[Senate Hearing 109-641]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 109-641
 
       REGIONAL FARM BILL FIELD HEARING: HARRISBURG, PENNSYLVANIA

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

                                HEARING

                               before the

                       COMMITTEE ON AGRICULTURE,
                        NUTRITION, AND FORESTRY

                          UNITED STATES SENATE


                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION


                               __________

                             JULY 21, 2006

                               __________

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


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

                                 ______

                    U.S. GOVERNMENT PRINTING OFFICE
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           COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY



                   SAXBY CHAMBLISS, Georgia, Chairman

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

            Martha Scott Poindexter, Majority Staff Director

                David L. Johnson, Majority Chief Counsel

              Vernie Hubert, Majority Deputy Chief Counsel

                      Robert E. Sturm, Chief Clerk

                Mark Halverson, Minority Staff Director

                                  (ii)

  
                            C O N T E N T S

                              ----------                              
                                                                   Page

Hearing(s):

Regional Farm Bill Field Hearing: Harrisburg, Pennsylvania.......    01

                              ----------                              

                         Friday, July 21, 2006
                    STATEMENTS PRESENTED BY SENATORS

Chambliss, Hon. Saxby, a U.S. Senator from Georgia, Chairman, 
  Committee on Agriculture, Nutrition, and Forestry..............    01
                              ----------                              

                               WITNESSES

Wolff, Danny, Secretary of Agriculture, State of Pennsylvania....    02

                                Panel I

Eckel, Keith W., Representing Specialty Crop Industry............    10
Martin, Klaas `Klaus-Martins', Representing Organic Farming 
  Reserach Foundation............................................    11
Shaffer, Carl T., Representing the Pennsylvania Farm Bureau......    08
Wilkins, Richard, Representing the Mid-Atlantic Soybean 
  Association....................................................    09

                                Panel II

Cotner, Don, Representing Cotner Farms...........................    24
Phillips, Christine, Hetz, Representing Fairview Evergreen 
  Nurseries and PA Landscape and Nursery Association.............    23
Shirk, James, Representing the Shirk Farm and Penn State 
  University.....................................................    22

                               Panel III

Bower, Logan, Representing the Professional Dairy Managers 
  Pennsylvania...................................................    29
Hackenberg, David, Representing the American Beekeeping 
  Federation.....................................................    33
Jurgielewicz, Joe `Jurgawicks', Representing PennAg Industried 
  Association....................................................    31
Ruth, Robert M., Representing the National Pork Producers Council    32
                              ----------                              

                                APPENDIX

Prepared Statements:
    Bower, Logan.................................................    68
    Cotner, Don..................................................    64
    Eckel, Keith W...............................................    50
    Hackenberg, David............................................    85
    Jurgielewicz, Joe `Jurgawicks'...............................    75
    Martin, Klaas `Klaus-Martins'................................    55
    Phillips, Christine, Hetz....................................    62
    Ruth, Robert M...............................................    77
    Shaffer, Carl T..............................................    42
    Shirk, James.................................................    59
    Wilkins, Richard.............................................    47
Document(s) Submitted for the Record:
    Specter, Hon. Arlen, a U.S. Senator from Pennsylvania........    90
    Statemet of the American Mushroom Institute and the U.S. 
      Apple Association..........................................    94
    Statemet of Burleign Anderson on behalf of the R-CALF USA....    97
    Statemet of Dennis McGrath, President, Western Pennsylvania 
      Conservation...............................................   107
    Statemet of Gerald Carlon, American Raw Milk Producers 
      Pricing Association........................................   110
    Statemet of the Heritage Conservancy.........................   113
    Statemet of Mike Waugh, Chairman, Pennsylvania Delegation of 
      the Chesapeake Bay Commission..............................   116
    Statemet of the Pennsylvania Dietetic Association............   119



          REGIONAL FARM BILL HEARING: HARRISBURG, PENNSYLVANIA

                              ----------                              


                         FRIDAY, JULY 21, 2006

                                       U.S. Senate,
         Committee on Agriculture, Nutrition, and Forestry,
                                                     Harrisburg, PA
    The committee met, pursuant to notice, at 1 PM at the 
Pennsylvania Farm Show Complex. The Honorable Saxby Chambliss, 
chairman of the committee, presiding.
    Present: Senators Chambliss and Santorum.
    Also present U.S. Representative Don Sherwood.

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

    Chairman. This field hearing will now come to order. Good 
afternoon.
    I would first like to ask the officers of the Pennsylvania 
Future Farmers of America to come forward and lead us in the 
Pledge of Allegiance.
    [Pledge.]
    The Chairman. Thank you. The future of agriculture is in 
the hands of these young men and women, and it is, indeed, a 
privilege to have them come out today to help us get started 
this afternoon. I always get excited when the blue jackets come 
to Washington, and it seems like it is always in July and 
August when they come. Somehow, I feel a little bit sorry for 
them, but I am so proud of them that they don't mind walking 
around in 95-degree weather with their jackets on. But they are 
great young men and women.
    And let me tell you what a privilege it is for me to be 
here today. I have had the opportunity on only one other 
occasion to spend much time in Pennsylvania to take a look at 
your agriculture, which, obviously, is significantly different 
from the way we grow crops in the southwest part of Georgia. 
But at the end of the day, all of us in agriculture have so 
much in common that we share not only agriculture in common but 
we share values in common. So it is, indeed, a privilege for me 
to have a chance to come up here and visit with you and of 
course to visit with my good friends Don Sherwood and Rick 
Santorum. We had President Shaffer in Washington, DC last week. 
I had a chance to speak to him and the other 50 presidents of 
the Farm Bureau from around the country. So Mr. President, it 
is good to see you again this week.
    I am, indeed, privileged to have my good friend, Don 
Sherwood, here. Don and I served together in the House of 
Representatives. He has not only been a close friend from an 
agriculture perspective, but he is a good personal friend, 
also. So Don, we are sure glad to have you here, and any 
comments you want to make at this time, we would be happy to 
hear from you.
    Mr. Sherwood. Well, thank you, Senator. And thank you so 
much for being here.
    And Senator Santorum, I appreciate you holding this field 
hearing today and everything the committee has done to make 
this event quite a success.
    The focus today, of course, is on the future of farming and 
on what the 2007 Farm Bill and its programs should look like. I 
think it is great that the witnesses came to share their 
insight and ideas as we work with our colleagues in Congress 
and Secretary Johannes and his folks at USDA to shape the 
nation's farm policy. We need to know what is working and what 
may need some improvement.
    We are very fortunate to have with us today some of my 
constituents who are leaders in Pennsylvania's agricultural 
community, Keith Eckel of Clarks Summit representing the 
Specialty Crop Industry. Keith is a green tomato producer, 
among other things. Mr. Don Cotner of Danville is representing 
the Poultry Industry. And David Hackenberg of Lewisburg 
represents the American Beekeeping Federation. And of course, 
as the Senator said, we have Carl Shaffer, the President of the 
Pennsylvania Farm Bureau representing all their members.
    Agriculture is Pennsylvania's No. 1 industry, and we 
sometimes forget how important it is to the economy of the 
whole state. And I can speak for my own congressional district. 
Dairy, in particular, is so important in the northern part of 
the state. It is very important in Lancaster County, also. My 
congressional district is number 30 out of 435 in the country 
in the number of cows. And I take a personal interest in 
keeping dairy and agriculture in the northeast successful and 
competitive. We are close to the markets. We have the water. 
And we do it in an economically and an environmentally 
sustainable way. The huge farms in the San Joaquin Valley have 
now replaced some pretty big cities in producing smog. What we 
do in Pennsylvania, where we have our agriculture spread out 
and our cattle spread out over a large area, is very 
environmentally friendly. And it is important that we keep 
northeastern agriculture viable so that we have a fresh, 
wholesome supply of milk that will be able to take care of the 
consumers in the eastern part of the country for a long time to 
come.
    So with saying that, I would like to introduce the 
Secretary of Agriculture from Pennsylvania, Danny Wolff. We are 
very, very fortunate to have a Secretary of Agriculture that 
was a great dairy farmer and knows what we do in Pennsylvania 
probably better than anybody.
    So Secretary Wolff, welcome.

 STATEMENT OF DANNY WOLFF, SECRETARY OF AGRICULTURE, STATE OF 
                          PENNSYLVANIA

    Mr. Wolff. Congressman, thank you very much.
    I know that you are very familiar with the Farm Show 
Complex, because you have exhibited here many times over the 
years. And I know Senator Santorum has been here many times in 
visiting agriculture events, but I would like to welcome 
Chairman Chambliss to the Farm Show Complex. It is during 
January farm show season here, and the farm show has the 
distinction of being the largest indoor agriculture exposition 
in the United States. So it is something we are very proud of. 
And every September, we host the all-American dairy show, and 
it is the largest dairy show in the world that is held right 
here in Harrisburg, Pennsylvania.
    Pennsylvania has some very unique statistics. We are 32nd 
in size, so we are, obviously, not the largest state in the 
United States. And we are sixth in population. So we are near 
the top in terms of population. When you add into that the 
strong agriculture economy that we have here, therein lies some 
of the challenges that agriculture is facing today and faces in 
the future. The focus of this current administration here in 
Pennsylvania for the last 3 = years has been the profitability 
of the farms in Pennsylvania, because we know that the number-
one reason that farmers go out of business and the number-one 
reason that our next generation chooses not to come to the farm 
is because of profitability. So we have focused on a few 
initiatives like the Acre Initiative that allows farmers to 
challenge local ordinances that restrict normal agriculture 
operations, the Dairy Task Force that is working on developing 
a strategic plan for the future of the dairy industry in 
Pennsylvania, the Pennsylvania Preferred Campaign that allows 
consumers to see a label and know they are supporting local 
agriculture by purchasing that, the First Industries Fund that 
offers low capital to our farmers and keeping their cost of 
capital low, the Center for Farm Transition and making sure 
that we have all of the information available to transfer one 
farm to the next generation, and when that transition happens, 
making sure that we have everything in place to try to 
encourage the top soil in topsoil. And last but not least, the 
Ag Renewable Energy Council to see where that fits into the 
future of the farmers here in Pennsylvania.
    We would also like to thank USDA for your continued support 
in programs like Animal ID where Pennsylvania has been part of 
that and is one of the leading states and the program developed 
as well as the Avian Influenza Pandemic Initiatives that we 
have been able to use for surveillance of our poultry flocks. 
And in fact, we have about 250,000 to 300,000 surveillance 
samples we do every year. So we could not do those types of 
surveillance initiatives and/or look at new programs without 
the support of USDA.
    The 2007 Farm Bill is going to be critical to the future of 
the farmers in Pennsylvania. Pennsylvania farms are smaller. 
They are only about 137 acres. And they are very diverse. And 
we hope that one thing that we have learned from previous Farm 
Bills is that one size doesn't fit all, that agriculture is 
different in different parts of the United States, and it is 
different here in Pennsylvania.
    And in closing, I would just like to leave with one special 
note. I just returned from northeastern Pennsylvania, up in 
Congressman Sherwood's district, and the devastation of the 
June 2006 flooding was very, very damaging to the farmers in 
the northeast. We are asking for consideration of additional 
ECP funds to help those farmers up there as well as to be 
considered as part of the $4 billion line item in the Senate Ag 
Appropriations bill to qualify these farmers for some disaster 
assistance.
    So with that, once again, welcome to Pennsylvania. We are 
thrilled you are here. And thank you for choosing Pennsylvania.
    The Chairman. Well, Mr. Secretary, thank you very much, and 
thank you for coming out today from what I know is a very busy 
schedule to be with us. I marvel at your facility here. What a 
great physical complex you have. And obviously, folks around 
the country have an appreciation for it, and that is why they 
come here and why it makes you the largest indoor show. My 
hometown is Moultrie, Georgia, which is down at the very 
southwest part of our state. We have the Sunbelt Expo in the 
middle of October every year. We are the largest outdoor farm 
exhibition show east of the Mississippi River, and we are very 
proud of that, and I can understand why you are so proud of 
your facility here. I understand Pat Kerwin is out of town 
today, but Pat and his staff really are to be commended for 
working with us to help coordinate this today along with 
Senator Santorum's office. I appreciate Pat as well as his 
entire staff, and we thank you for being such great hosts 
today.
    I was elected to Congress in 1994, and probably the best 
thing about having the opportunity to represent the people of 
your respective congressional districts is to have the 
opportunity to come to Washington and meet what you find out 
very quickly are some of the brightest minds in our country as 
well as some of the hardest working people in our country and 
just some of the best people in our country. One of the first 
folks I met, even though I was on the House side of the 
Capitol, was a brand-new freshman Senator from Pennsylvania 
named Rick Santorum. Rick was good friends with a lot of my 
close friends in the House, so we were thrown together quite 
often, and we developed a very fast friendship. I had no idea 
that 8 years later I would have the privilege of serving with 
him in the U.S. Senate.
    Indeed, it has been a true privilege to have the 
opportunity, first of all, to work with Rick, I won't have to 
tell you folks in Pennsylvania, there is not a harder working 
Senator for any group of constituents anywhere in America than 
Rick Santorum. He develops a lot of parochial interest. You all 
will notice we have got some Georgia peanuts up here. We are 
pretty proud of the peanuts we grow in Georgia, and after I got 
elected, I was very forceful in my advocacy for the peanut 
program. Well, it just so happened that Rick had a parochial 
interest that was on the other side of that issue, and we had a 
lot of fun with it, and we had a lot of battles with it. At the 
end of the day, we sure were glad in 2002 when the peanut 
growers and peanut shellers and food processors, like Hershey 
Foods, were able to get together, and we developed a peanut 
program that was good for all sectors of the industry. And Rick 
and I worked very closely during that Farm Bill process to make 
sure that happened.
    I want to tell you just a quick anecdote, because, Mr. 
Secretary, you made it very plain about how important dairy is 
here, and Don has certainly emphasized this to me over the 
years. We had a very difficult decisions to make during the 
budget reconciliation process last year, and one of the truly 
difficult decisions we had to make had to do with the MILC 
contract program. The President had made a commitment, during 
the campaign, to extend this program. He had no idea what it 
was going to cost, and like a lot of politicians, he said what 
was convenient at the time. But when we got down to the budget 
reconciliation process, we found out that the MILC program was 
going to cost $1 billion. Well, here they were asking 
agriculture for a contribution of about $9 billion out of our 
farm programs, and on top of that, they were asking us to spend 
$1 billion for the MILC program, and it just didn't work. So we 
began to negotiate with the budget committee, and at the end of 
the day, folks, we were able to get that number of $9 billion 
down to a reasonable figure. But were it not for Rick Santorum, 
the dairy producers around the country would not have the MILC 
program today. He is the one that was primarily responsible for 
the inclusion of that in the U.S. Senate bill that came out 
from a budget reconciliation standpoint. And again, as always, 
it was a pleasure to work with Rick. To see Rick in action and 
to see how committed and how passionate he is about an issue is 
one of the things that truly makes serving in the U.S. Congress 
a pleasure.
    So Rick, I am glad you could join us today. Thanks for 
inviting the Ag Committee up to Harrisburg and to Pennsylvania, 
and we are very pleased to be in your state.
    Senator Santorum. Thank you very much, Mr. Chairman, for 
coming here. Thank you, obviously, for those very kind remarks. 
And thank you, more importantly, for making those changes in 
the budget last year to preserve this vitally important 
program. And Don Sherwood, my colleague, deserves a lot of 
credit for the work that he did in working the House side on 
this. It was a great team effort from our entire delegation in 
Washington to keep this program.
    But being on the Ag Committee, which I happen to be on, is 
a good position to be in to try to make some of the changes. 
And we have been working, as many of you know, if you have ever 
been to any hearings where I have talked about agriculture in 
the past, I always like to say the truth, which is I am the 
first Senator from Pennsylvania on the Senate Ag Committee in 
over 100 years. And I think it is obvious from the kind of farm 
legislation that was passed over the past 100 years, we haven't 
had much representation.
    And what we have been trying to work on, and one of the 
reasons I am so happy that Senator Chambliss agreed to have the 
hearing for the northeastern part of the country, he is doing a 
series of hearings around the country to try to get input from 
producers about the next Farm Bill. And it was very kind of him 
to select Pennsylvania. I think it makes a lot of sense to 
select Pennsylvania, because I think we are pretty reflective 
of northeastern agriculture. We have just about everything that 
is grown up in the northeastern part of the United States. It 
is grown here in Pennsylvania, and we have a lot of issues in 
common, and so it is a good place to get a snapshot of the 
problems that we confront.
    As you know, Mr. Chairman, dairy is a big business here, 
and obviously, we are going to have to battle through what 
dairy policy is. And of all of the things I have worked on in 
the U.S. Senate, I can not think of anything that is more 
difficult than dairy policy, but we are going to continue to 
struggle through that and make sure that we have a program that 
works for all of the United States, which that is what makes 
dairy policy so difficult is because it is so different from 
region to region of the country.
    Another area that is of very important concern is to 
understand that we are different here in the northeastern part 
of the United States than in Pennsylvania when it comes to the 
mix of crops that we grow. We are not a big program crop state, 
although, yes, we have row crops here, obviously, but specialty 
crops is really what Pennsylvania is most known for. And when 
you look at the fact, Mr. Chairman, that specialty crops now, 
in market value, produce as much, or get as much, at the 
marketplace as row crops do in America, we sort of come into 
our own here. And yet it is not reflected in the laws dealing 
with agriculture policy. And we are not looking to have our 
strawberries in a program crop, but we are looking for things 
that make the Federal Government programs work better for our 
fruit and vegetable growers. And that is what we are going to 
hopefully hear from some of our witnesses here today. And 
certainly you will be hearing from me and those of us from the 
northeastern part of the United States in the future. And I was 
with one of our guests here earlier who Don introduced, Keith 
Eckel, who unfortunately was a victim of the flood a few weeks 
ago. And just to understand how crop insurance doesn't 
particularly work well because of the way it is structured and 
the difference in the topography and the climate as you go from 
one set of acreage to another that may be in the same farm. You 
don't have those differences out in Iowa, but you have those 
differences when you have bottom land and you have hillside 
land. But the specialty crop program doesn't take that into 
account, doesn't understand the differences in farming in 
places like Pennsylvania and farming in places where we tend to 
think of big Ag states. So those are the kinds of things that 
hopefully you will hear today and understand that we do have 
some unique challenges here in this section of the country. And 
I really do appreciate you taking the time to come. The last 
time I was in this room was for a meeting of USDA. And Mr. 
Secretary you were a co-sponsor of this along with us to talk 
about renewable energy. That is another very promising area, 
obviously, for agriculture and something that there is great 
interest here in Pennsylvania. We want to encourage and we need 
to encourage, not just for farm income, but, frankly, for 
national security, as we see in the Middle East today. And the 
time before I was in this room was for an Ag Committee hearing, 
which you permitted me to chair of our subcommittee where we 
talked about insecurity, and the Secretary testified and 
mentioned briefly how important those issues of terrorism and 
protecting our food supply.
    So we have got a lot of issues on our plate here. It is 
very important to the producers here in Pennsylvania, and it 
has been very important to the people of Pennsylvania. And I 
just want to thank you, Mr. Chairman, for taking the time to 
come.
    And my final comment, I just want to introduce a good 
friend of mine and outstanding State Senator from the farm belt 
in Pennsylvania, Noah Wenger. Noah, thank you for being here. 
And Noah is in the leadership of the Senate Republicans in the 
State Senate. And I see Representative Art Hershey back there 
from Chester County. If there are any other Representatives or 
Senators here I haven't spotted yet, please make yourself 
known, but I wanted to introduce my two colleagues and thank 
them for being here.
    The Chairman. Thank you, Rick. I want to make sure, too, 
that we don't leave out a very prominent group that 
participated in the pledge of allegiance a minute ago, and that 
is our 4-H students. We are very pleased to see you two folks 
here. The first public speech I ever gave was when I was 8 
years old as a 4-H member in a high school cafeteria in Tracy 
City, Tennessee. I was absolutely scared to death. So you never 
know where you two folks may go one of these days. Thank you 
all for your help this afternoon.
    Agriculture in the United States is very diverse, and we 
are here today to gain a better understanding of the unique 
nature of the agricultural industry in the northeastern part of 
the United States. This is the third in a series of regional 
field hearings that we will hold in preparation for the writing 
of the next Farm Bill. The next scheduled hearing will take 
place next Monday in Ankeny, Iowa and we will also hold other 
hearings in Nebraska, Oregon, Montana, and Texas. These 
hearings are intended to provide American producers an 
opportunity to explain how Farm Bill programs have worked and 
what changes to these programs should be considered as we look 
to write the Farm Bill next year.
    As many of you know, American agriculture will face 
tremendous challenges in the coming year. In 2002, Congress 
wrote a Farm Bill with the belief that our programs were 
compliant with our international obligations. Unfortunately, 
the Brazilians successfully brought a case against the United 
States, which has forced us to examine many of these 
preconceptions. The current Doha round of negotiations within 
the World Trade Organization provides additional uncertainty 
about future agricultural programs. While I can unequivocally 
say that we will not unilaterally disarm in anticipation of any 
international trade agreement, we must ultimately create future 
policies and programs that can stand the scrutiny of our 
international trading partners.
    In addition, the 2002 Farm Bill was written during a time 
of budget surplus. The current budget deficit places a 
tremendous amount of pressure on all spending programs, 
including agriculture. It will be important for us to balance 
any changes or additions to the current Farm Bill with the need 
to remain fiscally responsible. Developing the next Farm Bill 
is a tremendous responsibility, and as chairman of the 
committee, I understand the importance of leaving the halls of 
Washington, DC to meet with actual producers who work the 
fields, milk the cows, and help provide this country with the 
most abundant, affordable, and safest supply of food this 
planet has ever known.
    I commend all of you for your hard work on behalf of all 
Americans, and I look forward to hearing the testimony from our 
witnesses today.
    I would remind our witnesses that we would like for you to 
keep your opening remarks to 3 minutes. We will be happy to 
take any full statement that you want to put into the record.
    And at this time, we will move to our first panel, which 
consists of: Mr. Carl T. Shaffer of Mifflinville, Pennsylvania, 
representing the Pennsylvania Farm Bureau; Mr. Richard Wilkins 
from Greenwood, Delaware, representing the Mid-Atlantic Soybean 
Association; Mr. Keith Eckel, Clarks Summit, Pennsylvania, 
representing the Specialty Crop Industry; and Mr. Klaas Martens 
from Penn Yan, New York, representing the Organic Farming 
Research Foundation.
    Gentlemen, thank you very much for being here. We look 
forward to your comments. Carl, we will start with you.

  STATEMENT OF MR. CARL T. SHAFFER, PENNSYLVANIA FARM BUREAU, 
                   MIFFLINVILLE, PENNSYLVANIA

    Mr. Shaffer. OK. Thank you.
    If I can, Mr. Chairman, I would just, once again, like to 
repeat the expression of thankfulness for you to come to 
Pennsylvania. On behalf of Pennsylvania farmers, we are glad to 
have you here. Senator Santorum, thank you for your effort and 
help setting this up. And to the other two friends of 
agriculture, Congressman Sherwood and Secretary Wolff, thank 
you for your effort in this.
    I would just like to start out in saying a little bit about 
my operation. As you said, my name is Carl Shaffer, and I am 
fortunate enough to be President of Pennsylvania Farm Bureau, 
which is the largest Pennsylvania farm organization. We have 
over 40,000 members we represent. But I am also a full-time 
farmer. I make my full-time living off farming. My operation 
this year consists of about 1,200 acres of corn for cash sales, 
about 400 acres of green beans that go to a processor, and 
about 200 acres of wheat that is marketed for cash sales and 
ground into flour.
    I was very happy to hear you say about the differences 
between Georgia and Pennsylvania farming and Senator Santorum 
expounded on that a little bit. It is not only the market. It 
is the diversity of crops. It is the topography. As a matter of 
fact, we have something that we jokingly refer to as vertical 
set-aside [ph] in Pennsylvania that is some land that is a 
little too steep, even for the cows to stand on sometimes.
    But I would like you to consider in the next Farm Bill a 
new approach, maybe a regional approach. A little more regional 
consideration in crafting the next Farm Bill, I think, would be 
a big benefit. I know it is a daunting task, but we have to.
    The flood was mentioned, and I want to just expound on 
that. In 1980 and 1994, Pennsylvania agriculture and the whole 
Ag community made a deal with Congress that we would trade ad 
hoc disaster programs for a workable crop insurance. Thus far, 
in Pennsylvania, 43 percent of our producers take advantage of 
crop insurance. Because of the regional differences, it just 
doesn't work as well as it does maybe in Illinois or Indiana. 
Also, last Farm Bill, conservation programs were just the top 
priority. But as I told Secretary Johannes last year in a 
meeting, this is a Farm Bill, not a conservation bill. Some of 
the concentration of money that went to conservation programs 
never got down really to the production Ag side, and that is 
something I think you really need to look at in the next Farm 
Bill.
    Also, in closing, one thing I would just like to say, 
something expounding on what you said, when we go into the next 
Doha rounds or trying to finish them, we can't disarm ourselves 
with a Farm Bill that has no teeth. If it is giving away the 
store, we really have no bargaining chip, and I think, Mr. 
Chairman, hearing you before, you agree with that, that we need 
to have something to bargain with.
    So just in conclusion, it would be helpful for a Farm Bill 
that takes consideration of different areas of the country in 
trying to craft that to come up with some common sense risk 
management tools that is going to work in the northeast here. 
And once again, the global trading issue is going to be a very, 
very high issue.
    So thank you very much for coming, again, and thank you for 
your time.
    [The prepared statement of Mr. Shaffer can be found in the 
appendix on page 42.]
    The Chairman. Thank you.
    Mr. Wilkins.

    STATEMENT OF MR. RICHARD WILKINS, MID-ATLANTIC SOYBEAN 
                ASSOCIATION, GREENWOOD, DELAWARE

    Mr. Wilkins. Yes, I appreciate the opportunity and the 
invitation to come and give testimony today. Senator Chambliss, 
you may appreciate this. As I traveled north today, as soon as 
I crossed the Mason Dixon line, we ran into bottlenecks, and 
Senator Santorum, that Route 41 and Route 30 could sure use 
some help down there. The only blessing was I think the two 
heavy trucks that were in front of me were burning a soybean 
biodiesel blend, and that made it tolerable.
    But I have the pleasure of serving as the President of the 
Mid-Atlantic Soybean Association. That association makes up 
four states: the state of Pennsylvania; Delaware, formally 
known as the three lower counties of Pennsylvania; Maryland; 
and New Jersey. We won our independence from William Penn a 
long time ago.
    Soybean producers in the mid-Atlantic region are not only 
producers of soybeans but also huge consumers of soybeans. Over 
10 percent of the nation's soybean production is consumed in 
the mid-Atlantic region by mostly the meat and poultry 
industries. We look forward to the writing of the new Farm 
Bill, having a chance to provide input into that. Overall, 
soybean producers are satisfied with the program, the way it 
has been working. The direct payment along with the counter- 
cyclical payments have been helpful. I understand that we are 
currently about $18 billion below what had been the projected 
expenditures for the term of this Farm Bill. It has provided a 
safety net, a way of helping crop producers at times when 
market conditions were low. We would much rather take our 
profits from the market rather than through loan deficiency 
payments, but until the rest of the world will give us the 
market access that we deserve, we need some type of safety net 
underneath of us.
    Again, I would like to point out that we are huge 
supporters and appreciate the support that you have been giving 
to soybean biodiesel. We have worked really hard in pushing for 
soybean biodiesel and the renewable fuels in the Jobs Creation 
Act. We were dismayed that when the Jobs Creation Act went to 
the Internal Revenue Service for rule writing that they allowed 
Malaysian and Ecuadorian palm oil to also receive the same 
excise tax credit as domestic production. We wish that 
something could be done to alleviate those problems.
    To tell a little bit more about myself, I am, like most 
other farmers in the mid-Atlantic regions, working two full- 
time jobs. I am a full-time farmer, and I also run a full- time 
farm equipment and farm supply business. And I think that is 
something that is unique to the region is that many of the 
farms have to have a source of income off the farm, also, in 
order to be able to sustain that lifestyle.
    Again, the regional approach, I think, is something that we 
need to look at.
    Thank you.
    [The prepared statement of Mr. Wilkins can be found in the 
appendix on page 47.]
    The Chairman. Mr. Eckel.

   STATEMENT OF MR. KEITH W. ECKEL, SPECIALTY CROP INDUSTRY, 
                  CLARKS SUMMIT, PENNSYLVANIA

    Mr. Eckel. Mr. Chairman, Senator Santorum, again, I would 
reiterate we really appreciate you coming here to Pennsylvania, 
the largest agricultural state in the northeast, and I think 
the one with the most positive future, and we appreciate your 
interest in us.
    I want to visit with you a few moments about specialty 
crops and some of our concerns.
    No. 1, I think it is extremely important to reflect on the 
fact that specialty crops account for approximately = of the 
total crop sales in this country. They are specialty crops, but 
they are not minor crops. In Pennsylvania, the production 
amounts to $609 million. The mushroom industry is the largest 
single cash crop in Pennsylvania. Just a few miles from here, 
in Adams County, we visit a county where it is the fifth 
largest county in the Nation with orchards. We are a state that 
has tremendous specialty production. And that comes from 
someone who has also been a dairy producer and is still a green 
producer.
    I want to highlight a few concerns.
    One, I think it is important that when we look at the Farm 
Bill that we make it, as our goal, a safe, adequate, 
affordable, dependable supply of food and fiber. And in fact, 
if that is our goal, risk management becomes an important tool 
for specialty producers. The recent flood underlined the 
problems that we have. I have friends and neighbors who only 
grow crops along the river, never participated in a program, 
but they do not grow crops that are insurable by Federal crop 
insurance. And as a result, they have lost their total income 
for the year, but worse than that, their total expenditures. I 
can not, in good conscience, go to them and say, ``Because we 
have a crop insurance program, we can't support disaster 
assistance.'' These people need help. Risk management needs to 
be reworked to help us do that.
    In the area of conservation, I have a concern that many of 
those dollars are not finding their way to producers as they 
used to. I would emphasize that sometimes here in Pennsylvania 
the CREP program becomes a program that competes with private 
farmers trying to rent that land. We are enrolling whole farms 
in that land. That was not the intent. We need to look at that.
    Research and extension funding are critically important. 
The Federal Government has not been making those investments in 
the past. In my operation over the last 20 years, I have 
reduced by fertilizer applications by 50 percent as a result of 
banding fertilizers rather than broadcasting, a result of 
research and extension work. The same can be said for pesticide 
application. The need for us to maintain our competitiveness is 
clear: research and extension is an important part of that.
    I would be remiss if I did not mention one program that I 
am very concerned about, and that is immigration reform, not 
tied to the Farm Bill, but very much tied to specialty crops. 
We must have a workable, accessible program to supply labor to 
the specialty crops in this country or we will export the 
production of fruits, vegetables, and mushrooms around the 
world. I don't think we want to depend on foreign nations for 
that production.
    Gentlemen, I appreciate your interest and look forward to 
working with you on these important issues.
    [The prepared statement of Mr. Eckel can be found in the 
appendix on page 50.]
    The Chairman. Thank you.
    Mr. Martens.

   STATEMENT OF MR. KLAAS MARTENS, ORGANIC FARMING RESEARCH 
                 FOUNDATION, PENN YAN, NEW YORK

    Mr. Martens. Mr. Chairman and members of the committee, 
thank you for this chance to testify.
    My name is Klaas Martens, and I represent the Organic 
Farming Research Foundation. I went through the land grant 
system and was a conventional farmer. I started farming 31 
years ago, and I did things pretty much like everybody else in 
our community that was growing corn, soybeans, and other crops, 
and dairy cattle.
    About 14 years ago, we converted our farm to organic 
management. We were surprised, actually, to learn that our 
yields did not go down. Our cost of production did. Organic 
farming has been very good for our family and our farm and our 
community. At this point, there are nine other farms bordering 
us who are farming organically, and they are a major stimulus 
to the local economy.
    In the past, we have talked about subsidies. I am not proud 
to say it, but when we were farming conventionally, I was 
growing crops to trade dollars and getting my profits by 
farming the programs. Today, that is not true. Markets for 
organic foods have grown at the rate of over 20 percent per 
year for the past decade. This rate doesn't show any signs of 
slowing down. Consumer demand is currently outpacing supply.
    I am personally very concerned about our share in the 
market. As companies like Wal-Mart that need a very large 
stable supply of organic foods enter the marketplace, they need 
to have a reliable supply, they need to get what they want when 
they want, and I am afraid they are going to go overseas and 
start buying the organic foods elsewhere.
    The key to increasing organic production is research, 
extension, and good information. The reason we have a sell in 
Penn Yan and a lot of organic farms is that we have been 
learning from each other. We are very close to Cornell 
University. We have had terrific support from our researchers. 
And we have been able to institute changes on our farms that 
have made organic farming extremely successful. One thing I 
would like to quip is that organic farming and conventional 
farming are 95 percent the same. It is best management 
practices.
    There are a few things that I would like to ask for that I 
think would help make organic farming more competitive and help 
us hang on to our market share. I think we need to prioritize 
support for organic farming. We need to increase the amount of 
money available for research into organic farming and 
disseminating that research to the farms that need it. I think 
we need to continue the program for cost sharing. A lot of 
farms, and even businesses, that go into organic see that cost 
of certification is a big upfront cost, and they are starting 
out with a small portion of their business doing that. By 
having this cost share available, they are able to offset part 
of that cost until their market grows. And we have seen 
business after business in our area do that and watch their 
markets explode and then be on their own. So this program has 
been very effective and a big help in us meeting the demand for 
organic food.
    I would like to thank you for the chance to testify before 
this committee and for the support that the USDA has shown to 
organic farming.
    One last thing I would like to point out is that when you 
look at the size of the organic market, 2.5 percent of organic 
food, we could increase the amount of money put into research 
by fivefold and only be bringing it up to the fair share, if 
look at it as a proportion of the industry. And if you look at 
the growth we have, this fivefold increase would still be 
behind.
    Thank you.
    [The prepared statement of Mr. Martens can be found in the 
appendix on page 55.]
    The Chairman. Thank you very much, gentlemen.
    I have a series of questions, which I need to direct to 
you, Mr. Shaffer, and you, Mr. Wilkins, that we are going to 
ask at every field hearing we do so that we can make sure that 
we have the right information from the different sections of 
the country.
    First of all, how would you prioritize the programs of the 
Farm Bill generally and the commodity titles specifically? How 
would you rank the relative importance of the direct payment 
program, the marketing loan program, and the counter- cyclical 
payment program?
    Mr. Shaffer?
    Mr. Shaffer. Of those three, the first question I would 
have is, as you have talked about, how are they going to be 
interacted once we have a new trade agreement settled. That is 
going to determine a lot of where we need to go, and that is 
why, as I mentioned before, we are kind of at a critical period 
as far as lack of direction, because once we develop our trade 
agreement, then the direction might be different than what we 
are prioritizing now.
    I am a very big supporter of counter-cyclical payments. I 
am a very big supporter or safety nets. And I think they would 
be needed just because it puts a floor under it. It is 
something that is not going to be utilized all of the time. And 
incidentally, you discussed something that was interesting 
about the amount of cost to the Farm Bill. and I look back at 
the last Farm Bill, and it is a shame that the Congressional 
Budget Office doesn't realize money not spent as a savings, 
because I think on a lot of programs in the last Farm Bill, 
whether it be the MILC program or whatever, if that money is 
not all spent, it is still considered allocated, and we can't 
show that as a savings. So I guess I just bring that up, 
because when we look at budget cutbacks, once you have cut it 
back, we aren't taking into account that the Ag community 
didn't utilize all of the money that was allocated in the first 
place.
    But I think the direct payments and counter-cyclical 
payments, as far as the crop program, have worked well. But to 
some of the side rules of those payments, for instance with the 
vegetable industry, if you infringe on the base with 
vegetables, you run the risk of a penalty. So therefore, we 
need some more flexibility when we are rotating specialty crops 
around with program crops. That is what I was referring to as 
some of the different challenges of the northeast.
    I hope that answers some of your questions.
    The Chairman. Mr. Wilkins.
    Mr. Wilkins. Mr. Shaffer made a very, very good point, that 
it is difficult to talk about the 2007 Farm Bill not knowing 
what is going to come out of the Doha round, if an agreement 
will be reached or not. But to answer your question, looking at 
the three programs that you specifically relate to, the direct 
payment program, marketing loan, and counter-cyclical, I 
believe that we would want the marketing loan program and the 
loan deficiency payment. We would prioritize that as, out of 
those three, being the No. 1 program that we would want to see 
continue. At times when commodity prices are below cost of 
production, we need some type of a safety net there to ensure 
that we are at least going to break even and be alive to farm 
the next year. Second, I would rank the direct payment program 
as number two. And third, the counter-cyclical payment program.
    One flaw that I see with the counter-cyclical payment 
program is it is not based on amount of money that the producer 
received. It is based on the average market price. The formula 
has not taken into account the number of bushels of production 
that was sold at that price. So many producers that don't have 
an adequate amount of storage space to store a year's worth of 
commodity, they could be penalized, because if they are forced 
to sell their commodity at harvest time out of the field and 
market price rises, they didn't capture that increased market 
price. But then the counter-cyclical payment is based on the 
average market price for the year, and that takes some of that 
counter-cyclical payment back away from them, which we have 
seen that happen several times in the last 3 to 4 years.
    Other programs of the Farm Bill, the Conservation Security 
Program, excellent program. We really feel that that program 
will reward producers that are good stewards of the soil, that 
have been and have already put into practice good conservation 
practices. In some of the conservation programs that we have 
had in the past, you had to be harming the environment before 
you would qualify for the program. The Conservation Security 
Program takes a different approach. It says you are already 
doing this, we are going to reward you for doing that. I think 
there are some other parts of the Farm Bill, the assistance for 
marketing co-ops. That was an excellent part of the Farm Bill. 
We would like to see that continued, also.
    The Chairman. We can expect an effort to further reduce 
payment limits in the next Farm Bill. Do payment limits need to 
be modified in this Farm Bill? If so, why?
    Mr. Shaffer. We have, as you said, a limited supply of 
money. We would like to see the payment limits removed on 
there. It goes back to the amount of money that you said is 
going to be available as far as that goes. In Pennsylvania, 
payment limits might not mean as much as they do in other parts 
of the country. So I guess for me to comment from Pennsylvania 
as far as payment limits, other parts of the country might have 
a different view on it. I would just say, as far as our 
Pennsylvania farmers, if there is enough money to adequately 
help the greater number of farmers is what I am looking for, if 
that includes payment limits or whatever, but I am looking for 
that there be a safety net able to be provided to the greatest 
number of farmers.
    Mr. Chairman, it is so important that we keep, not 
artificially, but valuable the number of farmers in business as 
possible. If we don't, in Pennsylvania and other parts of the 
country, I am afraid if we start losing our infrastructure, our 
agricultural infrastructure, we already see there are fewer and 
fewer machinery dealers, fewer and fewer processing plants, we 
won't get those back, and that is why I think it is so vitally 
important to develop a program that is going to keep the 
maximum amount of farmers in business as possible. And like I 
said, not artificially prop them up, but actually make it so 
they can stay in business.
    Mr. Wilkins. Mr. Chairman, the issue of payment limits is 
probably one of the issues that divides the agricultural 
community. Looking at the blue jackets, when I had the pleasure 
of wearing the blue jacket, I visited Washington, DC for 
Leadership Week, met with then-Secretary of Agriculture Butts, 
who told us plant fencerow to fencerow. The world is hungry. We 
can get rid of everything that you produce. And as young 
agriculturalists, we went home and we listened to those words, 
and we became very efficient producers of food. But then market 
prices went down, cost of production continued to spiral 
upwards. What were we forced to do? Outbid our neighbor for the 
next farm. And it is really sickening in my region at how 
values of being good neighbors and helping each other have, in 
many cases, been squashed by the need to get bigger in order to 
remain competitive. This is why the agricultural camp is so 
adamant about protecting payment limits, keeping them large, 
protecting the three entity rule. And I have really mixed 
feelings on this, because on one side, I understand the need 
that you must get larger and larger and larger in order for 
efficiencies of production, but at the same time, I look back 
and see that when we were only farming 500 and 600 acres we 
still had time to spend in our community. We still had time to 
belong to community organizations, to do things recreationally 
with our families. And now that we are pushed to be bigger and 
bigger producers to survive, a lot of those things we don't 
have time for today. We have to work 16-hour days, 6 and 7 days 
a week. And I wish there was something that we could do to 
reward the small farm producers, but not at the expense of 
taking too much money away from the large operations.
    Mr. Martens. Mr. Chairman?
    The Chairman. Yes, sir.
    Mr. Martens. I think there has been an unintended 
consequence from raising the payment limits and having these 
payments, that they have become an entitlement that goes with 
the land. And I have got a personal interest. My son is sitting 
here. He is 17 years old, and he would like to farm. And he 
regularly asks me, ``Dad, how am I going to be able to afford 
to get a piece of land so that I can become a farmer? And I 
think we are seeing greatly inflated land prices partly as a 
result of the way, not intended, the program is working. And I 
think payment limits could possibly help rectify that 
situation.
    The Chairman. All right. The Doha round of negotiations 
seeks to provide additional market access for U.S. agriculture 
goods in exchange for cuts in domestic farm payments. How 
important are exports to the future of farmers?
    Mr. Shaffer. I think they are vital. We are already 
producing over 30 percent more than what we use in this 
country. If we don't have an export program, we are just going 
to basically put probably close to 30 percent of our farmers 
eventually out of business. So this is so vital. As far as the 
Doha rounds, we need, and it was very gratifying to hear from 
Susan Schwab the other day when I was in Washington, that her 
philosophy is that she is intending on standing firm, that a 
bad deal is worse than no deal. And personally, I agree with 
that, and I think you are on the same program as that. But I 
think the people in the United States have to understand, as 
far as exports and imports, how vital it is to keep the United 
States' agriculture healthy. We are hearing every day, that is 
all you hear in the news, about the price of fuel and depending 
on foreign oil. I think if the people had to depend on foreign 
food, between biosecurity issues, availability, and price, 
there would be more dissatisfied voters, I think, in this 
country than anyone has ever seen. So I think the whole ability 
for exports is getting back the ability to keep our farmers in 
business. We have to have that export market to utilize our 
overproduction.
    The Chairman. I didn't intend to skip you guys down there. 
I was primarily asking this to the commodity growers, but any 
time you all want to jump in, feel free to do so.
    Mr. Eckel. Senator:
    The Chairman. Sure.
    Mr. Eckel. Your previous question, I agree totally with 
Carl. And for the specialty crop industry, it is extremely 
important that we have access to those markets. And I would 
just make one observation from having been involved in the 
previous round of negotiations, and that is that this is a work 
in progress. And one of the additional things, if we do get an 
agreement, is to insist on a continuity clause so that we 
continue down this path. We won't achieve all of our goals, in 
my opinion, in this round. It will take more rounds. 
Continuity, a commitment to future negotiations, will be key 
and something that I don't hear many people mentioning about.
    The one comment I would make about payment limitations, and 
this is coming from a specialty crop producer, but I have had 
experience with many of your colleagues from other production 
crops, there is a philosophical argument that you have to deal 
with. I had indicated in my testimony that it was important 
that we be geared to a farm program that assures an adequate 
supply of food and fiber. Once we set any payment limitation, I 
believe we have modified that goal, because now we are talking 
about income support rather than production encouragement. And 
I think that that is a philosophical discussion that absolutely 
needs to be in the minds of those of you who deal with the next 
Farm Bill. What is the real goal? If the real goal is just 
financial support of a certain group of individuals, there are 
probably better ways to do that than a farm program.
    The Chairman. Mr. Eckel, I want to direct this question to 
you, but before I do, my part of the country has primarily 
been, historically, row crop production. Peanuts, cotton, and 
tobacco have been our staple crops for decades. My home county 
is one of the more diversified counties in the country. In 
fact, we pride ourselves on being the most diversified 
agricultural county east of the Mississippi River. If you can 
eat it, wear it, or smoke it, chances are, it could have come 
from my home county. But my son-in-law is a produce farmer. Joe 
grows cabbage, cucumbers, squash, all kinds of greens, bell 
peppers, and eggplants. He and I have talked about this 
question many number of times that I am going to direct to you. 
Do you have any thoughts about relaxing or eliminating the 
planting restriction in order to comply with our WTO 
obligations? What would the impact of relaxing or eliminating 
that provision be on specialty crop growers?
    Mr. Eckel. The one concern that I have is that when we 
relax that provision, what we ultimately do is cause the 
traditional vegetable producer who has never established a base 
to have to compete against those program crop producers who are 
now entering vegetable production but armed with a payment, if 
direct payments are kept in that proposal. In fact, in the 
current structure, could actually receive direct payments and 
counter-cyclical payments. That is unfair competition to that 
individual who has been a traditional vegetable producer and 
never built a base. I understand the need for flexibility, but 
if, in fact, we have to do that, we may well have to look at 
some other way to level that playing field, otherwise, he will 
be competing against someone who has an economic advantage that 
he does not have.
    The Chairman. Mr. Martens, as an organic producer, how have 
you been able to utilize the conservation provisions in the 
2002 Farm Bill?
    Mr. Martens. We have participated in all of the Federal 
programs. We have gotten EQIP funds for putting in contour 
farming, diversion ditches. Our farm, I am proud to say, is 
farming well below the erosion factor. I do have a concern. I 
hope this is not totally off topic, but we have gotten terrific 
support from the very well trained NRCS staff that has worked 
with us. And I am very concerned that we have got five senior 
district conservationists in our area who are retiring this 
year, and there have not been sufficient people trained to 
replace them. And we are going to sorely miss the contribution 
that NRCS gives if we don't put resources into training new 
people that can continue doing that. So to kind of sum it up, 
we have participated in all of the programs. Our farm has 
definitely benefited, but I am very concerned for the future, 
not just organic farmers, but all farmers having the support 
from NRCS technical people that we need.
    The Chairman. Senator Santorum.
    Senator Santorum. Thank you, Mr. Chairman.
    I would ask Carl. I think you made the quote that this is a 
Farm Bill, not a conservation bill. Obviously, there are 
substantial conservation programs in the Farm Bill. Do you have 
suggestions of how we could alter those conservation programs, 
and anybody else who would like to comment, also, but I wanted 
Carl to start, alter those conservation programs to be more 
beneficial to production?
    Mr. Shaffer. Well, I don't want to be flip, but the first 
thing sounds like we ought to move to Penn Yan, New York with 
the farm. It sounds like it is working better there. It is not 
in Pennsylvania. EQIP used to be called the ACP program years 
ago. It was a vital tool for cost shares that a producer, an 
operator, could apply for cost share money to do conservation 
practice. And back then, to be honest with you, NRCS, that used 
to be the Conservation Service then, would receive from zero to 
5 percent money of the total budget for technical training. Now 
that is up to 19, almost 20 percent, that they get for 
technical training. And also, my concern is there is an 
advisory committee made up of approximately 40 people in 
Pennsylvania. And one, maybe two, out of that 40 has ties to 
production agriculture. And those are the people that are 
advising where the EQIP money should be spent. So I think we 
need to relook at things, because we need programs that are 
going to provide help, especially with our WTO agreements where 
the green box would allow for some more conservation money to 
get to producers. Somehow, we need workable programs where that 
conservation money actually gets to production agriculture and 
isn't tied up with some sort of middle person or something. We 
need technical advice. We don't need water police. And some of 
this money is sort of geared toward enforcement rather than 
money to actually go to a farmer to implement practices to 
better our environment. And I think we need to do that. We need 
to concentrate on that.
    Mr. Martens. I think the conservation money, especially the 
EQIP program, maybe we have benefited better than other parts 
of New York, but we have had some very good people working with 
us. But they are a win-win situation. The farmer wins, because 
we improve our land, we protect our soil from erosion, and we 
increase our production. But the public that pays the taxes 
also wins, because their water is cleaner and their air is 
cleaner and their environment is a better place. So I think 
there is a fairness in these conservation payments where we can 
go to the taxpayer and say, ``Yes, we are taking your money and 
using it on farms, but we are doing things that are going to 
benefit you.'' And just, for example, the big project that our 
farm just completed is a farm that is uphill above the village 
of Penn Yan. We had a flood in the year 2000 when eight inches 
of rain fell overnight, and there were two kids with a rowboat 
out in the middle of my kidney bean field. That flood just 
narrowly missed flooding the entire village. Now what this 
project has done, by putting in terraces, contour strips, and 
better water management, is protected the village. And I think 
there is hardly anybody in Penn Yan downstream from that farm 
who doesn't feel that their tax money was well used.
    Senator Santorum. OK. Keith and then Carl, if you want.
    Mr. Eckel. Senator, this is more of an administrative 
observation. NRCS has been extremely important to agriculture 
and to the environment, I think, in providing technical service 
over the years, as my colleague has indicated. One of the 
concerns that I see in the operation is that with the advent of 
some of the new conservation programs, they have become the 
administrator of funds as well as the technical advisor 
provider. It seems to me that perhaps within USDA we are 
creating two agencies. We already have the Farm Service Agency 
who historically has administered those programs, and I think 
it is better equipped to do that. And I am concerned that we 
are taking away time from that critical technical advice in 
doing that where FSA could do that. Again, I would indicate it 
is an administrative concern, but perhaps something that should 
be looked at as you work on the bill.
    Mr. Shaffer. Just a little more follow up. There are other 
programs. And it was ironic he just talked about the flood, and 
we just had a flood. You were there. You saw it. There is a 
program called the Emergency Conservation Program, which is a 
conservation program. Wonderful. It is just geared for what we 
have had. It is to help clean out waterways, diversions, and 
straighten things up. It would really help with a lot of this 
flood damage so if we have more rain, we are not going to have 
more erosion down in the streams and creeks and rivers. The 
problem is, there is zero money allocated in the program. So we 
do have some programs that work really well where there are no 
dollars in there, so it is not available. In the CREP program, 
I have utilized some of that money to do some conservation 
practices. Great program. The only thing, it will only pay, for 
some reason, for projects that run up and down the hill. It 
won't pay for projects that run across the hill. And to try to 
stop erosion, projects that you can apply across the hill to 
collect the water and channel into that project that up and 
down the hill. But we can talk until we are blue in the face, 
but there needs to be some common-sense approaches to the 
conservation program. I am not saying, and please don't take 
this wrong, that it is not good. It is good, but it just needs 
to be tailored that it does what it is intentioned to do. When 
you vote for it, I know you have in mind it is to go to 
production Ag to do conservation practices or reward people 
that are good stewards of the land. But when it is getting lost 
some place in the middle, that is what we need to address.
    Thank you.
    Senator Santorum. Just one final question. I talked about 
the issue of crop insurance, and I think it would be helpful to 
the committee if you could explain, any of you, Keith, maybe 
since you have gone through this, some of the problems that we 
are having here in Pennsylvania with the crop insurance program 
and some suggestive changes that we could make in the program 
that could help improve our coverage here and take care of some 
of our farmers.
    Thank you.
    Mr. Eckel. No. 1, from the specialty crop perspective, we 
absolutely need to develop a program that offers coverage for 
all producers. We don't have that now. Some of our small family 
farms located along the Susquehanna River and all of the other 
creek bank areas in Pennsylvania, those operations are small. 
They are retail. They may grow 30 different crops. We talked 
about vegetables. It happens that I grow two that are 
insurable: sweet corn and tomatoes.That is not by accident. 
That is by plan for myself. But those who grow those others 
have no protection at all. That is a serious problem, so we 
need to broaden the protection to all crops, number one.
    No. 2, the program is administered differently in different 
parts of the country. If we living in the Midwest, sectional 
equivalence would allow us to break up our operations. I will 
use my operation as an example. My operation is composed of 
nine separate farms, some as far as seven miles away that we 
own. The FSA offices had encouraged us to group them under one 
FSA number, which we did. If we lived in the Midwest, for crop 
insurance purposes, we could separate them by sectional 
equivalence. In the northeast, we can't. You were in the 
northeast 2 weeks ago. We had tomatoes, for instance, that were 
flooded along the Susquehanna River. Because I have tomatoes 
that are also grown on a different farm five miles away, there 
will be no coverage for them. So it is critically important, in 
my opinion, that sectional equivalence or insurance by tract 
rather than by FSA number would be very, very important. We 
have to increase the expertise of FCIC at all levels in order 
that we can adequately provide that coverage. Until we do, we 
absolutely have to have the consideration of a disaster 
program, because, gentlemen, while this disaster was narrow in 
scope, it was devastating to the producers that are involved. 
They deserve assistance. There is no one in this country that, 
seeing that, would say that they did not. So we have got to 
work in that Farm Bill to correct that, but I personally 
believe something needs to be done for those producers now that 
didn't have that protection.
    Mr. Shaffer. I stated in my opening comments that in 1980, 
the Ag community made an agreement with Congress to forego the 
large ad hoc disaster payments. And I am 100 percent supportive 
of crop insurance. It is a voluntary way where I feel a farmer 
can self-help himself. He is paying a portion of the premium, 
and he is making that decision whether he wants to provide a 
safety net for himself, and he is contributing to it with money 
out of his farming operation. But having said that, in 
Pennsylvania, when 43 percent of the farmers are taking 
advantage of this program, it is not because they just don't 
like crop insurance, because if it doesn't work for them, they 
are not going to take advantage of it. We are classified as an 
underserved state, and I told the administrator of risk 
management I would love to get off that list. I would love for 
us to be off that list that Pennsylvania is an underserved 
state, because that means more of our producers are able to 
take advantage of crop insurance.
    Mr. Eckel mentioned the specialty crop, and we have 
mentioned that. We have mentioned the green crops. At worst, 
the agricultural community is so dependent on one sector or 
another that if one sector is getting a better deal from the 
Federal government and the other sector isn't, that puts them 
at a disadvantage. I know we are on a global market, but we are 
also competing within the United States. So I really feel that 
crop insurance can't be one cookie-cutter policy for the whole 
country.
    And something you can relate to, Mr. Chairman, I was told, 
I said, ``Well, we can't make it different for northeast,'' as 
the southeast said. ``That is all the same.'' I said, ``Well, I 
beg to differ, because if you can find a cotton or a rice 
policy written in Pennsylvania, I would love to know about 
it.'' So there already are some differences in amongst the 
different parts of the country.
    Thanks.
    Mr. Martens. I think all of the things that Mr. Eckel 
shared about crop insurance applied to most organic farms, too, 
with one important difference. Crop insurance seems to work 
fairly well for corn and soybean farmers. Those are easy crops 
to insure. Maybe wheat. That program works for the farmers in 
my area, too. As an organic farmer, though, when I sell my 
soybeans that go to Japan, I am getting $22 a bushel compared 
to a ready soybean that might bring less than $5. And I can't 
insure my $22 soybean for more than the going price for the 
cheapest soybeans in the community. So I am really not getting 
meaningful coverage on the grains because of the difference in 
value, and I think we need to have a way that a farmer can 
actually insure their exposure to us in an equitable way. And I 
think this could be fairly easily done.
    The Chairman. Don, did we cover everything you wanted to 
ask about?
    Mr. Sherwood. They pretty well got through the specialty 
crop insurance, which I wanted to talk about. And we talked 
about conservation a little bit. And to go back to the CREP 
program, I think it needs to be reemphasized that the way the 
CREP program was set up in Pennsylvania, not only did it take a 
lot of marginal farmland out of production, which is a good 
thing, it also took a lot of good farmland out of production, 
because in Pennsylvania, land rents are not as high as the CREP 
program, anywhere near as high in most parts of the state. And 
so it has been counterproductive for agriculture in that 
regard.
    The other thing, we have all talked about the flood. And we 
all know that we need money for disaster relief, but we also 
need to change our policies in this country a little bit. In 
this part of the world, we went in the creeks in 1972 and sort 
of straightened them up, and nobody has been allowed to do it 
since. So the creeks were ready for a disaster, because when we 
had a hard rain, they all blocked up and split into three 
channels and go out through the agricultural ground or go out 
through a residential neighborhood because they hadn't had any 
work done on them in years and years because that is out of 
favor right now. And really, there was more mud in the creeks 
and mud in the river and mud in the Chesapeake Bay by this 
natural rainstorm than there could have been many times over in 
all of the projects that might have been done in the last 30 
years and weren't done. So I think we have to relook at those 
policies a little bit.
    The Chairman. Well, gentlemen, thank you very much. We 
appreciate your testimony and your input very much.
    Yes, sir. Mr. Wilkins?
    Mr. Wilkins. Mr. Chairman, if I could, please, on the Doha 
round of negotiations. And we were talking about Mr. Shaffer 
mentioning that 30 percent of current farm production is being 
exported. Historically, that is ever since the 1970's that we 
have been very dependent upon exports to keep our production 
utilized. We are on the verge, though, in this nation that if 
we continue to increase the production of ethanol, if we 
continue to increase the production of soybean biodiesel, and 
we are just starting to look at biomass energy production, we 
could sustain a vibrant farm economy in this country with 
hardly any exports, but with programs that would help to 
utilize the production as renewable fuel. I mean, that is what 
I am looking forward to, working over the next few years to 
continue to get renewable fuels encouraged and production 
ramped up. And I think it is very important that these 
incentives for renewable fuels end up to the consumer, either 
the producer or the consumer.
    In my county, I purchased 100 percent soybean biodiesel 
prior to the excise tax credit, and I paid $3.20 a gallon for 
it. After the excise tax went into effect, I paid $3.30 a 
gallon for it. I asked my supplier how I could possibly be 
paying more after he is receiving $1 a gallon excise tax 
credit, and his simple answer was: supply and demand. Supply 
and demand. I could stick an extra dollar of profit in my 
pocket. And what I want to see is when a consumer pulls up to a 
fuel pump island that they don't have to pay extra for 
renewable fuel. And the polls have shown that consumers are 
willing to pay a small amount extra for renewable fuels if it 
means reducing our dependence on foreign oil.
    Thank you.
    The Chairman. Let me assure you, as we write the Farm Bill 
next year, the energy title that we put in the 2002 Farm Bill, 
for the first time I would add, is going to be greatly 
expanded, because this is a key issue all across America. We 
have never used ethanol in the southeast, because we have not 
had a supply, but the demand is there. The supply is going to 
now come, just like it is everywhere. So whether it is 
biodiesel or ethanol, we are going to see an awful lot more in 
the way of manufacturing of those products and utilization of 
those products across the country.
    Let me again thank all of you for coming out today. We 
appreciate very much your input and your testimony. We look 
forward to continuing the dialog with you as we approach the 
writing of this bill next year.
    Thank you.
    Mr. Wilkins. Thank you, Mr. Chairman.
    Mr. Shaffer. Thank you.
    Mr. Eckel. Thank you.
    Mr. Martens. Thank you.
    The Chairman. I would like to call our next panel forward 
at this time: Mr. James Shirk of East Earl, Pennsylvania, 
representing the Shirk Family Farm and Pennsylvania State 
University; Ms. Christine Hetz Phillips of Fairview, 
Pennsylvania, representing the Fairview Evergreen Nurseries and 
Pennsylvania Landscape and Nursery Association; Mr. Don Cotner 
of Danville, Pennsylvania, representing Cotner Farms.
    Mr. Shirk, Ms. Phillips, Mr. Cotner, welcome to our panel 
today. Thank you very much for taking your time to come here 
with us, and we look forward to hearing your testimony. We are 
happy to submit your entire statement for the record.
    We would ask that you hold your comments brief.
    Thank you.
    Mr. Shirk.

STATEMENT OF MR. JAMES A. SHIRK, SHIRK FAMILY FARM, PENN STATE 
              UNIVERSITY, EAST EARL, PENNSYLVANIA

    Mr. Shirk. Chairman Chambliss, Senator Santorum, and 
everyone else, thank you very much for coming to Pennsylvania 
and being here to hold this hearing.
    My wife and I are the ninth generation to live on our 
family's farm and are committed to continuing to be a part of 
agriculture like our family has for the last 248 years. It is 
my belief that the purpose of the Farm Bill is to provide the 
framework for ensuring the long-term viability of agriculture 
in the United States in the interest of national security and 
quality of life for all Americans. My comments will focus on 
three general areas: the critical need for full funding of Ag 
research and extension at land grant universities, farmland 
preservation, and the distribution of farm program dollars.
    Penn State and the land grant institutions continue to have 
a critical role in the generation and distribution of relevant 
knowledge in providing an educated workforce for generations to 
come. One specific area in Pennsylvania that land grants have 
played a significant role is their assistance in combating 
avian influenza. Twenty-five years ago, we faced an outbreak of 
avian influenza that virtually destroyed our industry, and 5 
years ago, we faced an outbreak again, but through partnerships 
with universities and the Department of Agriculture, the impact 
was significantly and greatly reduced.
    Two components of that success came directly from the 
universities through the development of a faster test for the 
presence of the virus and a better understanding of composting 
techniques which minimized the spread of the disease. 
Unfortunately, the Federal component of research extension 
funding that allows for these success stories has been flat for 
some time, and it is now time to initiate change in the system. 
The next Farm Bill should establish a new institute under USDA 
reporting directly to the Secretary of Agriculture that would 
consolidate agencies, programs, and activities.
    The second area I would like to address is the value of 
farmland preservation programs. These are an economic stimulus 
and provide a background for expansion and profitability in our 
industry. In 2000, my father entered into an agreement to sell 
the development rights from our farm. One of the primary 
reasons for participating was to purchase the farm and to keep 
it in our family. Generation transfer is a very common reason 
for preserving land, thus providing the opportunity for farms 
to remain in the same family for multiple generations. In 
Lancaster County, we are fortunate to have a non-profit land 
trust that can also provide this service. The Lancaster 
Farmland Trust is a very active, nimble, and effective 
organization that has preserved almost 15,000 acres through 
donated easements or low-cost purchases, with many farms using 
the Trust as part of their estate planning. The Trust estimates 
they have saved taxpayers around $35 million using their 
organization to preserve this land. Federal policy should 
encourage the use of non-profit land trusts as a cost-effective 
model for preserving farms and consider expanding tax 
incentives for easement donations.
    My final comments revolve around distribution of Federal 
Farm Bills and the regional equity. The advantage we do have in 
production is our proximity to major populations and thus 
consumers. The next Farm Bill can invest in our advantages by 
providing incentives for value-added production and expanding 
our regional supply chains.
    [The prepared statement of Mr. Shirk can be found in the 
appendix on page 59.]
    Chairman Chambliss, I thank you for the opportunity to 
share my thoughts and look forward to any questions you would 
have.
    The Chairman. Thank you.
    Ms. Phillips.

 STATEMENT OF MS. CHRISTINE HETZ PHILLIPS, FAIRVIEW EVERGREEN 
  NURSERIES, PA LANDSCAPE AND NURSERY ASSOCIATION, FAIRVIEW, 
                          PENNSYLVANIA

    Ms. Phillips. Mr. Chairman and distinguished gentlemen, 
thank you for coming today and for your interest in the 
concerns of Pennsylvania agriculture. Thank you.
    My name is Christine Hetz Phillips, and I am the CEO of 
Fairview Evergreen Nurseries, a 3,500 acre agricultural 
operation located near Erie, Pennsylvania. I also serve on the 
Penn State Erie County Cooperative Extension Board and on the 
Board of the Pennsylvania Landscape and Nursery Association, or 
the PLNA.
    PLNA represents predominantly family owned businesses in 
Pennsylvania's $5.6 billion landscape nursery and retail garden 
center industry, known as the ``green industry''. The green 
industry employs over 100,000 Pennsylvanians, is Pennsylvania's 
largest cash crop, and the fastest growing segment of 
agriculture in Pennsylvania. Nationally, nursery and greenhouse 
production represents 11 percent of the commodity agriculture.
    Our green industry has not played a major role in previous 
Farm Bills because we are a non-subsidized component of 
agriculture. The green industry is not seeking subsidies, but 
stands in need of research and development funding. 
Pennsylvania State's College of Agricultural Sciences has 
provided such research and development supported by Farm Bill 
grant funding. And PLNA simply asks that this funding continues 
as the partnership between the college and the green industry 
has been immensely beneficial to the nurseries and landscape 
contractors and garden centers of Pennsylvania.
    With new challenges, such as the Asian Longhorn Beetle, 
Emerald Ash Borer, and Phytophthera Ramorum, or Sudden Oak 
Death, the green industry must be equipped to respond to these 
diseases and/or pest crisis. Farm Bill funding can help bridge 
the widening gap between current resources and these needs. 
Historically, the Commodity Credit Corporation has been a 
strong funding source for quarantine and eradication efforts, 
but this has been scaled back. More funding is needed to ensure 
the short and long-term safety and stability of our nursery and 
greenhouse crops.
    The challenge of invasive species is another area in our 
industry that suffers for lack of strong scientific research. 
Research in this relatively new field is desperately needed, 
but funding is scarce and difficult to find. The 2007 Farm Bill 
could provide additional grant dollars for the issue of 
invasive species so the industry can better understand the 
implications of certain plants in both our landscapes and 
forest lands.
    Finally, I want to direct your attention to the most vexing 
problem in the green industry. Our industry's greatest need is 
access to sufficient labor. Pennsylvania's own Senator Arlen 
Specter has helped to author excellent legislation, and the 
Senate has passed this good bill, which will begin to solve our 
nation's labor and immigration crisis.
    I want to thank the Senators here today for their hard work 
to achieve a bipartisan and balanced bill that will achieve a 
real solution for our farms, communities, and agribusinesses.
    Thank you.
    [The prepared statement of Ms. Phillips can be found in the 
appendix on page 62.]
    The Chairman. Thank you.
    Mr. Cotner.

      STATEMENT OF DONALD COTNER, COTNER FARMS, DANVILLE, 
                          PENNSYLVANIA

    Mr. Cotner. Yes. Senator Chambliss, welcome to the 
beautiful rolling hills and valleys of Pennsylvania. Thanks for 
coming here.
    Senator Santorum, thanks for hosting this program.
    And Secretary Wolff, thanks for sharing your house with us.
    It is a pleasure to speak with you today, and I appreciate 
the opportunity to talk to you about the status of Pennsylvania 
agriculture and the potential implications of the upcoming Farm 
Bill.
    First off, I would like to provide a very brief background 
of myself. We are a third-generation family farm involved in 
the production and marketing of eggs. We raised 1,300 acres of 
corn and soybeans annually, and we recently began a commodity 
trading and soybean processing business serving northeastern 
United States feed industry and the emerging biofuels industry. 
Additionally, I serve as Director of AgChoice Farm Credit and 
for PennAg Industries Association. AgChoice, as part of the 
Farm Credit System, provides financing and financial services 
to rural Pennsylvania. And PennAg is a trade association, which 
provides lobbying and operational services in support of 
agriculture and related industries. My comments are not meant 
to reflect positions of these entities.
    I was pleased that Congressman Sherwood recognized the fact 
that I was involved in poultry and egg production, however, I 
was asked to participate with an emphasis on biofuels, so that 
is where I will emphasize.
    The emerging bioenergy markets present a tremendous 
opportunity to reverse the current conditions of agriculture in 
our region. In order to energize our local Ag economy, we must 
stimulate local corn and soybean prices. Rather than reduce 
supply to achieve this goal, we need to spark corn and soybean 
demand. The present and ongoing fuel crisis presents a great 
opportunity to do just that. Ethanol and biodiesel production 
within our region would eliminate any locally produced surplus, 
would create buyer competition for our corn and soybeans, and 
put profits into the farmers' pockets.
    Without question, government assistance will be required to 
overcome the establishment and startup costs inherent to the 
biofuels industry. The programs put into place in the new Farm 
Bill must promote growth and increased market competition. The 
new Farm Bill needs to promote the agricultural community to 
get involved in ethanol and biodiesel from the beginning to the 
end of the cycle: from farmers to consumers. Agriculture needs 
to see incentives that encourage farmers to plant more acres of 
beans for biodiesel plants and more acres of corn for ethanol 
plants. I would encourage programs for farmers that commit to 
produce for the biofuel industry.
    Agriculture needs government support for ethanol and 
biodiesel startups. I would encourage continuing grant programs 
and tax credit programs for bio-based fuel producers and 
blenders. Agriculture needs a Farm Bill that encourages the 
community to use biofuels. Actively promote it. Reward the farm 
community to use it. Consider reducing taxes on bio- based 
fuels. Set reasonable, yet progressive, biofuel usage mandates 
in public transportation and the railroad industry.Possibly tag 
funding for public awareness programs on the merits of ethanol 
and biodiesel fuels.
    And thank you, again, for the opportunity to speak with 
you.
    [The prepared statement of Mr. Cotner can be found in the 
appendix on page 64.]
    The Chairman. Thank you very much.
    Ms. Phillips, you talked about research, as did some of our 
other witnesses earlier, and unfortunately, we are not likely 
to have additional funding for any new research programs in the 
next Farm Bill. Are there any existing programs, from a 
research standpoint, that you think we are not fully utilizing 
or that we are, in effect, not getting the benefit from that we 
ought to shift to other areas?
    Ms. Phillips. I don't know, really, about shifting any of 
the resources. I am on the Penn State Cooperative Extension 
Board. I do know that funding to them overall has dropped 2 
percent, I think every year for the last three or four years. 
That was one main area where a lot of research was taking 
place. Also, as a new member on the PLNA, I know they look at 
research. As a member on the HRI Board of the ANLA, which is a 
trust for research into horticultural concerns they have tried 
to be a significant resource. But there are so many different 
invasive plants, invasive bugs, just everything that concerns 
our industry. I know the Avian flu was even talked about. I 
think our government could do a lot of good by granting money 
in the form of research with this Farm Bill.
    Mr. Shirk. Mr. Chairman?
    The Chairman. Sure.
    Mr. Shirk. If I could add on to that as well. That is kind 
of the genesis for one of the comments I made about 
consolidating agencies into an institute so that some of those 
research lines could not only be enhanced, but they could be 
better coordinated to increase deliverables from those programs 
effectively. Individual and national programs in CSREES, AMS, 
ERS, could be maintained and grown through a better integration 
of how they are coordinated. The funding could be competitive. 
It could be based on priority areas and problem issues and 
require extension and research on a multi- institutional basis 
across county lines to leverage those activities across state 
so that you can expand on those benefits. An important part of 
that, though, is that there not be an elimination of local 
priorities and that they would still have funds to be able to 
reach issues that are site- specific to individual states. 
Pennsylvania's prime example is the mushroom industry, as 
already mentioned. This is a high-value crop, a specialty crop 
here in Pennsylvania, that benefits greatly from the base funds 
that universities have, but their individual needs would never 
rise to the level to compete for a national competitive 
funding. So maintaining the level of base formula funds is a 
very important part of where those research dollars go.
    The Chairman. Mr. Shirk, should we shift funding from land 
retirement programs to working lands programs like farmland 
protection to achieve a better balance, or vice versa?
    Mr. Shirk. I think that it is a perfect marriage to have 
both of them working in together. Farmers are considered to be 
the first environmentalists, and whenever times get tough, 
there can be a temptation to bring in marginal production land 
and try and utilize that in order to put more monies into your 
pockets. When a farmer accepts Federal dollars or state dollars 
or benefits from preserving farmlands, they have a fiduciary 
and an environmental responsibility to maintain the long-term 
production of that farmland. The conservation and the 
stewardship and the fiscal responsibility must be a part of any 
type of conservation programs and farmland preservation 
programs are enacted through the Farm Bill.
    The Chairman. Mr. Cotner, you talk about the utilization of 
alternative crops for production of alternative fuels, which I 
agree with you. I know they are doing a lot of research, just 
like we are at the University of Georgia, particularly on 
cellulosic crops. In fact, we grow something in Georgia that is 
a cellulosic crop that is called kudzu. If we could ever figure 
out a way to manufacture alternative fuels out of kudzu, I tell 
you, we are going to put everybody else out of business, 
because we certainly have an abundance of it.
    But what is your thought on utilization of crops like 
switch grass or other cellulosic crops? Where do you think we 
are headed in that direction?
    Mr. Cotner. I understand that the levels of yield from some 
of those product is greater than the yield from soybeans, and 
it would be a valuable source of biofuel. I think we should 
further explore those. And I am not sure what the byproducts 
would be for switch grass and so forth, and that needs to be 
studied further.
    The Chairman. Being in the poultry business yourself, we 
are number one in broiler production down our way, and I am 
sure your folks are doing the same thing from a research 
standpoint when it comes to looking at trying to capture 
methane and other energy sources out of the poultry industry. 
An issue that we have relative to the utilization of corn, 
particularly in the manufacturing of ethanol, is that we have 
got to be careful that we don't use all of our resources which 
are necessary for feedstocks for folks in the poultry industry. 
How can we balance agriculture's potential in renewable energy 
production with wildlife, environmental, and feedstock 
concerns?
    Mr. Cotner. That is a very good question, and something 
that I have considered. But the bottom line is, the amount of 
money back to the producer has to increase if the government 
subsidy is decreased. And we will have the byproduct from corn-
based ethanol is a product that is well suited for dairies and 
maybe probably decrease the cost of that byproduct. But the 
initial commodity, corn, that should increase and go back to 
the farmers. However, I do understand that the corn distiller 
is not a prime feed for poultry, but the dairy industry is a 
very good user of that product.
    The Chairman. That is a very difficult and sensitive issue. 
Rick was just telling me that Pennsylvania is a corn- deficient 
state. As we expand on this particular ethanol production from 
corn as a resource, we are going to have to be careful that we 
don't use all of the corn to make ethanol, and that we make 
sure our dairy folks, our cattle folks, and our chicken folks 
have plenty of resources also.
    Rick?
    Mr. Shirk. Mr. Chairman? I am sorry.
    The Chairman. Yes, sir.
    Mr. Shirk. If I could add something into that as well.
    The Chairman. Sure.
    Mr. Shirk. One of the best results of all of this attention 
being paid to biofuels is that it creates windows for educating 
consumers about the value of agriculture. And it is amazing to 
see how suddenly people see value in farming when it is going 
to affect their gas tank when they have been fed by the 
livestock industry and the food industry in the country for all 
of these years, but you have got to make hay when the sun 
shines. Our region would benefit most by having investment in 
energy production that utilizes resources that we have in 
excess. In Pennsylvania, we have a lot of excess manure. If we 
can guide our energy production and investments towards places 
where we have challenges like manure. We have excess soybeans. 
This is a perfect place to do that. We have cellulosic 
opportunities because of the hardwoods industry. If we can 
guide energy production to where we have excess and 
opportunity, I think that is the best way to wisely use those 
resources.
    Mr. Cotner. I think, too, that you need to recognize the 
fact that we have been producing soybeans in excess in 
Pennsylvania, and the farmers in Pennsylvania have been paying 
high transportation costs, either to the southern part of the 
country or to the Midwest where they process soybeans into to 
soybean meal. It is something that we ourselves don't use. We 
use mechanical pressure and heat, and then we press the oil 
out. But without transporting that out, without paying the 
freight costs and the demand increasing in Pennsylvania, would 
cause the basis to move in favor of the farmer, therefore 
getting a better price to him, which is critical if we are 
going to do away with subsidies.
    The Chairman. Rick?
    Senator Santorum. Yes, I just want to follow up on this 
same line.
    You talked a lot in your testimony, Mr. Cotner, about 
incentives. You mentioned repeatedly about incentives for the 
development of alternative energy sources. I am sitting here, 
step away from this being an Ag hearing, as a consumer saying, 
why do we need to provide incentives for this production when 
you are sitting here with oil at $75 a barrel?'' I mean, what 
additional incentives need to be given when you have got a 
marketplace where it would appear that you can probably make a 
fair amount of money at oil prices? What sort of program does 
the government have to do in addition to the fact that you have 
got a market that makes about anything profitable when you are 
producing at this point? Why do we need incentives?
    Mr. Cotner. Well, that is the current market. And right 
now, oil is at its highest level it has been forever. If you 
incentivize and extent grants to produce more biodiesel and 
ethanol use, there will have to be some sort of mandate for the 
public to use it and some reason for the consumer to use it. So 
when oil, if it ever does, drops below $40 again and the price 
of soybean oil and ethanol----
    Senator Santorum. You are suggesting that we have to 
provide a mandate to use this, the biodiesel?
    Mr. Cotner. Yes.
    Senator Santorum. Why do we have to provide a mandate?
    Mr. Cotner. Well, currently, I believe that you wouldn't 
have to, but when, as I said, crude oil prices drop below the 
$40 level, then you will have all of these ethanol plants and 
all of these biodiesel plants going broke. You will have the 
production of soybeans and corn maybe fencerow to fencerow to 
supply these plants. So if there is not a mandate involved, 
then there will be a surplus again. The companies will go 
broke.
    Senator Santorum. OK. So what you are suggesting is we need 
an incentive to build it and a mandate to use it?
    Mr. Cotner. Yes. Yes. As opposed to subsidizing.
    Senator Santorum. An incentive is a subsidy, isn't it?
    Mr. Cotner. Pardon me?
    Senator Santorum. An incentive is a subsidy.
    Mr. Cotner. Yes, in a way, how ever you develop it. But a 
mandate is not. A mandate would not cost the taxpayer any 
money.
    Senator Santorum. OK. And you would want this. I am just 
trying to understand. You would want this at this point, even 
though we have very high prices, or you would want this at a 
trigger level that if oil drops below a certain level, that you 
get some sort of mandate? Or how would you envision that?
    Mr. Cotner. Well, I envision it as a trigger level, yes, 
but also, have a reasonable mandate, not something that is 
preposterous. For example, Minnesota has a mandate to use a 
certain percentage of B-20, which is 20 percent biofuels mixed 
in with the diesel fuel. And I think something reasonable would 
work.
    Senator Santorum. OK. Just back to you, Mr. Shirk. You made 
a point in your testimony about regional supply chains. Can you 
get into that from the standpoint of specialty crops? I think 
you were talking about that.
    Mr. Shirk. I think what I am really talking about is how 
could farmers increase their returns per acre, and the 
specialty crops are a way to do that. If we could grow toasters 
in corn crops, we would figure it out and how to harvest it 
with a combine, we would do that. We are looking for 
opportunities to get a return on our investments in that 
farmland. Not every farm has the ability to direct market what 
they can grow to their neighbors, but many farmers certainly 
have the ability to produce them. What could be developed is 
additional infrastructure to link producers to markets. When 
you came in today, you saw the farmers' market sitting out in 
the parking lot outside. That is a great opportunity to 
interact there, but it is a limited number of people that have 
the time to take a day out of their week to come up there and 
sell their wares, and it is only 1 day a week. So there are 
things that are limited on there. If there is a way to look at 
value-added grant programs, rural business and enterprise 
reforms to increase the ability to access processing, 
packaging, and shipping for cooperatives, they would be much 
better positioned to serve a regional marketplace with their 
specialty crops. It doesn't have to be a crop. It can be a 
specialty product, but as long as it increases the return per 
acre that a farmer has on his land, that is the bottom line.
    Senator Santorum. Thank you, Mr. Chairman. I appreciate it.
    The Chairman. Mr. Secretary, anytime you want to jump in 
here, don't hesitate if there is anything you would like to 
cover. These are your experts.
    Well, thank you all very much for being here today. Now I 
can't let three Penn State graduates be here without reminding 
you if it were not for Penn State, the University of Georgia 
would possess our second national football championship. So you 
all tell Coach Paterno he is the class of college football 
coaches, but we will fund his retirement, if he is ready. He is 
a terrific guy.
    Thank you all very much for being here. And again, we look 
forward to staying in touch with you.
    Our third panel today consists of: Mr. Logan Bower of 
Blain, Pennsylvania, representing the Professional Dairy 
Managers of Pennsylvania; Dr. Joe Jurgielewicz of Hamburg, 
Pennsylvania, representing PennAg Industries Association; Mr. 
Robert M. Ruth of Harrisburg, Pennsylvania, representing the 
National Pork Producers Council; Mr. David Hackenberg of 
Lewisburg, Pennsylvania, representing the American Beekeeping 
Federation. If you gentlemen would come forward. Thank you all 
for being here today. You all have seen the routine. We are 
going to follow that again. We will be happy to submit your 
entire statement for the record.
    Mr. Bower, we will start with you and go right down the row 
there. We look forward to your comments.

 STATEMENT OF MR. LOGAN BOWER, PROFESSIONAL DAIRY MANAGERS OF 
               PENNSYLVANIA, BLAIN, PENNSYLVANIA

    Mr. Bower. Mr. Chairman, Senator Santorum, and members of 
the committee, I appreciate the committee's invitation for me 
to come here today and present my views on dairy in regards to 
the 2007 Farm Bill.
    I am Logan Bower. We currently milk 600 cows and farm 650 
acres in the western end of Perry County located in south- 
central Pennsylvania. I have been in business for the past 13 
years, and I am the third generation to own and operate the 
farm our dairy is currently located on.
    I will address very briefly each of the following issues: 
No. 1, a safety net for the U.S. dairy industry; number two, 
Farm Bill funding; No. 3, trade; and No. 4, regulations.
    No. 1, safety net. Reform farm safety net by preserving and 
expanding the best features of the existing farm safety net, 
including a trade-compliant income stabilization program for 
dairy producers. The safety net should not discriminate between 
farmers of differing sizes, nor should the safety net 
discriminate between farmers in different regions of the 
country. The safety net should not result in price enhancement, 
meaning that it should not be an inducement to produce 
additional milk. The government safety net should be just that: 
a device that prevents a collapse of producer prices without 
stimulating milk output or sending inappropriate signals to the 
marketplace.
    No. 2, funding inequities. Historically, many Farm Bill 
programs have not effectively addressed the needs of 
Pennsylvania producers. Current farm programs and policies are 
needed to correct inequities in farm spending, half of which 
now flows to just 8 states and 22 congressional districts. 
Although Pennsylvania has significant farm sales, our state 
receives a disproportionately small share of Federal farm 
spending that is primarily based on production of a few 
commodities, including corn, wheat, rice, and cotton. According 
to the tributary strategies developed under the Chesapeake 2000 
agreement by Pennsylvania, Maryland, Virginia, New York, West 
Virginia, and Delaware, the Chesapeake Bay watershed needs an 
additional $200 million per year in Federal assistance to 
agriculture conservation as well as a similar amount of state 
funding in order to bring nitrogen and phosphorus loads back to 
an acceptable level. The funds are needed to support farmers in 
designing and implementing nitrogen and phosphorus reducing 
conservation practices in their farming operations.
    No. 3, trade. I support a successful, multilateral round of 
trade talks if it helps level the very uneven playing field in 
dairy export subsidies, tariff protections, and domestic 
support programs, but I can't support any final agreement that 
doesn't represent a net increase in our opportunity to better 
compete against our more heavily subsidized and protected 
competitors in the European Union, Canada, and Japan as well as 
more balanced trading opportunities with key developing 
countries.
    And finally, regulations. The PA dairy producers desire 
science-based environmental regulations that focus on 
encouraging compliance rather than stressing harsh penalties. 
Given the chance to adopt new technology that yield improved 
environmental performance, the PA dairy leaders will exceed 
expectations, given the right climate and science-based 
strategies.
    In closing, I want to thank you for holding these hearings, 
and we welcome you to our state and hope you enjoy your stay.
    I will be happy to answer any questions or provide you with 
any additional information that you request.
    [The prepared statement of Mr. Bower can be found in the 
appendix on page 68.]
    The Chairman. Thank you very much.
    Dr. Jurgielewicz.

     STATEMENT OF DR. JOE JURGIELEWICZ, PENNAG INDUSTRIES 
               ASSOCIATION, HAMBURG, PENNSYLVANIA

    Dr. Jurgielewicz. Good afternoon, Chairman Chambliss, and a 
special welcome to our own senator, Senator Santorum.
    My name is Dr. Joe Jurgielewicz. I am a poultry producer 
and veterinarian specializing in the production of duck from 
Shartlesville, Pennsylvania in Berks County. We at Joe 
Jurgielewicz & Son are fully integrated Pekin Duck producer, 
producing more than three million ducks annually. Our operation 
includes 6 company-owned farms and 20 contract producers 
located throughout Pennsylvania.
    I am here today representing not only the poultry industry 
but also the member companies of PennAg Industries. PennAg 
Industries represents more than 650 agribusinesses in the state 
of Pennsylvania.
    Let me first speak as a poultry producer.
    As you are well aware, the threat of AI is a high priority 
in Pennsylvania. The media and public have focused much 
attention on the Asian strain of highly pathogenic AI, or bird 
flu, and the Federal Government has extended major resources to 
prepare for potential human pandemic. I would like to commend 
Congress and the USDA for their efforts to use sound science to 
educate the public and calm the fears associated with the avian 
flu. Please know that the poultry industry in Pennsylvania is 
doing its part as well. Pennsylvania has traditionally led the 
industry in surveillance testing with more than 240,000 AI 
samples being tested every year.
    Because of Pennsylvania's diverse industry and contribution 
to the live bird markets, we have dealt often with low-path AI. 
Low-path AI can be present in a flock without clinical signs. 
This low-pathogenic form presents no risk to human health. 
However, it is very important to control this so it does not 
have the ability to circulate and mutate to high AI. We support 
and encourage the proposed regulation from USDA that would 
provide indemnities at 100 percent of the value of any birds 
that would be destroyed due to low pathogenic AI.
    For more than 10 years, Pennsylvania has maintained a 
closely held data base of industry information that has been 
extremely useful in situations involving the diseases of 
poultry. To maintain the confidentiality of this information, 
we have kept the information at the University of 
Pennsylvania's New Bolton Center. When needed for quick action, 
relevant portions of this data base are accessed and provided 
to state and Federal officials.
    With the development of the National Animal Identification 
System, a system similar to the one that had been in place here 
in Pennsylvania, we understand the value of this resource. We 
would like to encourage the inclusion of privacy protection in 
the Farm Bill for information submitted by producers. 
Confidentiality must be a top priority in this system.
    I would like to offer some comments on behalf of PennAg. 
PennAg membership is comprised of various sectors of 
Pennsylvania's agriculture. Pennsylvania's agriculture industry 
is unique and diverse in its makeup, and we appreciate you 
recognizing that. In the northeast, we have the unique 
opportunity and advantage to market to urban and suburban 
populations that are in close proximity to our production 
areas. This also presents great challenges. The general public 
is becoming further and further removed from food production, 
which creates an education and communication gap between 
producers and their neighbors, particularly when discussing 
environmental issues. Because of this, we wish to stress the 
importance that all components of the Farm Bill be science 
based, consistent, and realistic for producers. In saying that, 
funding that will help producers to implement best management 
practices will be crucial.
    I would like to thank you for your time and efforts.
    Thank you.
    [The prepared statement of Dr. Jurgielewicz can be found in 
the appendix on page 75.]
    The Chairman. Thank you.
    Mr. Ruth.

   STATEMENT OF MR. ROBERT M. RUTH, NATIONAL PORK PRODUCERS 
               COUNCIL, HARRISBURG, PENNSYLVANIA

    Mr. Ruth. Good afternoon, Chairman Chambliss and Senator 
Santorum.
    I am Robert Ruth, a pork producer from Harrisburg, 
Pennsylvania. I am President of Country View Family Farms. 
Country View Family Farms is a division of Hatfield Quality 
Meats, a family owned pork processing facility, which has been 
in business since 1895. Hatfield is owned by the Clemens 
family, which is still actively involved in the business. 
Country View Family Farms is furrow-to-finish operation that 
markets 750,000 hogs per year. I am also responsible for the 
procurement of animals for Hatfield. We purchase an additional 
1.2 million hogs per year from farmers in the five- state area 
around Pennsylvania. I am grateful to you for holding this 
field hearing and the opportunity to provide you with my views 
on what is working and what we need to improve upon as we 
consider that reauthorization of the 2002 Farm Bill.
    I would like to submit my written testimony and request 
that it be included in the record.
    Pork producers make an investment in the industry to 
maintain a competitive edge, both domestically and globally. 
The 2007 Farm Bill should also make an investment in 
competitiveness by opening access to new markets, enhancing 
conservation efforts, and rewarding producers for good 
practices. Taking these important steps will maintain a vibrant 
agricultural sector that provides a safe and secure food supply 
and innovative fuel options.
    Pork producers, along with other livestock and poultry 
producers, are the single biggest customers for U.S. grain 
producers. Our single largest expense, by far, is the feed we 
purchase for our animals. Pork producers are strong and vital 
contributors to the value-added agriculture in the United 
States, and we are deeply committed to the economic health and 
vitality of our businesses in the communities that our 
livelihoods help support.
    Pork production has changed dramatically in this country 
since the early and mid-1990's. Technology advances and new 
business models changed operation sizes, production systems, 
geographic distributions, and marketing practices. The demand 
for meat protein is on the rise in much of the world. Global 
competitiveness is a function of production economics, 
environmental regulations, labor costs, and productivity. The 
United States must continue to be a leader in food production 
to meet the needs of increased consumer demands.
    As the U.S. pork industry evaluates the reauthorization of 
the 2002 Farm Bill, I would like to point out three key 
initiatives that I would like for you to consider. One, to be a 
world leader, we must maintain our competitive advantage. Two, 
to compete in a world market, we must strengthen our 
competitive position. And three, we must not let outside 
activist groups harm our industry.
    The next Farm Bill should help the United States pork 
industry maintain its current points of competitive advantage. 
These include: low-cost production, unparalleled food safety, 
and consumer-driven further processing. In addition to 
maintaining our competitive advantage, the next Farm Bill 
should strengthen that position by expanding and including such 
elements as trade assistance, science-based conservation, and 
environmental programs.
    Finally, the next Farm Bill should not harm the competitive 
position of the U.S. pork industry by imposing costs on or 
restricting the industry from meeting consumer demands in an 
economical manner.
    Mr. Chairman and members of the committee, we must be 
cautious about allowing activists groups, which do not 
represent the best interests for the livestock sector to push 
their particular agenda by adding regulations to our business 
practices. This will severely alter the intent of the Farm 
Bill, a piece of legislation that, for the last 50 years, has 
been aimed at maintaining the competitiveness of U.S. 
agriculture and the U.S. livestock sectors.
    I would like to thank you, once again, for holding this 
hearing. I respectfully request your continued focus and 
attention to the matters I have brought to you today.
    Thank you.
    [The prepared statement of Mr. Ruth can be found in the 
appendix on page 77.]
    The Chairman. Thank you very much.
    Mr. Hackenberg.

   STATEMENT OF MR. DAVID E. HACKENBERG, AMERICAN BEEKEEPING 
              FEDERATION, LEWISBURG, PENNSYLVANIA

    Mr. Hackenberg. Thank you for this opportunity to speak on 
issues important to the beekeepers in the Farm Bill. My name is 
David Hackenberg.
    From my headquarters in Lewisburg, Pennsylvania, my family 
and I operate 3,000 colonies of honeybees. We operate in 
Pennsylvania, Florida, California, New York, and Maine. We 
produce honey and beeswax, and provide pollination services for 
growers of a wide variety of crops. I have been a beekeeper for 
44 years.
    Over the years, I have worked with beekeeper associations 
in several states and allowed Federal university bee 
researchers to use my colonies for field trials in several 
projects. I am also well acquainted with beekeeping issues 
across the country; I have been active in the American 
Beekeeping Federation for over 30 years, serving as President 
in 1998 and 1999, and have served two stints on the National 
Honey Board.
     My family beekeeping operation, and all of the American 
beekeeping industry, are facing many challenges. We are 
continuing to deal with three exotic pests: varroa mites, the 
honey bee tracheal mite, and small hive beetles. USDA and 
university scientists are working on a solution to these pests, 
but they develop a resistance to these treatments as fast as 
they come on line. All of these treatments are expensive, 
costly to purchase, and labor-intensive to apply.
    Modern commercial beekeeping is a highly mobile operation. 
We beekeepers move our colonies from honey crop to pollination 
to winter nursery grounds in an attempt to maximize our 
efforts. Mobile means fuel-consuming, which these days can cost 
more every time we fill the tanks.
    Honey prices have strengthened recently, but have been 
severely depressed for several years. Drought has taken a toll 
on the honey crops, as with other crops. But poor honey crops 
do not always mean an expected bump in the price, since honey 
is a world crop and is freely imported into the United States. 
Frequently, this imported honey is sold at prices below United 
States cost of production. It gives the producers in developing 
countries like China clear economic advantage since they are 
not required to adhere to our many costly requirements and 
realities of doing business in the United States. Relatively 
low labor costs for foreign producers and the lack of 
disincentives for adulteration or production of low-quality 
product are among some of the most problematic realities.
    We are facing erosion in our markets from what we call the 
honey pretenders: products that purport to be honey but are 
blends of cheaper syrups labeled to confuse consumers into 
thinking they are buying 100 percent pure honey. I see these 
fraudulent products on sale everywhere I go. The honey 
processors who buy my honey have to compete with them, 
resulting in lower prices paid to me.
    Many of these ``honey pretenders'' contain little or no 
honey. Sometimes their labels are legal, confusing the most 
acute of shoppers. Others are outright fraud that are clearly 
labeled as pure honey, even though they are not. We continue to 
seek the assistance from the Food and Drug Administration to 
combat fraud, but in the light of the tight budget, Food and 
Drug assistance is very limited. The U.S. honey industry has 
petitioned Food and Drug to establish a standard of identity. 
We ask that Congress promulgate a standard of identity of honey 
as soon as possible.
    During the early period of honey price downturn, the honey 
marketing loan program of the 2001 Farm Bill served as a true 
safety net. It worked as intended and allowed honey producers 
to borrow funds while holding our honey crop for a better 
market. The program has been operating at a minimal cost. In 
periods of low prices, it is critical that beekeepers have this 
program available.
    The industry is also working with the USDA Risk Management 
Agency to make affordable and effective crop insurance 
available. I look forward to such a crop insurance program to 
help stabilize my honey production during times of disaster- 
diminished honey crops. However, so far, RMA has not approved 
or piloted a crop or revenue insurance product for beekeepers. 
We urge the committee to encourage RMA to move forward in this 
area. Honey bees are known for their honey, but their value as 
pollinators of plants vastly exceeds the value of honey 
produced: about $200 million in the farm gate last year. Their 
pollination is a unique and irreplaceable service to the rest 
of agriculture, a service that enables growers to be more 
profitable and effective. A Cornell University study has 
determined that pollination by the honey bees adds $14.6 
billion in value to major agriculture crops. This is not even 
in consideration of backyard gardens and other ornamental and 
environmental crops.
    I have some other things in there, and we will talk about 
them in the questioning period, but I appreciate you coming 
today. And I look forward to your questions.
    [The prepared statement of Mr. Hackenberg can be found in 
the appendix on page 85.]
    The Chairman. Thank you very much, Mr. Hackenberg. I am 
generally familiar with a lot of the issues involved in your 
industry. One thing you heard me talk earlier about in our part 
of the world, we are a large vegetable-producing area, and a 
lot of our farmers are concerned about the decreasing number of 
honey bee colonies. What is the situation in this part of the 
country? How does your industry invest in that?
    Mr. Hackenberg. Well, it is the same thing all across the 
whole country. And actually, when you talk about the bee 
business, we are talking about the whole United States, because 
it is mobile. As I said before, our operation moves up and down 
the east coast and even on to California to pollinate almonds 
in the wintertime. And it has gotten so severe in the past year 
that the almond crop in California right now is using over a 
million hives of bees in February, which is the off season. 
That is when the bee numbers are down. And with the Almond 
Board's projections of where their numbers of acres are going, 
by the year 2012, they are going to need two million colonies 
of bees. That is more bees than are commercially managed in the 
United States. And we have already started importing package 
bees from Australia this past year, during the winter, which is 
bringing in some more exotic pests that we really don't need. 
We already have our share of them. But what we need is research 
and a way to keep these things alive. The mites came here in 
the 1980's from other parts of the world, and it has just 
devastated the bee industry. And one out of every three bites 
of food that the American people eat is dependent on the honey 
bee to be put on that table, along with a lot of other things, 
cotton and so on. Without the pollination of cotton, your crops 
aren't what they need to be.
    The Chairman. Are we doing a good enough job, from an 
inspection standpoint, on making sure that bees that come into 
this country are pure and free of harmful insects?
    Mr. Hackenberg. Do you want my opinion or do you want APHIS 
opinion? No, in reality, what has happened is, We have left 
some things slip by. I mean, APHIS has left some things slip 
by. There has been pressure put on by the almond industry to 
open up the borders for Australia. And they got in here in a 
last-minute, spur-of-the-moment thing last winter. The almond 
people, they are part of agriculture, too, don't get me wrong, 
but they would like to open the Mexican border and let the 
Mexican bees come north. And down there we are dealing with the 
Africanized bee situation.
    The Chairman. You raised an interesting issue on the 
labeling of some honey that may not be pure honey. We have a 
food labeling bill that I am a strong supporter of. I am going 
to be testifying, as a matter of fact, on that bill next week, 
and we are going to make sure we have honey included in there.
    Mr. Hackenberg. I just came from a National Honey Board 
meeting in Denver about two weeks ago, and we had people there 
from Food and Drug. The problem is they just don't have 
resources. They have been cut way back. And what we are talking 
about here is economic adulteration. And it is not killing 
anybody, except me and Bill Gamber, who is sitting in the 
audience some place as a honey packer. His business is going 
downhill because he has got to compete with these pretenders. 
And I can buy high fructose corn syrup for 18 cents a pound, 
while the price of honey right now is running about 90 cents, 
so you have got the bad guys making a good living.
    Senator Santorum. Is this a matter of just prosecution, 
investigation? What is the----
    Mr. Hackenberg. There is just nobody going after anybody, 
basically. We have been fighting this thing for a number of 
years, and it continues to get worse, because one guy gets away 
with it. Several years ago, there was a case in Michigan where 
they put some young attorneys on this case, and they didn't 
really know what they were doing, and they lost it on some 
technicalities. And from that point forward, these bad actors 
have just kind of laughed at the industry and said, ``Look, we 
got away with it.'' And even legitimate companies have gotten 
into this blending situation of blending corn syrup and other 
cheap sweeteners with honey. Sixty percent of the honey in the 
United States is consumed in food products. And then you pick 
up a box of Cheerios that says Honey Nut Cheerios. I don't go 
to the supermarket very often, but when I walk through the 
supermarket and I look at 39 cereals on that store shelf and 19 
of them had the word ``honey'' on the label, that is what they 
are using to sell the product. But when you pick that up and 
look at it, out of the 19, I think it was eight of them that 
didn't even have honey on the label. And if honey is there, it 
is way down the list below sugar and corn syrup and all of 
that. So this is the problem we have with the labeling 
situation. And it is really a severe and unique situation. I 
ran a honey packing business for 25 years until 1994 when we 
had a major catastrophe and the place burnt down, and so we 
changed, with a lot of things that were happening in the 
industry with consolidations and stuff, we decided to become 
better beekeepers and devote our time toward pollination. But 
with mislabeling and stuff, we go to Food and Drug here in 
Philadelphia and don't get any help, because it is not one of 
their priorities. It doesn't make headlines.
    The Chairman. Mr. Bower, we had a hearing yesterday in the 
Ag Committee, an oversight hearing on the dairy program. 
Obviously, one of the major issues that we discussed in 2002 is 
going to be front and center again in 2007, the issue of 
forward contracting. What is your thought about whether or not 
forward contracting ought to be available to producers rather 
than just through the cooperative measures?
    Mr. Bower. Currently, it is available to producers. I have 
used forward contracting in the past. I am currently not using 
any. Forward contracting has not been a popular issue among 
dairymen. A few years ago, when it became available, a lot of 
dairymen did, and I think today they are a little bit 
skeptical, because the milk market is controlled by very few 
people and very few businesses. And I personally am a little 
skeptical of forward contracting.
    The Chairman. So you must have been part of the pilot 
program.
    Mr. Ruth, during the last Farm Bill debate, there was 
considerable discussion on the competition in the livestock 
marketplace. What effect would bans on packer ownership, 
forward contracting in your industry, and mandatory country of 
origin labeling have on livestock producers? Should Congress 
reauthorize the livestock mandatory price reporting program?
    Mr. Ruth. Well, the issue of mandatory contracts, we think 
that it would basically hurt the industry. One of the areas 
that we look at is that it seems that as we progress in the 
livestock arena to offer more contracts to producers that are 
beneficial to both parties, there are groups that are against 
that and would like to revert back to the way that we priced 
hogs 25 or 50 years ago. And we think that that would be a 
backwards movement for the hog industry. We are in favor of 
mandatory price reporting. We think that is good for the 
transparency of the market between the processors and the 
producers.
    The Chairman. Dr. Jurgielewicz, what is your most pressing 
environmental or conservation concern? Do existing conservation 
programs help address those concerns?
    Dr. Jurgielewicz. Our most pressing conservation concern 
right now is waste management in all of the poultry industry. 
The constant changing of regulations and then trying to adapt 
to those regulations. the new regulations have hurt a lot of 
the smaller producers, especially since ducks were clumped 
together as a more waste-producing animal, which it wasn't, and 
that is why, in my testimony, I said we have to use more 
science-based facts when we are making our rules and 
regulations. Since the duck industry is a relatively small part 
of the poultry industry, we weren't represented specifically, 
and we got the lower end of the deal on that. More research on 
what to do with waste products. That could be one of our 
concerns for the future.
    Mr. Ruth. Mr. Chairman, if I may add to that, from a waste 
standpoint, we are very concerned about manure being considered 
a hazardous waste under the super funds. And we would like your 
support to stop that movement. Manure has been used for 
fertilizer for thousands of years, and it is a very organic 
type of material. And to classify it as a chemical with a 
million half-lives, I think, would be a great detriment, 
especially when you look at the cost of fuel and the cost of 
nitrogen, manure is gaining value back as a fertilizer in the 
eyes of a lot of grain farmers. So we need to be careful about 
how we classify it and remember that it is a resource, not a 
waste product.
    The Chairman. Rick.
    Senator Santorum. Thank you, Mr. Chairman.
    I would just ask Mr. Bower, you laid out how you would like 
to see a dairy program work, and I think you said you want a 
program that doesn't create an advantage of big versus small, 
doesn't have regional impact, is a true price support when the 
price goes down, and does not encourage production. Wouldn't we 
all like to have a program like that? We have been trying to 
get a program like that for 50 years in dairy. My question is 
what is that program, because if you have that answer, you can 
accomplish a great many things in Washington, DC.
    Mr. Bower. That is a good question.
    Senator Santorum. OK. Thank you. I just want to know. I 
thought, ``Boy, that is great. He has the answer to my question 
I have been searching for for 15 years.''
    Mr. Bower. Just to add to that, I think the way I have 
always looked at the situation is that this country was built 
on capitalism, which is free enterprise. And with free 
enterprise, you have winners and losers, just like in the 1983 
Sugar Bowl.
    Senator Santorum. Well put. Very well put.
    The Chairman. A Penn State graduate.
    Mr. Bower. And unfortunately, I think that our society has 
become a society where we don't want to see losers anymore. And 
I believe that low milk prices will cure low milk prices. And I 
am a dairyman, and if I have a cow that is not pulling her 
weight, she goes down the road, because she is not making me 
money. And I think whenever you have a price support program, 
as we have in place right now, that you keep businesses in that 
hurt the industry in the long run.
    Senator Santorum. OK. Thank you.
    You mentioned that you were involved on the forward 
contracting pilot program, which I was the author of, and you 
said it didn't work for you very well.
    Mr. Bower. Well, I wasn't involved in that pilot program, 
but I had done some contracting. I haven't contracted in the 
past year, but 3 years prior to that, I had contracted.
    Senator Santorum. And you said----
    Mr. Bower. Some years it worked, some years it didn't work. 
And I kind of got disgusted with the situation and decided to 
take the free market.
    Senator Santorum. OK. And in talking to other producers, is 
that the general consensus that that program didn't work?
    Mr. Bower. There are some winners, some losers.
    Senator Santorum. That is sort of the way the market works, 
right?
    Mr. Bower. That is right. I have talked to producers that 
have experience on both sides of the fence.
    Senator Santorum. OK.
    Mr. Bower. I mean, I am not quite sure where you were going 
with that question, because I was under the assumption that 
contracting was always available, the tools were there. And it 
was just a matter of the producer educating himself or taking 
advantage of the opportunities to initiate the contracts.
    Senator Santorum. Well, the staff can probably correct me 
if I am wrong, but we provided some support. If you are a co-op 
member, that is my understanding that it is available through 
the co-op. The question is whether it is available to 
independent producers, is that correct?
    Mr. Bower. Right. No, I can do forward contracting and 
hedging without going through my co-op.
    Senator Santorum. OK. Well, I will check with the folks. 
Maybe I need to understand the program a little better.
    The only other question I had, I wanted to talk to Mr. 
Hackenberg. And I am just curious, because I know the import 
issue is still a very big issue. Does that continue to be a 
problem in the industry or has that abated at all?
    Mr. Hackenberg. Well, that depends who you talk to in the 
industry. I believe in free trade. I believe it will level 
itself out, but when we come to Washington, we have got 
different segments of the industry that are still fighting 
Argentina and China over tariffs. If I had my way, to make the 
whole thing a politically level playing field, we would have a 
tariff on everybody that was coming in, whether it was Canada 
or whoever, but that is not going to work under the trade laws. 
And unfortunately, the way the world honey trading works, we 
put tariffs against Argentina and China, and you are talking 
about regulating or looking at stuff coming in. Well, Chinese 
honey that is under these rules still comes in here, but when 
it is on a ship, the paperwork changes hands many times over, 
and Chinese honey may come from some other country. The same 
way with Argentina. And it still gets here. We have been to 
customs. We have been to everybody in Washington that is 
handling this and they just blow us off. We are a small 
industry, and if this was happening to the dairy industry or 
the corn or soybeans, you know, somebody would get to the 
bottom of it. It is just like the chemicals and products we 
need to treat the mites. When there are only, probably 1,600 
commercial beekeepers left in the United States, if there even 
is that many, a chemical company can't afford to spend a lot of 
money to make chemicals to take care of a mite problem, because 
it takes millions of dollars to develop this stuff. And it is 
the same way with the import situation. We just don't have big 
enough clout down there. Yes, we get the, ``Oh, sure. We will 
look into it.'' And then somebody makes a couple of phone calls 
and that is the end of it. The same way with the adulteration 
and the pretender situation. If this was happening in the milk 
industry, everybody would step up to the plate and take care of 
it.
    Senator Santorum. Thank you, Mr. Chairman.
    The Chairman. Gentlemen, as with the other panelists, thank 
you very much for being here. I know all of you are very busy. 
We appreciate you taking the time out of your schedules to come 
and share these thoughts with us. Also, we look forward to 
dialoguing with you as we go through this process over the next 
several months.
    To all of our audience today, we thank you for coming out 
and sharing with us and listening in on what is being heard. I 
encourage anyone interested in submitting a written statement 
for the record to visit the committee's website at 
Agriculture.Senate.gov for details. We can accept written 
statements up to five business days after this hearing.
    I want to again thank the folks here in Harrisburg for 
hosting us, the Secretary and all of the folks here, at this 
facility. What a great place to have this hearing, and Rick, 
you have been a very gracious host. We appreciate you and your 
interest in agriculture for America, not just for Pennsylvania. 
You have been a great asset to the committee, and thanks for 
being here today and having us here.
    Senator Santorum. Thank you, Mr. Chairman.
    I want to thank you, again, and all of the members of your 
staff for their cooperation in holding this hearing here. And 
you have done an outstanding job, as a freshman member or a 
freshman in the sense it is your first term in the United 
States Senate to become a chairman of the full committee and to 
be able to go through the difficult process that you just went 
through with the budget reconciliation in the first year as 
chairman is really testament to your skills and your work 
ethic. And I really appreciate you coming to Pennsylvania and 
taking the trips around the country to listen to producers 
about this upcoming Farm Bill. And hopefully, you have got a 
little better insight on agriculture here in northeastern 
United States as a result of this hearing here today.
    Thank you, Mr. Chairman.
    The Chairman. Thank you.
    With that, this hearing stands adjourned.
    [Whereupon, at 3:41 p.m., the hearing was adjourned.]


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                            A P P E N D I X

                             July 21, 2006



      
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                   DOCUMENTS SUBMITTED FOR THE RECORD

                             July 21, 2006



      
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