and 
a better understanding of our programs by our customers and 
hopefully by those who are looking at the efficiency of our 
programs.
    Streamlined payment processes and reduced paperwork for our 
customers, we have saved nearly 330 staff years alone through 
those efforts; establishing a process for rapid watershed 
assessment, taking what was once a multiyear program process 
down to 6 months.
    The Web Soil Survey: our soil surveys are now available 24 
hours a day, 7 days a week via the Web. We have put out as much 
information in the last 10 months through the Web as we've done 
through the last 10 years.
    Conservation programs on working agricultural lands benefit 
both producers and the public, supporting sustainable 
agriculture and enhancing the environment. As we move forward, 
NRCS will emphasize cooperative conservation, a watershed 
approach, as well as a market-based approach to helping people 
help the land.
    I thank the chairman and the members of the committee for 
the opportunity to appear today and for your ongoing support 
and attention to implementing the conservation provisions of 
the 2002 Farm Bill.
    I would be pleased to answer any questions the members may 
have.
    [The prepared statement of Mr. Knight can be found on page 
60 in the appendix.]
    Chairman Chambliss. All right. Mr. Johnson.

   STATEMENT OF JOHN JOHNSON, DEPUTY ADMINISTRATOR FOR FARM 
PROGRAMS, FARM SERVICE AGENCY, U.S. DEPARTMENT OF AGRICULTURE, 
                         WASHINGTON, DC

    Mr. Johnson. Thank you. Mr. Chairman and members of the 
committee, we appreciate the opportunity to review the 
operation of the farm bill's conservation programs as 
implemented by the Farm Service Agency.
    I am pleased to report to the Committee this morning that 
there have been significant accomplishments under the 
Conservation Reserve Program since the 2002 Farm Bill. FSA has 
implemented the president's directive to re-enroll and extend 
contracts for more than 28 million acres of land, which were 
scheduled to expire from 2007 to 2010. More than 84 percent of 
the producers with expiring 2007 contracts have elected to re-
enroll or extend their contracts.
    The Department just announced this week that we have 
accepted 1 million acres in this spring's general sign-up in 
addition to the 2.9 million acres accepted since 2002. Total 
enrollment now stands at 36.7 million acres with annual rental 
payments to producers totaling $1.8 billion annually.
    These acres have reduced soil erosion by 450 million tons, 
reduced nitrogen, phosphorous, and sediment leaving the field 
by well over 85 percent and sequestered over 48 metric tons of 
carbon dioxide on an annual basis.
    CRP contributes to increased wildlife populations as well 
including more than 2 million additional ducks annually in the 
Northern Prairie, recovered Sage and Sharp-Tailed Grouse 
populations in Eastern Washington, increased Ring-Necked 
Pheasant populations, as well as increased grassland bird 
populations.
    CRP is building upon these successes with several 
initiatives including enrollment of 100,000 acres recently in 
the Presidential Quail Initiative designed to create habitat 
for quail upland birds and other species. We have executed 
agreements with Pheasants Forever, Ducks Unlimited, and the 
National Wild Turkey Federation to jointly work toward 
achieving mutual program objectives.
    Fourteen new CREP agreements, ``Conservation Reserve 
Enhancement Program'' agreements, were signed with state 
governments to improve both water quality and quantity, create 
wildlife habitat, and control erosion on more than 800,000 
acres. Three of these targeted water conservation as their 
primary focus. Combined, the agreements with Colorado, Idaho, 
and Nebraska, provide for enrollment of up to 235,000 acres 
with projected water savings of $360,000 acre feet annually.
    One of the Farm Service Agency's first Web-based 
applications was developed using GIS technology to enroll land 
in CRP. This upgrade has improved workload management for our 
county offices, saved millions of dollars of implementation 
costs and increased the accuracy of our work.
    A 10-state pilot program has been developed for private 
sector technical assistance, which is scheduled to begin late 
this summer. Finally, later this month, FSA will roll out a 
$404 million Emergency Forestry CRP program to restore more 
than 700,000 acres of private forestland damaged by the 2005 
hurricanes.
    FSA also implements the emergency conservation program to 
provide emergency funds to help farmers and ranchers 
rehabilitate farmland damaged by natural disasters and 
implement emergency water conservation measures during periods 
of severe drought. Since the 2002 Farm Bill was passed, FSA has 
allocated more than $500 million in assistance including the 
funds appropriated by Congress for the 2005 hurricanes.
    The Grass Roots Source Water Program administered by FSA 
was also authorized under the 2002 Farm Bill, and more than $13 
million has been distributed to assist rural communities with 
protecting their drinking water sources.
    Under the Grassland Reserve Program administered jointly 
with NRCS, FSA has enrolled almost 2,600 contracts and 
obligated almost $93 million in annual rental payments. Looking 
forward to the 2007 Farm Bill, while environmental indicators 
suggest much progress and resource conservation has been made, 
many challenges remain and new issues continue to emerge, they 
include: nutrient enrichment and hypoxia in some waterways; 
conflicts over water availability for agricultural, 
environmental, and urban uses; reducing greenhouse gas 
concentrations through carbon sequestration; and developing 
sources of renewable energy and bio-based fuels. Many people 
are asking if there is an appropriate interface between CRP in 
our nation's efforts to address these concerns.
    Other broad policy considerations include identifying 
specific goals for water quality, wetlands restoration, 
wildlife habitat, air quality, soil erosion, and recovery of 
threatened and endangered species.
    Now, attention should also be given to the resources needed 
to accomplish these goals. The use of information technology is 
vital for cost-effective program delivery. We recognize that as 
programs become more sophisticated in targeting limited 
resources, we must become more proficient in developing more 
elaborate software. There is, however, intense competition for 
IT funds which could impact farm bill implementation.
    A few program considerations in a CRP that could be 
examined are whether land expiring from a CRP contract should 
be considered eligible for re-enrollment, even if that land is 
no longer capable of being cropped due to an easement, 
conversion to trees, or other factors.
    Also, should certain conservation practices such as 
wetlands and buffers be exempt from the statutory 25 percent 
cropland limitation, and should the standards for waiving that 
25 percent cropland limitation be modified? Also, is there an 
appropriate nexus between CRP and bio-energy production?
    As Congress debates the upcoming farm bill, we hope 
consideration is given to improving our existing programs, 
funding WTO consistent green payments that enhance 
environmental benefits, encouraging private-sector markets for 
environmental services, and emphasizing a voluntary approach 
for conservation over a more regulatory approach. We look 
forward to working with you on these critically important 
issues.
    Thank you. I would be pleased to answer any questions the 
Committee might have.
    [The prepared statement of Mr. Johnson can be found on page 
85 in the appendix.]
    Chairman Chambliss. Thank you, gentlemen. Both of you were 
almost on time. That's pretty good for two guys from the USDA.
    Senator Harkin.
    Mr. Harkin. Thank you very much, Mr. Chairman. I'm sorry I 
am not on time. I apologize for being late. Every Wednesday 
morning I have an Iowa breakfast. We seem to have a lot of 
Iowans in town this week. So I apologize for being late.
    Chairman Chambliss. They knew this hearing was going on, 
talking about CSP and CRP.
    Mr. Harkin. That's it. Oh, some of them are there, too. 
They probably just came in the door back there, I suppose.
    I just want to thank you for holding this hearing on 
conservation programs. When I was chair of this Committee in 
the 2002 Farm Bill, we worked very closely. Well, you were in 
the House at the time on the House Ag Committee, and we worked 
closely with you and the other members of the House Ag 
Committee to hammer out really strong conservation provisions 
in the farm bill. I think we have every reason to be proud of 
what we've done.
    I know we have on the second panel Jim Andrew of Jefferson, 
and I look forward to his testimony. I would ask that my 
statement be made as a part of the record, and I won't read the 
whole thing, Mr. Chairman.
    It's clear, I think, to us that the Doha round, I still 
have hopes that it is going to be concluded successfully, that 
we are in the world trading position now, that we're a part of 
WTO, that the old ways of doing things are going to have to 
change.
    In the past, from the New Deal on, we paid farmers based on 
what they grew and how much they grew. I think that's giving 
way now, and the shift in the last farm bill was to start 
paying farmers on how they grow, ``green payments,'' the 
Europeans call it, which are fully compatible with our 
obligations under WTO.
    Now we see a whole new realm of productivity in this 
country, not for food nor fiber but for energy, for renewable 
energy. With all of the cropland that we have in CRP and other 
areas, how can we utilize now the productive capacity of 
America for renewable energy, at the same time conserving our 
soil and our water and providing for clean air and providing 
for wildlife habitats.
    It is possible to do all that. We can meet our demands for 
food and fiber and at the same time meet the growing demand 
that we're going to have for renewable energy production. That 
is really some of the things that we tried to get started in 
the 2002 Farm Bill.
    I'm going to be asking some questions again of Mr. Johnson 
about the CRP stuff and also Bruce Knight. I must say that I 
agree with you when you said that the Conservation Security 
Program is the future.
    While I have been somewhat critical of the Department in 
the past for some of the early implementation and stuff, I 
recognize it was a new program. It needed to be fleshed out a 
little bit.
    My biggest gripe is with the Congress that keeps cutting 
the money out of the program and putting caps on it to the 
point where next year we may not have one new sign-up in the 
program because of the caps that have been put on the program 
by the Congress.
    I do give the Agency credit for correcting some of the 
earlier missteps by making the program work better for farmers 
and ranchers, but I think we've just go to do more to ensure 
that this innovative program achieves its full potential.
    So with that, Mr. Chairman, I thank you and I ask again 
that the rest of my statement be made a part of the record.
    (COMMITTEE INSERT:)
    Chairman Chambliss. Without objection.
    Gentlemen, Section 2005 of the 2002 Farm Bill required the 
U.S. Department of Agriculture to develop a plan to coordinate 
land retirement and working land conservation programs and to 
submit a report to the House and to the Senate Ag Committees. 
That report was due December 31, 2005, and that report is 6 
months overdue. When can we expect it?
    Mr. Knight. We, the Department, should be able to deliver 
that report to you in the very near future. We are in the 
departmental clearance process on it. Both of the agencies, 
their respective work has been done, and it's just a matter of 
clearance at this stage.
    Chairman Chambliss. All right. Well, that's a very vague 
answer. Give me a time line. Are we talking about 30 days? 
Sixty days? What's the time line?
    Mr. Knight. I would certainly be willing to do my best to 
deliver it to you within 30 days.
    Chairman Chambliss. We will call you. Gentlemen, again, 
this is directed to whichever one is best to answer it. What is 
the average administrative cost per acre or contract for each 
of our environmental programs, our conservation programs?
    Mr. Knight. I can submit for the record the administrative 
costs or the technical assistance costs for each of the 
programs that we administer at NRCS. The one that folks focus 
on the most, of course, is the Environmental Quality Incentives 
Program.
    At the beginning of the 2002 Farm Bill, the administrative 
costs would have run around 28 to 29 percent. We have been able 
to bring that down to about 22 percent. That varies somewhat by 
project-by-project. Those things that require a great amount of 
engineering, of course, have high costs where you're doing the 
engineering to construct a lagoon or lay out the terraces.
    Because of the efficiencies, we have been able to do in the 
administration side of things with the new software and the 
technology, we've got a new program called ``ProTracts,'' that 
has been able to save about 330 staff years on the 
implementation side of things alone, and that's what's been 
able to bring these costs down.
    The next stage for us is a national uniform ranking tool 
that would eliminate errors and speed up the delivery costs for 
the programs as well, but on EQIP it was right around 29 
percent. It's down to 22 percent. I will submit for the record 
for WRP, the wildlife habitat incentive program, each of the 
programs we administer.
    Mr. Johnson. Mr. Chairman, we would be glad to provide that 
on a contract basis or a per acre basis for the record. I don't 
have the exact number with me, but I would simply reiterate 
what the chief has said. We have collaborated with NRCS to 
refine the technical assistance needed for CRP and have come up 
with increased efficiencies and reduced the workload on both 
NRCS as well as FSA staff in administering that program.
    The GIS tool I mentioned that we have implemented has saved 
us over $16 million at sign-up time. It has reduced manual 
entries from a thousand manual entries down to a hundred, a 90 
percent reduction in manual entries, with a corresponding 
reduction in error rates. So we are taking every advantage of 
automation as well as just some common-sense provisions with 
NRCS that administrative costs. We will be glad to provide 
those numbers to you.
    Chairman Chambliss. OK. Mr. Knight, you mentioned in your 
testimony and you just stated again that you saved ``330 staff 
years.'' What does that mean?
    Mr. Knight. Those would be full-time equivalents for staff 
if you estimate an average hiring cost of running around 
$100,000 a year. So you're talking about significant savings on 
an annual basis that. Every dime we are able to save in program 
administration costs because of our direct charge system in 
turn means additional contracts we are able to put on the 
ground.
    Our average EQIP contract is around $20,000 a year or 
smaller with an individual, and so every time I save $20,000 
costs that's one more contract we are able to put on the 
ground. These savings have amassed a significant increase in 
contract delivery for us.
    Chairman Chambliss. Well, Obviously our goal as we write 
every farm bill is to ensure that the money goes to the farmer 
for these critically important programs. The more we can save, 
from an administrative standpoint, obviously I think you 
gentlemen know the happier members are on the Hill, and our 
farmers are better able to really utilize these programs. So 
that's a critically important issue that we need you to 
continue to work on.
    I've got a number of other questions, but I'm going to 
because of the time constraints go to Senator Harkin at this 
time.
    Mr. Harkin. Thank you, Mr. Chairman.
    I just have kind of three questions I want to cover: one, 
the Contract Security Program, EQIP, and CRP. Mr. Knight, again 
I just want to thank you for taking charge of the CSP. The work 
that you've been doing on correcting some of the earlier 
missteps, I think it's moving ahead fine now. Although, as you 
know, I still have a problem with the watershed-based approach 
on this.
    Because what happens is if you're in a watershed and you 
qualify for a Tier I, you may have a neighbor that's down the 
road that may not be in the watershed. They may actually be 
doing more conservation work than you, but they don't qualify 
for it because they are not in the watershed. Well, we know all 
that.
    My question is, how long--and if you can't answer it today, 
if you'd just get back to me, I would appreciate it--how many 
years would it take NRCS to offer CSP on every watershed at 
least once, on every watershed? If you can't, if you'd just get 
back to me on that, I'd appreciate it.
    Mr. Knight. I will recalculate that and get back to you on 
the record on that, sir. Our original intent, as you know, was 
to be able to do it once every 8 years.
    Mr. Harkin. Eight years, yes.
    Mr. Knight. But because of some of the restrictions on 
spending, we have probably fallen off that 8-year schedule.
    Mr. Harkin. Well, the other thing I need to know, Bruce, is 
how much would it cost to put the program back on track to 
cover every watershed by 2011, which would basically be our 8 
years? How much money would it take to put it back on track so 
that we could get it at least once to every watershed in the 
country?
    Mr. Knight. We will provide that calculation for the record 
for you.
    Mr. Harkin. I need to know it. Last, a lot of complaints 
had to do with, and I have contacted you about this in the 
past, the sign-ups always come in the spring. That's when 
farmers are busiest. They don't have time to pay attention to 
it. Is there any way that we can get the sign-ups completed no 
later than February, let's say, rather than continuing into the 
spring?
    Mr. Knight. That is certainly our objective. It has been a 
major effort to move sign-ups for all the programs into the 
winter months. We were successful in that this year, completing 
EQIP prior to the spring planting and WHIP prior to spring 
planting.
    In most parts of the country, we beat the clock on CSP, but 
it was not a good time for the more Southern states. We will 
this summer release states to start the selection process for 
the watersheds for next year, then proceed forward. We hope to 
be able to do CSP during the winter months.
    My desire is to be able to test run CSP one more year 
before farm bill considerations, so that you will be able to 
evaluate all the different things that are lessons learned from 
CSP for full consideration by the Committee for the 2007 Farm 
Bill.
    Mr. Harkin. Again, Mr. Knight, let me just publicly thank 
you for your leadership on this issue of moving the CSP 
Program. You have operated under some pretty difficulty 
circumstances, not of your own making, as I've said earlier, 
but of our making here.
    Even with that, we proceeded ahead on it and I just want to 
compliment you for that in taking charge of that program. 
Hopefully, we're going to be able to make some further advances 
in the next farm bill coming up to move it head even more 
aggressively.
    On EQIP, let me just ask you, and this again is a little 
bit parochial, but it seems odd to me that Iowa with one of the 
most intensively used agricultural landscapes on the planet is 
tenth in overall EQIP funding behind neighboring states like 
Kansas, Nebraska, and Minnesota.
    Well, basically what I've been told is that EQIP basically 
is skewed more to beef production than pork production. I think 
Mr. Spronk is going to speak to that later on.
    Again, my question is: when allocating EQIP funds to the 
states each year, how does NRCS determine which areas of the 
country have the greatest environmental needs? I'm concerned. I 
just wonder because with all of the hog production we have in 
Iowa why we're tenth overall in EQIP funding. That may sound 
parochial, but it has to do with how these funds are allocated.
    Mr. Knight. The fund allocations is certainly one of the 
thorniest challenges we face in how to put the dollars in the 
states for the efforts that are the most important nationwide. 
We have a set of four priorities on EQIP.
    Basically, they are very broad: it's about clean water, 
soil, air quality, and wildlife habitat. Then, we have an 
allocation formula that now has about 30 different factors 
included in it. Trying to make a formula that is as scientific 
and knowledge-based as possible for allocation of those funds.
    We have made many improvements in those programs over the 
last few years. We have heavily weighted the allocation formula 
to the priority that the livestock sector is facing right now 
of compliance with the EPA rules as it pertains to the AFO/CAFO 
provisions. The number of animal units out there, they are 
either swine, poultry, or cattle heavily influence how many 
funds flow from state to state.
    Then, of course, we also have regional equity provisions 
that are in place, setting a desire to have at least $12 
million in several states. That also has dollars shifting from 
one part of the country to the other.
    I had mentioned earlier that we are trying to make a very 
transparent process. We have now published these allocation 
formulas for review. This summer I'm also seeking through an 
RFP process a peer review to ensure that the allocation process 
is as valid as it could be.
    We have used internal guidance and professional knowledge 
for developing and constructing of these allocation formulas. 
I'm not going to outside peer review to make sure that we have 
as valid a structure as we can to respond to needs from year to 
year.
    One of the things that I think that will be important for 
people to realize as we have them constructed today, I do 
anticipate that as a particular priority need for the Nation is 
addressed, a state's allocation could in turn start to decline 
as we try to address needs somewhere else.
    The heavy weighting we have now to the EPA AFO/CAFO rule, 
once we've swallowed doing all of those comprehensive nutrient 
management plans, which we're doing through both CTA and EQIP, 
may in fact cause the allocations to shift around the country. 
The jury is still out on how well that's going to work.
    Thank you, Mr. Chairman.
    I have one more question, but it will wait until the second 
round.
    Chairman Chambliss. Mr. Thomas.
    Mr. Thomas. Thank you, Mr. Chairman. It's a good subject 
for our hearing, and I'm glad to do that. Certainly, I am 
pleased with the emphasis that is being put on conservation. I 
particularly want to welcome Olin Sims here from Wyoming, who 
not only do we have ranchers as well as farmers in this program 
you know. So it's nice to have him here, and we do have a 
little different view.
    Just a general reaction maybe from both of you, I think we 
have I think about nine different programs, isn't that correct, 
conservation programs?
    Mr. Knight. In the case of NRCS, we now have 22 programs to 
administer.
    Chairman Chambliss. I think your number is right, but there 
are a lot of subprograms.
    Mr. Thomas. I guess I'm wondering, we're going to be 
looking for more efficiency and more ways to do more. Which one 
of these programs is used the most? Could they be combined? 
Would it be more efficient, managerially, to have less 
programs?
    Mr. Knight. Those programs where we can do that 
administratively within the constraints, we're moving forward 
with that. The cost-share programs, which are EQIP plus the 
Wildlife Habitat Incentives Program, then the subprograms that 
the Chairman mentioned, ground and surface water conservation 
in the Klamath Basin all within EQIP, those are all cost-share 
programs.
    We are using the same rules, the same manual, the same 
sign-up trying to move forward to putting as much similarity to 
those programs as we can so that we're able to gain 
efficiencies there, but I do still need in many places 
different program managers because they are different programs 
by statute.
    We have a similar consideration with the easement programs. 
There is a great deal of variability between the Farm and 
Ranchland Protection Program, the Grasslands Reserve Program, 
and the Wetlands Reserve Program. We are trying to look for 
efficiencies that we can do by putting common rules between the 
easement programs, so that it becomes a portfolio that is more 
streamlined in the administration.
    Mr. Thomas. That's a good thing. Sometimes programs get a 
little protective internally and it's hard to get as much 
efficiency among them as there could be.
    Mr. Knight. That is very true. We have reorganized the 
internal management of the Agency along those broad categorical 
lines in order to reduce the tendency for the inside turf.
    Mr. Thomas. Mr. Johnson, do you have any comment?
    Mr. Johnson. Well, our three programs--the Conservation 
Reserve Program, the Emergency Conservation Program, and the 
Grassroots Source Water Protection Program--have somewhat 
different focuses than we do part of the Grassland Reserve 
Program, which could be somewhat similar to CRP in some 
respects.
    The Emergency Conservation Program has a whole different 
intent and purpose than our Conservation Reserve Program, so I 
don't see a real overlap there. The Grassroots Source Water 
Protection, it is a small program aimed at rural communities 
which has a distinct focus. In our small portfolio of programs, 
as compared to what the chief has to deal with, I don't see a 
whole lot of overlap.
    Mr. Thomas. OK. What would you say are the greatest 
challenges for you and producers in administering these 
conservation programs?
    Mr. Johnson. My No. 1 challenge, and it's beyond 
conservation but through all the farm subsidy programs I 
administer as well, is automation and IT investments in 
modernizing how we deliver programs. As we are asking our folks 
to do more with less repeatedly, I've got to provide them 
better automation. As I mentioned in my statement earlier, the 
competition for those resource dollars for IT investments is 
intense.
    Mr. Thomas. Well, what's the result? If doing what you want 
to do, would it reduce your administrative costs?
    Mr. Johnson. I believe it would. As I mentioned, a very 
modest step we took forward in our utilizing GIS for CRP sign-
up is to date we estimate about $16 million in sign-up 
administrative costs. I believe that's just the tip of the 
iceberg of what could be realized, but it's a major challenge.
    Mr. Thomas. It is a challenge. The Senator from Iowa was 
talking about not wanting to reduce spending. We're going to 
see reduced spending in all of government I hope, so we have to 
find ways to be more efficient and to make it work as 
productively as possible.
    In any event, really again speaking for more open space 
areas like Wyoming ranch areas where the conservation programs 
are is very important, probably even more important than the 
crop programs in terms of the future in preserving the land and 
all.
    So thank you, Mr. Chairman.
    Chairman Chambliss. Mr. Salazar?
    Mr. Salazar. Thank you very much and Ranking Member Harkin. 
Let me first say to Chief Knight and Mr. Johnson that I very 
much appreciate the efforts of USDA in Colorado and the 
conservation efforts you have on programs which have major 
acreage and supporting of farmers and ranchers throughout the 
state.
    I know we have significant acreage enrolled in CRP and we 
receive lots of assistance from EQIP and also CSP. In 
particular, I want to say that the Middle South Platte CSP 
Program is one that is working very well in the state of 
Colorado.
    It's also an area that is in dire need of assistance 
because of what has happened with the shutdown of literally 
about a thousand wells, which has affected probably 10,000 to 
30,000 acres of prime pond land up in that area. So I 
appreciate the work the USDA does in that regard.
    Let me just ask one very broad question for both of you. As 
we look at the rewrite of the conservation bill and what I 
think is going to be a significant interest of this Committee 
with respect to renewable fuels and renewable energy, how do 
you see the conservation programs tying in to what might be a 
goal that this Committee pushes forward with respect to 
renewable energy? I think you had alluded to that in your 
testimony, Mr. Johnson, so if you can just broadly answer that 
question, both of you, I would appreciate that.
    Mr. Johnson. Certainly, Senator. Thank you for the 
question. I think that topic is worthy of discussion, and there 
is a lot of interest in that subject. As I mentioned in my 
remarks, currently under the current authority that we have we 
utilize managed haying and grazing, which allows people to 
harvest biomass from CRP acreage on an interval no more often 
than once every 3 years.
    There is a reduction in the CRP rental payment in the year 
they do that harvesting. So currently today we have a limited 
ability to engage in harvesting biomass off of CRP acreage. The 
question remains: is that sufficient or should it be changed, 
altered, reduced, or expanded? Obviously, there is a lot of 
interest in that.
    I receive inquiries from producers as well as interest 
groups about everything from hardwoods to switchgrass to even 
some folks who have some unique ideas about oil seeds. Bottom 
line, there is lots of interest, but I think the question is 
worthy of debate and discussion. I don't have the answer laid 
out for you here today, but it's certainly something that 
merits discussion as we seek to minimize our dependence upon 
other sources of energy.
    Mr. Salazar. Would the notion, Mr. Johnson, be that if 
there was a biofuels project they could use some of the biomass 
coming out the lab, that may be the 3-year restriction would be 
one that would be lifted or adjusted in some way?
    Mr. Johnson. That is one approach that could be considered. 
There are concerns about a critical mass that is needed to 
support some of these biomass energy plants, and you need a 
certain number of acres within a certain radius of that plant 
to make it viable.
    Whether CRP in and of itself could meet that need in any 
one region of the country is something that would have to be 
looked at. There may be other sources of that biomass besides 
the CRP acreage that could enter into that business plan for 
that facility, but those are things that certainly need to be 
looked at and discussed.
    Mr. Knight. On the NRCS side, as it pertains to energy, the 
first priority was the here and now of energy conservation and 
the nexus of conservation practices and energy coming together. 
We saw an opportunity this winter with that, and released a 
tillage estimator that provided for folks with just three 
clicks on the website.
    The fuel savings associated with going from conventional 
tillage to no till. We saw that for a very typical operation in 
the High Plains, like from Colorado up to Montana, a wheat 
operation there would show $9,000 to $10,000 a year in annual 
savings by going from conventional till to no till.
    We followed that up a little later this winter with a 
fertilizer estimator to try to help producers with the same 
thing, to do the what-ifs of fertilizer of fall application 
versus spring, different forms of fertilizers or application. 
There is a tremendous amount of change occurring with 
inoculants and inhibitors.
    We worked closely with the fertilizer industry on this, and 
are showing a lot of savings that can be done again in this 
$9,000, $10,000, $15,000 a year annual savings in fertilizer 
bills, and that in turn will reduce any potential nitrogen 
loadings.
    The fascinating thing is if you actually had 250 million 
acres nationwide under auto-steer technology instead of manual 
steering of our tractors, auto steer, you would save about $750 
million a year in fertilizer costs, just with precision 
agriculture, never reducing those things.
    The next one we will release next week will be an 
irrigation estimator that will be, I expect, very widely used 
in Colorado and throughout the arid West to show the savings 
associated with water savings. If we save 20 to 30 percent on 
water savings, you``re going to see savings in fuel pumping 
costs of as much as $52 to $100 an acre.
    Mr. Salazar. Thank you, Mr. Knight. Do you have a summary 
that would set forth what the potential is with respect to 
energy conservation with the programs that you were just 
describing.
    Mr. Knight. We certainly will. We will provide that for the 
record for you.
    Mr. Salazar. If you could, provide that for me and I'm sure 
for the rest of the members of the committee it would be 
helpful.
    Thank you very much.
    Chairman Chambliss. Senator Crapo.
    Mr. Crapo. Thank you very much, Mr. Chairman. I want to 
thank you as many have because the conservation title of the 
farm bill continues to be one of the key portions of that 
effort we're undertaking now.
    First, Mr. Johnson, I just want to make a statement to you. 
It's a thank you to you and to Secretary Johanns as well as the 
others at the Department who have put so much work into the 
Conservation Reserve Enhancement Program Agreement with the 
State of Idaho recently.
    As you know, that agreement which was signed on May 19th, 
which we talked about at previous hearings, envisions enrolling 
up to 100,000 acres of irrigated cropland in the Idaho Eastern 
Snake River Plain Aquifer. That could actually reduce irrigated 
water used by 200,000 acre feet annually. It's going to be a 
very significant benefit in Idaho for water quality as well as 
wildlife habitat and a big assist for the farmers as well. So 
thank you very much for making sure that this happened.
    I just have one question for each of you, and it actually 
follows up on the question that Senator Salazar asked, and that 
is, I guess I would like you to just go a little further into 
the issue. Because as farmers and ranchers are facing increased 
pressures, to what extent are the farmers and ranchers being 
able to utilize these programs to address their energy needs?
    Mr. Knight. I appreciate the follow-up question. The 
tillage, those estimators, have had phenomenal coverage. I 
can't remember the exact number of producers who have gone 
through, but were well over the hundreds of thousands of 
producers who have used those estimators to be able to go 
through things.
    As I mentioned, we are about able to release the irrigation 
estimator. I also have one in process now for confined 
livestock operations, just because heating and cooling for 
confined livestock is a very energy-intensive operation as 
well.
    Then, we also have the opportunities that are coming forth 
in the Conservation Security Program, which specifically says 
we are supposed to be looking at energy conservation and 
renewable energy use. We have authority in there for an energy 
audit. There is a tremendous need for that throughout farm 
country to be able to respond quickly. We are finding that 
there is a real challenge in finding qualified auditors to be 
able to help people on energy audits on the farm.
    We do a small payment within CSP for renewable energy use 
as well as energy conservation. So that if you can prove that 
you used to use 15,000 gallons of diesel fuel a year, you have 
made these changes and you are now doing fewer, then we would 
do a small, admitted token payment in CSP, but it is intended 
to look at these conservation needs in a much more holistic 
manner--not just water, not just soil, but energy as well.
    Mr. Johnson. From CRP's perspective, obviously if a 
producer elects to enroll their land in CRP and plant to a 
conserving use cover, whether it be hardwoods or switchgrass or 
anything else, their energy consumption, in terms of tillage 
practices or fertilizer or whatever else, is going to be 
greatly reduced, so that will provide them a savings. That's an 
economic calculation each producer makes on their own as to 
their best utilization of their land.
    Along with that, the 2002 Farm Bill did give us some 
special authority on CRP to allow the placement of *Windsor 
binds for energy generation on farms. That has been allowed on 
a case-by-case basis, decisions at county committee's level. I 
can't tell you the number of them around the country, but that 
is another alternative that relates to energy production on the 
farm.
    Mr. Crapo. Well, thank you. I just would like to tell you 
I've held, either I or my staff have held, 25 or 30 town 
meetings across Idaho over the last, oh, six or 8 months or so 
to try to talk about the upcoming farm bill.
    One of the most common inputs that we are getting from 
those involved in production agriculture is that perhaps we 
should consider a very increase in our focus on an energy title 
or as well as the connection between energy and consumption 
issues and the utilization of other programs, particularly the 
conservation programs.
    Where we can achieve these two objectives, I think it would 
be very, very helpful. I encourage your focus on that as we 
work with you on developing our approach to the various titles 
of this next farm bill.
    Mr. Knight. I appreciate that very much. If I could augment 
our earlier, both of our statements, one of the things that we 
have also done on the energy issue is we found that many people 
were slowing down implementation of existing EQIP contracts 
because of the escalating costs of energy.
    PVC pipe for a pipeline is very energy-intensive. Steel 
costs have gone up. So we have provided a special initiative to 
modify the payment levels under EQIP for some of those older 
contracts as trying to be responsive to the energy crisis.
    Mr. Crapo. Well, thank you. That's exactly the kind of 
thinking and the kind of action that I think we need to focus 
on as we try to assist in dealing with this issue.
    Chairman Chambliss. Senator Nelson.
    Mr. Nelson. Thank you, Mr. Chairman.
    First of all, I want to suggest that I appreciate the move 
toward recognizing the critical areas of cattle, of the cattle 
industry in EQIP, giving that a high priority, recognizing that 
the cattle industry is facing a major challenge of complying 
with EPA requirements, so I appreciate that.
    I hope that you can continue to recognize the critical 
nature of that industry and the requirement for EQIP to be a 
major ally for the cattle industry to come into compliance and 
avoid having what would otherwise be a major disruption to the 
cattle industry, so I appreciate your taking that into 
consideration.
    I thought I would start off with something positive, but 
I'm not going to go to something negative, either. I just 
wanted to compliment you on it.
    Mr. Knight. Thank you, sir.
    Mr. Nelson. In your statement, Mr. Knight, you mentioned 
the changes in EQIP's maximum payment limitations and other 
changes to the program. I know you have talked about this, but 
can you give us an idea of what this has meant to farmers and 
ranchers and whether or not these changes have actually saved 
money and how much, or do they just shortchange agriculture 
producers? Do the changes appear to be more beneficial to 
larger operations or smaller operations and overall how they 
affect the conservation goals that we all are pursuing?
    Mr. Knight. There were quite a lengthy list of changes that 
were authorized in EQIP and the farm bill that have helped 
improve the implementation of the program. Because of the 
concerns from some of the larger operations, we can now go up 
to $450,000 per contract on EQIP. Yet, our average EQIP 
contracts, probably hovering around $20,000. So we can do the 
larger ones where needed.
    We have put checks and balances in on anything that goes up 
over $100,000 or $150,000, but you're only talking about a few 
hundred a year that fall into that category. We have the--Mr. 
Nelson. Only a few hundred that would fall into the large?
    Mr. Knight. Into the very large categories, but those are 
also very large environmental needs.
    Mr. Nelson. Sure.
    Mr. Knight. We will also, in order to make sure that we are 
balanced, launch a limited resource producer initiative and put 
aside with a goal of about $10 million this year specifically 
targeted limited resource producers, making sure that we are 
flexible enough to be able to work in those communities as 
well. The response has been outstanding. So we are finding that 
we are making EQIP work on both ends of the spectrum.
    Our effort and our endeavor on EQIP is to make sure that is 
size neutral. We are trying to respond to addressing the 
environmental goals of a producer regardless of size of the 
operation to address the environmental needs in the community. 
It has been quite a challenge, but we are pleased with the 
results we have seen thus far.
    Mr. Nelson. Would you have any of that information? I don't 
need to know the names of those individuals, but a breakdown of 
the large, the number of the large, and the number by category?
    Mr. Knight. We will provide that for the record for you, a 
number of the large producers. I will also supplement that with 
a summation of how we have done with the limited resource 
initiative as well and attempt to break it out by livestock 
class, since most of them tend to be livestock operations that 
go into the larger funding category.
    Mr. Nelson. Yes. You discuss the benefits of the RC&D 
Programs and then mention that the president's budget basically 
cut the funding in half and sought to half the number of RC&Ds.
    Can you explain in ways that we would understand the 
thinking behind the cuts in what appears to be a successful and 
important program? I guess when you get a program in place, 
having been a Governor putting programs in place, I am always 
concerned about seeing them cut when they are working. I might 
not support increasing the funding for it, but you sure have a 
difficulty for me to understand why and how you would cut it.
    Mr. Knight. A resource development and conservation program 
is really very unique in that it tries to bring together the 
mutual goals of both economic development and conservation.
    I mean for all too long folks have tended to think of 
conservation and economic development as being mutually 
exclusive, and they are not. So what it tries to do is marry up 
economic creation opportunities with conservation objectives. I 
have visited a tire recycling plant in your home state of 
Nebraska, as an example, of responding to the needs there.
    The desire from the administration's budget proposal this 
year was to send a clear signal that the intent is for these 
individual coordinators is to not have that to be an ongoing 
Federal commitment of the individual staff person.
    These councils, many of them, are very vibrant and are 
being in enough soft money that they should be able to stand 
alone so that we can start making investments into the other 
counsels that are on the wait list out there.
    We have been under flat funding for the last several years, 
and so we find that the RC&D movement is tending to be a closed 
community now. We are not able to bring in new ones. We are 
funding only the existing ones and continually having to 
constrict the funding on that because of that.
    The desire from the president's budget was to send a signal 
that it's time to think of this in new ways and try to move 
forward. We thought that sharing coordinators across council 
lines would be a good way of doing that.
    Mr. Nelson. Well, I thank you for your explanation. My time 
is up, Mr. Chairman, but perhaps I'll talk to Mr. Knight later 
and try to get a better idea of what the future is for this 
program.
    Thank you very much.
    Chairman Chambliss. Senator Talent.
    Mr. Talent. Thank you, Mr. Chairman.
    I appreciated your testimony. It seems to be a thoughtful 
attempt to implement these programs. Mr. Knight, I agree with 
you that conservation is not only consistent with economic 
development, I think there is a growing realization that the 
two are mutually dependent long-term.
    Senator Salazar and Senator Nelson asked several of the 
questions I was going to ask, so let me just make a comment and 
then just ask an open-ended question of you two. It would be 
good it seems to me, and I would like to almost like to say if 
``for once'' we had, you know, across different committee 
jurisdictions and across the Congress a sustained and 
coordinated policy in an important area.
    I can see one developing in the Congress regarding energy. 
There seems to be pretty broad support for at least reasonable 
incentives and attempts to conserve, which several senators 
have asked about, and also for renewable fuels.
    I would hope that in your thinking over the course of the 
next 6 months to a year, and keeping in mind that a new farm 
bill is probably on the way, that you all would be thinking and 
giving us your ideas about how we can move constructively in 
this direction in a new farm bill.
    I mean, what do you think we can do to adapt your programs, 
for example, to enhance the production of different kinds of 
renewables or to enhance the energy conservation efforts you've 
already been engaged in? So I think that would be useful. It 
certainly would be for me, and I suspect for others.
    OK. If you had, what would be for each of you, say, your 
top two priorities for these kinds of programs in a new farm 
bill? I mean, what would you like to see? I've heard you talk 
about, you know, assistance in new information technology. But 
I mean if the Congress would do the top two things that each of 
you wanted, what would they be?
    Mr. Knight. I've got to first of all think of it. I 
appreciate the--first off, my reaction to the energy issue, one 
of the things that I haven't mentioned that is very key in 
mind, we're seeing a wave of development on waste digesters 
where we are capturing the methane off of confined livestock 
units, off the manure, and converting that into energy or heat 
for many operations.
    We are seeing a large influx of funding both from NRCS in 
the EQIP Program and within rural development on waste 
digesters. There is a tremendous opportunity there if we look 
creatively up and down the scale of how to turn various waste 
streams into income streams as it pertains to energy.
    We also have our scientists working on being able to answer 
some of those questions of the imponderables of how sustainable 
can you harvest biomass, how sustainable is a grain-based 
conversion to ethanol off of soils under no till versus 
biomass--some of those sorts of things to really see most 
productive, least productive soils, to try to have the best 
possible status on that. Now, as to the top two priorities, it 
may be best at this stage----
    Mr. Talent. Mr. Chairman, let me just say it's really a 
sign of how the Congress operates that these two witnesses are 
nonplused that a senator is actually asking them their opinion 
about something.
    [Laughter.]
    Mr. Knight. We are plused [laughter].
    Mr. Talent. Look, I don't want to put you on record with 
something--that was a friendly question. If you would rather 
wait and give it to me for the record later on, you can, or 
speak in general terms, that would be OK.
    Mr. Knight. It would be best for us to wait at this time. 
The secretary has a very methodical process laid out for the 
listening sessions.
    Mr. Talent. OK.
    Mr. Knight. Those papers have been released from the 
results of that. The secretary has now released the risk 
management paper, a conservation paper will be released very 
shortly. That is going to even of itself just open the broad 
question and not represent administration policy.
    Mr. Talent. All right, that will be fine. For the record, 
let me just add one comment, and then I'm done. Mr. Chairman, 
my time is almost up anyway. When you're thinking about how to 
dovetail these programs best with both an energy conservation 
and renewable energy type goals, think in terms of, a little 
bit in terms of process.
    I don't want to sound like a lawyer. But how can we change 
or adapt this process so as to help produce from the ground up, 
from these producers and from our local leaders, more of these 
ideas?
    Like, you were talking about the waste digesters, which I'm 
sure that probably came from the ground up, how can we change 
the systems of decisionmaking so that we are more open to these 
ideas and a quick response to them and implementation of the 
good ones? If you would think in those terms, I would 
appreciate it.
    Mr. Knight. Certainly.
    Mr. Talent. Thank you, Mr. Chairman.
    Chairman Chambliss. Before I go to Senator Baucus, let me 
just repeat the announcement I made before started, and that is 
we have a vote which I think has just been called or is about 
to be called. We also have a joint session, I think, starting 
at 11.
    Senator Harkin and I intend to adjourn to go vote probably 
after Senator Baucus completes his questioning. We are going to 
come back and complete this hearing. So any of you who wish to 
come back for either additional questions with this panel or 
questions for the second panel, obviously we will be here.
    Senator Baucus.
    Mr. Baucus. Thank you very much, Mr. Chairman.
    I want to thank both of you. I think basically the 
conservation programs are working pretty well we've got right 
here at home, and sure with some likable adjustments around the 
edges here and there, but by and large I think we are not too 
far off the mark. I might say that we received in Montana over 
$100 million in conservation payments. So it's big; it's 
important.
    Second, I think next to Texas we are the largest CRP state. 
That's a mixed blessing as you well know, but still it is very, 
very large. About 90 percent of private land in Montana in one 
form or another is farmland. Two-thirds of our state is grazing 
land, the entire state, some is private and some is public. But 
this is very important to us.
    I like the idea of thinking about an energy title. The time 
is ripe, and I urge all of us to be thinking more seriously 
about how we would write that, what it should be. I'm stunned 
at the interest in developing, I don't know how to pronounce 
the words, ``cellulosic ethanol'' products. You know, the 
figures I've seen, saving about 14 billion--no, I've forgotten 
the figures.
    The point is we could be much more self-sufficient with the 
development of cellulose forms in production of ethanol. It is 
much more efficient in terms of sugar content. If you compare 
corn, much more efficient, if they can figure out how to do it 
with an ear of corn. So, I strongly recommend that.
    I might also, though, say that clearly commodity support 
payments in the Farm Program are a very important addition to 
conservation. It's a proper balance that we've got to maintain 
here. I know you understand that and agree with that. 
Agriculture is our No. 1 industry. In my state, it's about $2 
billion worth. By Montana standards, that's a lot. It's 
critically important to Montana. I might say, too, that I urge 
you to think more about the Grassland Reserve Program. The 
program I think is about 245 million in Montana alone. I mean, 
we signed up for 200 million, applications for 200 million, 
which indicates to me that demand nationwide could be higher 
than 254, I've forgotten what the number is, in the program.
    I would urge you to be thinking about expanding Grassland 
Reserve Programs. Senator Thomas and I have been working. It's 
our idea and it's going better, frankly, than I expected.
    Also, I would be kind of interested in your thoughts on how 
to address the problems with smaller communities caused in some 
respect by CRP. Because so much land is put in CRP that is not 
taken out of production that some of the smaller communities, 
at least in Montana and I think in other parts of the country, 
are hurting.
    Of course, it gets to the tradeoff between the younger 
farmers and the older farmers. The older farmers, yeah, they 
like the CRP; they can go South. The younger farmers say, 
``Whoa, I can't buy because there is nothing there to get into. 
I want to get into agriculture, which is very difficult.''
    I'm just curious if you could give me some thoughts of how 
we might mitigate some of the adverse consequences, there is 
compensation and everything, the adverse consequences caused in 
small towns by CRP.
    Mr. Johnson. Senator, the 2002 Farm Bill required us to 
submit a report on the economic impacts of CRP. Analysis was 
done by ERS, and I believe the report was submitted in 2004. 
Overall, from the big picture, it asserted that CRP did not 
have a negative impact on rural economies. It did acknowledge 
that there could be some isolated local impacts, but they were 
mitigated usually within a period of two or 3 years.
    So it remains a bone of contention in some parts of the 
country. I understand that. But from the best analysis that we 
have done, we don't think that the overall impact is negative, 
and that's what the Department reported back to Congress in 
2004.
    Having said that, I think it is important as we pursue 
program implementation that we do it in such a way that we 
don't unfairly compete in the marketplace for land, enticing it 
out of production.
    This past year we required all our state and counties to do 
a review of their soil rental rates because we do not want to 
unfairly bid against a neighboring farm or a rancher for that 
land to take it out of production.
    At the same time we don't want to be below the market rate 
because if you aren't competitive, then no one will put land 
into the conservation program, so it's a matter of finding that 
balance.
    As you are probably aware, some of those rates were 
adjusted in Montana as well as some of our other Western states 
downward, and then in the Midwest some of those rates were 
increased.
    Across the country we are trying to level these things out 
and have our soil rental rates at the market price, because 
again we want to be competitive but not unfairly so. We don't 
want Uncle Sam outbidding the local farmers, and at the same 
time we don't want to be below the local cash rental rate.
    So it is a matter of finding a balance. We think we have 
done the best we can with the program, and that it does offer 
economic stimulus and returns to the rural communities in terms 
of recreation and hunting opportunities.
    I was visited by the game director from South Dakota, who 
was very concerned. They didn't want to lose a single acre of 
CRP because of the economic benefit that pheasant hunting 
brought to South Dakota. So there are economic benefits that 
return to the rural community through CRP as well. It's not a 
negative.
    Mr. Baucus. Well, I know that. I know it's true. All the 
things you've said are true. I just urge you the community is 
very sensitive to the question that there are tradeoffs.
    Mr. Johnson. Yes, sir.
    Mr. Baucus. I just ask you to be sensitive to the 
tradeoffs. I'm out of town. I've got to got, but I do ask you 
to try to see if there is a way to increase the amounts for the 
Grassland Reserve Programs. It's very important.
    Mr. Johnson. We have spent what we were authorized to 
spend.
    Mr. Baucus. I know. But, I mean, you might just kind of go 
back through channels or whatever and say, ``Hey, we need more 
here. The authorization needs to be a little higher here.''
    Mr. Knight. I believe both agencies, we have looked for 
every creative way we can, but we are at the spending cap on 
the GRP until farm bill consideration.
    Mr. Baucus. I know you are. Right, I was just saying that 
you can buildup a case, ``Hey, we need to expand that,'' that 
would be helpful.
    Mr. Knight. The grasslands look to be probably the most 
endangered ecosystem in North America. When you put the tall 
grass, mid-grass and short grass prairies together.
    Mr. Baucus. Thank you, Mr. Chairman. Thank you.
    Chairman Chambliss. Thank you.
    Gentlemen, we are going to adjourn to go vote. If you will 
take a break for a few minutes, we will be back.
    [Recess.]
    Chairman Chambliss. We will now resume our hearing by 
calling on Senator Coleman.
    Mr. Coleman. Thank you very much, Mr. Chairman.
    I apologize for missing the testimony of Mr. Knight and Mr. 
Johnson. Foreign Relations has taken a great interest in energy 
and dependence on foreign oil. We had Chairman Greenspan 
testify. He had a lot of good things to say about ethanol and 
about the cellulosity ethanol and the impact that ethanol can 
and will have in lessening America's addiction to oil. So I 
apologize for not hearing the testimony.
    I have two issues that I just want to bring up. One, I do 
want to thank Mr. Knight properly on the record for the work 
that he does and the NRCS does. They are much appreciated in my 
state.
    Minnesota ranks tops in the country in terms of applicants 
and acres for WRP, for the ``Wetlands Reserve Program.'' I 
think we have more folks on a waiting list to sign up, than we 
even have in the program. There is great, great demand here.
    Here is my concern. I am going to probably ask witnesses in 
the next panel to address this also. On the one hand, you know, 
we want to be local. We talk about being local, but I get a lot 
of frustration from, or I hear a lot of frustration from my 
growers and producers, about disparity of interpretations of 
NRCS regulations between adjacent counties. That is pretty 
frustrating to folks.
    I know it's a balancing act, but I wonder if you can help 
me kind of figure out whether there can be more uniformity in 
conservation program implementation over similar regions 
without losing that local flexibility?
    Mr. Knight. [No microphone.] I appreciate the question. I 
am grateful to hear about the work that NRCS has been doing in 
Minnesota.
    [Microphone on.] We pride ourselves in having a locally led 
process, which is priority setting, done as close to the 
grassroots as possible, as well as making sure that our 
standards and practices determine how you implement something.
    What works in Northern Minnesota is very different than 
what works in Southern Minnesota, as you are well aware, so we 
try to have the flexibility for that to vary. However, the 
disparity across those lines need to be transparent and logical 
for an individual producer to see.
    The first course for us has to been to build transparency 
into our program implementation so that it makes sense to 
anybody. If it's a black box, it appears to be unfair or maybe 
even discriminatory, and so our first level has been to make 
things as transparent as possible.
    All or our rules published on the Web so that everybody can 
have those. Most of our programs are backlogged, which means 
that we rank everything and we accept the program offering in 
EQIP that has the greatest environmental goods and services 
being delivered.
    Well, what we've done because of that is published the 
ranking process as well, so that everybody knows the ranking 
process before they submit an application, so that it fits in 
there.
    The practices and standards amass themselves in the ``Field 
Office Technical Guide'' that used to be about five binders 
like this [indicating], 3 inches wide, that were sitting only 
in the office that nobody could access unless you were an 
employee.
    Those are now on the Web so that everybody can see those 
practices and you can compare which practices are utilized in 
Northern Minnesota versus Southern Minnesota or, perhaps even 
more importantly, across state lines from Minnesota to Iowa, 
and so the first level of this is the transparency.
    You will hear from some of the panelists that follow me how 
difficult it is to really change some of these things, 
especially as it pertains to changing priorities for different 
classes of livestock.
    We appear to be doing a good job with the beef industry, 
but there is a fair amount of dissatisfaction with the swine 
industry because the practices don't quite fit yet, and so it 
takes a continual effort to address those.
    The first level is transparency, next comes training and 
recognition from the individual areas. A third thing is to make 
sure that the ranking processes are fair. When we go to a 
national format for ranking, I think that will improve the 
fairness across county and state lines in the implementation of 
EQIP.
    Mr. Coleman. I appreciate your focus and attention to this.
    Mr. Johnson, let me just ask you: yesterday, USDA released 
the results for re-enrollment and extensions of CRP. The 
president actually talked about that in Minnesota in 2004. The 
original estimates of 15 to 20 percent landowners and in some 
areas numbers as high as 50 percent of not re-enrolling.
    My concern is, you know, what is USDA doing to address 
large numbers of acres that are potentially coming back into 
circulation? The impact it has on production, the impact it has 
on crop prices, and the impact that has on the hay reserve for 
ranchers, the impact on conservationists, wildlife and hunting 
have raised concerns.
    Can you talk to me a little bit about what we're doing to 
minimize these potential impacts and how do you plan to 
aggressively address the next batch of CRP acres expiring?
    Mr. Johnson. We took the acres that were expiring from 2007 
through 2010 and broke them into two groups. There are 16 
million acres expiring in 2007 and another 12 million expiring 
from 2008 through 2010.
    We took the 2007 contracts first, and this January we 
mailed out notices to all contract holders about their options 
to re-enroll or extend their contract per the president's 
commitment in your state back in August 2004.
    Of those, what we announced this week, we announced the 
results of our general sign-up, we also announced that of those 
2007 expiring contracts, 73 percent I believe it is, 73 or 74 
percent--no, excuse me, 84 percent, 84 percent of them had 
taken us up on the option to extend or re-enroll.
    We have a 16 percent slippage or attrition rate, which is 
not as great as I might have thought it was. When we looked at 
historic offers of opportunities to extend contracts, we saw a 
range of anywhere from 15 to 25 percent slippage, so here we've 
got 16 at the low end of it. We are well-satisfied with that, 
and that does result in another, you know, million-plus acres 
coming back into production.
    Individual landowners and producers make their decisions 
based upon their own local economic conditions and what they 
think they can best utilize that land for. But it I was right 
in the ballpark of what we expected historically and we are 
satisfied and pleased that 84 percent of them are extending 
their contracts.
    Mr. Coleman. I appreciate that. Thank you.
    Thank you, Mr. Chairman.
    Chairman Chambliss. NRCS, demand for it is increasing and 
yet the funding for conservation operations budget is 
declining. What are you doing to control costs and otherwise 
address this reality of budget declines?
    Mr. Knight. The budget declines over the last few years in 
technical assistance have been very great, of course increasing 
earmarks, but as significant was the $10 million reduction for 
Katrina, an across-the-board reduction as well. So we have 
taken many steps to try to contain costs.
    I have a freeze throughout the Agency on new vehicles. I 
have a freeze on major IT asset purchases as well, to be able 
to contain those costs. We have been able to avoid any major 
need to--we haven't had to let go any permanent employees. A 
few states have had to make adjustments on temporary employees, 
or they have been shifted to other assignments.
    One of the key things on the Conservation Operations 
Account has been for the first time we have put national 
priorities in place to clearly manage this as a program, have 
priorities, what we are trying to achieve, a manual that 
strictly says what should and should not be done into to make 
sure we are managing the program as efficiently as we possibly 
can.
    Long-term, the next phase is to really look at what is the 
work that is being done there, are there ways to automate and 
increase efficiencies in there. We are looking for everything 
we can. It is a small example of efficiencies that come from 
there, but since CTA provides that basic underlining planning 
work, I will give you this example.
    We do a lot of engineering work. We have saved nearly 
$700,000 by doing a nationwide buy of the AutoCAD software that 
our engineers do instead of buying that piece by piece. We are 
looking for every one of those kinds of savings we can do to 
constrain cost, so that we can put as many people on the ground 
as we possibly can.
    Chairman Chambliss. Last month, the EPA released a 
``Wadeable Streams Assessment,'' and in that EPA found that 42 
percent of streams are in poor condition, 25 percent are in 
fair condition, and 28 percent are in good condition. Nitrogen, 
phosphorus, and sediment were the most common stressors.
    NRCS began the Conservation Effects Assessment Project in 
order to measure and understand how conservation programs 
possibly affect the natural environment. What do we know from 
that study, and will it help us make decisions for the next 
farm bill?
    Mr. Knight. We have tried to streamline the SEEP process in 
order to have some preliminary results in time for this 
committee and others' consideration for the next farm bill. 
Certainly the largest quandary that not just USDA Natural 
Resources' agencies but everybody working on natural resources 
has is: how do you measure the impact of what we are doing?
    We have 70 years of experience in soil and water 
conservation, and probably a little less than a decade on air. 
We know we are doing good things, but it is very difficult to 
evaluate which is the most effective. Terraces versus no till? 
What does greater groundwater recharge in Georgia? Is it small 
dams and ponds, or is it water conservation on the irrigation 
systems? That is our desire to ultimately get to with SEEP is 
to be able to have a series of models that will help us make 
that evaluation at as local a level as possible for the 
effectiveness of that conservation investment.
    SEEP is certainly a long-term investment. We hope to have a 
few initial results, but I'm fearing they will be sketchy for 
the 2007 Farm Bill. But it's important to think of SEEP as a 
long-term investment for conservation effectiveness. The 
participation within USDA and with the other Federal agencies 
has been outstanding.
    ARS is a major player in SEEP as well as CSREES. EPA has an 
individual loan to us as a liaison to help us in the relations 
with that. We are working closely with the wildlife community 
to have as robust as possible program to be able to provide 
answers not just for this farm bill, but for Agency management 
into the future of the next farm bill.
    Chairman Chambliss. The ``April 2006 GAO Report'' on the 
Conservation Security Program cites weak internal controls and 
the lack of quality assurance in case file documentation as 
factors that have led to CSP payments duplicating other 
conservation program payments. It also found that wildlife 
habitat assessment criteria vary widely by state. How are we 
addressing these deficiencies?
    Mr. Knight. That particular report was done from the 
snapshot of the 18 pioneer watersheds from 2004. Many of the 
suggestions that came from that report were, quite frankly, as 
a result of some of our internal efforts.
    We have an O&E process that we use internally to learn from 
those things. We had already made the changes on the internal 
controls to guarantee that we did not have duplication or 
multiple payments.
    We have done similar things on the wildlife arena, though 
costs constraints are always a challenge there. We have a 
statutory limitation in CSP that we cannot do more than 15 
percent as technical assistance. That means that certain 
disciplines within the Agency that love to go to the field, my 
wildlife folks, the range scientists, have a certain 
frustration that they are not going to the field ahead of the 
completion of a CSP contract. We have instead automated that 
and use the indexes. I think we have responded fully and 
completely to all the things that were outlined in that report.
    Chairman Chambliss. Mr. Johnson, we talked about the 
administrative cost per acre per contract on our programs, and 
you are going to submit that to us. Would you also give us the 
technical assistance cost per acre for CRP and CRP enhancement 
programs at the same time you provide the other information?
    Mr. Johnson. I certainly will. I will be glad to do that.
    Chairman Chambliss. The USDA announced the results of the 
latest CRP sign-up and the results of the contract extension 
and re-enrollment offer on Monday of this week. What's the 
total current enrollment for CRP? Please walk us through the 
allocation for each subset such as continuous sign-up, CREPs, 
et cetera. How many acres will be extended or re-enrolled?
    Mr. Johnson. On the re-enrollments and extension, as I 
mentioned earlier, there are 28 million acres expiring between 
2007 and 2010. We broke those into two pieces. What we 
announced yesterday or earlier this week was that of the 2007 
contracts that were expiring, 84 percent of those folks have 
taken us up on the offer to re-enroll, that is 84 percent and 
that is 16 million acres.
    Contracts that are expiring from 2008 through 2010, those 
producers and landowners have been given until the end of this 
month, the end of June, to come into their county FSA Office 
and pay a compliance fee so that the paperwork can follow that 
will allow them to take us up on that offer as well.
    So it will probably be sometime in mid-July or late July 
before we have all that data in our computer system to say 
exactly how many, what percentage of that 12 million acres is 
taking us up on the opportunity to re-up. I don't have any 
reason to think that that will be dramatically different than 
the people in 2007. If it stays true to that, we are looking at 
a 16 percent slippage rate overall.
    Now, as far as the number of acres assigned, we have a 39.2 
million acre cap. We are currently at 36.7 after the sign-up, 
which about 400,000 acres of the million we just accepted were 
expiring contracts that were enrolled. We have some room to 
work.
    Of that I think we are anticipating, correct me if I'm 
wrong, about 400,000 acres a year for Continuous CRP and CREP. 
The president's budget this year had a 2.5 million acre general 
sign-up. Obviously, we didn't achieve that.
    We will be reassessing as far as what we plan for the next 
year, whether we need to develop some new tools to encourage a 
more robust sign-up in our continuous practices in our CREPs.
    I will say that the three CREP agreements I mentioned that 
were focused on water conservation in both Colorado and 
Nebraska and Idaho have been enthusiastically received. We have 
seen very strong interest there, and so those acres might chew 
up fairly quickly.
    Likewise, with the Presidential Quail Initiative, which the 
Chairman helped us kick off a year or two ago down in South 
Georgia, we have seen strong interest there with almost a 
hundred thousand acres enrolled; we had only budgeted 250,000 
acres. That is going very quickly.
    We have seen, perhaps, a reduced interest in our general 
sign-up acres where we only have a million acres being enrolled 
in this general sign-up. We are seeing in other parts of our 
continuous and CREP programs a very healthy appetite for acres, 
and so we may have to adjust our planning in that regard.
    Chairman Chambliss. Many CRP supporters have expressed 
concern that FSA is not doing enough to ensure wildlife and 
water quality measures are maintained throughout the life of 
CRP contracts, and that the benefits promised when contracts 
were signed are not being met. What oversight strategies or 
polices does FSA have in place to ensure the promises of CRP 
are achieved and maintained?
    Mr. Johnson. Our general policy which applies to all CRP 
contracts in our county offices requires our county offices to 
do a compliance check on 10 percent of the contracts every 
year, so obviously it will take the full 10-year cycle of our 
contract before they get through all the contracts on 
compliance checks.
    But after the president made his announcement about 
committing to utilization of the full cap and announcing the 
initiatives for wetlands and quail habitat in Minnesota, that 
was referred to earlier, he directed us to go out with a 
``Federal Register Notice,'' seeking comment on the program and 
how to address this whole issue of the expiring acres. In the 
5,000-plus comments we got back, compliance was a significant 
concern, as you have identified here this morning.
    As a result, a policy decision was made that as we 
implement re-enrollments and extensions on all 28 million 
acres, that is 28 of the 36 that are in the program, the lion's 
share of it, we were going to require a compliance check on 
every one of those contracts before we process the paperwork 
for either an extension or re-enrollment.
    On virtually every one of those 28 million acres, we will 
be doing a compliance check this year because we do think it is 
an issue that needs to be taken seriously. I don't have a 
complete report of all the findings there.
    A lot of it was focused on noxious weed type things, but I 
will tell you that anecdotally I've heard reports that we found 
at least one trailer park and one water tower on the CRP acre. 
It is something that we are taking seriously. Every one, every 
acre, of these 28 million acres this year will have a 
compliance check conducted on it.
    Chairman Chambliss. I haven't seen many quail flying around 
trailer parks lately.
    [Laughter.]
    Chairman Chambliss. Those compliance reviews that you're 
doing, is that done with local FSA Office folks, or do you do 
that----
    Mr. Johnson. No, it's done locally by the county office. We 
did institute a fee for the compliance check this year of $45 
per contract plus a dollar per acre. We utilized that money to 
hire temporary employees in the county offices to assist with 
this workload, because it was a very significant workload for 
us to try to cover all 28 million acres in a single year.
    Chairman Chambliss. Well, that answers my question about 
overtaxing the local folks, because as we all know the are very 
stressed out right now, from an employment standpoint.
    Last, Mr. Johnson, conservation and wildlife groups have 
asked FSA to establish a longleaf pine national priority area 
and to devote 700,000 acres to it. What's the status of that 
request?
    Mr. Johnson. That is under consideration. As I mentioned 
earlier, when I was talking about kind of the changes in 
appetite for CRP, we have seen some strong interests for some 
of our specialized, continuous practices.
    As we look at meeting the president's stated goal of 
utilizing the full 39.2, we are looking at other types of 
practices that would target conservation and would be well 
received, and there would be a healthy appetite for. That was 
one of the ones that is under consideration right now. I don't 
have a date certain when we will have the decision made, but we 
are aggressively examining that alternative.
    Chairman Chambliss. Senator Harkin.
    Mr. Harkin. I had a question, but actually Senator Salazar 
asked it earlier and fleshed it out, so I don't have anything.
    Chairman Chambliss. OK.
    Mr. Coleman, do you have anything else?
    Mr. Coleman. Nothing.
    Chairman Chambliss. OK. Gentlemen, thank you very much. We 
appreciate your being here this morning and providing very 
valuable testimony. We thank you.
    We will ask for our second panel to come forward.
    [Pause in proceedings.]
    Chairman Chambliss. Gentlemen, thank you. We have Dr. James 
Earl Kennamer, senior vice president for Conservation Programs 
from the National Wild Turkey Federation from Edgefield, South 
Carolina, a great part of the world; Mr. Olin Sims, president 
elect of the National Association of Conservation Districts, 
McFadden Wyoming; Mr. James O. Andrew of Andrew Farms, 
Jefferson, Iowa, on behalf of the Iowa Soybean Association; Mr. 
Randall Spronk, chair of the National Pork Producers Council 
Environmental Policy Committee from Edgerton, Minnesota.
    Gentlemen, we welcome all four of you here. We look forward 
to your testimony. I will ask you again if you could keep your 
opening statements to 5 minutes, and we will submit your full 
statement for the record, if you need any additional time for 
that. Mr. Kennamer, we will start with you. Thank you for being 
here. How are things in Edgefield these days between Quail 
Unlimited and the Wild Turkey Federation? It doesn't get any 
better than that.
    Mr. Kennamer. Well, I agree with you, Senator. We just need 
some rain right now.
    Chairman Chambliss. In South Georgia, it's the same way. 
Welcome.

STATEMENT OF DR. JAMES EARL KENNAMER, SENIOR VICE PRESIDENT FOR 
    CONSERVATION PROGRAMS, NATIONAL WILD TURKEY FEDERATION, 
                   EDGEFIELD, SOUTH CAROLINA

    Dr. Kennamer. Thank you. The NWTF is dedicated to the 
conservation of the wild turkey and to preservation of the 
turkey hunting tradition. Since NWTF's founding in 1973, North 
America's wild turkey population has grown from 1.3 million to 
nearly 7 million birds. This is a result of cooperative efforts 
of state, Federal and prevential wildlife agencies, the NWTF, 
and its 500,000 members and partners.
    The NWTF conservation partners and grassroots members have 
raised and spent more than $224 million on conservation 
priorities to help conserve and improve more than 9.6 million 
acres of wildlife habitat and to uphold our hunting heritage.
    I am pleased to tell you that our Federal agricultural 
conservation programs work well. Together we are putting 
conservation practices on the ground, helping landowners and 
producers, our communities, our land and our wildlife.
    One area where existing conservation programs can be 
improved is more emphasis on active forest management. Our 
nation's forest supplies supply over 50 percent of the 
freshwater flow in the Lower 48 States where an estimated 180 
million people depend on the forest for their drinking water. 
They are critical to our economy, to our environment, our 
citizens and our wildlife.
    Another forestry program, the Forest Stewardship Program, 
is one of the best programs to provide technical assistance to 
private forest landowners. Through the program natural resource 
professionals have written over 260,000 forest management 
plans, improving almost 30 million acres.
    However, the program does not provide any cost-share 
assistance to landowners. It is imperative that we provide more 
opportunities for cost-share funding for forest landowners in 
this program.
    Perhaps our greatest disappointment with regard to forestry 
conservation lies with the Forest Land Enhancement Program. 
FLEP is a well-designed, well-intentioned program, but its $100 
million in mandatory funding has been diverted to other uses. 
To improve forest management, FLEP funding must be used for its 
intended purpose.
    The Environmental Qualities Incentive Program, ``EQIP,'' is 
another program that can be strengthened to help address forest 
management needs. However, only 1 percent of EQIP funds are 
spent on forest management, and only about 5 percent of the 
funds are for general wildlife management.
    Overall, this $1.1 billion program in 2006 spends less than 
$10 million annually in forest cost-share assistance to 
landowners. The NWTF recommends strengthening EQIP's 
implementation regulations and the underlying to ensure the 
targeting of more EQIP funds to wildlife activities that 
improve biodiversity in forest health. Increased EQIP funding 
will also further enhance opportunities to improve wildlife 
habitat including forests.
    Finally, EQIP and other conservation programs should 
require more contribution agreements to allow nongovernmental 
organizations to assist private landowners, thereby avoiding 
the cumbersome technical service provider process.
    The Conservation Reserve Program has an excellent long-term 
track record for providing landscape conservation of soil, 
water, and wildlife. We support continued refinement of the 
Environmental Benefits Index, ``EBI,'' to further produce high-
quality wildlife habitats.
    We also suggest encouraging practices like more hardwoods 
and longleaf pine plantings on CRP, more native warm season 
grass plantings, improved mid-contract management on wild 
loblolly pine CRP contracts, and more full-time employees at 
FSA to improve CRP compliance.
    We also support an increased emphasis on the Wildlife 
Habitat Incentives Program to manage native plant communities 
and increase biodiversity. However, WHIP has seen dramatic cuts 
for mandatory spending levels.
    We recommend full funding for WHIP and support broadening 
the number of targeted species and place more emphasis on long-
term benefits or practices such as prescribed burning or 
targeted hardwood planting.
    Hunting is an honored, American tradition. Opportunities 
for public access to hunt on private lands provide economic 
benefits to local communities, the hunting industry, and 
broaden support for farm and conservation programs.
    Mr. Chairman, did you know that 18 million hunters spend 
$30 billion annually. We support incentives to open private 
lands to hunters by offering additional points through the 
Environmental Benefits Index or adding other cost-share 
assistance to support access.
    In summary, the NWTF believes that our agricultural 
conservation programs have made a significant positive impact. 
With some modern administrative and statutory adjustments and 
consistent funding, these programs can provide even greater 
benefits to our wildlife, our citizens, and our economy in the 
future.
    One thing I would close in saying, Senator, is that I hope 
with all of the gains that we have been able to make with all 
of these conservation programs, going all the way back through 
the years and hearing the testimony this morning about energy, 
that we don't sacrifice those long-term gains that we have made 
to go for energy. We support energy and the ways to do that, 
but I think we can't rob that to make it happen.
    Thank you, sir.
    [The prepared statement of Mr. Kennamer can be found on 
page 97 in the appendix.]
    Chairman Chambliss. Thank you. You make a very good point. 
We have got to be careful how we balance the interest of energy 
versus wildlife and versus our food production also. It is 
something that this Committee is going to look very strongly 
at.
    We are excited about the opportunity for our farmers and 
our ranchers to participate in the alternative energy 
production, but at the same time we do understand that the farm 
bill next year is going to be an issue of national security in 
addition to farm security.
    I can't let you be here to testify without complimenting 
the great work that the Wild Turkey Federation has done along 
with Departments of Natural Resources in virtually every state 
in the country to increase the turkey population around the 
United States. What a terrific job you have done there and what 
great results have been achieved by that.
    We know a lot of that is because of the conservation 
programs that farmers have taken advantage of or landowners 
have taken advantage of that are provided for in the farm bill. 
Thank you very much.
    Mr. Sims.

 STATEMENT OF OLIN SIMS, PRESIDENT ELECT, NATIONAL ASSOCIATION 
          OF CONSERVATION DISTRICTS, McFADDEN, WYOMING

    Mr. Sims. Good morning, Mr. Chairman and members of the 
committee. My name is Olin Sims, president elect of the 
National Association of Conservation Districts, as we refer to 
as ``NACD.'' I am a rancher from McFadden Wyoming. My family 
runs a 700 cow/calf operation on 22,000 cares of deeded, 
private, state and Federal leases in Southern Wyoming. I have 
served on my local Conservation District for nearly 20 years 
now.
    Across the United States nearly three thousand Conservation 
Districts--almost one in every county--are helping local people 
to conserve land, water, forest, wildlife, and related natural 
resources. We share a single mission to coordinate assistance 
from all available sources--public and private, local, state 
and Federal--in an effort to develop locally driven solutions 
to natural resource concerns.
    NACD believes that every acre counts regardless of its use 
in the adoption of conservation practices. We are pleased to 
have the opportunity to provide testimony today. NACD and the 
Wild Turkey Federation have entered into an agreement to 
promote wild turkey habitat at the local level. The other 
witnesses on the panel are friends from the Pork Producers and 
the Soybean Growers represent the major customers that 
Conservation Districts in America serve.
    The 2002 Farm Bill impacted producers across the country; 
but in my area, in Wyoming, they conservation programs are the 
farm bill to us. I am happy to have had the opportunity to 
participate in some of those programs.
    My family implements environmental stewardship practices 
such as intensive rotational grazing, integrated wheat control, 
introduction of new grasses, and windrowed hay management for 
energy savings.
    The 2002 Farm Bill provided an increased emphasis on 
working lands, provided a balance between programs that retire 
land from production and those that a producer is still 
producing a crop.
    Conservation Districts hope this trend continues in the 
future. Let me stress that NACD defines working lands as those 
lands in economic production of food, feed, and fiber and 
believe that producers must have an economically viable farming 
and ranching operation to make an investment in conservation 
practices in the future.
    NACD was pleased with the overall funding commitment 
provided in conservation program options in the 2002 Farm Bill 
but is concerned with the alterations to the funding of the 
program since the passage of that bill.
    Overall, as we look at the 1902 conservation programs, the 
implementation results vary from state to state. Not all 
programs impact each region of the country the same way. Some 
are just not options for producers, so we must continue to 
focus on a menu of options for conservation assistance in the 
future. USDA conservation utilizes the local workgroups to 
assist in targeting funds and programs to address local 
resource needs and priorities.
    Local workgroups convened by Conservation Districts and 
comprised of Federal, state, county, tribal, and local 
government representatives coordinate local program delivery. 
Local workgroups are an important element of program delivery 
to allow for local priorities and resource needs to be 
addressed.
    Increased adoption of conservation practices through the 
programs provide a benefit to landowners and the general 
public, resulting in improved nutrient management with 
decreased nutrient sediment runoff as well as increased 
wildlife habitat. Programs have protected farm- and ranchlands 
from development and protected wetland areas through easement 
programs.
    Conservation financial assistance provided through the farm 
bill is an important component in achieving agricultural 
sustainability, both economically and environmentally. But, Mr. 
Chairman, let me assure you that every time you hear NACD 
members talk about the farm bill, we will talk about 
conservation, technical assistance, what we refer to as ``TA.''
    TA is utilized to work with landowners on conservation 
plans from design, layout and implementation, helping 
landowners to understand highly erodible lands and the 
necessary compliance for farm bill commodity programs.
    Technical assistance has been a key component in working 
with livestock producers to understand the EPA AFO/CAFO 
regulations. District staff and NRCS staff have held workshops 
across the country to educate producers on needs to make sure 
that their operations don't fall under enforcement actions of 
the Clean Water Act.
    The bottom line is that producers need quality technical 
assistance to maximize the effectiveness of financial 
assistance they receive. Even without financial help, many 
producers still rely on that technical assistance to help them 
with their operations.
    Mr. Chairman, technical assistance should never be 
considered an administrative cost. The EQIP Program has been 
widely successful across the country. Even with a substantial 
increase in funding provided in the 1902 Farm Bill, the demand 
still exceeds the available dollars.
    The input from the local level is key in making the program 
successful. Many states do have a backlog of EQIP projects that 
have been approved but not implemented yet, and we feel it is 
crucial to have the personnel on the ground to help assist 
those producers in those contracts.
    NACD was a strong advocate for the incentive-based 
conservation program, the CSP program; but in the development 
of the program and the creation of the regulations and actual 
implementation, the program changed significantly from our 
original concept. We hoped for a program that was easy for 
producers to access, but yet it has been extremely hard for 
them to do so, a complex program it turned out to be.
    The 2002 Farm Bill was a hallmark for conservation in this 
country. It offers a sound mix of programs and resources to 
build upon for the future. It was a tremendous leap forward, 
and there are still many who remain untouched by its potential. 
From our perspective, we believe that every acre counts, and I 
believe the Farm Bill is the best mechanism to deliver.
    Mr. Chairman and members of the committee, I thank you very 
much for the opportunity to testify before you today.
    [The prepared statement of Mr. Sims can be found on page 
120 in the appendix.]
    Chairman Chambliss. Mr. Andrew.
    Let me just turn to Senator Harkin before you speak, Mr. 
Andrew.
    Mr. Harkin. Thank you very much, Mr. Chairman.
    I just want to welcome Jim Andrew to the Committee. I was 
looking here, I was just showing this to the Chairman. This is 
an ``Iowa Natural Issue,'' our spring issue, and it's a picture 
of Bruce Knight, NRCD chief, who flew in from Washington, D.C., 
to sign Iowa's first Tier III CSP contract with Jim Andrew, a 
fifth generation farmer in Greene County. Congratulations on 
that Jim. Thank you.
    I just want to say, Mr. Chairman, that if you wondered or 
if anyone ever wondered how you can really do conservation and 
still be a successful farmer, all you have to do is go look at 
Jim Andrew's farm and find out how he farms. He has done it 
well, and he has done it for many years. He is not a Johnny-
come-lately to this. He has been doing this long before I ever 
got involved in this.
    Many of the things that he is doing are things that we have 
sort of looked at. He is just a very progressive farmer. I know 
a lot of questions were raised, and we're going to get to that 
later, about how you can combine wildlife habitat and CRP 
ground, but still use production working lands.
    Believe me, it can be done, and there is a farmer right 
there that has done it and shows how to do it. I welcome him to 
the Committee. I may not be able to stay for all the questions. 
I just want to take this opportunity to welcome you here, Jim.
    Mr. Andrew. Thank you, Senator Harkin.
    Chairman Chambliss. That is a pretty high compliment coming 
from Senator Harkin there, Mr. Andrew, so we've got high 
expectations for your testimony and your answers.
    [Laughter.]

 STATEMENT OF JAMES O. ANDREW, ANDREW FARMS, ON BEHALF OF THE 
           IOWA SOYBEAN ASSOCIATION, JEFFERSON, IOWA

    Mr. Andrew. I've crossed the country flashing Senator 
Harkin's picture on the screen and calling him the father of 
CSP, so I am the prodigy of the Father of CSP's efforts.
    Mr. Chairman and members of the committee, my name is Jim 
Andrew and I am here representing the Iowa Soybean Association 
as a farmer director and a fifth generation corn and soybean 
farmer from West Central Iowa.
    As a lifelong steward of the land, I would like to thank 
you and the Committee for the vision and leadership you 
displayed in crafting and passing the sweeping conservation 
provisions of the 2002 Farm Bill.
    It was and still is an unprecedented commitment of the U.S. 
Government to help the nation's farmers meet not only their 
personal conservation goals, but also to make progress on 
addressing agriculture's contribution to improving overall 
environmental quality.
    However, as time passes and other priorities present 
themselves, I and many of my fellow farmers fear that the solid 
commitment to the conservation title is weakening. We believe 
there is good reason to review and reinstate the Committee's 
original scope and intent.
    In Iowa, the Conservation Security Program, or ``CSP'' 
contracts, still represented a small percentage of the over 
60,000 Iowa farmers on working lands. Funding levels and rules 
for program participation, particularly with the CSP leave 
farmers with no guarantee they will be able to participate in 
the future.
    Overall, $3 billion has been removed from the original CSP 
appropriation since 2002. If allowed to stand, the $280 million 
cap proposed in the current House Agricultural Appropriation 
Bill would result in few, if any, new watersheds becoming 
eligible for CSP in 2007. We recommend full funding of the 
conservation title of the 2002 Farm Bill.
    Andrew Farms enrolled in CSP in 2005. Because of our over 
30 years using progressive conservation practices, we found the 
CSP enrollment and evaluation a smooth, orderly, fair, and 
rewarding experience.
    As one of the first Tier III recipients in the nation, I 
have spoken before more than 3,000 farmers and conservations 
from all over the United States. In the process of explaining 
the CSP program to those still waiting for their watersheds to 
be selected, I have heard several recurring messages.
    Many farmers are becoming disillusioned and frustrated with 
the slow pace of program implementation. The ever-changing 
rules and budgetary constraints differ greatly from the way the 
program was originally explained to the farmer and are causing 
some to give up before they even enroll.
    The selected watershed concept has led to rules and 
regulations which vary greatly from watershed to watershed and 
state to state. This is particularly hard to justify and for 
farmers to understand who are used to rules that are fairly and 
consistently applied nationwide.
    Some farmers are making expensive capital investments in 
conservation systems in anticipation of their watershed being 
selected which may be five, eight, how many years away. Some 
are going as far as hiring paid consultants to put their 
records and farm operations in the best condition to maximize 
their tier and financial reward.
    The program originally allowed a fully transferable 
gentleman's agreement between tenant and landlord for the 10-
year commitment. Rumors and sources now tell me that those not 
able to honor the original terms because of a change of 
ownership or tenancy will have their contracts canceled and may 
be fined a portion of the proceeds already issued. This is 
causing a great deal of concern and anguish among farmers and 
landlords and will greatly limit the potential participation 
until it is resolved.
    The CSP program needs to be simple enough at Tier I to 
allow the maximum of initial participation while not watering 
down the requirements to where they are meaningless. At the 
same time, farmers won't enroll if funding does not exist to 
support the additional enhancements they need to make the rise 
to the next tier.
    Finally, when I realized that we had been awarded Tier III 
and would be recognized with a national signing ceremony at one 
of our three ponds, attended by Bruce Knight, chief of NRCS, I 
had some real apprehensions as to the reaction of my fellow 
farmers and local taxpayers.
    Of all the civic-minded things that my father and I have 
done during the course of our lifetimes, nothing has been as 
well received and accepted as the Conservation Security 
Program.
    We continue to be dumbfounded with the sincere 
congratulations and compliments from farmers and urban 
residents alike. This reinforces to us that conservation 
supersedes partisan politics and is of primary importance to 
all citizens.
    Based on our experience, we feel you have a mandate to 
strengthen and continue the rapid implementation of the 
Conservation Security Program nationwide. We know the program 
works well on a small scale. Provide the needed funding and 
support and farmers will work with you cooperatively to get the 
job done.
    I appreciate this opportunity to present our views and 
recommendations to you and will be pleased to respond to any 
questions or comments. Thank you.
    [The prepared statement of Mr. Andrew can be found on page 
117 in the appendix.]
    Chairman Chambliss. Thank you, Mr. Andrew.
    Mr. Spronk.

   STATEMENT OF RANDALL SPRONK, SPRONK BROTHERS III, CHAIR, 
NATIONAL PORK PRODUCERS COUNCIL ENVIRONMENTAL POLICY COMMITTEE, 
                      EDGERTON, MINNESOTA

    Mr. Spronk. Good morning, Chairman Chambliss, Ranking 
Member Harkin, and members of the committee. My name is Randy 
Spronk. I am a pork producer from Edgerton, Minnesota. My 
family and I operate a farrow to finish hog operation. We also 
raise corn and soybeans. I am here this morning proudly 
representing the National Pork Producers Council and the 
thousands of U.S. hog producers throughout the country.
    I am chair of NPPC's Environmental Policy Committee. We are 
very grateful to you for holding this hearing and we appreciate 
you accepting our written remarks for the record. What follows 
is my summary of that written statement.
    Pork Producers are proud of our commitment and our support 
for Congress' effort to dramatically increase funding for the 
conservation programs during the 2002 Farm Bill, particularly 
the Environmental Quality Incentives Program, ``EQIP.''
    We believe that the clear direction given in the 2002 Farm 
Bill was that EQIP program would help farmers deal with their 
top environmental challenges. Pork producers look forward to 
participating in the EQIP program to help us to continue to 
improve our environmental performance and to meet or exceed our 
regulatory requirements, state or Federal.
    While our support for this program continues today, I must 
tell you that overall pork producers have been sorely 
disappointed in the EQIP program. This disappointment has not 
been universal. However, we think that the EQIP program is 
missing a tremendous opportunity to have a dramatic effect on 
the environment by failing work with many of our producers. The 
bulk of my comments this morning focus on the EQIP program 
under the 2002 Farm Bill.
    The EQIP program, despite numerous helpful amendments made 
in the 2002 Farm Bill, has made only minimal contributions to 
pork producers' environmental performance. In short, pork 
producers have received little EQIP funding.
    We first detected this trend in the data from the 2003 
program year. We reviewed and discussed these findings with 
NRCS leadership and some important steps were taken to address 
these issues, but the bottom result unfortunately did not 
change.
    Using NRCS data and our own estimates in the 2003, 1904, 
and 1905 program years, pork producers received only about 3 
percent of EQIP cost-share assistance provided to all livestock 
producers, 43 million out of a total of 1.26 billion.
    As reported in 2004, this is less than the share provided 
to goat, emu, ostrich, elk, and bison producers. This is a 
seriously disappointing result given all of our producers' hard 
work in the 2002 Farm Bill and with NRCS leadership in several 
states.
    These numbers and percentages improve a little when you 
focus on some of the major swine-producing states, but not 
enough. For example, in the 2004 program year, in eight states 
that account for 80 percent of U.S. pork production, pork 
producers received approximately 5 percent of all EQIP cost-
year assistance funds, and just 9 percent of the funds that 
went to livestock that year.
    An improvement, yes, relative to the national figure of 3 
percent, but this still strikes us as a significant 
underinvestment in the environmental practices of pork 
producers.
    Indiana is probably the brightest spot we have seen so far. 
In 2004, a pork share was 22 percent, and in 2005 it appears to 
have been a very strong 37 percent. We looked closely at 
Indiana to see how this kind of performance can be achieved in 
other states.
    NPPC has now undertaken in states with significant levels 
of hog production a detailed review of the EQIP program 
performance for pork producers. We will provide you with those 
results when that work is completed, but I can make some 
preliminary observations.
    First, EQIP applications from pork producers appear not to 
be ranking well because producers have already invested in the 
core elements of sound manure management systems. We have 
engineered manure storage facilities in addition to manure 
management plants.
    Second, EQIP cost-share assistance is not generally 
available for mobile equipment, yet one of pork producers 
greatest needs is for new, expanded, and more precise mobile 
manure utilization equipment.
    Third, there is a lack of effect in economical air emission 
mitigation technologies and practices that EQIP program can 
support.
    Fourth, EQIP funds allocated to counties for final 
application approvals often prove inadequate to cover more than 
one or two modest-sized EQIP contracts.
    No. 5, NRCS major commitment to molding the use of 
Comprehensive Nutrient Management Plans, or ``CNMPs,'' is not 
yet adequately reflected in the program in many states.
    No. 6, insufficient EQIP funds have been made available to 
support farmers' use of technical service providers, ``TSPs,'' 
to require CNMPs.
    No. 7, there can be a long lag time between when decisions 
are made and policies change in a state NRCS office and when 
new policies are adopted in the field.
    Last, NRCS field and area personnel often have insufficient 
understanding of todays' pork production to work effectively 
with pork producers or they simply lack the time to do so.
    These observations are preliminary and far from conclusive, 
but they are based on pork producers' experiences. We will 
share with the Committee more detailed review of these issues 
to develop more concrete recommendations for program changes.
    The National Pork Producers Council and its pork producer 
members want EQIP to succeed. It holds considerable promise, 
particularly as we move into a period where livestock producers 
may need help addressing air emissions that are regulated under 
the Clean Air Act, but I must be frank with you.
    The many issues we have raised with you today weigh heavily 
on us and have discouraged our producer members from 
participating in the program. There is a general perception 
among producers that EQIP simply will not work for pork 
producers. We look forward to working with you during the 
upcoming 2007 Farm Bill discussions to make EQIP better address 
pork producers' concerns.
    Thank you.
    [The prepared statement of Mr. Spronk can be found on page 
120 in the appendix.]
    Chairman Chambliss. Thank you. To each of you, thank you.
    Senator Harkin, I know you have to leave us here shortly. 
I'm happy to turn to you for any comments or questions 
initially.
    Mr. Harkin. Well, I really appreciate that, Mr. Chairman. 
Thank you very much.
    Just as kind of a general question from the previous panel 
that was here and some of the questions that were asked, there 
has been a lot of discussion about whether USDA has a larger 
number of separate conservation programs that may be necessary 
or practice to administer. We have heard that brought up.
    Do you think it would be helpful to reassess the structure 
of these separate programs, that we have gotten to the point 
where the focus is too much on which program is applicable and 
less on directly solving the challenges of what needs to be 
done on the land?
    Just go down the line, how do you feel about this? Are 
there too many of these separate programs? Should they be put 
an umbrella type of thing or not? just a general sense of how 
you feel about it.
    Mr. Kennamer. Well, Senator, I think in some of the cases, 
it was addressed in the earlier panel, the different programs 
that we have designed now to fit specific needs and what they 
do. I know there have been a lot of problems with coordination 
and interpretation. I think the important thing is maintaining 
what we have here, to better define what the rules would be, 
and then to make sure that we have adequate funding.
    So, I guess in summary for me I don't see us combining a 
lot of those things. I think we just need to implement it and 
better do what we have been doing all along, and I think we 
will get more money and more bang to the ground.
    Mr. Harkin. Fair enough.
    Mr. Sims?
    Mr. Sims. Mr. Chairman and Senator Harkin, I certainly 
agree. We are very supportive of the conservation programs in 
the 1902 Farm Bill, but our membership has voiced some concern 
about, you know, the number of programs. Some of the producers 
down at the local level sometimes don't understand which 
program would work for them best, and they need some assistance 
with that.
    We do believe and we have had some discussion that it could 
be grouped up, the programs could be grouped up, into three or 
four different categories: working lands programs, your 
incentive-based programs, your retirement programs, and then 
you have easement programs that fit in there as well.
    I do think we have got a good conservation title right now, 
but we certainly could tweak it a little bit to make it just a 
little more user-friendly for our producers out on the ground.
    Mr. Harkin. Very good.
    Mr. Andrew. Senator Harkin, I think probably the number of 
programs make it easier to identify the one that applies to 
you. However, I think there is also consideration that we don't 
do a very good job of, No. 1, making them identifiable to the 
farmer producer; there is a lot of confusion.
    Second, in a lot of situations, the ways the rules and 
regulations are administered from county to county and state to 
state, I heard more complaints in St. Louis at the National No-
Till Conference.
    Thankfully, they weren't coming from Iowans, but in other 
states where one fellow said, ``I couldn't get the answer I 
wanted on CSP, so I went over to this guy I heard in another 
county that was the Conservation District commissioner and 
asked him and he gave me what I wanted, and then I went back 
and told the other guy you're supposed to do it this way.''
    There is a lot of confusion and that just creates a real 
problem to a producer who is trying to make the best use of his 
time, and I don't have time to hire somebody to go and chase 
all the details down for the program.
    Mr. Harkin. Very good.
    Mr. Spronk?
    Mr. Spronk. I would echo previous comments here that it can 
be very confusing for producers out on the ground, you know, to 
identify the particular program that is necessary for them. I 
also, on the other hand, do believe that once you have a 
program set up such as the EQIP to improve it rather than 
changing it dramatically, because they have prior 
understanding. I try to work with what's there and improve it 
before we move on.
    Mr. Harkin. One last thing. I thank you all for your 
testimony, for being here this morning. One last thing, Mr. 
Andrew, on this problem that we are having with this 
transferability, this has come up a lot of times in terms of a 
tenant who is on and he gets a contract and he may lose his 
tenancy. I remember this very well. There was talk at the time, 
``What happens?''
    ``Well, in that case, he ought to be able to put that on 
something else or move it to something else, maybe land that he 
owns or something. Maybe he has it on some tenancy land, but he 
could put it on land he owns or something like that.''
    From what you are telling me is that that's not happening.
    Mr. Andrew. As I understand it, Senator, the source that 
approached me indicated that this is resolved because of an I 
believe USDA Inspector General audit has determined that they 
have got to clean up the system and come up with something.
    Well, in doing so we go from a very gentleman's agreement 
of if I do not get my lease renewed 2 years from now, I know 
that the person that does as long as he maintains the same 
farming procedures for that landowner will be able to keep the 
contract. It is being indicated that is not the case, and now 
it's going to be canceled and, as I indicated, in some cases 
even a fine issued, so it is an issue that needs to be looked 
into.
    Mr. Harkin. I think, Mr. Chairman, this is something that 
we really have to look into because this was brought up in the 
discussion on the farm bill about what happens in situations 
like that, and I thought it had been settled, but obviously it 
hasn't. I think we really need to take a look at that and why 
it's happening that way. I would be open for any suggestions 
you have. You have been all over the country and stuff, so how 
we fix it, let me know.
    Mr. Andrew. Senator, as you well know, we are facing an 
aging farm population that are in the landowner positions, and 
this is going to be a recurring problem. I would hope that we 
could come up with a fix that could be agreeable to all 
parties. I think most farmers are honorable people.
    They are not intending to scam the government for up to 
$45,000. It will be a lot bigger figure than that. As such I 
think this could be worked out amongst honorable men and not 
take the approach that you are going to Leavenworth if you 
can't get your contract renewed.
    Mr. Harkin. Well, we've got to figure it out. Thank you 
very much, Mr. Andrew.
    Thank you, Mr. Chairman, for allowing me to go first.
    Chairman Chambliss. Mr. Coleman.
    Mr. Coleman. Thank you, Mr. Chairman. Just on a personal 
note, it is great to have Mr. Spronk here, a familiar face from 
Southwest Minnesota. I would note for the members of the 
committee, read his entire testimony.
    Mr. Spronk, you've chosen to focus in the short time you 
had on EQIP, but there is I think an important kind of 
statement being made in the early part of your written 
testimony talking about the commitment of our pork producers to 
the environment, to water quality.
    You also then briefly touch upon, although I'm not going to 
discuss it here today, but the issue of energy and the 
possibility of hog manure replacing commercial fertilizer at 
some point in time. I do hope my colleagues take the time to 
read the full extent of your testimony. I think it's important.
    Let me just direct first a question to you and then to the 
panel. You've laid out seven or eight specific concerns about 
EQIP. If we were to focus even more, I mean, what do Minnesota 
pork producers need most from EQIP right at this time? What is 
it, if you say ``A'' and ``B,'' what do you need most right 
now, that you would want folks to focus on?
    Mr. Spronk. You know, as we look at funding, funding the 
EQIP program, it needs to be utilized so that we can comply 
with Federal regulations, the Clean Air Act and the Clean Water 
Act. As I look at the Clean Water Act, the best thing you can 
do for us as producers is to allow us to utilize more acres to 
apply the manure on. To me that is the best and highest use of 
manure.
    Because when I use that sustainable resource as my 
fertilizer source for my next corn crop, it is replacing a 
natural gas option, you know, that probably is going to be 
imported from some other country, and so it is a very 
sustainable, long-term highest best use for the nutrients 
that's utilized. Anything that you can do to make that manure 
more mobile to spread it out over more acres is the highest and 
best use in my mind.
    Second, as we look to the Clean Air Act, Pork Producers are 
spending $7 million of their own funds, checkoff funds, on a 
study, a national air emissions study. We don't know. You know, 
we want to be able to have technologies in a toolbox available, 
as Chief Knight said earlier, on air emissions, you know, 
whether or not we need to mitigate. We want to have that ready 
for them when they come to be able to utilize these programs to 
help producers to meet those clean air requirements.
    Mr. Coleman. I noticed Mr. Andrew and Mr. Sim kind of 
nodding their heads when you talked about manure more mobile. 
Would you want to either respond or do you agree with Mr. 
Spronk? Do you have any of the concerns he raised?
    Mr. Andrew. Senator Coleman, to your first question on 
EQIP, I would say that I know in Iowa right now there are 1,500 
contracts in EQIP last year and there are 1,500 awaiting 
funding. As usual, it's always a money question.
    Second, we have some real concerns in the manure management 
area as far as the science-based application of manure. Pork 
production in the state of Iowa is as vital to our state as it 
is to Minnesota, and yet we have differing people saying 
different things. We very much put our money behind science-
based research, which the Iowa Soybean Association has been 
trying to do. Yet, we find we are running against some real 
impacts in state DNR changing the rules.
    Mr. Coleman. Mr. Sims?
    Mr. Sims. Senator, I certainly agree and there has been a 
lot of conversation this morning about energy and whether we 
need an energy title within the conservation--the farm bill. 
Excuse me.
    I think energy needs to be incorporated into the 
conservation title of the farm bill, just as the gentleman 
spoke of using manure for fertilizer to keep from having to 
purchase commercial fertilizers. I think that's a wonderful 
thing.
    I do see in the EQIP program and with a lot of the programs 
is the shortage of technical assistance to have the right 
people out there to work with the producers to understand the 
benefits and how to go about using manure for fertilizer 
application to reduce their commercial fertilizer costs, and so 
I think education is quite important and those all can be 
components of technical assistance in the EQIP program.
    Mr. Coleman. I don't know, Mr. Kennamer, if you want to add 
to it, but I do have to say we have got some pretty, you know, 
strong wild turkey habitat in South Minnesota.
    Mr. Kennamer. A lot of turkeys.
    [Laughter.]
    Mr. Coleman. We greatly appreciate the work that you do and 
your organization does. It's very, very important to Minnesota.
    If I can add a macro question here, the Chairman and I we 
are involved in trade issues and are concerned about WTO. One 
of the issues that is coming up now is, you know, what we can 
do with what we call Green Box programs with the WTO, and here 
is my concern.
    I'm just looking for a little help on this. I haven't 
fleshed this out totally. They are concerned that, you know, 
for WTO purposes, concerned about not paying producers, what is 
it, an amount more than what they would be paid to implement 
conservation practices; those have been raised.
    The question is, on the one hand, there are some who are 
saying that we should be looking at our conservation programs 
as ways of dealing with some of the opportunities that we 
provide to farmers, kind of combining commodity and 
conservation. On the other hand, the concern is if, in fact, we 
run into WTO problems as a result of doing that, is that going 
to kind of undermine our conservation efforts?
    I guess the question is: Is there much point in blending 
conservation and commodity programs if in the end we make those 
conservation programs trade distorting under WTO? Does anybody 
want to help me with that? We are trying to sort our where we 
are going. I think this issue is going to be in front of us as 
we look at the next farm bill. Does anybody want to----
    Mr. Andrew. Senator Coleman, I think you are probably on 
the right track here; although, I am not so concerned. All of 
the explanations I have received over the years on WTO and the 
DOHA round would indicate that we would be very much in Green 
Box with the conservation payments.
    It's whether we can get them up to the level to displace 
the present LDP's countercyclical payments and everything 
that's presently under the Farm Service Agency. But I guess 
I've also seen a great deal of concern that as we hear the DOHA 
round is dragging along, it's not going to happen, that we 
don't need to address these issues and transfer any of this 
into conservation green payments because we are probably not 
going to see DOHA come about.
    Well, we still have the case of the trade disputes facing 
us such as the Brazil cotton, and there are other issues with 
other commodities that are just waiting to be filed in 
courtrooms, if we do not solve the DOHA round. I think we have 
some concerns that we have got to orient toward the green 
conservation area.
    Mr. Coleman. Does anybody else want to provide any insight 
on that?
    Mr. Sims.
    Mr. Sims. Senator, I'm probably the least qualified to 
speak to the World Trade Organization negotiations that are 
going on, but it seems like what's good for the WTO it would 
limit production in the United States, and I struggle with that 
severely. I do believe that it's wise that we keep our working 
lens in production.
    I think we stay focused on that as we move forward to draft 
the 2007 Farm Bill and not get too hung up on where the WTO is 
at, at this point because it appears that they are struggling 
severely to come to agreement. I think we need to stay focused 
on what is good for America.
    Mr. Coleman. I appreciate that. I would appreciate you 
gentlemen continuing to be part of the discussion as we look at 
the next farm bill and as we look at how we continue to benefit 
from our conservation program. Thank you and thank you for your 
testimony.
    Thank you, Mr. Chairman.
    Chairman Chambliss. Thank you, Senator, as always.
    I will say gentlemen we are hopeful, as Senator Harkin said 
earlier, that we are going to have some resolution within the 
WTO, but we can't unilaterally disarm and we're not going to 
let the WTO write our farm bill. We've got to strengthen every 
single title in that farm bill as well as expand our energy 
title, and that is certainly our goal and what we hope to do. I 
am a lot more concerned the farmers in Paris, Texas, than I am 
farmers in Paris, France, I assure you.
    Mr. Kennamer. Very good.
    Chairman Chambliss. Gentlemen, looking back at the 2002 
Farm Bill, do any of you have a red flag out there relative to 
any conservation program that you have participated in, or that 
you have seen or know about that is not working? Is there 
anything that we did in 2002 that we ought to think about 
basically totally restructuring or eliminating from a 
conservation standpoint? Does anybody have a response to that?
    Mr. Sims. Mr. Chairman?
    Chairman Chambliss. Yes, sir?
    Mr. Sims. I do have a couple of thoughts or at least a 
program I felt was overlooked specifically in the funding area, 
and that was the Watershed Rehab Program in the farm bill. 
There are a tremendous number of facilities that were built 
over the last several years to help with flood mitigation that 
are in disrepair, and there has not been funding made available 
for those rehab projects, and think that's something that we 
seriously need to look at.
    Mr. Kennamer. Senator, I would like to make a comment as it 
relates to that, too. I don't think in looking at the plan and 
the way it was put together it's necessarily red flags. I don't 
think we took advantage of a lot of opportunities, and maybe 
doing TSP and some of the others has gotten so cumbersome that 
we need to refine some of that so that NGO's, like my 
organization, can come in and help implement some of the things 
that have been part of the plan.
    I think fine tuning some of this and bringing more 
involvements, you will bring more dollars to the table. I 
mentioned the $224 million that we have done with private and 
state and Federal funds with all of our partners, if one dollar 
came from our organization, it could match with the other 
dollars of that included within the $224 million.
    We deal with landowners and farmers. I grew up with a farm 
background. I've been working with farmers for 35 years 
implementing wildlife, and I don't think we've taken advantage 
of that outside source. It could fit into what we've got now. 
From a red flag standpoint, we can do a better job tweaking 
what we've got.
    Chairman Chambliss. Senator, you raised a good point. We've 
got a lot of matching grant type programs. I'm not sure if what 
you're saying is that there have been programs that you have 
taken advantage of that have been matching per regulation or 
whether it is just money that you put in to supplement 
programs, but I assume it's the later; is that correct?
    Mr. Kennamer. We have done all of the above. A lot of what 
we try to do is to tell the landowners these different parts of 
the conservation programs of the 2002 Farm Bill how they can 
better utilize those, because we are already working with them 
on a lot of management not only for turkeys but for other 
wildlife as well. What you just mentioned, we have funding 
sources from a lot of different sides of things and we are 
working with landowners to implement that.
    Chairman Chambliss. Mr. Andrew, one problem that we have 
encountered with CSP is I'm not sure we did a very good job of 
educating farmers around the country of really what the program 
is and how you can take advantage of it. I notice you said you 
did not participate in the program until 2005.
    Mr. Andrew. No, sir. Chairman, I was watching your program 
while it was being formed in the womb, and I waited until 2005 
when the Raccoon River Watershed was accepted. That as the 
first opportunity I had to apply.
    Chairman Chambliss. OK. Have you experienced a similar 
reaction from farmers as you have been around the country from 
an education standpoint on what they can or might be able to 
take advantage of there?
    Mr. Andrew. Very much so, sir. Again, the National No-Till 
Conference in Saint Louis last January, we had farmers from all 
over the United States. We had a room, and it was the most 
heavily attended area, for a breakout session on CSP. It was 
like a cacophony of voices.
    You had so many interpretations and rules and different 
states and almost downright arguments over, ``No, it's this 
way. No, it's that.'' For farmers, we are kind of used to 
pretty much across the board programs.
    I guess between that and the speediness with which things 
are done, I'm always intrigued with the fatback and the pick 
program days of the Reagan years. We could seed down thousands 
of acres over night, get paid and make more money than we ever 
made in our life.
    Yet, along comes CSP, and I recognize it's a new Federal 
program, but the delay factor and the drag of developing it and 
implementing it and getting the correct information to the 
country, a man could grow cobwebs out in the country waiting 
for it.
    We farmers, we are pretty high-geared. We get right in the 
field and we live on kind of an annual system of life, from 
sowing the crop to harvesting it and starting over again. It is 
very hard to accept something that drags on for a couple of 
years, and when you finally get it then it's changing every 
year, depending on funding levels or whatever.
    Chairman Chambliss. Mr. Kennamer, I'm intrigued by your 
idea of giving a higher Environmental Benefits Index score for 
landowners who are willing to open their CRP acres to public 
hunting. You also suggest that two properties rank equally, the 
landowner willing to open their land to public access or use 
should have preference for funding eligibility. Would you 
comment on that proposal in a little more detail, please?
    Mr. Kennamer. Well, I think a good example, Senator, is 
that conservation impacts a lot of local communities. When 
people come to hunt and if you look like, taking Kansas, for 
example, in the Midwest, they have over $1 million acres of 
land that landowners have leased to the state for public 
hunting. We are obviously concerned about public hunting.
    A hundred and eighty-six thousand bird hunters will 
generate about $121 million in that particular economy of 
Kansas. Fifty percent of that land is in CRP, and so the 
communities that are going to benefit from a lot of that and a 
lot of species like the Lesser Prairie-Chicken and others would 
be able to benefit.
    I guess the point I want to make is that whatever program 
we do that is going to help these landowners to be able to 
provide wildlife and have good, good incentives to do that is 
going to be good for the local community and ultimately for us.
    Chairman Chambliss. Mr. Sims, generally NACD supports a 
greater balance among the conservation programs. How would you 
better balance them besides providing more funding? Do you 
support reducing the acreage gap for CRP? What do you think 
would be a good balance?
    Mr. Sims. A good balance needs to be determined, in my 
opinion, Mr. Chairman, based on the needs out there at the 
ground level. I apologize if I start to stray from your 
questions just a little bit, but I want to put a tremendous 
amount of emphasis on the local workgroups and how they 
determine the priorities for the utilization of our 
conservation programs. I think that's absolutely paramount. As 
far as the cap on CRP, you know, there is a great debate across 
the country about CRP right now.
    I guess the position that we have at this point as our 
organization works the issue is that we are very, very 
supportive of CRP and the work that it has done to address 
those sensitive plans and feel in the future that it needs to 
stay focused on those highly erodible lands. Perhaps, there are 
some areas that we can do some adjustment on in that particular 
program right there.
    Chairman Chambliss. Mr. Andrew, Federal funding of course 
is not limitless. While I expect Congress will continue to 
increase its support for conservation over time, I do not 
expect big increases in spending in the near future because of 
the budget constraints that we are likely to have in the next 
farm bill.
    This means we need to find other ways to meet our 
conservation goals. Are you and the Iowa Soybean Association 
looking for other ways to get more bang for our buck out of our 
conservation programs? Do you have any thoughts you might give 
us on that?
    Mr. Andrew. Yes, sir, our Soybean Association has been the 
recipient of several funds from Congress for nitrogen research 
on farm, whole farm research projects. That has done more, kind 
of the old Missouri ``show me'' attitude, to change the minds 
of farmers than all of--I shouldn't say all--but a lot of the 
research that comes out printed from Iowa State University.
    If a farmer can see based on what his neighbor does or what 
he himself does in a participation project on 40 acres or so of 
his own land, it will go a long way. The example being years 
ago I used to put 180 pounds of anhydrous ammonia on to grow an 
acre of corn.
    Based on research that I've done with Iowa State University 
in nitrogen strip plots, I now use 100 pounds, and that's a 
considerable lessening. It makes me feel good that I'm not 
contributing to the hypoxia zone, and it also improves the 
groundwater in downtown Des Moines, Iowa, as they drink out of 
the Raccoon River.
    It saves me, particularly this year when nitrogen prices 
went to $485 a ton, it has just saved me a lot of money in 
producing corn. Similarly, being a no-till user my fuel costs 
are about a third to a half at the most of what the 
conventional tillage guys are. When I go to a meeting and I 
hear them crying about high-priced diesel fuel and high-priced 
gas, I say, ``You ought to take a look at this.''
    Well, this spring I've witnessed more neighbors no tilling 
their ground than I've ever seen in the past. When I ask them, 
they say, ``We finally got smart and followed you, and we're 
going to do it your way because we save so much, versus the old 
way.''
    Chairman Chambliss. That's interesting. You know, farmers 
continue to be creative and innovative. That's the only way you 
can survive, so it's good advice you gave your neighbors, and 
I'm glad they heeded you.
    How would you have implemented CSP, given the limited funds 
and other restrictions placed on the program since 2002, if you 
could jump into the shoes of the folks at NRCS and make a 
decision on how it should have been implemented?
    Mr. Andrew. That's a very difficult question, and it's one 
that I have stewed with and stayed up a lot of nights. I don't 
know, I guess I've always kind of had the standard response, 
that's above my pay grade.
    [Laughter.]
    Mr. Andrew. Mr. Chairman, I don't know. I guess I would 
really have to devote a lot more time thinking, and I don't 
have a grasp. In preparing my talks, I would flash up a slide 
of the whole continental United States and protectorates. I 
never realized there was CSP in Guam and Puerto Rico.
    I would like to see CSP put out for me, an old Midwest farm 
boy, what the hell does CSP amount to in Guam. Are we 
protecting volcanoes or forest jungles or what? Because we've 
got to realize that we have so much great differences in 
topography across this country.
    It is very difficult for my mind-set that's been farming 
that same piece of land for 34 years to put myself in the shoes 
of that producer in Guam or Alaska or Florida or wherever, and 
so I would have some real difficulties answering your question, 
sir. I admit it's beyond my pay grade.
    Chairman Chambliss. Mr. Spronk, I appreciate and respect 
the effort pork producers have put into making EQIP work better 
for pork producers. Your testimony mentions several items that 
could have improved EQIP's effectiveness. What do you think is 
the most needed change in the direction of EQIP?
    Mr. Spronk. I guess I would refer to Mr. Sims as he had 
testimony on the technical service provider part of it. There 
are some things in Comprehensive Nutrient Management Plans that 
we as pork producers could use where we need to develop mass 
balance for the farm. All the nutrients on the farm and where 
they are ending up, you know, that is a program that I would 
wholeheartedly support more increased funding for in the TSP 
program.
    I think it was pretty well as I stated earlier to Senator 
Coleman's question, you know, we need these regulations to 
help, in order to comply with the Clean Water Act and the Clean 
Air Act.
    You know, if we can any time for the Clean Water Act, any 
time that we can use mobile equipment to actually take those 
nutrients and spread them over more acres, it's appropriate, in 
addition to anything we can do as we need to come into 
compliance with the Clean Air Act, anything that we can help 
with mitigation and to create that toolbox for producers, to 
help with whether it be a particulate matter or ammonia 
emissions or hydrogen sulfide emissions.
    Chairman Chambliss. Is there an anti-pork bias in RCS?
    Mr. Spronk. I don't know that I would go that far. I think 
it's just very difficult for the local providers to take the 
programs and apply them to pork. As I stated earlier, some of 
the times we are biased. I've got facilities that they are 
engineered cement containment pits with roofs on them.
    It doesn't go anywhere unless I put it there, and so the 
only thing where I'm vulnerable is during my manure 
application. I've got a manure management plan, but that 
doesn't mean we can't improve on what we're doing. So to a 
certain extent of it, we have already set the bar high; in 
order to go higher, we need some additional help.
    Chairman Chambliss. Well, the only reason I asked that is 
because the previous conversation here this morning about it 
seems like the beef producers are taking more advantage of 
EQIP, obviously, and maybe we have done some things to design 
it to favor beef over pork. We need to make sure that we are 
treating everybody equitably.
    We in the Southeast have started utilizing EQIP more with 
our chicken production facilities, and we want to make sure 
that we are treating everybody fairly with all of these 
programs.
    Norm, do you have anything else?
    Mr. Coleman. I don't have anything else.
    Chairman Chambliss. Well, gentlemen, thank you very much. 
There may be some questions to be submitted by our other 
members who could not be here today. I will say that to both 
panels. We will leave the record open for 24 hours. Anybody who 
wishes to submit additional questions, we will get them to you, 
and I would ask that you promptly respond to them. Staff tells 
me we are doing 5 days instead of 24 hours.
    [Laughter.]
    Chairman Chambliss. We will get over the next few days any 
questions that may be forthcoming. Thank you all very much. 
This has been a very informative hearing.
    We stand adjourned.
    [Whereupon, at 11:48 a.m., Wednesday, June 7, 2006, the 
hearing was adjourned.]
      
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