[Senate Hearing 109-819]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 109-819

    REVIEW NOMINATIONS FOR USDA, CFTC AND FARM CREDIT ADMINISTRATION

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

                                HEARING

                               before the

                       COMMITTEE ON AGRICULTURE,
                        NUTRITION, AND FORESTRY

                          UNITED STATES SENATE


                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION


                               __________

                            DECEMBER 6, 2006

                               __________

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


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


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           COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY



                   SAXBY CHAMBLISS, Georgia, Chairman

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

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

                                  (ii)



















                            C O N T E N T S

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                                                                   Page

Hearing(s):

Reveiw Nominations for USDA, CFTC and Farm Credit Administration.     1

                              ----------                              

                      Wednesday, December 6, 2006
                    STATEMENTS PRESENTED BY SENATORS

Chambliss, Hon. Saxby, a U.S. Senator from the State of Georgia, 
  Chairman, Committee on Agriculture, Nutrition, and Forestry....     1
Cochran, Hon. Thad, a U.S. Senator from Mississippi..............     2
Harkin, Hon. Tom, a U.S. Senator from Iowa.......................     9

                                Panel I

Keenum, Mark E., Nominee for Under Secretary for Farm and Foreign 
  Agricultural Services, U.S. Department of Agriculture..........     4
Sommers, Jill E., Nominee to be Commissioner of the Commodity 
  Futures Trading Commission.....................................     6
Strom, Leland A., Nominee for the Board of the Farm Credit 
  Administration.................................................     7
                              ----------                              

                                APPENDIX

Prepared Statements:
    Harkin, Hon. Tom.............................................    18
    Keenum, Mark E...............................................    20
    Sommers, Jill E..............................................    24
    Strom, Leland A..............................................    26
Document(s) Submitted for the Record:
Durbin, Hon. Richard J.:
    Written letter of support for Leland A. Strom................    32
Leahy, Hon. Patrick J.:
    Written letter of support for Mark E. Keenum.................    33
Roberts, Hon. Pat:
    Written letter of support for Jill E. Sommers, Mark Keenum 
      and Leland A. Strom........................................    34
    American Association of Crop Insurers, letter of support for 
      Mark E. Keenum.............................................    35
    Copeland, Cook, Taylor & Bush, P.A., letter of support for 
      Mark E. Keenum.............................................    36
    Ducks Unlimited, letter of support for Mark E. Keenum........    38
    International Dairy Foods Association (IDFA), letter of 
      support for Mark E. Keenum.................................    39
    National Council of Farmers Cooperatives, letter of support 
      for Leland A. Strom........................................    40
    National Milk Producers Federation, letter of support for 
      Mark E. Keenum.............................................    41
    The Farm Credit Council, letter of support for Leland A. Srom    42
    Various agricultural organizations, letter of support for 
      Mark E. Keenum.............................................    43
Question(s) and Answer(s):
Baucus, Hon. Max:
    Submitted questions to Mark E. Keenum........................    48
Crapo, Hon. Mike:
    Submitted questions to Mark E. Keenum........................    49
Harkin, Hon. Tom:
    Submitted questions to Mark E. Keenum........................    51
    Submitted questions to Leland A. Strom.......................    53
    Submitted questions to Jill E. Sommers.......................    54
Keenum, Mark E.:
    Written response to questions from Hon. Max Baucus...........    55
    Written response to questions from Hon. Mike Crapo...........    57
    Written response to questions from Hon. Tom Harkin...........    59
Sommers, Jill E.:
    Written response to questions from Hon. Tom Harkin...........    62
Strom, Leland A.:
    Written response to questions from Hon. Tom Harkin...........    63
Additional Material(s) Submitted for the Record
    Committee questionnaire and Office of Government Ethics 
      Executive Branch Personnel Public Financial Disclosure 
      Report filed by Mark E. Keenum.............................    66
    Committee questionnaire and Office of Government Ethics 
      Executive Branch Personnel Public Financial Disclosure 
      Report filed by Jill E. Sommers............................    83
    Committee questionnaire and Office of Government Ethics 
      Executive Branch Personnel Public Financial Disclosure 
      Report filed by Leland A. Strom............................   100





















 
    REVIEW NOMINATIONS FOR USDA, CFTC AND FARM CREDIT ADMINISTRATION

                              ----------                              


                      Wednesday, December 6, 2006

                                       U.S. Senate,
         Committee on Agriculture, Nutrition, and Forestry,
                                                     Washington, DC
    The Committee met, pursuant to notice, at 9:31 a.m., in 
room SR-328a, Russell Senate Office Building, Hon. Saxby 
Chambliss, Chairman of the Committee, presiding.
    Present or submitting a statement: Senators Chambliss, 
Cochran, Roberts, Coleman, Harkin, Leahy, and Salazar.

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

    Chairman Chambliss. Good morning. We here today to conduct 
a hearing on three nominations to important posts in the 
Federal Government. The nominees are Mark Keenum to be Under 
Secretary of Agriculture for Farm and Foreign Agricultural 
Services and to be a member of the Board of Directors of the 
Commodity Credit Corporation; Leland Strom, to be a member the 
Board of Directors of the Farm Credit Administration; and Jill 
Sommers to be a Commissioner at the Commodity Futures Trading 
Commission.
    We all appreciate their willingness to come forward and 
engage in public service.
    One of the nominees, Mark Keenum, is no stranger to this 
Committee, having served on Senator Cochran's staff for over 17 
years. Mark has been a good friend of mine for many years and 
Mark, it is indeed a privilege to have you being willing to 
step up at the Department of Agriculture and continue your 
public service.
    I welcome all of the nominees and thank them for appearing 
before the Committee.
    For the information of Senators and staff, and after 
consultation with Senator Harkin, I ask that any questions of 
the nominees for the record be submitted by 4 p.m. today in 
order to expedite the confirmation process.
    Senator Harkin will be recognized when he gets here but I 
want to say publicly how much I appreciate the cooperation of 
Senator Harkin in getting these nominees up here in a very 
expedited manner, particularly you, Jill. Jill has been a good 
friend of mine for many years. She is a very capable person to 
be going to the CFTC. We had to sort of pull and tug down at 
the White House to get the paperwork, the bureaucracy. As the 
Chairman the Appropriations Committee well knows, it is 
difficult to endure sometimes. But we did. But it could not 
have happened without Mark and without Senator Harkin's 
cooperation, so I appreciate that very much.
    At this time I will turn to my good friend from the State 
of Mississippi, Senator Cochran, for an introduction.

STATEMENT OF HON. THAD COCHRAN, A U.S. SENATOR FROM MISSISSIPPI

    Senator Cochran. Mr. Chairman, thank you very much.
    I am pleased to join you in welcoming our nominees to the 
Agriculture Committee today for their confirmation hearing. I 
am especially pleased, of course, that Mark Keenum has been 
nominated by President Bush to be Under Secretary of 
Agriculture for Farm and Foreign Agricultural Services.
    I do not know of anyone who would bring any better 
qualifications to this job that Mark Keenum. He has an 
Agriculture Economics degree from Mississippi State University. 
He got graduate degrees from that university, including a Ph.D. 
He was on the faculty as an instructor for a while and actively 
engaged in research in some very important emerging agriculture 
and aquaculture areas of interest and concern in our State.
    He worked for the Extension Service. He has worked as a 
research assistant at Mississippi State University, as I 
pointed out. And he joined my office here in Washington as a 
specialist in agriculture and agriculture economics.
    He has really been an outstanding member of my staff, both 
in helping to develop policy initiatives and monitor all the 
legislation affecting the Department of Agriculture.
    And then, when I was Chairman of this Committee, he was a 
very valuable adviser and an assistant in helping shape policy 
there, writing Farm Bills. He was actively engaged in several 
Farm Bill hearings leading up to the bill, the crafting of the 
language, negotiating with other member's staffs, and working 
to work out differences in conference with the House, dealing 
with the Administration over the years, all in a very 
professional and thoughtful way.
    His personal qualities are impeccable. He is courteous, he 
is intelligence, he works hard, he has a sense of 
responsibility, he has got good judgment.
    So I am pleased to be here today and to congratulate him on 
his nomination and to urge the Committee to favorably consider 
the nomination and report it as soon as possible. We really do 
need somebody in this position as soon as possible, and he will 
do a great job in helping develop options for the next Farm 
Bill. He will be a great resource in that process for the 
Administration, as well as for the Congress, and particularly 
this Committee in the Senate.
    He and his wife, Rhonda, are close personal friends of 
mine. She is, of course, in an important position at the White 
House. They have four delightful, darling children who were a 
little bit rambunctious a while ago, so we have not have not 
invited them in to testify yet. They are a great family and 
they will reflect great credit on the Senate family, I think, 
in this new responsibility that Mark will have.
    Thank you, Mr. Chairman.
    Chairman Chambliss. Mark, obviously in this Committee, 
there is no higher recommendation that can come from anyone 
other than Senator Cochran, so you have got a lot to live up to 
there. He referenced your children, and you being a good friend 
of mine for so many years, the only thing I question is your 
judgment to have four under the age of two. Wow.
    Mr. Keenum. I am very blessed.
    [Laughter.]
    Chairman Chambliss. That is a great attitude to have.
    We have statements from Senator Durbin supporting the 
nomination of Mr. Strom, that we will place in the record.
    [The prepared statement of Hon. Richard Durbin can be found 
on page 32 in the appendix.]
    [The prepared statement of Hon. Pat Roberts can be found on 
page 34 in the appendix.]
    [The prepared statement of Hon. Patrick J. Leahy can be 
found on page 33 in the appendix.]
    Mr. Keenum. Thank you very much, Mr. Chairman.
    I would like to introduce my best friend and my wife for 
the past 22 years, the mother of our four children, my wife, 
Rhonda Keenum.
    And somewhere, I am told, are my children. Here they come.
    [Laughter.]
    Mr. Keenum. We have 2-year-old triplets and their names are 
Kathryn, Everett and Mary Phillips. And we have a 7-month-old 
daughter named Victoria.
    [Laughter.]
    Mr. Keenum. As I said, Mr. Chairman, I am very, very 
blessed.
    Chairman Chambliss. Your job of crafting a Farm Bill will 
be easy compared to going home at night.
    [Laughter.]
    Chairman Chambliss. Ms. Sommers.
    Ms. Sommers. Thank you, Mr. Chairman.
    My wonderful husband, Mike, is behind me. And we also have 
a handful at home, a 3-year-old, a 4-year-old and a 2-year-old. 
And we decided that today was not the day to bring them. It was 
not a challenge I was up for today.
    [Laughter.]
    Ms. Sommers. Thank you.
    Chairman Chambliss. Mr. Strom.
    Mr. Strom. Thank you, Mr. Chairman.
    Dr. Keenum. I can offer my wife. I would like to introduce 
my inspiration of 29 years, Twyla is here with me today. And 
she, at one time, owned operated a preschool for almost 15 
years, so she can help today.
    [Laughter.]
    Mr. Strom. I have with me also my son, Derek, and his wife, 
Kim. Derek is nearing the end of his Ph.D. work in particle 
physics at Fermi Lab in Illinois.
    I have with me also my daughter, Amber, who works for the 
Department of Agriculture at the National Wildlife Research 
Center in Fort Collins, Colorado; and my youngest son, Tyler, 
who is a junior at Iowa State University, studying ag business 
and economics.
    Chairman Chambliss. Great. We are glad to have all of those 
here.
    All of you obviously have very impressive, very fine 
looking families.
    Before we take your statements, I would like to ask all 
three of you to stand and raise your right hand.
    To each of you, do you swear that the testimony you are 
about to provide is the truth, the whole truth, and nothing but 
the truth, so help you God?
    Mr. Keenum. Yes.
    Ms. Sommers. Yes.
    Mr. Strom. Yes.
    Chairman Chambliss. To each of you, do you agree that you 
will appear before any duly constituted Committee of Congress 
if asked to appear?
    Mr. Keenum. Yes.
    Ms. Sommers. Yes.
    Mr. Strom. Yes.
    Chairman Chambliss. Thank you, very much. You may be 
seated.
    We will now take any opening statements that you have. 
Again, Mark, we will start with you, Jill, and Mr. Strom, and 
go in that direction.

 STATEMENT OF MARK E. KEENUM, NOMINEE FOR UNDER SECRETARY FOR 
  FARM AND FOREIGN AGRICULTURAL SERVICES, U.S. DEPARTMENT OF 
                          AGRICULTURE

    Mr. Keenum. Thank you, Mr. Chairman. Thank you, Senator 
Harkin, as well, and distinguished members of the Committee. I 
am both honored and humbled to appear before you today for 
consideration for the position of Under Secretary for Farm and 
Foreign Agricultural Services.
    I would like to express my gratitude to President Bush for 
nominating me and my appreciation to Secretary Johanns and 
Deputy Secretary Connor, for the confidence they have bestowed 
upon me.
    I especially want to thank Senator Thad Cochran for his 
gracious introduction.
    I have been extremely fortunate to have been able to serve 
Senator Cochran as his Legislative Assistant for Agriculture 
for seven-and-a-half years and as his Chief of Staff for the 
past 10 years. During my tenure with him, I have learned a 
tremendous amount. In fact, I have spent many hours in this 
very room, participating in staff deliberations, Committee 
hearings and markups addressing numerous issues important to 
American agriculture.
    It has been an honor for me to serve Senator Cochran for 
these many years and I owe a great deal to him for the person 
that I am today. He has been a tremendous influence in my life, 
both professionally and personally. Senator Cochran is a 
thoughtful and deliberate decisionmaker. He also wants to know 
the facts and not the rhetoric. Of the many things I have 
learned from the Senator, the most important is how to treat 
people, always with dignity and respect.
    I was born in Starkville, Mississippi while my father was 
studying agriculture at Mississippi State University. Early in 
his professional life, my father went to work for the U.S. 
Department of Agriculture. After over 30 years of service with 
the Natural Resources Conservation Service, he retired and is 
currently living with my mother on a small farm in the 
Mississippi Delta. During my father's service with USDA, we 
lived in several small rural communities throughout 
Mississippi.
    My paternal grandfather also worked for USDA, with the 
former Soil and Water Conservation Service. He, too, owned a 
farm in the Mississippi Delta, in addition to owning and 
managing with my grandmother a small country story. I have very 
fond memories of riding on a tractor with him as a young boy 
while he plowed his fields. If confirmed, I would be a third-
generation employee of USDA.
    I have grown up in and around agriculture all my life. My 
experience has spanned from working as a farm laborer, a crop 
scout, an agricultural extension specialist, an agricultural 
research associate, and an agriculture economics professor, to 
working with the members and the staff of the U.S. Senate 
Committee on Agriculture, Nutrition, and Forestry during the 
consideration of three Farm Bills and other legislative 
initiatives important to American agriculture.
    During my career, I have learned a great deal about the 
complex nature of agricultural production that farmer's face 
today. U.S. farmers and ranchers are the most efficient and 
resilient producers in the world. Our Federal Government has a 
key role to play in ensuring that U.S. farmers are able to meet 
the challenges of producing a bountiful supply of safe and 
affordable food and fiber products, despite the many risks they 
face.
    Farmers also should have the resources and support they 
need from the Government to produce crops that can help to 
reduce our Nation's dependency on foreign oil. Additionally, 
with agricultural exports expected to reach a record of $68 
billion this year, it is imperative for our Government to work 
aggressively to promote U.S. agricultural products in the 
international arena while pursuing fair access to vital export 
markets.
    Mr. Chairman, distinguished members, I have spent the 
greater part of my career working within the Senate family, and 
therefore I have a keen appreciation for the unique nature of 
the legislative process. I believe this experience will be 
especially beneficial during reauthorization of the Farm Bill 
this coming year. During my tenure, I have especially 
recognized the importance and the benefits of pursuing 
solutions in a bipartisan manner.
    I can pledge to this Committee that, if confirmed, I will 
fully dedicate myself to the broad mission of this important 
office and that I will commit to be accessible to all members 
and staff.
    Again, Mr. Chairman, distinguished members, I want to thank 
you for allowing me to appear before you today and I welcome 
any questions or comments.
    Thank you Mr. Chairman.
    [The prepared statement of Mr. Keenum can be found on page 
20 in the appendix.]
    Chairman Chambliss. Thank you.
    Ms. Sommers.

STATEMENT OF JILL E. SOMMERS, NOMINEE TO BE COMMISSIONER OF THE 
              COMMODITY FUTURES TRADING COMMISSION

    Ms. Sommers. Thank you, Mr. Chairman.
    Chairman Chambliss and members of the Agriculture 
Committee, I am honored to sit before you today as a nominee to 
be Commissioner at the Commodity Futures Trading Commission.
    It is a true honor and privilege for me to be nominated by 
the President and be considered for this distinguished 
position.
    I would also like to thank Senator Roberts and his staff 
for their support through this process, as well as the 
Agricultural Committee staff for their assistance.
    I have already recognized my wonderful husband, Mike, who 
is here with me today and my children, who are at home.
    I started working on Capitol Hill over 15 years ago for 
Senator Bob Dole as an intern during the last semester of my 
senior year in college at the University of Kansas. I worked 
for him in various capacities for almost 5 years. And from 
Senator Dole, I learned the importance of a fair and reasonable 
decisionmaking process.
    I grew up in a small town in Southeast Kansas, Fort Scott. 
My parents have owned a small business in our farming community 
for 38 years. My parents taught me the value of hard work and 
integrity, and I promise to bring all of the values of my 
Kansas roots with me to the Commission.
    During my career, I have had the opportunity to work within 
the futures industry. It is a fascinating world which is 
constantly changing and innovating. For example, when I started 
with the Chicago Mercantile Exchange in 1998, their electronic 
trading platform was used for overnight or after hours trading 
and the electronic volume was less than 15 percent of their 
total volume. Today, the CME trades millions of contracts a day 
electronically with a system that trades virtually 24 hours.
    Fortunately, when Congress was tasked with reauthorizing 
the Commodity Exchange Act in 2000, they saw that the industry 
was quickly evolving and they created a framework to give the 
CFTC the appropriate regulatory tools to keep pace with the 
development in these markets. This bill and my work on it 
shaped fundamentally my view of how the Government can and 
should interact with these markets. The CFMA unleashed the 
power of the free market on the futures industry and it did it 
in a way without sacrificing a rigorous enforcement structure 
at the CFTC.
    The CFTC does an outstanding job of encouraging market 
growth while ensuring the integrity of the market place and 
protecting market users. The Agency has taken this mission 
seriously and pursues very aggressive action against wrongdoers 
in the market.
    My regulatory philosophy rests on some of the basic 
principles Congress stressed during CFMA, fair and flexible 
supervision while providing strong and independent oversight.
    Congress got it right with the CFMA. It did it through 
encouraging competitiveness and assuring legal certainty. 
Congress, in its wisdom, understood the truth, that American 
entrepreneurs and traders are the best in the world if given 
the power to succeed. Whether you are a farmer trading wheat in 
Kansas City or a trader in Chicago buying Treasury Bonds, the 
CFTC regulates each market with the proper level of oversight. 
Every one of the contracts traded on each futures and options 
exchange in the United States plays an important role, and 
every market participant deserves to have confidence in the 
integrity and efficiency of those markets.
    I understand that there are several challenging issues 
facing the Commission, but as a mother of three children under 
five I know how to handle a challenge.
    If confirmed by this Committee and the Senate, I would work 
hard to ensure that the CFTC continues its role of encouraging 
efficient, transparent and financially sound futures and 
options markets while protecting the public from fraud, 
manipulation and abusive practices.
    Thank you for the opportunity to appear before you today. I 
will be happy to answer any questions the Committee may have.
    I would also like the record to reflect an oversight on my 
SF 278 form that I found yesterday while going over it with the 
Committee staff. On page five of seven, the Chicago Mercantile 
Exchange stock should be listed as generating income between 
$5,001 and $15,000 due to a sale of stock in June of 2005.
    [The prepared statement of Ms. Sommers can be found on page 
24 in the appendix.]
    Chairman Chambliss. Thank you.
    Mr. Strom.

STATEMENT OF LELAND A. STROM, NOMINEE FOR THE BOARD OF THE FARM 
                     CREDIT ADMINISTRATION

    Mr. Strom. Mr. Chairman, Senator Harkin, and distinguished 
members of the Committee, I also have deeply honored and 
humbled to have the opportunity to appear before you today as a 
nominee of the President for the Board of the Farm Credit 
Administration. And also. I would like to say again, I am very 
proud to have my family with me today.
    I am also very proud to appear before you today with the 
support of my Senators from Illinois, Richard Durbin and Barack 
Obama, as well as my Congressman, Speaker J. Dennis Hastert.
    Being here today is far from the small dairy farm in which 
I was raised in Kane County, Illinois. In the late 1800's my 
grandparents settled in the picturesque rolling hills of the 
Fox River Valley, about 40 miles west of Chicago, at the time a 
good day's journey from the city.
    One of my earliest farming experiences was at the age of 10 
when my brother and I purchased a used John Deere 14T baler 
and, pulling it behind an Allis Chalmers WD45 tractor on loan 
from dad, began doing custom hay baling. Fortunately, my 
brother was older and did most of the wagon loading until I got 
a little bigger and could actually throw a bale of hay. Those 
experiences though provided me a strong understanding of the 
value of a good day's work, along with the satisfaction of a 
job well done. Today, the city has reached our farm and my 
small community is faced with the challenges that comes with 
population growth.
    Similarly, the agricultural industry today faces many 
challenges. The issues of globalization, technology, energy, 
and trade, are only a few examples of the myriad of forces 
shaping the agricultural landscape of the 21st Century.
    Over the years, I have had the honor and pleasure of 
serving the ag industry in a variety of ways, from being a 
board member of our local farm service cooperative and 
organizations such as Farm Bureau, to serving as a member of 
the Federal Reserve Bank of Chicago's Advisory Council on 
Agriculture, Labor and Small Business.
    In regards to this role that I have been nominated for, I 
hope that you may find me uniquely qualified from an experience 
standpoint, as I have been a member/borrower of the Farm Credit 
System for nearly 30 years. Shortly after becoming a borrower 
in the late 1970's, I was asked to run for the board of the 
local Production Credit Association and was elected in 1981.
    I have over 25 years of service to that organization, as 
well as serving 9 years on the board of AgriBank, one of the 
System's district banks. Over the last three decades, there 
have been many other roles and assignments I have served, which 
have given me a deep understanding and a great respect for the 
role the System plays in the agricultural sector and in rural 
America.
    My service to the Federal Reserve has given me a better 
knowledge of how the Farm Credit System fits into the overall 
industry that lends to agriculture, which includes the 
commercial banking sector as well as other sources of 
agricultural credit.
    During the ag crisis of the 1980's I gained a deep 
understanding of the issues that confront the agricultural and 
lending industries, and how important having sound business 
practices can be to reaching success. I have a very profound 
respect for the importance of the role that the Farm Credit 
Administration plays as the arms-length safety and soundness 
regulator of the Farm Credit System.
    In closing, I would like to say that I take a strong 
interest and pride in community and public service. From 
coaching youth sports at home and serving on my local church 
and school boards, to the Federal Reserve and the Farm Credit 
System, I have always considered the calling of public service 
a high priority in my life and, hopefully, something that I can 
pass on to my children and future generations.
    If you should find me worthy of this position, I look 
forward to working with you toward a strong and prosperous 
agricultural and rural America.
    I thank the Committee for their time and consideration and 
look forward to your questions.
    [The prepared statement of Mr. Strom can be found on page 
26 in the appendix.]
    Chairman Chambliss. Thanks very much to all three of you.
    Now that Senator Harkin has joined us, Tom, I will turn to 
you for any opening comments you wish to make. But I want to 
reiterate what I said in my earlier opening statement, and that 
is you and I have always had a great working relationship. We 
have worked in a very bipartisan way. And that has been no 
better exhibited than by your cooperation and the cooperation 
of your staff in expediting this hearing, particularly with 
respect to Jill, as we just got her paperwork in the last day 
or two.
    Thank you for that and I thank Mark and all of your staff 
for being so cooperative and willing to get this expedited.
    As you and I know, it is the best interests of farmers and 
ranchers across America that this happen and that is the spirit 
we have always worked in and I thank you.

     STATEMENT OF HON. TOM HARKIN, A U.S. SENATOR FROM IOWA

    Senator Harkin. Mr. Chairman, thank you and let me might 
repay that in kind by thank you for your leadership of this 
Committee over the last couple of years and for your 
willingness to move ahead on early hearings on the Farm Bill. 
You went all over the country to get input from people in a lot 
of different places around America. You came to Iowa, I know, 
and went to other states. I want to thank you for that.
    And I just want you to know that as I assume this gavel, 
next month I guess, that we intend to pick up on that. I thank 
you for that. You have laid a great groundwork for the input on 
the Farm Bill. And I look forward to working with you closely 
as we develop that next year.
    Again, I want to thank you and I want to thank your staff. 
Martha has been great in working with us through all of this.
    And this Committee has always--I have always liked the fact 
that we sit at a table. It has always been a kind of a nice 
thing. I do not like these boxes and stuff.
    Chairman Chambliss. Better than a submarine.
    Senator Harkin. But it has always been a nice feeling for 
all of the years I have been here to sit around a table. It 
just has less of a partisan ring to it and stuff like that. And 
that is the way we have tried to operate this Committee. I know 
that we will continue to do the same in the future.
    So I just thank you very much for all of your cooperation 
and everything you have done, and look forward to a very smooth 
transition and working with you on the upcoming Farm Bill.
    I say the same to my good friend, Thad Cochran too. We have 
always had a great relationship here on this Committee and 
working with you all. We have got some tough battles ahead. I 
know that, not so much here, I think budget problems more than 
anything else, in terms of what we are going to get for our 
next Farm Bill and everything.
    But we have a good Committee, a great Committee. There is a 
lot of issues out there confronting us that we will be facing 
down the road.
    These three nominees, I have looked at their backgrounds 
and stuff, and I could not be more pleased with all of your 
backgrounds and your expertise, and I hope that we can expedite 
this and get it through the floor soon. I do not know when, Mr. 
Chairman.
    Chairman Chambliss. As soon as possible, tonight or 
tomorrow.
    Senator Harkin. Before Friday anyway, as I understand we 
may not be back after Friday.
    But I want to thank our three nominees for being willing to 
serve the Government, to serve the public in these capacities.
    As I said, and I will just ask that my statement be made a 
part of the record, but all three of these positions are very 
important, very vital to the smooth functioning of our markets, 
in the case of the Commodity Futures Trading Commission, in 
terms of the Under Secretary of Agriculture for Farm and 
Foreign Agricultural Services, it covers a broad gamut of 
things that we do. And of course, with the Farm Credit 
Administration. All three are very vital functions.
    I thank you for your past service and for being willing to 
serve in this capacity, and hopefully we will get this done 
very soon.
    Thank you, Mr. Chairman.
    [The prepared statement of Hon. Tom Harkin can be found on 
page 18 in the appendix.]
    I know Senator Coleman has a very important hearing he has 
to attend in a few minutes, so I am going to defer my questions 
until the end and I will recognize Senator Coleman initially 
for any questions he would like to begin with.
    Senator Coleman. Thank you, Mr. Chairman. I greatly 
appreciate that courtesy.
    I want to make clear that I think these are all 
extraordinary nominees. I hope that we can move very, very 
quickly on their confirmations.
    I really just have one line of inquiry to Dr. Keenum, and 
again reflect, stating up front, this is a tremendous nominee.
    I have some concerns about things that happened before you 
are going to get to USDA, particularly regarding the sugar 
policy, the Sugar Program. The concern I have is we had a sugar 
market last spring thing that was in balance. There was a 
disruptive impact on the sugar industry in Minnesota and North 
Dakota due to bad weather in the beet regions, monstrous 
hurricanes and cane sugar.
    But we had a sugar market in balance, and USDA doubled 
their inputs to compensate, the market was well supplied, the 
sugar policy was working as designed.
    On July 27, I do not have the charts here to show you, but 
I am sure you are familiar with it, the USDA, by its own 
actions, undermined the U.S. sugar market balance and has 
severely threatened the no-cost operation of our sugar policy.
    What happened on that date is USDA issued a decision that 
sent the market into a nose dive. You can actually see that in 
some of the graphics. It announced an increase to the then-
current import quota of 2005-2006, announced an import quota 
for 2006-2007 that was more than half a million tons in excess 
of our WTO and NAFTA import requirements, and promised Mexico 
generous and unwarranted additional access for the last quarter 
of 2007.
    I think market prices since July 27th have dropped two to 
three cents per pound, or more than 10 percent. Each one cent 
drop in price means a loss for industry of $170 million in the 
value of this year's crop.
    Furthermore, sugar loan forfeitures are now a serious 
threat, when they were not before. Raw cane sugar prices have 
already fallen below loan forfeiture levels. Refined beet 
prices are declining and nearly at forfeiture levels, as well.
    Again, doctor, this is something you were not responsible 
for. But what I would like is from you a commitment to work 
with us and work with this Committee to restore balance to the 
U.S. sugar market, eliminate the threat of sugar loan 
forfeitures that would be very costly to American taxpayers.
    Can I get that commitment?
    Mr. Keenum. Absolutely, Senator.
    In my review of the situation you described, the Department 
of Agriculture, in July, did an estimate on U.S. domestic 
production of sugar and they underestimated sugar yields. And 
as such, they adjusted the tariff rate quotas to allow more 
imported sugar to come into the U.S. markets. It had a negative 
impact when we found out our actual yields were much higher 
than had been estimated.
    It would be my intent, Senator, to sit down and talk with 
representatives of the sugar industry, get their input on this, 
talk with the pertinent staff at USDA that has oversight over 
the sugar program, at FAS and FSA, and get all the facts.
    Because the law, as I understand it, is very clear. It 
requires that the program be managed in a way that there is no 
net cost to taxpayers. These actions and the estimations of the 
yields are always unpredictable when you are dealing with 
yields and weather and whatnot. But I think it is important and 
incumbent upon the Government and the agencies that have 
jurisdictions over these important programs to again comply as 
best they can to the intent of the law. And again, the law says 
to manage the program at no net cost to the taxpayers.
    And because of these actions, we are at very close levels 
of loan forfeitures. Again, this would be something I would 
look at and take very seriously if I am confirmed.
    Senator Coleman. I appreciate that, greatly appreciate it 
and do look forward to working with you and working with the 
Chairman and working with this Committee. I know this is 
critically important, too, on the House side. Colin Peterson 
represents these area, the Chairman of the Ag Committee.
    The observation I have in working with staff on this is 
that perhaps there was not an understanding that Mexico is a 
net importer of sugar. So we set up a situation here where we 
have Mexican sugar farmers are higher cost producers. Nearly 
half the sugar industry in Mexico is owned and operated by the 
Mexican government. There is a deficit--Mexico is a deficit 
producer of sugar and corn sweetener and Mexico is a net 
importer of sugar.
    Somehow, I am not sure if all of this was calculated in 
that final decisions. So it has had that impact.
    Mr. Chairman. I appreciate, again, your courtesy. These are 
just a few of the concerns I am hearing from my sugar 
producers, concerned about unfair trade practices with respect 
to Mexican sugar, the problems resulting in the failure to 
enforce NAFTA. And I appreciate your pledge to work with us to 
address these concerns.
    Mr. Keenum. Absolutely. I look forward to working with you 
and your staff specifically on this issue, Senator.
    Senator Coleman. Again, Mr. Chairman, I look forward to 
strongly supporting these nominations.
    Thank you.
    Chairman Chambliss. Thank you.
    Senator Harkin.
    Senator Harkin. Thank you, Mr. Chairman. I just had one 
question for Mr. Keenum.
    Mr. Keenum, we included a provision in the 2002 Farm Bill, 
Section 1614, that directs the Secretary of Agriculture to 
establish procedures to track the benefits provided directly or 
indirectly to individuals and entities. We wrote that section 
simply because USDA and Congress ought to know where the 
taxpayers' money is going and there was a lot of concern at 
that time.
    We are now four-and-a-half years from when that requirement 
was enacted. Unfortunately, the provision has still not been 
implemented.
    If confirmed as Under Secretary, by what date will you be 
able to bring the Department into lawful compliance with this 
requirement of the Farm Bill?
    Furthermore, could you give a commitment to this Committee 
that within 90 days of the date of your confirmation, the 
Department will comply with this requirement of the Farm Bill 
to assure that Farm Program payments are transparent and can be 
traced to the individuals who receive the payments? Again, that 
was in the Farm Bill, the last Farm Bill.
    Mr. Keenum. Yes sir.
    I will make every effort to do as you have requested, 
Senator. I can pledge that.
    I do not know the status of where that report is within the 
Department. I know they have been working on this report and 
the law does require it and it is public information and it 
should be made available to the public as soon as it is 
available to be released.
    This will be a priority for me because, again, it is 
required under, law, and I will make sure that any agencies 
that I have supervision over will comply with the intent of 
Congress fully. This is one of those areas.
    So yes, Senator, I will pledge to you that, if confirmed, 
that I will make every effort to do as you have requested.
    Senator Harkin. I appreciate that very much. Thank you.
    Mr. Strom. I see that again, you have got a long background 
in credit and banks, director of your local Production Credit 
Association, the First Farm Credit Services, AgriBank, and of 
the Farm Credit Counsel. Obviously great experience. However, 
it may raise questions about your ability to shift gears now 
and become an impartial regulator of the System.
    Again, what assurances can you give this Committee to 
demonstrate that you will provide the necessary independent 
oversight to assure the safety and soundness of the Farm Credit 
System?
    Mr. Strom. Senator, I have given this considerable amount 
of thought because I do realize that my background in the Farm 
Credit provides me a unique perspective on the System. But I do 
realize, as I mentioned in my opening statement, I profoundly 
understand the relationship that the Farm Credit Administration 
serves as the safety and soundness regulator. And I commit to 
you that I will work very hard to fulfill the role as a board 
member and to see that that administration does provide the 
oversight of both the Farm Credit System and Farmer Mac that is 
needed. And I pledge that if tough decisions are needed to be 
made, I am prepared to make those difficult decisions.
    Senator Harkin. Thank you very much, Mr. Strom.
    Mr. Chairman, I do not have any further questions. Thank 
you and I hope we can get them through.
    Chairman Chambliss. Thank you. Mr. Cochran.
    Mr. Cochran. Thank you, Mr. Chairman.
    I do not have any questions but I congratulate all three 
nominees and look forward, as a member of this Committee, to 
staying in touch with the work of your agencies and the 
Department of Agriculture and I will expect that we will 
probably have an opportunity to hear from you again at hearings 
and as we work our way through the writing of this next Farm 
Bill.
    I congratulate all of you.
    Thank you.
    Chairman Chambliss. Thank you.
    Mr. Salazar.
    Mr. Salazar. Thank you very much, Chairman Chambliss.
    Let me say at the outset that I very much enjoyed working 
with you and with the staff on this Committee over the last 2 
years. I appreciate your leadership and the work that we have 
been able to do together. And I look forward to working with 
all of this Committee, including Senator Harkin as the incoming 
chairman, to work on the issues that are important to all of us 
on a bipartisan basis.
    I echo Senator Harkin's comments. I think when we sit 
around this table, I think that the Senators who come here come 
here because they really do care about rural America and 
agriculture. And I think that that transcends Democrat or 
Republican issues and how we move forward in the next several 
years is something that I am very much looking forward to.
    We sit on this Committee, I know, by choice and it is 
certainly my choice to be here and I look forward to working 
with all of you.
    To the nominees, to Mr. Strom, Ms. Sommers, and Dr. Keenum, 
I congratulate each of you and your families. I look forward to 
supporting you in this nomination process. And again, I echo 
the comments that have been said today, that I hope we are able 
to get you confirmed very, very quickly.
    I have a comment and question, two quick ones.
    First, Dr. Keenum, I am concerned about some of the 
perception that we have around the world on American 
agriculture. Yesterday I had a meeting, and I think Senator 
Harkin did as well, with the President of Costa Rica, Oscar 
Arias. One of the things that he talked about was how it was 
that American agriculture was being perceived in Latin America 
and now American agriculture was being seen as the reason why 
there had been a default and a breakdown on the world trade 
negotiations.
    And so my question to you, in the very important role that 
you will play, is what steps do you think we can take to try to 
improve the image internationally that American agriculture has 
today?
    Mr. Keenum. We have a very robust agricultural industry. 
This year we are looking at agricultural trade exports that are 
going to exceed $68 billion, and projections for this coming we 
are going to be somewhere in the $70-plus billion range.
    So obviously, we want to have good relations with our 
trading partners. We depend on their markets. We count on up to 
nearly a third of what we produced being exported to support 
producer's incomes and market prices. Like I said, we have to 
have good relationships with our trading partners. And it is a 
two-way street, as well.
    So if I am confirmed, I will do everything in my power to 
always promote and protect the best interest of American 
agriculture, but do it in a way that is fair and working with 
our trading partners.
    Mr. Salazar. I look forward to working with you on those 
issues because I know that those issues are going to be 
significant for us over the next several years.
    To Mr. Strom, my question to you has to do with the Farm 
Credit System and credit to be made available in the future 
with respect to renewable energy initiatives. I think, based on 
the conversations that this Committee has had over the last 
year on the new Farm Bill, I think that one of the titles that 
we would hope to be as robust as possible, and many feel that 
by some of the publications they will be what we do with 
respect to renewable energy opportunities across America.
    I would like to know what your thoughts are in terms of 
enhancing and capitalizing on opportunities for renewable 
energy.
    Mr. Strom. Senator, coming from my home State of Illinois, 
where the ethanol industry now is in a growth phase with many 
plants under construction, really with other sources of 
renewable fuels available now and in the future, I am a strong 
supporter of the area of energy and renewable fuels.
    As far as the Farm Credit System, I can commit to you that 
will I be supportive of looking into that area further. I know 
that there is a considerable amount of work already going on 
within the Farm Credit System in some of the financing efforts 
to help finance construction of renewable fuels, processing 
facilities, and so forth.
    The future is bright, but I also think we have to watch 
that segment of that industry so that down the road we do not 
overbuild in that area also.
    So I think it is a good and bright prospect for the future. 
Some warrant caution, probably down the road. But as a 
regulator of the Farm Credit System, I believe that the Farm 
Credit System needs to be involved in a very positive and 
proactive way in the expansion of that arena.
    Mr. Salazar. Thank you.
    And thank you, Mr. Chairman.
    Chairman Chambliss. Thank you.
    Let me just say that I have no specific questions, 
primarily because Mark, I think I have asked you every question 
I could ask you over 15 years. I hate, since I have got you 
under oath, to miss this opportunity. But knowing your 
background in agriculture, I know what a great job you are 
going to do. And again, I just want to say to you that I thank 
you for your willingness to serve.
    Jill, you and Mike have been good friends of mine since I 
have been here, in spite of Mark working on the other side. We 
are going to excuse that. I really look forward to you going to 
CFTC.
    I have had a close connection with that organization 
because my son used to work over there and I know how 
critically important it is to farmers and ranchers to move 
forward and really do the oversight job they need to do. And 
under the current leadership there, you are going to be a huge 
asset to them there.
    Mr. Strom, again I have reviewed your record and I know of 
your long background and your history in farm credit financing, 
and there is no more critical asset for farmers and ranchers 
than the ability to borrow money. I know you are going to be, 
again, a huge asset to this organization, and we thank all 
three of you for your willingness to serve.
    I want to add, in addition to the letters of support 
previously mentioned, we also have, in support of Mr. Strom, a 
letter from the National Council of Farm Cooperatives, a letter 
from the Farm Credit Council, that will be inserted into the 
record.
    [The following information can be found on pages 40 and 42 
in the appendix.]
    So those will be inserted into the record.
    And again, any questions to be submitted for the record, I 
mention to staff again, must be done by four o'clock this 
afternoon. We expect to ask a discharge by unanimous consent, 
with the cooperation again of Senator Harkin, sometime later 
today and move these nominees within the next couple of days on 
the floor of the Senate.
    Unless there is any further business, we stand adjourned.
    Thank you.
    [Whereupon, at 10:15 a.m., the hearing was adjourned.]
      
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