[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]



 
     HEARING TO REVIEW DISASTER CONDITIONS ACROSS THE UNITED STATES

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

                                HEARING

                               BEFORE THE

                        COMMITTEE ON AGRICULTURE
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                            OCTOBER 25, 2007

                               __________

                           Serial No. 110-33


          Printed for the use of the Committee on Agriculture
                         agriculture.house.gov



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                        COMMITTEE ON AGRICULTURE

                COLLIN C. PETERSON, Minnesota, Chairman

TIM HOLDEN, Pennsylvania,            BOB GOODLATTE, Virginia, Ranking 
    Vice Chairman                    Minority Member
MIKE McINTYRE, North Carolina        TERRY EVERETT, Alabama
BOB ETHERIDGE, North Carolina        FRANK D. LUCAS, Oklahoma
LEONARD L. BOSWELL, Iowa             JERRY MORAN, Kansas
JOE BACA, California                 ROBIN HAYES, North Carolina
DENNIS A. CARDOZA, California        TIMOTHY V. JOHNSON, Illinois
DAVID SCOTT, Georgia                 SAM GRAVES, Missouri
JIM MARSHALL, Georgia                JO BONNER, Alabama
STEPHANIE HERSETH SANDLIN, South     MIKE ROGERS, Alabama
Dakota                               STEVE KING, Iowa
HENRY CUELLAR, Texas                 MARILYN N. MUSGRAVE, Colorado
JIM COSTA, California                RANDY NEUGEBAUER, Texas
JOHN T. SALAZAR, Colorado            CHARLES W. BOUSTANY, Jr., 
BRAD ELLSWORTH, Indiana              Louisiana
NANCY E. BOYDA, Kansas               JOHN R. ``RANDY'' KUHL, Jr., New 
ZACHARY T. SPACE, Ohio               York
TIMOTHY J. WALZ, Minnesota           VIRGINIA FOXX, North Carolina
KIRSTEN E. GILLIBRAND, New York      K. MICHAEL CONAWAY, Texas
STEVE KAGEN, Wisconsin               JEFF FORTENBERRY, Nebraska
EARL POMEROY, North Dakota           JEAN SCHMIDT, Ohio
LINCOLN DAVIS, Tennessee             ADRIAN SMITH, Nebraska
JOHN BARROW, Georgia                 TIM WALBERG, Michigan
NICK LAMPSON, Texas
JOE DONNELLY, Indiana
TIM MAHONEY, Florida

                                 ______

                           Professional Staff

                    Robert L. Larew, Chief of Staff

                     Andrew W. Baker, Chief Counsel

                 April Slayton, Communications Director

           William E. O'Conner, Jr., Minority Staff Director

                                  (ii)

                             C O N T E N T S

                              ----------                              
                                                                   Page
Baca, Hon. Joe, a Representative in Congress from California, 
  opening statement..............................................     9
Boyda, Hon. Nancy E., a Representative in Congress from Kansas, 
  opening statement..............................................    10
Davis, Hon. Lincoln, a Representative in Congress from Tennessee, 
  opening statement..............................................     3
Everett, Hon. Terry, a Representative in Congress from Alabama, 
  prepared statement.............................................     4
Goodlatte, Hon. Bob, a Representative in Congress from Virginia, 
  opening statement..............................................     2
    Prepared statement...........................................     2
Graves, Hon. Sam, a Representative in Congress from Missouri, 
  prepared statement.............................................     5
Hayes, Hon. Robin, a Representative in Congress from North 
  Carolina, opening statement....................................    32
Lampson, Hon. Nick, a Representative in Congress from Texas, 
  prepared statement.............................................     4
Marshall, Hon. Jim, a Representative in Congress from Georgia, 
  opening statement..............................................     3
McIntyre, Hon. Mike, a Representative in Congress from North 
  Carolina, opening statement....................................    31
Peterson, Hon. Collin C., a Representative in Congress from 
  Minnesota, opening statement...................................     1
Smith, Hon. Adrian, a Representative in Congress from Nebraska, 
  prepared statement.............................................     5

                               Witnesses

Simpson, Hon. Michael K., a Representative in Congress from Idaho     6
    Prepared statement...........................................     8
Rippey, Bradley R., Agricultural Meteorologist, World 
  Agricultural Outlook Board, U.S. Department of Agriculture, 
  Washington, D.C.; accompanied by Dr. Gerald A. Bange, 
  Chairperson, World Agricultural Outlook Board, U.S. Department 
  of Agriculture; and Tom Harbour, Director, Fire and Aviation 
  Management, U.S. Forest Service, U.S. Department of Agriculture    11
    Prepared statement...........................................    13
Easley, Hon. Mike, Governor, State of North Carolina, Raleigh, NC    33
    Prepared statement...........................................    36
Givens, Hon. Ken, Commissioner, Tennessee Department of 
  Agriculture, Nashville, TN.....................................    49
    Prepared statement...........................................    50
Duvall, Zippy, President, Georgia Farm Bureau Federation, Macon, 
  GA.............................................................    52
    Prepared statement...........................................    54
McKinnon, Bill R., Executive Secretary, Virginia Cattlemen's 
  Association, Daleville, VA.....................................    80
    Prepared statement...........................................    81

                          Submitted Statement

Shuler, Hon. Heath, a Representative in Congress from North 
  Carolina, prepared statement...................................     6


     HEARING TO REVIEW DISASTER CONDITIONS ACROSS THE UNITED STATES

                              ----------                              


                       THURSDAY, OCTOBER 25, 2007

                          House of Representatives,
                                  Committee on Agriculture,
                                                   Washington, D.C.
    The Committee met, pursuant to call, at 10:07 a.m., in Room 
1300 of the Longworth House Office Building, Hon. Collin C. 
Peterson [Chairman of the Committee] presiding.
    Members present: Representatives Peterson, Holden, 
McIntyre, Etheridge, Boswell, Baca, Marshall, Herseth Sandlin, 
Salazar, Boyda, Space, Kagen, Pomeroy, Davis, Barrow, Lampson, 
Mahoney, Goodlatte, Lucas, Moran, Hayes, Rogers, Musgrave, 
Conaway, Schmidt, Smith, and Walberg.
    Staff present: Claiborn Crain, Adam Durand, Alejandra 
Gonzalez-Arias, Scott Kuschmider, Merrick Munday, Clark 
Ogilvie, John Riley, Anne Simmons, April Slayton, Kristin 
Sosanie, Bryan Dierlam, Alise Kowalski, Kevin Kramp, Rita 
Neznek, and Jamie Weyer.

OPENING STATEMENT OF HON. COLLIN C. PETERSON, A REPRESENTATIVE 
                   IN CONGRESS FROM MINNESOTA

    The Chairman. We appreciate everybody making the effort to 
be here today. I am going to kind of dispense with my statement 
as we have Members from the areas affected. I just want to say 
that we have been hearing a lot from our Members in the areas 
where the drought is going on, and because of their concerns we 
are holding this hearing today. For myself, we passed a 
disaster bill, but because of the timing, we had a February 28 
cut-off date. I would like to see us extend that date for the 
balance of 2007 to try to pick up some of these problems. We 
are also working on a permanent disaster solution in the farm 
bill which has a good chance of getting accomplished. Maybe we 
can work something in there so hopefully, somehow or another, 
we will be able to make a response that will address this 
situation. We also have the forest fire problem ongoing. It 
seems to get worse every year. I have been having discussions 
with other Members including Norm Dicks and others. Norm was 
telling me that they used to spend 13 percent of their budget 
on fighting these fires. Now, it is 47 percent, and the stuff 
that we are interested in, this Committee and Forestry, is 
being short-changed because this money is being diverted, so 
there is some effort going on now that maybe we would do some 
kind of a similar permanent situation for forest fires that we 
are doing for ag disaster. So there are some discussions going 
on with that. But we appreciate the witnesses being here. We 
appreciate all the Members for their concern and raising this 
issue and will now recognize the gentleman from Virginia.

 OPENING STATEMENT OF HON. BOB GOODLATTE, A REPRESENTATIVE IN 
                     CONGRESS FROM VIRGINIA

    Mr. Goodlatte. Well, Mr. Chairman, thank you very much for 
holding this hearing. It definitely impacts Virginia and much 
of the Southeast. There are those who believe that if you carry 
an umbrella, it won't rain. I think there may be a corollary 
that if you hold a hearing on drought, it will. So to the 
extent you deserve credit for that, Virginians are very 
thankful. It has been raining quite well through much of the 
state for the last day. I also want to thank you for working 
with us on the issue of addressing the enormous and growing 
cost of fighting forest fires and the impact that it has on the 
other programs. I know there is a representative of the Forest 
Service, USDA, here today and we will touch on that and its 
impact in this area as well. Thank you for convening this 
hearing to discuss the drought conditions many communities 
throughout the nation are experiencing. This situation is 
affecting practically every state including my home State of 
Virginia. I am pleased that Mr. Bill McKinnon will be 
testifying. He will be detailing for us exactly what Virginians 
are dealing with in terms of drought conditions. Since 2004, 
Mr. McKinnon has served as Executive Secretary of the Virginia 
Cattlemen's Association. He is a graduate of Virginia Tech 
where he received a Bachelor's and a Master's degree in Animal 
Science. He has 27 years of experience working in the livestock 
industry in Virginia. His career has focused on providing 
educational programs and serving producers in the areas of 
agricultural production, economics, livestock management and 
cattle marketing. I would also like to thank Mr. McKinnon for 
agreeing to serve as a witness today. There continues to be 
significant concern throughout our nation regarding drought and 
weather-related disasters. Significant parts of 31 states, by 
my count, have been designated disaster areas by the U.S. 
Department of Agriculture this year. In Virginia alone, many 
counties have been declared disaster areas. In a report 
released by the USDA on October 18, 83 percent of Virginia is 
suffering from severe to exceptional drought conditions. I 
appreciate the appearance of our witnesses today and I look 
forward to receiving their testimony and ideas about steps 
Congress can take to address this situation, perhaps to add on 
to what has just recently been done. And, once again, I thank 
the Chairman for calling this timely and helpful hearing.
    [The prepared statement of Mr. Goodlatte follows:]

Prepared Statement of Hon. Bob Goodlatte, a Representative in Congress 
                             From Virginia
    Mr. Chairman, thank you for convening this hearing to discuss the 
drought conditions many communities throughout the nations are 
experiencing. This situation is affecting practically every state 
including my home State of Virginia. I am pleased to introduce Mr. Bill 
McKinnon who will be detailing for us exactly what Virginians are 
dealing with in terms of the drought conditions. Since 2004, Mr. 
McKinnon has served as Executive Secretary of the Virginia Cattlemen's 
Association. He is a graduate of Virginia Tech where he received a 
Bachelor's and a Master's degree in Animal Science. He has 27 years of 
experience working in the livestock industry in Virginia. His career 
has focused on providing educational programs and serving producers in 
the areas of agricultural production economics, livestock management 
and cattle marketing. I would like to thank Mr. McKinnon for agreeing 
to serve as a witness today and I look forward to hearing his 
testimony.
    There continues to be significant concern throughout our nation 
regarding drought and weather related disasters. Significant parts of 
31 states, by our count, have been designated disaster areas by the 
U.S. Department of Agriculture this year. In Virginia alone, 15 
counties have been declared disaster areas. In a report released by the 
USDA on October 18th, 83 percent of Virginia is suffering from severe 
to exceptional drought conditions.
    I appreciate the appearance of our witnesses today and I look 
forward to receiving their testimony and ideas about steps Congress can 
take to address this situation. Once again, I'd like to thank our 
Chairman for scheduling this timely hearing.

    The Chairman. I thank the gentleman. I would--everybody's 
statements will be made part of the record. I would entertain 
if Members from the affected areas want to make a statement, I 
would entertain that. We also have Mr. Simpson with us, who is 
not on the Committee. What is your time table? Are you okay? 
Mr. McIntyre, do you----
    Mr. McIntyre. Thank you, Mr. Chairman. I will be brief and 
I will defer until--I know we have Governor Easley coming. I 
will wait until he comes. Thank you very much.
    The Chairman. The gentleman from Georgia? Bob, you want to 
wait until the Governor gets here? The gentleman from Georgia.

  OPENING STATEMENT OF HON. JIM MARSHALL, A REPRESENTATIVE IN 
                     CONGRESS FROM GEORGIA

    Mr. Marshall. Thank you, Mr. Chairman, I appreciate you 
holding this hearing. It is a very important issue to my State 
of Georgia, and we have here today testifying on the fourth 
panel Zippy Duvall, a life-long farmer, who is President of the 
Georgia Farm Bureau. He also farms in north Georgia that has 
been particularly struggling right now. I think everybody has 
seen it in the news media, and you see what is going on where 
Atlanta is concerned, but what you don't see often enough is 
the impact on agriculture and forestry. Thank you, Mr. 
Chairman.
    The Chairman. I thank the gentleman. Anyone else that wants 
to make a statement? Mr. Davis.

 OPENING STATEMENT OF HON. LINCOLN DAVIS, A REPRESENTATIVE IN 
                    CONGRESS FROM TENNESSEE

    Mr. Davis. Mr. Chairman, I too want to join the Members of 
this Committee in thanking you for having the foresight of 
being willing to bring those in from the most severely affected 
areas of our nation. Weather related disasters certainly with 
the drought, in Tennessee we have had an unbelievable hit, kind 
of a double-whammy from an early freeze or late freeze in one 
situation and then with the drought that has been almost 
devastating. We are listed in Tennessee and northwestern 
Georgia and northern Alabama has probably been the most 
effected when it comes to analyzing the impact of the drought. 
And we are lucky this morning, and I am very pleased that you 
have allowed, Mr. Chairman, Ken Givens, our Commissioner of 
Agriculture this year, to actually be one of those that will 
discuss the impact of the drought and the freeze in Tennessee, 
and I yield back my time.
    The Chairman. Thank the gentleman. All other statements 
will be made part of the record.
    [The prepared statements of Messers. Lampson, Everett, 
Graves, Smith, and Shuler follow:]

 Prepared Statement of Hon. Nick Lampson, a Representative in Congress 
                               From Texas
    I would like to thank Chairman Peterson for holding this important 
hearing today, so that we can shine a light on an issue that most 
Americans don't even know exists. I would also like to thank our 
colleague, Congressman Simpson for taking the time to testify today, 
along with Mr. Rippey, Governor Easley, and all of the others.
    Unfortunately, the wildfires in California and drought conditions 
in the Southeast have attracted greater attention to this issue that 
affects our nation's farmers and ranchers too often. Folks in my 
district and across Texas faced drought conditions in 2004 and 2005, 
and although things are looking okay right now, there are some spots 
this year that have gotten either too much or too little rain. And as 
we speak, those in the Hill Country and North Texas are bracing for 
potential wildfires. Texas agriculture has faced extreme losses and 
hardship due to droughts, wildfires, and floods, and I'm glad we're 
here today to discuss the issue.
    These issues affect those who live in towns and cities as well as 
farmers, and I believe that in addition to helping after a natural 
disaster occurs, we must also make an effort to inform our constituents 
on ways to prepare their homes and businesses before an emergency even 
occurs.
    Although we have made great strides in developing crops that are 
more resistant to floods, drought, and pests, our agriculture economy, 
and the livelihoods of many of our constituents, remain at the mercy of 
forces that are out of our control. We must take these factors and the 
testimony of those here today, into account as we complete provisions 
in this year's farm bill such as the revenue-based countercyclical and 
disaster aid programs.
                                 ______
                                 
Prepared Statement of Hon. Terry Everett, a Representative in Congress 
                              From Alabama
    Thank you Chairman Peterson for holding this hearing today on an 
issue that is weighing on most of our minds. Unfortunately, many of my 
colleagues, and myself included, are facing extreme weather conditions 
in our districts that are having an adverse impact on the daily lives 
and livelihoods of the people we represent.
    My State of Alabama and many states across this nation are 
experiencing some of the worst drought conditions in years. At the end 
of September, about 43 percent of the contiguous United States was in 
moderate to extreme drought conditions according to the National 
Climate Data Center. Areas from Pasadena, California--which is 
suffering the driest year since records started in 1878--to the Great 
Lakes that are significantly below average levels--to Alabama where 
many of our reservoirs have very little storage left, and lakes, 
streams and rivers are drying up. Additionally, these dry conditions 
are attributing to the horrific fires that California citizens are 
facing today.
    What does this mean to our citizens? It is impacting every aspect 
of their lives. Water shortages have become so severe that communities 
have had to place water restrictions and are already considering 
transporting water in for human consumption. The inability of energy 
providers like Alabama Power to operate may result in a reduction in 
power for citizens and businesses.
    Farmers are seeing their crops dry up in the fields with complete 
or severe losses due to lack of irrigation and producers are having to 
sell off their livestock due to the scarcity of feed and water. 
Businesses are suffering from an inability to transport goods on 
waterways since they can not be navigated due to low water levels.
    More than half of Alabama's 4.5 million residents have been living 
under water restrictions for months and there appears to be no end in 
sight. Central Alabama is about to be 60 inches below normal rainfall. 
Many of our crops are either in ``poor'' condition or are a complete 
loss. This is the same situation that we face with much of our 
livestock. This comes on top of drought conditions in previous years, 
making it difficult for our farmers to handle this year's losses.
    I am sure that many of my colleagues will add that their state is 
seeing similar devastation. The question today is what we can do to 
help. For our rural communities, we need to continue to support efforts 
to improve their water facilities through USDA Rural Development 
programs. For agricultural production, there are several things that we 
can and need to address.
    First, Congress needs to reevaluate our existing crop insurance and 
disaster programs. Farmers have often discussed with me the problems 
with the current crop insurance system and how at times they must lay 
out more money just to demonstrate loss of crops than what they receive 
from the insurance company. Additionally, we continually hear from 
farmers of how the disaster payments don't kick in for several years--
sometimes coming too late to help the farmer mitigate his losses. This 
seems counterproductive and this Committee needs to address it.
    In response to comments made to me regarding crop insurance, I 
introduced the Farm Risk Management Act of 2007 (H.R. 1882) in April 
with several Members--including Representative Mike Rogers and 
Representative Jo Bonner of this Committee. This bill would create risk 
management accounts, using both USDA and individual farmer 
contributions, to reduce the financial impact of disasters on the 
agriculture community. This program would go beyond the scope of the 
current crop insurance by allowing farmers to withdraw funds from their 
accounts to help offset any unforeseen farm expenses including high 
energy or fertilizer cost. Programs like these need to be included in 
the 2007 Farm Bill to help farmers and ranchers.
    Second, we need to find ways to assist farmers to mitigate their 
losses. One approach is the legislation that I introduced earlier this 
year--the Farm Reservoir Act (H.R. 2088). Once again, I would like to 
thank Chairman Peterson and Ranking Member Goodlatte for ensuring that 
this program was included in the new farm bill (H.R. 2419) as part of 
the Regional Water Enhancement Program. This program will assist 
farmers in building reservoirs and other water-saving projects. Of 
course this would not solve all of the problems that our farmers are 
facing in the current extreme drought. However, it would have enabled 
farmers to save some of their crops and not have to be in direct 
competition for water for other uses such as human consumption, power, 
and navigation.
    Droughts have had a costly economic impact on agricultural 
producers throughout the country in recent years as well as upon the 
quality of life of our citizens. As much as I wish that we could 
legislate rain, we can find ways to make sure that we help these 
communities pull through the disasters that they are facing.
    I look forward to hearing from our witnesses today and to have a 
constructive conversation on how this Committee can revise its existing 
programs to be more responsive and efficient.
                                 ______
                                 
  Prepared Statement of Hon. Sam Graves, a Representative in Congress 
                             From Missouri
    Thank you Chairman Peterson and Ranking Member Goodlatte for 
holding this important hearing.
    I'd like to briefly point out one issue of particular concern that 
came up this year. Missouri is a state that is subject to almost every 
possible kind of weather condition. This year alone we have had ice 
storms, freezes, floods, and droughts. The spring freeze that hit 
Missouri has caused a particularly complicated problem. To my 
knowledge, USDA has no way to take into account the impact of this 
freeze in combination with drought conditions when making assessments. 
As a result, no emergency haying and grazing declaration was issued for 
land enrolled in the Conservation Reserve Program even though the 
shortage of forage was the same as if there was a D3 drought.
    The governor, FSA state committee, Members of the Congressional 
delegation, Missouri Farm Bureau, and other organizations and 
individuals contacted USDA, but were unable to get acknowledgement that 
D2 conditions in combination with the spring freeze constituted a 
disaster. This issue needs to be looked at, because I believe this lack 
of flexibility will continue to be a problem, particularly in states 
with weather conditions as varied as those in Missouri.
    Thank you again Chairman Peterson and Ranking Member Goodlatte. I 
look forward to our witnesses testimony.
                                 ______
                                 
 Prepared Statement of Hon. Adrian Smith, a Representative in Congress 
                             From Nebraska
    Good morning and thank you, Mr. Chairman. This hearing is necessary 
and timely, and I am pleased that we are holding it today.
    Even with the record crops projected for this year, many farmers 
and ranchers will not be enjoying such bounty. Floods have drowned out 
crops in some areas. Drought covers extensive areas of the Southeast 
and the western states. Indeed, extended droughts in Nebraska's Third 
District are causing farmers in the Panhandle to wonder how much longer 
they can keep farming.
    It is important that the policies we enact will strengthen American 
agriculture and provide long-term stability for our nation's producers. 
Our policies need to encourage the development of disaster management 
and mitigation strategies; which I believe are an important component 
of keeping American farms viable through periods of drought, flood, or 
other natural disaster, so that U.S. consumers have access to the 
safest, most affordable food products in the world and so that 
sustained growth for our rural communities is possible.
    I want to thank our witnesses for coming here today to provide 
testimony for the Committee, and I look forward to hearing from you.
    I appreciate the Committee for holding this hearing as an important 
step to meeting our goals.
    Mr. Chairman, I look forward to continuing to work with you, and I 
thank you for your time.
                                 ______
                                 
 Prepared Statement of Hon. Heath Shuler, a Representative in Congress 
                          From North Carolina
    Mr. Chairman, thank you for holding this important hearing today to 
address the emergency conditions caused by drought in North Carolina 
and the severe hardship our farmers and livestock industry faces with 
the shortage of hay. I especially appreciate Governor Michael Easley 
for taking the time to testify to this Committee regarding these 
emergency conditions.
    Reports from farmers indicate that the state's hay shortage could 
be as high as 800,000 round bales, forcing them to seek other options 
for feeding livestock through the winter. Typically livestock operators 
grow their own feed, but this year, due to extreme drought conditions, 
farmers must transport hay and alternative feeds from eastern North 
Carolina or out of state to sustain herds through the winter months.
    This drought has caused losses that threaten farming operations and 
jobs if livestock operations close. Without feed for livestock, farmers 
are selling dairy and beef cattle and closing operations. This will 
have long term detrimental effects to the agricultural economy, drive 
up consumer prices, and cause shortages in grocery stores throughout 
North Carolina and the region.
    Mr. Chairman, it is my wish that we work together to offset the 
effects of this drought on our farmers. Currently, the U.S. Department 
of Agriculture has declared 85 North Carolina counties disaster areas 
because of drought-related crop losses. The Federal disaster 
declaration authorizes the U.S. Farm Service Agency to make low-
interest emergency loans available to eligible producers in these and 
11 contiguous counties. However, we are finding that this disaster 
relief is not enough and we must provide supplemental emergency 
assistance to our farmers, who must withstand another natural disaster.
    Mr. Chairman, my thoughts and prayers are with the family farmers 
of North Carolina and throughout the drought stricken areas of the 
Southeast, and I thank you once again for this opportunity.

    The Chairman. We are pleased to welcome our friend from 
Idaho, who, I believe, serves on the Agriculture Appropriations 
Subcommittee. Is that correct? No, he doesn't? He is on the 
Appropriations Committee anyway. He is angling for that. Mr. 
Simpson, we are pleased to have you with us and your statement 
will be made part of the record and feel free to summarize.

   STATEMENT OF HON. MICHAEL K. SIMPSON, A REPRESENTATIVE IN 
                      CONGRESS FROM IDAHO

    Mr. Simpson. Thank you, Mr. Chairman. Good morning and 
thank you for inviting me to have the opportunity to testify 
before you today. Mr. Chairman, Idaho's agriculture producers 
are facing significant trials due to catastrophic fires and 
severe drought. This summer Idaho experienced some of the worst 
wildfires on record. Over 2 million acres burned and 15 
counties were declared disaster areas. The Murphy Complex Fire 
alone scorched over 600,000 acres, much of which was grazing 
land used by Idaho ranchers. As a result of losing these 
grazing lands some ranchers were forced to sell their entire 
herds. Other ranchers lost livestock due to the fire itself. 
Many were left with alternative grazing allotments to which 
they could move their livestock.
    While the Federal Government has been responsive to these 
ranchers by allowing emergency grazing and haying on CRP lands, 
I am concerned that these accommodations will be short-lived. 
However, the effect of the Murphy fire will be felt by ranchers 
for years to come because grazing will not be allowed on these 
lands until the monitoring objectives of the BLM's Emergency 
Stabilization and Rehabilitation Plan are complete. Under this 
plan less than \1/6\ of the affected land is scheduled for 
rehabilitation this season.
    These fires were so disastrous in part because of the 
prolonged drought Idaho is experiencing. This summer was too 
hot, too dry and too long. This drought is affecting the 
profitability of agricultural producers and even the existence 
of their farms. Idaho narrowly avoided water shortages this 
year. If Idaho does not receive significant snowfall this 
winter, farmers will face serious shortages of irrigation water 
next summer. If this happens, water experts estimate that over 
10,000 acres of farmland will go out of production next year.
    The combination of the heat and the lack of water caused a 
significant reduction in yield, quality and size of Idaho's 
potato crop. Also, many of Idaho's wheat and barley producers 
were unable to take advantage of the record high grain prices 
because they simply had nothing to sell.
    I have seen barley fields in my district that appeared 
harvested because there were simply no heads on the plant. They 
never grew. Many growers decided not to bother to harvest the 
crop because it wasn't worth it, because it wouldn't pay for 
the price of the fuel to harvest the crop, even at $10 a 
bushel.
    In some cases grain producers who had their crop forward-
contracted at $4 to $5 per bushel found themselves unable to 
fill their contract and had to buy grain at $9 to $10 per 
bushel to fulfill their contract commitments.
    Idaho farmers can often address things like viruses or 
pests by applying fertilizers or pesticides, but these natural 
disasters are beyond their control. Whether it is floods, 
hurricanes or fires, our nation has traditionally responded 
with aid to those affected by natural disasters. While Idahoans 
affected by these disasters may not be as visible as other 
disaster victims, their economic losses and disruption of their 
lifestyle is no less tragic. The government has a 
responsibility to come to the assistance of these people and to 
work to put a safety net below responsible growers who have 
fallen victim to these circumstances.
    Mr. Chairman, I thank you for holding this hearing. This is 
an important subject, and let me, in conclusion, just say this 
year we had dramatic fires up in central Idaho, and while the 
Forest Service is here, I would like to tell you that they did 
a tremendous job in fighting those fires. They are heroes in 
central Idaho and the Incident Commander from the Tahoe 
National Forest, we had to tell her that if she ran for my 
office she would probably win because she is so popular because 
of the job the Forest Service did. And I want to compliment 
them on the job that they have done in fighting these 
tremendous forest fires. Thank you, Mr. Chairman.
    [The prepared statement of Mr. Simpson follows:]

  Prepared Statement of Hon. Michael K. Simpson, a Representative in 
                          Congress From Idaho
    Good afternoon, Chairman Peterson, Ranking Member Goodlatte, and 
Members of the Committee. I appreciate the opportunity to appear before 
the Committee to discuss the ongoing disaster conditions in Idaho.
    Mr. Chairman, Idaho's agriculture producers are facing significant 
trials due to catastrophic fires and severe drought. This summer Idaho 
experienced some of the worst wildfires on record. Over 2 million acres 
burned and 15 counties were declared disaster areas. The Murphy Complex 
Fire alone scorched over 600,000 acres, much of which was grazing land 
used by Idaho ranchers. As a result of losing these grazing lands some 
ranchers were forced to sell their entire herd. Other ranchers lost 
livestock to the fire itself. Many were left with no alternative 
grazing allotments to which they could move their livestock.
    While the Federal Government has been responsive to these ranchers 
by allowing emergency grazing and haying on CRP lands, I am concerned 
that these accommodations will be short-lived. However, the effects of 
the Murphy fire will be felt by ranchers for years to come because 
grazing will not be allowed on these lands until the monitoring 
objectives of the BLM's Emergency Stabilization and Rehabilitation Plan 
are complete. Under this plan less than \1/6\ of the affected land is 
scheduled for rehabilitation this season.
    These fires were so disastrous in part because of the prolonged 
drought Idaho is experiencing. This summer was too hot and too dry for 
too long. This drought is affecting the profitability of agriculture 
producers, and even the existence of their farms. Idaho narrowly 
avoided water shortages this year. If Idaho does not receive 
significant snowfall this winter farmers will face serious shortages of 
irrigation water next summer. If this happens, water experts estimate 
that over tens of thousands of farm acres will not have access to any 
water next year.
    The combination of the heat and the lack of water caused a 
significant reduction in yield, quality, and size of Idaho's potato 
crop. Also, many of Idaho's wheat and barley producers are unable to 
take advantage of the record high grain prices because they simply have 
nothing to sell.
    I have seen barley fields in my district that appeared harvested 
because there were simply no heads on the plant. They never grew. Many 
growers decided not to bother harvesting what crop there was because it 
wasn't worth the price of fuel to run their equipment over the field--
even at $10 per bushel.
    In some cases grain producers who had their crop forward-contracted 
at $4-$5 per bushel found themselves unable to fill their contract and 
had to buy grain at $9-$10 per bushel to fulfill their contract 
commitments.
    Idaho farmers can often address things like viruses or pests by 
applying fertilizers or pesticides, but these natural disasters are 
beyond their control. Whether it is floods, hurricanes, or fires, our 
nation has traditionally responded with aid to those affected by 
natural disasters. While Idahoans affected by these disasters may not 
be as visible as other disaster victims, their economic losses and the 
disruption of their lifestyles is no less tragic. The government has a 
responsibility to come to the assistance of these people and work to 
put a safety net below responsible growers who have fallen victim to 
these circumstances.
    Once again Mr. Chairman, I appreciate the opportunity to appear 
before the Committee to discuss these important issues and welcome any 
questions you may have.

    The Chairman. Thank you, Mr. Simpson. We are going to take 
a break here after--we still have 9 minutes left on the vote. 
How many folks in Idaho have crop insurance of the ones 
affected? Do you have any idea what percent?
    Mr. Simpson. I don't know what the number is. Most of the 
people I went and talked to had crop insurance. The barley 
producers--I went down in August and toured some of the fields 
down in southern Idaho. It was amazing to look at it. It looked 
like the fields had been harvested and so forth, but it looked 
like it was a normal crop. But the fact is fields that would 
normally get 80 bushels an acre were getting 3, 4, and 5 
bushels an acre that is how severe the drought was. But I don't 
know the exact percentage of how many of them have crop 
insurance.
    The Chairman. If you could check on that and get me that 
information I would appreciate it.
    Mr. Simpson. Certainly will. You bet.
    The Chairman. Anything else? Mr. Salazar?
    Mr. Salazar. Thank you, Mr. Chairman. Mr. Simpson, we share 
kind of the same issues in Colorado as we are potato growers. 
We are the third largest potato growing state in the country as 
you are the first. The problem, Mr. Chairman, is that with 
potatoes it is very difficult to insure potatoes. So many of 
our potato growers suffer severely because it is so expensive 
that it is unaffordable at the moment to insure potatoes. I 
just wanted to make that comment. Thanks.
    The Chairman. Yes. We have heard that before, but I imagine 
the grain guys are like mine. There are probably quite a few of 
them, but the majority have crop insurance.
    Mr. Simpson. Exactly. Most of the grain producers do have 
insurance.
    The Chairman. All right. Any other questions? We will take 
a break to vote, and we have the witness from USDA and the 
Governor--Mr. Etheridge and McIntyre got the Governor on the 
way and we will convene when we get back from the vote. The 
Committee stands in recess.
    [Recess.]
    Mr. Etheridge [presiding.] Thank you, and before we welcome 
our second panel to the table, I am going to recognize the 
gentleman from California, Mr. Baca, for a brief opening 
statement. Mr. Baca?

    OPENING STATEMENT OF HON. JOE BACA, A REPRESENTATIVE IN 
                    CONGRESS FROM CALIFORNIA

    Mr. Baca. Thank you very much, Mr. Chairman, and I know 
that our Minority Ranking Member is not here, but I want to 
thank you for holding this hearing on disaster. I know what it 
means to be a platform for agricultural disaster throughout the 
country, but I want to take a few moments to mention obvious 
and real disasters going on right now in my own district and 
throughout southern California. As of this morning the 
wildfires have exploded in San Bernardino, Riverside, San 
Diego, Los Angeles, Ventura, Santa Barbara, and Orange County. 
And this is really a wildfire tornado as they call it that has 
consumed over 695 square miles of land, destroyed over 2,000 
structures, forced one million people to evacuate their homes, 
and a lot of these have come into my district, which presents a 
problem that has taken over six lives. For those of you that 
are not near those fires in that area, it is like a blanket of 
snow and ashes all over my district, that covers all of 
Fontana, Rialto, Colton, San Bernardino, the City of Highland, 
and then of course the fires that have occurred in Lake 
Arrowhead, Lake Gregory, the Green Valley area, Fontana, 
Ontario. There are many reasons for the catastrophe. Some are 
naturally occurring and others are arson. After the smoke is 
clear everyone is housed, fed and clothed, and of course I plan 
to come back to my colleagues on this Committee to craft a 
long-term solution that takes a realistic look at how we fund 
firefighters and that becomes very important. How we fund 
firefighters and what we must do to prevent future disasters of 
this magnitude. When I asked how many employees we have, I 
don't believe that we have enough firefighters even currently 
right now if we have another disaster in the area. And I know 
that it could conceivably go to the southeast as well. This 
project will require tremendous bipartisan cooperation and the 
jurisdiction of several other committees including Natural 
Resources, Appropriations, and Budget, but if we are to be true 
agents of change there is something that we must do and we must 
do it now. But all data indicates that the fire, nationwide, 
are increasing in size and intensity, and those of us in 
Congress must respond to those changes. We must have frank 
discussions about how we can prevent, and I state frank 
discussions, how we can prevent the extreme loss of trees, 
properties and life and then how we even deal with the barred 
beetle too as well that is a tornado waiting to explode, it is 
a time bomb that is there. The status quo can no longer do. Our 
planet is changing and we must acknowledge that and we must 
head on to meet our new challenges that are facing us. Again, I 
thank the Chairman and Ranking Member for their leadership. I 
look forward to hearing from the esteemed witnesses today and I 
look forward to working on a bipartisan issue that deals with 
all of us that are impacted or could be impacted now and in the 
future so that we are prepared to deal with this kind of 
disaster. Not only now but in the future to come, and that we 
have the resources and the funding that is there. Thank you, 
Mr. Chairman.
    Mr. Etheridge. I thank the gentleman. I would recognize the 
gentlelady from Kansas for a brief comment.

 OPENING STATEMENT OF HON. NANCY E. BOYDA, A REPRESENTATIVE IN 
                      CONGRESS FROM KANSAS

    Mrs. Boyda. Thank you so much, Mr. Chairman. I would just 
like to say thank you for coming. In Kansas we certainly 
experienced years and years of drought only to be followed by a 
tremendous 100-500 year flood, so this is extremely important. 
One of the things that I hear most in my district is our 
policies provide payments when we don't need them, and don't 
pay them when we do so approaching this issue from a good data-
based and good policy standpoint is going to be extremely 
important to all the farmers and ranchers in Kansas, and on 
behalf of them I say thank you.
    Mr. Etheridge. I thank the gentlelady. Our second panel, 
and we welcome you to the table, is Mr. Bradley Rippey, 
Agricultural Meteorologist for the U.S. Department of 
Agriculture here in Washington. He is accompanied by Dr. Gerald 
Bange, Chairman of the World Agricultural Outlook Board, U.S. 
Depart of Agriculture and Mr. Tom Harbour, Director of Fire and 
Aviation Management, Forest Service, U.S. Department of 
Agriculture. Mr. Rippey, please begin when you are ready. Your 
full statement will be included in the record and if you will 
please try to summarize as soon as possible we would appreciate 
it. Thank you, sir. You may begin.

          STATEMENT OF BRADLEY R. RIPPEY, AGRICULTURAL
     METEOROLOGIST, WORLD AGRICULTURAL OUTLOOK BOARD, U.S. 
DEPARTMENT OF AGRICULTURE, WASHINGTON, D.C.; ACCOMPANIED BY DR. 
                        GERALD A. BANGE,
CHAIRPERSON, WORLD AGRICULTURAL OUTLOOK BOARD, U.S. DEPARTMENT 
 OF AGRICULTURE; AND TOM HARBOUR, DIRECTOR, FIRE AND AVIATION 
MANAGEMENT, U.S. FOREST SERVICE, U.S. DEPARTMENT OF AGRICULTURE

    Mr. Rippey. Thank you, Mr. Chairman, for the invitation to 
appear before this Committee to discuss U.S. agricultural 
weather highlights for 2006, 2007, and an outlook for 2008. 
With me today as you mentioned are Dr. Gerald Bange, 
Chairperson of the World Agricultural Outlook Board, and Tom 
Harbour, Director of Fire and Aviation Management for the 
Forest Service.
    It has been nearly 20 years, specifically 1988, since the 
United States suffered through a coast-to-coast drought. Since 
then, there have been very frequent regional droughts, but few 
have had a major impact on national yield and production values 
for U.S. crops. I will begin by briefly reviewing the 2006 crop 
season before commenting on 2007 and discussing the outlook for 
the next few months.
    CY 2006 featured significant drought across the Plains and 
the South, but generally favorable conditions in the heart of 
the Midwest. You can look at Figure 1 on the screens. U.S. corn 
production totaled 10.53 billion bushels in 2006; the national 
yield was 149.1 bushels per harvested acre. At the time, the 
2006 production was the third largest on record; the yield was 
the second highest on record behind only 2004. Corn harvested 
acreage totaled 70.6 million acres. Soybean production in 2006 
totaled 3.19 billion bushels representing the largest U.S. 
soybean crop on record.
    In contrast, winter wheat and sorghum crops were affected 
by drought. Winter wheat production totaled 1.3 billion 
bushels, down 13 percent from 2004-2005. At the same time, the 
2006 sorghum production, 40 percent of which comes from Kansas, 
dropped nearly 30 percent, reflecting a sharp decline in yield.
    The cotton crop was less affected because in some areas 
irrigation buffered the effects of drought. Cotton production 
in 2006 was 21.7 bales, just nine percent below the 2005 record 
high. U.S. production and yields for cotton were the third 
highest on record.
    At the beginning of 2007, conditions on the Central and 
Southern Plains suddenly turned from drought to excessive 
wetness and flooding. These conditions negatively impacted 
yields and quality of the winter wheat crop. Farther east, we 
saw record-setting March warmth promoting a rapid planting pace 
for southeastern summer crops. In early April, however, a 
severe cold outbreak struck the Southeast and parts of the 
Midwest, harming jointing to heading winter wheat, emerged 
corn, varying degrees of damage to fruit and nut crops, and 
there was devastation to specialty and nursery crops. Freeze 
damage was reported as far north as the Ohio Valley, as far 
west as the eastern half of the Plains, and well into the Deep 
South. Since 1980, the National Climatic Data Center has been 
tracking billion dollar weather disasters which are weather-
related disasters that have overall damage estimates of $1 
billion or more. When the final data are reported, the April 
freeze is likely to become the first freeze outside the 
nation's citrus belt to reach the billion dollar benchmark. In 
the wake of the April freeze, drought in the Southeast 
intensified to historic proportions, please consult Figure 2, 
sharply curtailing the regional production of hay and rain-fed 
summer crops.
    For the most part, the U.S. corn crop experienced good 
weather during the 2007 growing season: 2007 corn forecast is a 
record 13.32 billion bushels, the largest harvested acreage 
since 1933, and the second-highest yield on record. On the 
other hand, and not entirely due to weather, the soybean crop 
fell to 2.6 billion bushels, down 19 percent from the 2006 
record high. While the U.S. corn acreage increased sharply in 
2007, the soybean harvest will reflect a drop in acreage from 
74.6 to 62.8 million.
    Current forecast for cotton production is 18.2 million 
bales, down 16 percent from last year. However, the yield is up 
12 pounds per acre from 2006. If realized, the cotton yield 
would be the third highest on record. The expected cotton 
harvested area of 10.5 million acres is down 17 percent from 
2006. Notably in Texas, the 2007 cotton abandonment was just 
six percent, down 36 percent from last year due to favorable 
growing-season rainfall and temperatures.
    While the eradication of drought across the Central and 
Southern Plains resulted in generally improved wheat yields, 
rains were too excessive in some areas. As a result the wheat 
crop was 1.5 billion bushels, up 17 percent from the previous 
year. The national yield was up a half a bushel from 2005-2006. 
Meanwhile, sorghum production nearly doubled due to large 
increases in yield and acreage.
    Shifting focus to the water supply situation, I will talk 
for a moment about California and we will discuss the wildfires 
in more detail during the question and answer session. But 
during the summer, drought lingered through 2007 across the 
Southeast and much of the West. Many concerns about water 
supplies as we approach the 2008 crop season, specifically in 
California the state's 151 intrastate reservoirs had above-
average storage through all of 2006, but a 2006-2007 sub-par 
winter wet season and unusually early snow melt has led to 
sharp declines in water storage. In a normal year, California's 
reservoirs are drawn down about 2.7 trillion gallons between 
May and October. This year, between April and September, we 
have seen that draw down of 3.4 trillion gallons.
    Now, the recent development of La Nina has significant 
implications for U.S. weather between now and next spring. A 
hallmark of La Nina is a substantial lowering of sea-surface 
temperatures in the central and eastern equatorial Pacific 
which disrupts the sub-tropical jet stream across the southern 
United States and results in drier-than-normal weather from 
autumn into spring. Given the current seriousness of drought in 
parts of the Southeast, several more months of dry weather 
could have serious implications for fall-sown crops, including 
winter wheat. However, winter wheat is normally a minor crop 
from a national perspective, less than five percent of the 
national production total. More importantly, an extension of 
the southeastern drought in the next spring could lead to 
summer crops being planted in dust and require substantial 
growing-season rainfall to prevent a third consecutive year of 
drought-reduced yields. Not including the Mississippi Delta, 
the Southeast typically accounts for nearly \1/4\ of U.S. 
cotton production and more than \2/3\ of peanut production.
    At present, favorable soil moisture in the Southern Plains 
suggests that the winter wheat crops should become well 
established this fall; however, the official National Weather 
Service Drought Outlook, on the screen as Figure 3, indicates 
the likelihood of drought development in parts of the Southwest 
as far east as western Oklahoma.
    Another potential impact of La Nina is warmer-than-normal 
weather across much of the country and wetter-than-normal 
conditions in several areas, including the Ohio Valley and the 
Northwest. A lack of persistently frigid weather may limit 
stress on livestock, but pests and disease-related issues could 
surface in 2008 due to the lack of killing freezes this winter. 
On the other hand, winter wetness in the Ohio Valley and in the 
Northwest would benefit small grains and help to ease or 
eradicate drought.
    The effects of La Nina on U.S. weather typically diminish 
during the spring months. The latest NWS outlook for March to 
May, issued last week, calls for wet conditions to subside next 
spring in the Ohio Valley and the Northwest. You can consult 
Figure 4 for a complete suite of winter-spring outlook package 
from the National Weather Service.
    Thank you. This completes my statement and we would be 
pleased to answer any questions the Committee might have.
    [The prepared statement of Mr. Rippey follows:]

 Prepared Statement of Bradley R. Rippey, Agricultural Meteorologist, 
   World Agricultural Outlook Board, U.S. Department of Agriculture, 
                            Washington, D.C.
    Mr. Chairman, thank you for the invitation to appear before this 
Committee to discuss U.S. agricultural weather highlights for 2006, 
2007, and the early season outlook for 2008. With me today is Dr. 
Gerald Bange, Chairperson of the World Agricultural Outlook Board.
    It has been nearly 20 years--specifically 1988--since the United 
States suffered through a coast-to-coast drought. Since then, there 
have been frequent regional droughts, but few have had a major impact 
on national yield and production values for U.S. crops. I will begin by 
briefly reviewing the 2006 crop season before commenting on the 2007 
season and then discussing the outlook for the next few months.
2006 Highlights
    The 2006 crop season featured significant drought across the Plains 
and the South, but generally favorable conditions in the heart of the 
Midwest (figure 1). U.S. corn production totaled 10.53 billion bushels 
in 2006, and the national yield averaged 149.1 bushels per harvested 
acre. At the time, the 2006 production was the third largest on record, 
while the yield was the second highest on record--behind only 160.4 
bushels per acre in 2004. Corn harvested acreage totaled 70.6 million 
acres. Soybean production totaled 3.19 billion bushels, representing 
the largest U.S. soybean crop on record. The U.S. yield of 42.7 bushels 
per acre was just slightly below the record high established in 2005. 
Soybean harvested acreage was a record-high 74.6 million.
    In contrast, the winter wheat and sorghum crops were affected by 
drought. U.S. winter wheat production totaled 1.3 billion bushels, down 
13 percent from 2004-2005. The winter wheat yield of 41.7 bushels per 
acre was down six percent from the previous year. At the same time, 
2006 sorghum production dropped nearly 30 percent, reflecting a sharp 
decline in yield.
    The cotton crop was less affected because in some areas irrigation 
buffered the effects of drought. The U.S. cotton production in 2006 was 
21.7 million 480 pound bales, just nine percent below the 2005 record 
high. U.S. production and yields were the third-highest on record.
2007 Highlights
    At the beginning of the 2007 crop season, conditions on the Central 
and Southern Plains suddenly turned from drought to excessive wetness 
and flooding. These conditions negatively impacted yields and quality 
of the winter wheat crop. Farther east, record-setting March warmth 
promoted a rapid planting pace for Southeastern summer crops. In early 
April, however, a severe cold outbreak struck the Southeast and the 
lower Midwest, harming jointing to heading winter wheat, burning back 
or killing emerged corn, causing varying degrees of damage to fruit and 
nut crops, and devastating numerous specialty and nursery crops. Freeze 
damage was reported roughly as far north as the Ohio Valley and as far 
west as the eastern half of the Plains. Across the South, pockets of 
freeze damage occurred as far south as Georgia, Arkansas, northern 
sections of Alabama and Mississippi, and portions of central and 
northeastern Texas. Since 1980, the National Climatic Data Center has 
been tracking ``billion dollar weather disasters,'' which are weather-
related disasters that have overall damage estimates of $1 billion or 
more. When the final data are reported, the April freeze is likely to 
become the first freeze outside of the nation's citrus belt to reach 
the billion-dollar benchmark. In the wake of the April freeze, drought 
in the Southeast intensified to historic proportions (figure 2), 
sharply curtailing the regional production of hay and most rain-fed 
summer crops.
    With the notable exception of the mid-Atlantic and Southeast 
regions, the U.S. corn crop for the most part experienced good weather 
during the 2007 growing season. The 2007 corn crop is forecast at a 
record 13.32 billion bushels, reflecting the largest harvested 
acreage--86.1 million--since 1933, and the second-highest yield--154.7 
bushels per acre--on record. On the other hand, and not due entirely to 
weather, the soybean crop is forecast at 2.60 billion bushels, down 19 
percent from the 2006 record high. Soybean yields are expected to 
average 41.4 bushels per acre, down 1.3 bushels from last year. While 
the U.S. corn acreage increased sharply in 2007, the soybean harvest 
will reflect a sharp drop in acreage from 74.6 to 62.8 million.
    The current forecast for U.S. cotton production stands at 18.2 
million 480 pound bales, down 16 percent from 2006. However, the yield 
is expected to average 826 pounds per acre, up 12 pounds from last 
year. If realized, the cotton yield would be the third highest on 
record. The expected cotton harvested area of 10.5 million acres is 
down 17 percent from 2006. In Texas, the 2007 cotton abandonment was 
just six percent, down from 36 percent last year, due to favorable 
growing-season rainfall and temperatures.
    While the eradication of drought in the Central and Southern Plains 
resulted in generally improved wheat yields, rains were excessive in 
some areas. The winter wheat crop totaled 1.5 billion bushels, up 17 
percent from the previous year. The national yield of 42.2 bushels per 
acre was up 0.5 bushel from 2005-2006. Sorghum production nearly 
doubled due to large increases in yield and acreage.
Water Supply Situation and Outlook for the Winter and Spring of 2007-
        2008
    Despite improved moisture on the Plains, drought lingered through 
the summer across the Southeast and much of the West. This has raised 
concerns about water supplies as we approach the 2008 crop season. 
While California's 151 intrastate reservoirs had above-average storage 
through all of 2006, a sub-par 2006-2007 winter wet season and 
unusually early snow melt has led to sharp declines in the state's 
water storage. In a normal year, California's reservoirs are drawn down 
about 2.7 trillion gallons, from 9.6 to 6.9 trillion gallons, from May 
to October. Between April and September of this year, California's 
water storage decreased from 9.5 to 6.1 trillion gallons, a draw-down 
of 3.4 trillion gallons.
    The recent development of La Nina has significant implications for 
U.S. weather between now and next spring. A hallmark of La Nina is a 
substantial lowering of sea-surface temperatures in the central and 
eastern equatorial Pacific Ocean. Unusually cool water in this region 
typically disrupts the sub-tropical jet stream across the southern tier 
of the United States, resulting in drier-than-normal weather from 
autumn into spring. Given the current seriousness of drought in parts 
of the Southeast, several more months of drier-than-normal weather 
could have serious implications for fall-sown crops, especially winter 
wheat. It should be noted, however, that winter wheat in the Southeast 
normally accounts for less than five percent of the national production 
total. More importantly, an extension of the southeastern drought into 
next spring could lead to summer crops being planted in dust and could 
require substantial growing-season rainfall to prevent a third 
consecutive year of drought-reduced yields. Not including the 
Mississippi Delta, the Southeast typically accounts for nearly \1/4\ of 
the U.S. cotton production and more than \2/3\ of U.S. peanut 
production.
    At present, favorable soil moisture levels in the Southern Plains 
region suggest that the winter wheat crop should become well 
established this fall. However, the official National Weather Service 
Drought Outlook, issued on October 18, 2007, and valid through January 
2008, indicates the likelihood of drought development in western 
Oklahoma and nearby areas (figure 3).
    Another potential impact of La Nina is warmer-than-normal weather 
across much of the country and wetter-than-normal conditions in several 
areas, including the Ohio Valley and the Northwest. While a lack of 
persistently frigid weather may limit stress on livestock, pest- and 
disease-related issues could surface during the 2008 crop season due to 
the lack of killing freezes. On the other hand, winter wetness in the 
Ohio Valley and the Northwest would benefit small grains and help to 
ease or eradicate drought conditions.
    The effects of La Nina on U.S. weather typically diminish during 
the spring months. The latest National Weather Service official outlook 
for March-May 2008, issued on October 18, calls for wet conditions to 
subside next spring in the Ohio Valley and the Northwest (figure 4).
    Thank you. That completes my statement and we would be pleased to 
answer any questions the Committee may have. 


Etheridge. I thank the gentleman, and let me just to say Members of 
Committee, we will recognize each Member for 5 minutes. You will be 
recognized in the order of seniority if you were here as the gavel 
sounded, otherwise, as you came to the Committee and I will recognize 
myself for 5 minutes. Mr. Rippey, let me ask you, your testimony 
covered a pretty broad range of agriculture, as it should, but my 
question is as you look at the map on the Southeast now into the second 
year, moving to the third year, and actually your numbers cover the 
whole country when you talk about averages and total production. By and 
large, across the country now, we are seeing a lot of commodity prices 
rise. My question deals with the Southeast, where production is down 
and in some cases nonexistent depending on where you are within rate 
region. My home State of North Carolina happens to be the hardest hit 
of all the southeastern states. Would you comment on how this affects, 
because the overall price structure is up, but your overall expenditure 
and investment in that crop hasn't gone down, so if you lose \1/2\, \2/
3\ or all of it, you are in pretty bad shape and the whole regional 
effects, especially in rural areas, I would be interested on your 
comment on that and what that may project over the next several years 
    if this continues.Mr. Rippey. Dr. Bange, would you like to address 
the economic implications of that?
    Dr. Bange. Mr. Chairman, I would say that is pretty much a worst-
case scenario for those who are in the midst of a drought, such as in 
the Southeast now. Unfortunately for them, we have very, very good 
crops elsewhere in terms of some of the row crops, in particular: the 
corn crop was good; the wheat crop was good; and the soybean crop was 
good. Those people, unfortunately, did not--in the Southeast, many of 
those people are not going to benefit from the prices that we have seen 
generally higher, because even though we have had these good crops, we 
have seen very strong commodity prices especially because of the 
utilization of corn for ethanol. It has tended to raise the whole price 
structure for the grain complex, so for those who have grain, it is not 
bad for those in the Southeast, for example, and other affected areas 
it is a pretty bad scenario.
    Mr. Etheridge. Thank you. I have other questions, but in the 
interest of time I will submit them for the record and ask you to 
respond. I will now yield to the Ranking Member for questions.
    Mr. Goodlatte. Thank you, Mr. Chairman. We are all too aware of the 
situation in southern California where drought, winds, and hazardous 
fuels are leading the catastrophic wildfires, burning thousands of 
homes, a million people are out of their homes right now, some lives 
have been lost. I know that much of the area is chaparral or shrub 
land, an ecosystem where fires normally occur; however, over the past 
year nationwide we have had the second worst wildfire season on record 
with over 8.3 million acres burning in all types of forests. To give a 
comparison: so far in southern California there are under a half-
million acres--16 times as much acreage of wildfires of what people are 
seeing on television these past several days in southern California is 
what the nationwide damage has been thus far this year. Earlier this 
year, we saw Florida and Georgia suffer damages of over 500,000 acres 
in one massive fire. In my home State of Virginia, the wildfire risk is 
extremely high right now especially in the southwestern part of the 
state. I would like to ask perhaps Mr. Harbour, who I know is with us 
from the Forest Service, but any of you please jump in. Do you foresee 
these wildfire seasons getting worse?
    Mr. Harbour. Yes, sir. The short answer is we do foresee wildfire 
seasons getting worse and why--confluence, sir, of the weather which we 
have been briefed on here--the drought--the conditions especially in 
forested lands where we accumulate fuel. As a fireman, we accumulate 
burnable vegetation, and, finally, the increasing juxtaposition of 
homes and values at risk with those forested lands all lead to a 
situation where we do foresee more intense, more severe fires in the 
future.
    Mr. Goodlatte. And will hazardous fuels reduction help with the 
severity?
    Mr. Harbour. Yes, sir. As a fireman, there is not only the response 
to the fire that we need to be concerned about, but there are the 
conditions prior to the fire that give our firemen a better chance of 
containing that fire at a small size. The condition of our national 
forest and grasslands, in our state and private forest and grasslands, 
is very important to folks in the firefighting service, Yes, sir.
    Mr. Goodlatte. And I take it that would be true even with the long-
term drought predictions that we have seen here.
    Mr. Harbour. Absolutely. Just to give us a better chance of dealing 
with the fire, when we have better conditions that we manage for on 
those lands.
    Mr. Goodlatte. And while forests are certainly a long-term crop and 
1 year of drought will not likely kill forests as it does traditional 
agricultural crops, how has the drought impacted private forest lands 
in the South where we have seen on these drought monitors just a 
devastating severity here in recent months?
    Mr. Harbour. You bet, sir. It has impacted lands in the Southeast. 
As you are aware, as we utilize those lands and harvest crops, we also 
use replant. And the small trees, in their formative years, are 
especially susceptible to drought. They have a high mortality when they 
are small and they can't overcome the drought conditions that larger, 
more mature trees could. It has impacted forested lands all over the 
nation, especially in the Southeast.
    Mr. Goodlatte. Thank you very much, Mr. Harbour. Let me turn to 
another subject. With regard to the impact on livestock producers, of 
which there are a great many in the Southeast and other parts of the 
country that have been drought-impacted and certainly in my 
Congressional district in the Shenandoah Valley in western Virginia, 
Mr. Rippey, the Senate Finance Committee recently passed a disaster 
portion that allocates $35 million per year for livestock-related 
disaster. When the USDA has made disaster payments to livestock in the 
recent past, what has been the annual amount?
    Mr. Rippey. We received a note this morning from John Johnson at 
FSA. I think Jerry Bange is going to address that question.
    Dr. Bange. Sir, that number would seem to be rather low to me based 
upon recent experience, although we are talking about numbers here that 
are highly variable from year to year depending upon the circumstances 
obviously. According to CBO, they support the current program at about 
$1.2 billion for the past 3 years. Looking at 2005, 2006 and 2007, I 
guess that would turn out to be about $400 million a year which would 
seem to me to be quite a bit higher.
    Mr. Goodlatte. So what the Senate has provided is less than 10 
percent of what the need has been in the past 3 years on average. And I 
would dare say there are some individual states that have received more 
than $35 million.
    Dr. Bange. Yes.
    Mr. Goodlatte. And I must share your concern that the amount 
provided by the Senate Finance Committee will be inadequate if there is 
a wide-spread national disaster affecting livestock producers, and 
quite frankly, I think that is happening right now. Do you think my 
concerns are justified?
    Dr. Bange. Yes, sir. I do.
    Mr. Goodlatte. Okay, and what would you say the long-term impact 
upon production agriculture would be of these weather-related 
disasters?
    Dr. Bange. Brad, you want me to answer that?
    Mr. Rippey. Certainly we have seen so many regional droughts in the 
last 20 years, I don't see any sign of that changing. As these droughts 
seem to move around from place to place I don't expect in coming years 
we are going to see much change at all from what we have been seeing, 
where we see droughts, they will move from the Plains to the Southeast 
to the Southwest, Northwest. Really the only area of the nation that 
has not been severely impacted by drought in the last 20 years 
ironically enough is the breadbasket, or the midwestern states. That is 
certainly a possibility. We have seen some fairly significant droughts 
infringing on the Midwest, including this year, across southern parts 
of Illinois, Indiana, but that is something that we will have to watch 
from a livestock perspective. Obviously, a lot of the inventories 
across the Plains and the Southeast, both of those areas have had 
substantial drought impacts over the last decade, and I really don't 
foresee any change in that in coming years.
    Mr. Goodlatte. Thank you, Mr. Chairman.
    Mr. McIntyre [presiding.] Thank you, Mr. Goodlatte. Mr. Rippey, you 
also mentioned the April freeze we experienced on the East Coast. It 
was particularly hard on specialty crops, I know, in my home State of 
North Carolina. This is, of course, known as the Easter freeze back in 
April before we ran into the situation with the drought this summer. I 
know you visited some farms there. Many of the farmers have said they 
have had to start from scratch just because of the result of the 
freeze, even before the drought, because they lost so much. Can you 
tell us what you expect the long-term impact to be on these specialty 
crops in states like the situation we had from the Easter freeze in 
North Carolina?
    Mr. Rippey. As I mentioned in my testimony, it was absolutely 
devastating to some orchards and nursery crops. It will take years to 
recover for some of those producers. Some of the other impacts were 
more shorter term, such as for corn or for winter wheat where it is 
just a 1 year recovery period. It is really in the specialty sector 
which is, obviously, a high cash flow for that as the prices are high. 
It is going to take a long time for folks in a 10 or 11 state 
southeastern and midwestern area to recover from this. Fruit trees will 
bounce back for the most part because there was not physical damage, 
but it is, again, looking at some of these nurseries that lost trees 
that will have to be restarted. A lot of specialty crops and nurseries 
seem to be the hardest-hit sector and will take a long time to recover.
    Mr. McIntyre. I know we have a vote underway that we may have to 
suspend for Mr. Lincoln Davis. Have you already been to vote?
    Mr. Davis. I haven't, and I probably will go vote and I will come 
back, and I would love to yield to someone else until I come back and 
claim my time.
    Mr. McIntyre. Thank you, sir. Do you have any question of this 
panel, Mr. Davis?
    Mr. Davis. More or less of a comment.
    Mr. McIntyre. If you go ahead and make that quickly because what I 
may do is dismiss this panel because I know that we have other panels 
coming in and the Governor of North Carolina will be coming in, so if 
you make your comment and then we may dismiss this panel.
    Mr. Davis. Thank you, Mr. Chairman. In my earlier comments I talked 
about basically the two-edged sword that cut both ways in Tennessee: 
the early warming period and then ultimately, a huge freeze that came 
and lasted for about 5 days which totally disrupted early April. It 
totally disrupted the normal spring that we would have, and then the 
drought came on and just strangled us. If you look at this map, you 
will find that most of what you see in Tennessee is in my Congressional 
district. I have 10,000 square miles of Tennessee's 40,000 so I have 
lived with that for the last 6 or 8 months. What many of our farmers 
are saying now is that we really don't need a law on this. Is there any 
way that we can find money just to buy feed for out cattle? I mean a 
lot of the folks who had commodity crops have insurance but in the 
horticultural interests, for instance, most of those had just the CAT 
Program, and there are questions whether or not they will even recover 
anything from that. We have been meeting with the RMA this week to talk 
about maybe revisiting the rules and the procedures of how a loss claim 
could be actually accessed by some of our farmers. So we are looking at 
several things in my district because it appears we have been the 
hardest hit, even in Tennessee, in the district I represent. Is there a 
possibility that there will be--I know we may have to act here--but is 
there any possibility that there will be some assistance to farmers to 
help recover herds that they have lost, hay that they cannot afford to 
buy? Do you foresee that coming from USDA?
    Mr. McIntyre. If I can suspend the hearing, we will let you answer 
that and come back. I have been informed there are a couple of other 
Members that did have questions of this panel, but I know the time is 
running out on the vote, so we will just temporarily suspend and come 
back to this panel. Thank you very much.
    [Recess.]
    Mr. Etheridge [presiding.] We are going to go ahead, if the 
witnesses will just hold the answers to Mr. Davis' question. I will 
assume you remembered the question. I was out. I apologize, and we will 
let you answer that assuming he comes back. If he doesn't get back, we 
will go ahead and get the answer for the record. Well, maybe we ought 
to go ahead and take the answer for the record so we will have it. It 
will be in an appropriate place. We will go ahead and take that answer 
now, if you would.
    Dr. Bange. Sir, I believe the way the question was posed by 
Congressman Davis--is there a chance that these people would receive 
disaster assistance: the general answer would be yes, but it requires 
specificity, that I obviously don't have, with regard to a case-by-case 
basis. With your permission I would like to take that question back to 
the Department and pose it to the proper people in USDA.
    Mr. Etheridge. If you would, please, and submit that to the 
Chairman and to the Members of the Committee.
    Dr. Bange. Yes, sir.
    Mr. Etheridge. That would be great. Thank you, sir. I now recognize 
the gentleman from Georgia, Mr. Marshall, for 5 minutes.
    Mr. Marshall. Thank you, Mr. Chairman. Could we go back to the 
prior screen? Is the technician able to that? Drought persistence. Is 
that it? Okay. Thank you. Your prediction here is that this drought is 
going to persist in north Georgia and all through the Carolinas until 
January of 2008. When you say persist, what do you expect?
    Mr. Rippey. That means that based on the D level conditions that we 
see on the Drought Monitor, those conditions will remain at the very 
best, they will remain the same. So where we see the D3s and D4s we 
will expect to see a continuation of that level of drought through the 
end of January.
    Mr. Marshall. We have had estimates provided to us by the 
Department of Natural Resources in Georgia that Atlanta is going to run 
out of water at present consumption levels--and those consumption 
levels by the way have diminished dramatically because we are banning 
all outdoor watering. I mean we have taken a number of steps already to 
try and decrease the consumption level--but that the City of Atlanta is 
going to run out of water in something like 70 to 80 days. If I 
understand this screen correctly, what you are saying is that Atlanta 
is not likely to get any relief from the drought for longer than that 
period of time. Am I correct about that?
    Mr. Rippey. Yes, we are expecting drought to continue, at least at 
the current intensity, through the end of January, which indicates that 
rainfall would be below normal between now and the end of January 2008.
    Mr. Marshall. When you say rainfall below normal, are you saying 
that the current severe drought that we are experiencing in north 
Georgia is going to continue or are you expecting that there will be a 
return to some water collection that might stave off this threatened 
end of the water supply for Atlanta if we continue to consume at 
current levels?
    Mr. Rippey. The only thing to consider is that water usage for 
agricultural and for forest purposes drops off in the fall and winter 
months, but at the same time we are still expecting drought to persist 
at its current intensity. So we may not be losing water at the rate 
that we have been through the summer and early fall months, but we do 
not expect any improvement in the drought depiction into early 2008.
    Mr. Marshall. You are worried about the weather. Are you also 
focused on water use?
    Mr. Rippey. We look at it from very general terms. I have been 
around long enough to know that each basin, each catchment basin has 
its very own specific requirements and has to be looked at 
individually. I am no expert on Atlanta's catchment basin.
    Mr. Marshall. So you don't know what the likely diminution and 
consumption would be as a result of it being the fall now and 
agriculture is not using as much as water, you wouldn't know that up in 
that area?
    Mr. Rippey. That is correct. I can only speak to that in very 
general terms.
    Mr. Marshall. Well, then let me just describe the north Georgia 
agriculture as being principally in the--actually, Zippy, if you could 
just step up real quickly and describe what agriculture there is in 
north Georgia. You can do a better job than I will. This is Zippy 
Duvall and he is the head of the Georgia Farm Bureau. He also farms up 
in north Georgia. Do you expect that there is going to be a substantial 
drop in water usage in north Georgia agriculture over the next few 
months?
    Mr. Duvall. No, sir. In north Georgia, we mainly are poultry, 
livestock, we do have some row crop areas up there but those crops have 
been made now and there will be some winter rice and stuff planted but 
they won't be irrigated.
    Mr. Marshall. Frankly, the amount of row-cropping and whatnot up in 
north Georgia is pretty small compared to poultry and cattle.
    Mr. Duvall. Very much so. The concern in the poultry industry is 
the possibility of restrictions going on water going into the 
processing plants. If that happens, that could cause a delay or down-
time of bringing chickens to the farm which would be absolutely 
critical or disastrous to our poultry farmers. And most poultry farmers 
are the small family farm.
    Mr. Marshall. Mr. Rippey, it would be very helpful to me and to the 
Georgia delegation if you and your office were in a position to sort of 
firm-up your estimates for that particular catch basin. What is going 
to happen over the next few months could be very helpful to the 
Department of Natural Resources in Georgia, as well. As I say, there 
are projections right now that Atlanta, the City of Atlanta, 
metropolitan Atlanta, is going to--that is millions of people--run out 
of water in about 2-3 months.
    Mr. Rippey. We will certainly look into that, and perhaps in 
partnership with other agencies including U.S. Geological Survey, which 
deals with water issues, we will take a look at that.
    Mr. Marshall. Well, if you could get back with my office, could you 
get back with me?
    Mr. Rippey. Yes, sir.
    Mr. Marshall. Thank you. Thank you, Mr. Chairman.
    Mr. Etheridge. The gentleman yields back, and let me just echo that 
and if you would make sure that is not just to his office but to the 
Members of this Committee and the Chairman, I think that would be most 
appropriate because this issue is serious enough and the issue just 
raised as it relates to poultry, these small farmers by and large have 
contracts. Those contracts are tied to payments to banks, and so if 
they get stretched out and they find themselves in a situation where 
they can't pay the bills; it would be a catastrophic issue over a long 
period of time. The gentleman from Tennessee had not quite finished so 
I am going to allow him the opportunity to follow up with one final 
question. Mr. Davis.
    Mr. Davis. Mr. Chairman and members of the USDA that are here, the 
question I asked, I believe you have already answered and the response 
was that you will take it back. I am not sure who you are going to take 
it back to, but--for the last 6 years we have been passing a 
supplemental, properly so, for our war efforts to defend our country 
against those who have perpetrated terrorist acts against this nation. 
I have been told that the soldier's ability to perform their duties 
depends on the food that is in their belly. There have been some armies 
throughout the history that have not been able to complete their 
missions because they were unable to have enough food, so there is 
obviously no comparison when we are talking about supply and funding 
for our troops to protect them and provide them for their basic needs. 
But coming secondary to that would be being sure that we have the food 
supply to provide this country with our basic needs as well. There is 
now hope that when you go back to this Administration and talk to them 
that you will explain to them that there is a request for a 
supplemental now, and that is for the supplemental appropriation. The 
big part of that has always been and will continue, perhaps, to be 
funding of the war in Iraq and in Afghanistan, so it is my hope that 
you include in that a request for the funds for some of these farmers 
who have been devastated and perhaps may not be able to continue the 
family farm. And I would hope that you would carry that message back. I 
hope that when the President sends his request to us it will have 
included in it supplemental appropriations for agriculture as well. 
Thank you, Mr. Chairman.
    Mr. Etheridge. I thank the gentleman. I now recognize the gentleman 
from California, Mr. Baca, for 5 minutes.
    Mr. Baca. Thank you very much, Mr. Chairman. Mr. Rippey, a question 
for you. But keeping in light of global warming and its impact it is 
going to have on us and looking at drought and the possibility of the 
need for water, not only for our farmers but throughout our area, in 
your testimony you briefly mention the amount of water stored in 
California's 152 reservoirs. Through September of this year, according 
to your information, our reservoirs contain about 6.1 trillions 
gallons, a decrease of 8 million gallons from last year. Can you 
estimate for us how the wildfires this week have changed the reservoir 
level?
    Mr. Rippey. In terms of water usage for wildfire fighting, I will 
defer to Mr. Harbour. He may or may not have an answer to that.
    Mr. Harbour. Mr. Baca, I am indeed a firefighter and we obviously 
use water in our firefighting efforts, but I don't have the expertise 
to answer that question, sir.
    Mr. Baca. All right, but in that process the firefighters and 
others in forestry use, they use helicopters, they use air jets, aren't 
they then draining some of our water that we have because whether it 
comes from Lake Arrowhead, Lake Gregory in my area, near my area. That 
impacts our water and the ability to supply water and it also impacts 
the reservoirs in our area if they are actually using water from these 
lakes to fight the fires, and then we have a drought because we don't 
have snows, we don't have rains now.
    Mr. Harbour. Yes, sir. I think I understand your question, and you 
are correct. We do use water, especially with our helicopters and with 
our air tankers to help the firefighters on the ground. We do, in fact, 
listen to the local authorities about their concerns about water. 
Water, however, in these emergency situations is very critical to us 
also. Not only do we use water from lakes and ponds, but we derive 
water from hydrants and so forth to help us in our firefighting 
efforts. I don't have an estimate of the gallons of water that we have 
used in the fight, but yes, sir, water is a key component of what we 
need to do to fight those fires.
    Mr. Baca. Thank you. Hopefully at one point we can get the 
statistics or the numbers because that impacts the drought, the water 
we had and when we look at global warming and supply of water to our 
area, and especially the State of California that relies a lot on the 
Colorado River and other reservoirs as well. The other question that I 
have for you, Mr. Harbour, do we have enough resources in manpower to 
meet future disasters as we look at the one that has hit California?
    Mr. Harbour. Mr. Baca, we are certainly going to have to sit down 
with Members of Congress and think about the impacts of these combined 
interactions of the changing weather that we have, the more severe 
weather, more homes and more improvements that we must protect and 
worsening conditions in our national forest. So we felt very good about 
the assets we had on hand to deal with these fires over the last week, 
but as we look ahead 5, 10, and 20 years it is certainly something that 
we want to discuss with you about how we position the combination of 
immediate assets which fight fire and the conditions that we put those 
firefighters into, the conditions of the land, the proximity of homes, 
all which affect the firefight that we are in.
    Mr. Baca. Okay. Thank you. Another question that I have, Mr. 
Harbour, we have one of the leading transportation hubs of southern 
California that runs through my area. On Tuesday, I was briefed by a 
few of your colleagues from the Forest Service, Danny Truesdale and 
Rick Cooksey. One question I had for them was on the transportation of 
hazardous materials and chemicals during a time of disaster, can you 
explain to the Committee what the standard procedure is for the 
transfer of hazardous materials by rail during an emergency, like the 
fires we have had this week?
    Mr. Harbour. I can tell you in general, sir, that we exercise our 
cooperative interagency relationships during emergencies. We have 
experts from the Department of Transportation at the Federal, state, 
and local level that talk to us and deal with us as we have an emerging 
situation, and so we do at times, as you know, sir, we stop traffic, we 
detour traffic, we may in fact impact rail or ground transportation 
routes because of fire. That, again, is not the particular expertise I 
have, but the answer, sir, is yes, we are in close cooperation with 
folks like Caltrans and CHP and the Department of Transportation for 
rail lines to determine how safe it is for those kinds of hazardous 
materials to go through an area that is either being impacted by fire 
or is expected to be impacted by fire.
    Mr. Baca. Okay. Thank you very much.
    Mr. Etheridge. I thank the gentleman. The gentleman from Nebraska, 
Mr. Smith, is recognized for 5 minutes.
    Mr. Smith. Thank you and I thank the leadership of the Committee 
for holding this hearing. Certainly, drought has affected Nebraska for 
quite some time. My question is for Mr. Rippey. The National Drought 
Mitigation Center at the University of Nebraska--Lincoln has published 
a 10 step checklist for drought preparedness planning. What do you 
think Congress could do to encourage states and localities to being 
proactive and develop long-term drought preparedness plans that will 
allow earlier recognition of drought conditions and promote thoughtful, 
and certainly pre-planned, strategies for response and mitigation that 
incorporate sound science policy and education? And, I guess as an 
aside, that as of 2006 only two states, Illinois and Washington, were 
developing long-term plans.
    Mr. Rippey. Yes, Dr. Michael Hayes is the Director of the National 
Drought Mitigation Center and Dr. Donald A. Wilhite, who preceded him, 
are at the forefront of this whole aspect of trying to get ahead of 
drought. We know it is going to happen. It is going to move around. And 
those folks have really been in the leadership. They have a great plan, 
but it needs to be implemented, it can't just sit there. Right now, for 
a lot of states, it is just on paper. I have been involved with the 
drought monitoring process since the beginning of 1999. We have seen a 
lot of improvement of the coordination in various states. North 
Carolina is one where we have a real good plan in effect where there 
are frequent meetings. I think that is the key. You pretty much 
mentioned it yourself that we need to get states involved at the state 
level and deal with this. If Atlanta had cut back on water years ago 
maybe we wouldn't be in this mess right now where there is, 
purportedly, just a short supply left. Take the National Drought 
Mitigation Center's ideas, work this down to the state and local level, 
and I think we would be much more prepared to confront drought on a 
national scale.
    Mr. Smith. Thank you, and I yield back.
    Mr. Etheridge. I thank the gentleman. Let me thank all of the other 
Members. I think we have been through those who would like to ask a 
question. Would anyone else like to ask a question who has not had an 
opportunity?
    Mrs. Musgrave. Mr. Chairman?
    Mr. Etheridge. Five minutes.
    Mrs. Musgrave. Thank you, Mr. Chairman, very much for recognizing 
me. First of all, when I look at the map and don't see anything except 
in the very corner of Colorado and the southeastern corner I am rather 
amazed because I have been in Congress for 5 years, and for 4 of those 
Colorado, of course, has been in a very severe drought. When our former 
governor assessed it, he said it was a drought of 300 year proportion. 
It was staggering in Colorado. I, again, am amazed that I see very 
little in regard to information on Colorado, and I would like you to 
comment on that if you could. I also would like to say that we are 
talking about drought here, but in Colorado we had a blizzard last 
winter that was very dramatic. Between 8,000 and 10,000 cattle died 
immediately. Of course, the calf production was severely damaged, much 
of those--probably a fifth of calf crop, perhaps even a fourth--are 
gone, and as high as 15,000 cattle were lost in that. And so you are 
looking at a 2 to 5 year recovery from that blizzard, and the blizzard 
came on top of the continued drought. We in Colorado have faced severe 
damages, so that is out on the eastern part of the state. Then another 
issue that we have to deal with is wildfires. Additionally, I would 
like you to comment on--I assume that you are already into Fiscal Year 
2008 dollars: but I want to know about funding for 2007, and if you had 
adequate funding. And if you didn't, where did you get more money for 
2007? Those are the issues I would like whomever to address please.
    Mr. Harbour. I think the question about fire funding is mine, 
ma'am. The Forest Service, in terms of our wildfire suppression 
spending in Fiscal Year 2007, spent just under $1.4 billion in our 
wildfire suppression efforts. The funding that you allowed us was 
sufficient to meet with the need; however, the expenditure of $1.4 
billion to deal with fires points out a problem that the Forest Service 
is confronting, which we would love to discuss with you in that close 
to half of the Forest Service budget now is a fire budget. We have 
always viewed the U.S. Forest Service as an agency which needs to not 
only manage the 200 million acres of national forest system lands in 
the U.S., but reach out to our state and private partners. And we are 
finding with the focus and stress with the fire program that the agency 
simply lacks the ability to continue to have vibrant programs in those 
other areas. And so we appreciate the funding that you have allowed us, 
and we certainly would like to talk about how we can, for the future, 
engage in discussions that allow us to have a more balanced program in 
the agency.
    Mrs. Musgrave. Thank you. How about specifics in Colorado please.
    Mr. Rippey. Looking at the weather situation, you spoke about the 
blizzard last January--and December and January. We always look at 
these weather disasters, and you have to look at them in two lights, 
and it was a devastating storm for the livestock. We saw pictures on TV 
of the hay being dropped by helicopters. At the same time, Colorado 
ended up with one of the best winter wheat yields in a very long time 
with the production at 40 bushels per acre, so at the same time it was 
devastating livestock, the wheat underneath--we didn't know how it was 
going to look when it came out--turned out looking great and it escaped 
the freeze so that is, again, a double-edged sword with that big 
blizzard because it did protect the winter wheat beneath. In terms of 
drought vulnerability, Colorado looks like they will dodge most of the 
bullet in the near future, but drought will strike again. And the 
better part of the last decade has been very difficult with drought, 
not just on the Plains but also in the mountains with water supply 
issues.
    Mrs. Musgrave. Yes.
    Mr. Rippey. Currently, things are looking very good. We might see 
some drought vulnerability in the far south because of the dry weather 
associated with La Nina, but the rest of the state looks to be in a 
sort of transition zone from drier conditions to the south, wetter to 
the north, so we don't foresee a near-term problem with drought in 
Colorado. That will be something that will surface again sometime down 
the road, and we will have to deal with it again.
    Mrs. Musgrave. Thank you very much and thank you, Mr. Chairman.
    Mr. Etheridge. I thank the gentlelady and we just had a vote call 
and let me add, Mr. Conaway had to leave. Let me ask this question for 
the record and ask you, if you would please submit your responses to 
the Committee. What has the forest fire situation been in Canada and 
Alaska compared to the Continental United States, and what do they do 
in Canada that makes forest fires worse or less severe in that case 
whatever it may be. And if you would provide that and submit it to the 
record we would sure appreciate that. And with that let me thank each 
of you for coming today, for your testimony. The Ranking Member and I 
were just talking here. Looking at this map that you provided, the 
seasonal drought outlook, through the next several months, there is not 
a lot of encouragement on it for the far West, nor for the Southeast, 
especially those hard-hit states of North Carolina, Virginia, all the 
way up to Delaware and as far south as Alabama. I do hope in this case 
you are wrong, and I am sure you do. But that being the fact, that is 
why we are having the hearing today, but I think that we have to be 
prepared to handle that. With that, let me thank you. The Committee 
will stand in recess while we get ready for our next panelists, and 
that will be as soon as we can vote, probably about 7 to 10 minutes.
    [Recess.]
    Mr. Etheridge. I am not sure I am going to get their attention. 
Governor, it is hard to get these guys to stay on task.
    Governor Easley. Well, I know there are a lot of fun and games 
going on today, so----
    Mr. Etheridge. Well, let me thank you on behalf of the Members of 
this Committee and Chairman Peterson and all of us for agreeing to our 
request as we hold this full hearing. The Chairman was kind enough to 
call a full hearing to talk about the Southeast, but specifically as we 
heard from the last panel that North Carolina is the hardest hit, 
really, as a full state. Even though, as my good friends in Georgia 
would probably take some umbrage to that with what is happening in 
Atlanta, but as a state in agriculture our whole state is covered. So 
let me welcome you, Governor, and thank you for accepting our 
invitation to appear today before this Committee to share your unique 
perspective on this urgent crisis that is affecting not only our state, 
but the whole Southeast and, as we saw earlier, parts of the far West. 
I want to thank you for your leadership in this pressing matter. You 
have been out front in our state and I assume you are going to share 
that very shortly as you talk about having been a clear voice on behalf 
of our farm families and rural communities. For my colleagues here, 
Governor Easley has spent nearly 2 decades--well, actually over 2 
decades now--as a public servant, fighting crime, protecting children 
and the elderly, and standing up for working families. Since taking the 
oath of office in 2001 as the Governor of North Carolina, his theme 
was, in North Carolina where every citizen in every county has the 
opportunity to succeed. He has worked at that goal. Governor Easley is 
a product of eastern North Carolina coming out of Nash County. He sort 
of knows what it is when you talk about row crops and tobacco and corn, 
soybeans and all those other crops that we have heard about today. He 
grew up on a tobacco farm. His roots are deep in the North Carolina 
soil, as mine are and the Members of this Committee my colleague Mike 
McIntyre, who joins me and Robin Hayes from North Carolina. He 
understands the Southeast region, but he also knows that we have the 
worst drought of a tragic proportion that we have had in many, many 
years. And he understands that there is a huge need for Congress to 
deal with it and to step in. It is my hope that Congress will work 
together, that we will press for an agricultural assistance package 
that the President will sign. By joining us here today, Governor Easley 
continues his strong leadership for agricultural families, for rural 
communities in North Carolina, and really our whole Southeast region. I 
want to thank him for that. We have been joined by another one of our 
colleagues who sits on a number of committees for North Carolina, Heath 
Shuler. Heath, we welcome you and glad to have you with us. And with 
that the Ranking Member is not here for an opening statement, so I will 
turn to my other colleague from North Carolina who might want to have a 
opening statement before we recognize you for your statement, Governor. 
Congressman McIntyre.

 OPENING STATEMENT OF HON. MIKE McINTYRE, A REPRESENTATIVE IN CONGRESS 
                          FROM NORTH CAROLINA

    Mr. McIntyre. Thank you, Mr. Etheridge, and we are pleased to have 
the Governor here with us today. For those who are joining us today, I 
am so pleased that our Governor would take the time to come from North 
Carolina, which helps emphasize clearly the distinct, unusual and 
unique situation we have in some areas what is being called a 300 year 
drought in North Carolina. The severe drought that is gripping the 
southeastern United States, and particularly our Tar Heel State, has 
destroyed millions of acres of valuable crops in our home State of 
North Carolina. Unfortunately, we know this situation has only gotten 
worse with the passage of time. We have had month after month of high 
temperatures, scorching sun, little to no rain except perhaps for today 
back home. We have seen what has happened to our crops; soybeans, corn, 
hay, cotton and nursery crops in particular. I know that back in the 
summer, when I was traveling around southeastern North Carolina, in our 
district I met with farmers who were already then facing up 80 to 90 
percent loss of their crops; especially in areas such as soybeans and 
hay and knew that the matter was only going to get worse if we didn't 
get rain by Labor Day. Well, we know Labor Day has long come and passed 
and we still, in many, many areas, have not hardly had any rain, if any 
at all. Where lush green fields of corn once stood, we now have ragged 
brown stalks beat down by the sun and they dot the rural landscape. 
They are constant reminders as we go home every weekend to our 
districts, and as I am sure as the Governor knows traveling throughout 
North Carolina of what has happened with this drought. I want to 
particularly thank the Governor and thank his office. I know that his 
Chief of Staff and I, Franklin Freeman, spoke several times back in 
August as I was meeting with farmers down our way. I want to thank Jim 
McCloskey from the Governor's office here in Washington, who we have 
talked with about this issue many times, back in August. We were 
working with the Governor's office and he then requested help from the 
Secretary of Agriculture, we were really pleased to be able to get that 
good cooperation as we have always had with the Governor's office on 
the state and Federal levels. We know that as Members of the 
Agriculture Committee and our work with the USDA, when we see the 85 of 
100 counties in North Carolina suffering that this is an issue that 
affects folks everywhere, and it also affects folks beyond the farms. 
Many people forget that this House Agriculture Committee also has 
authority over rural development and our rural communities. And when we 
consider now the restrictions on watering lawns and washing cars has 
turned into using paper plates in schools and asking folks to conserve 
water and realizing that our reservoirs are on the verge of running dry 
we have a serious situation. Governor, I want to thank you particularly 
for your efforts, for the efforts you have already made. I know at the 
League and Municipality Meeting in our district in Fayetteville just a 
week ago, you addressed the communities about this issue and what 
communities can also do as we deal with this situation with the 
drought. Thank you and welcome. We are glad to have you with us today.
    Governor Easley. Thank you.
    Mr. Etheridge. The gentleman yields back. The gentleman from North 
Carolina, Mr. Hayes.

  OPENING STATEMENT OF HON. ROBIN HAYES, A REPRESENTATIVE IN CONGRESS 
                          FROM NORTH CAROLINA

    Mr. Hayes. Thank you, Chairman Etheridge, and I do appreciate you 
being here today, Governor. I want to point out to Heath Shuler it has 
not rained for 4 days now before he finally shared that with us further 
to the east so keep it coming. Seriously, you have a great delegation 
here, both on the Agriculture Committee with Representatives Foxx, 
McIntyre, and Etheridge, and we are all working very, very hard 
together with you, Commissioner Troxler, to try and get the appropriate 
disaster assistance due to the severe drought conditions that our 
farmers have been plagued with for some time. We had several letters. 
Bobby and others have initiated many conversations, with leadership and 
the White House, and we are still looking to see where we can find the 
funding assistance that we need. As you and I talked a moment ago, we 
are not at all happy that the President has not included it in the 
supplementals. This is the quickest and most available bill that the 
Congress is responsible for appropriating and I feel confident that 
with our continued joint efforts from Georgia, Tennessee, and South 
Dakota we can ultimately prevail. I too was at an Ag Town Hall Meeting 
in Skyline County recently and heard about the losses firsthand, have 
seen it every time I travel. We are certainly open and willing to do 
whatever we can do to be of assistance and look forward to working with 
you and Mike, Bobby, Heath, Virginia, and all the rest of our 
colleagues particularly on the Agriculture Committee to do what we need 
to do and can do for the farmers. So, again, thank you for your efforts 
and we appreciate you being here. I yield back.
    Mr. Etheridge. Thank you. The gentleman yields back. Governor, 
thank you for such time as you may consume to--let me just say to you 
your full statement will be entered into the record. Governor Easley.

   STATEMENT OF HON. MIKE EASLEY, GOVERNOR, STATE OF NORTH CAROLINA, 
                              RALEIGH, NC

    Governor Easley. Thank you, Mr. Chairman. I appreciate that. I 
would rather put the statement in the record than read it.
    Just to kind of give you an overview of what is going on in North 
Carolina, which is somewhat emblematic of what is going on in the 
Southeast, with the South. I think you will find the other states that 
you have discussed are going to be seeing about the same thing that you 
are going to see in North Carolina.
    Before I move into that, though, let me thank this Committee. Thank 
you, first of all, for your leadership on the farm bill. I can promise 
you the farmers wanted me to send the message loud and clear that they 
like the House version of the farm bill better than they did the Senate 
version, so I will make sure I get that in the record. And, second, 
thank you for helping demonstrate that there is a need for Federal 
assistance for farmers in the southeastern states. The problem is worse 
than most other Members would understand. I hope I can shed a little 
light on that today.
    This is the worst drought that we have had in North Carolina. We 
started keeping records in 1895 and it is far worse than anything we 
have had since then. All 100 counties are now under some category of 
either exceptional, extreme or severe in North Carolina, and it does 
not look like it is going to get much better. The National Weather 
Service forecast is for a drier than normal winter, and the problem 
there is if we don't replenish our lakes and ponds and streams during 
the winter, then we really are going to face some tremendous challenges 
in the spring. We are trying to prepare for the spring now and taking 
steps to do that, but it does look like this is going to continue to be 
a problem throughout the winter and then on to the spring that we are 
all going to have to deal with in one form or another.
    The first signs of the drought began to manifest themselves about 
the end of March, mostly in Congressman Shuler's district up in western 
North Carolina. I want to point out that Congressman Shuler, though not 
on the Committee as well as Congressman Butterfield, have already been 
here today expressing their concern and interest in promising their 
assistance, so I appreciate that. Once we got some idea of the drought 
beginning to take effect, we started restrictions in April in certain 
parts of the state. We have continued to move those restrictions as the 
drought moved across North Carolina so that now every community is 
under some restriction whether it is voluntary or mandatory in the 
state.
    We have done some things, I think the right things, and have 
continued to do the right things. The obvious that you would 
anticipate: conservation and water restrictions for our citizens, 
inter-connectivity from one water basin to the other, one city may not 
have water where another has a lot and we hook those up. We did an 
awful lot of that, you may recall, in 2002. We had a pretty severe 
drought and we did a great deal of long-term solution work, which is 
connecting the water basins and that has helped us a lot this year. We 
continue to do that. We are transporting hay from one part of the state 
that had excess to the parts that do not. And we are transporting hay 
from out-of-state in to our state for livestock. And we have used a 
contingency emergency fund to get money out to farmers to go on and 
invest in cover crops now so that they will have something for 
livestock in the spring, after the first of the year. We hope that 
program will be effective.
    But North Carolina is often viewed as a biotech state or high 
finance state, the Research Triangle part. We are still--17 percent of 
our workforce is still agricultural--$66 billion of our economy is 
still agriculture. The ripple effect is very dramatic as to how it 
affects every little community that gets agricultural dollars in there. 
We estimate at this point, and we know it is going to grow a lot, but 
$325 million in losses already. And let me just give you a thumbnail 
sketch of where these losses are, and this is probably going to be 
exactly what you see in the other states. Soybeans are 20 bushels an 
acre lower than they were last year, the lowest they have been since 
1983, almost a quarter of a century ago. Corn is down 89 bushels an 
acre, and keep in mind, a lot of our farmers in the south went to corn 
and away from other crops because of the interest in ethanol. I think 
we want to continue to encourage that. Cotton is down below 2,000 
pounds an acre, which is a drop of over 50 percent. This is a bigger 
issue. This is a global issue because the quality is also down, so it 
affects us nationally and internationally, and we can talk more about 
that if we need to. Beans--in the South, we don't have many 4s and 5s. 
Those that were planted 4 or 5, which affects the maturation date when 
they can be harvested, they did all right. Some loss there, but what we 
usually plant are 6s, 7s in our region of the state--6s and 7s didn't 
do very well and the 8s didn't even come to yield, so they are down 
dramatically. Apples, up in the west, last year was 173 pounds an acre; 
this year, 49, and peaches are down 82 percent. And the apples and 
peaches, I just want you to keep in mind, this affects more than just 
agriculture.
    If these farmers can't make it and they sell out, it is a big 
environmental problem for us and for the nation because you then begin 
to see development on what was farmland and we don't have enough 
percolating water throughout the state. And that is something I think 
we all have to be mindful of as we look at these issues in the broader 
perspective. As far as livestock goes, hay is down 45 percent. I'm 
talking production, not yield. And so that is a major concern for us 
because there is not much to graze on out there, so the demand for hay 
is going to be greater where the supply is less. Ponds and streams are 
drying up so the water is not available for the cattle. This affects 
not only the beef cattle, but the dairy products--you don't get the 
yield on milk that you otherwise would get and the health of that 
livestock is endangered.
    I don't want to fail to mention poultry and swine. At the same time 
the processing plants use a lot of water; they don't have the ability 
just yet, the technology available to recycle a lot of that water when 
they are processing chicken and swine. Just to give you one example, in 
Congressman Etheridge's district, Siler City, they have two chicken 
processing plants. That's 1,700 jobs. They use a million gallons of 
water a day. The town uses three million; they use a million of it. 
Now, if they close down not only do we lose the 1,700 jobs but all of 
the farmers in that region who are in the poultry business then don't 
have a market to take that poultry and have it processed. So there is a 
huge ripple effect to agriculture in general, but that is just one 
example.
    The long and short is for residential customers and our citizens, 
we are conserving. Restrictions are out there. We cut back 20 percent 
early, went to 30, and I've asked, just for this week at least, for 
everybody to cut back 50 percent. By that I mean just halve it. 
Whatever you use in water, try to cut in half. Let us see how difficult 
it is and what it does over a week's time because we get our water 
reports from every water system daily and we try to look at them and 
combine them weekly to see what sort of use and cooperation we are 
getting.
    I am pleased to report, we are getting tremendous cooperation from 
our citizens and from our local government officials. They are doing a 
great job as you would anticipate that they would. For our industries, 
we are encouraging the use of technology in recycling the water, 
reusing the water, and we are looking at the possibility of some sort 
of tax credit as incentives to get industry to recycle more of this 
water as this water becomes more of a more precious resource. I think 
all of us need to look at doing some of that, looking at our tax system 
to see if we have the proper incentives in place.
    But for the farmers and agriculture, they need rain. There is no 
replacement for rain. There is not much you can do to conserve and cut 
back in agriculture. You have to have the rain for the crops to grow. 
As a matter of fact, right now the cover crops that I have talked about 
that need to be planted can't be planted until we get some water, some 
rain in place. Otherwise, the farmers are going to have to irrigate 
fields without crops in them. So they have to irrigate so they can 
germinate and get wheat planted, fescue, rye, whatever it takes to get 
them through the winter especially with the shortage of hay.
    Let me close by saying I think for America to continue to be strong 
and be self-sustaining, we have to have a strong agricultural 
community. The farmers have to continue to be strong and have to know 
that when the weather knocks them down, there will be somebody there to 
help them out. And that is why I am here today, to ask you to continue 
to move forward on your support to extend the Federal funding for this 
disaster assistance and these assistance programs that are now hung up. 
I have not declared an agricultural emergency simply because I know 
there is no money available. Those programs ran out at the end of 
February and if I were to send the signal that we are trying to get the 
money now, that may raise false hopes for the farmers. I don't want to 
do that at this point. I want to see that move forward. I know you are 
trying to move it forward now.
    I think Congressman Hayes alluded to the fact that a lot of this is 
tied up with the funding for the war in Iraq. The sooner we could move 
this forward would alleviate a lot of anxiety. A lot of these farmers 
are trying to make decisions about: whether they are going to stay in 
the business; what they are going to plant next year; whether they are 
going to continue to try and save the harvest. Livestock, especially, 
has got to decide what they are going to do with the herd at this 
point. And keep in mind, I hope all citizens keep in mind agriculture 
is not just about agriculture. It is about biotechnology. We are third 
in the nation of biotechnology, very proud of that in North Carolina, 
but you need agriculture to be strong in order for biotech to be 
strong. It is about energy, energy independence. We are trying to move 
in the direction of ethanol as one of the solutions. We need our corn 
farmers to do that. It is about food, it is about clothing, it is about 
tourism. Agriculture is about ``nutraceuticals,'' which we are moving 
into. In fact, it is something that people need to--it is about the 
environment and protecting and maintaining and conserving the great 
nation that we have.
    So with that let me close, Mr. Chairman. Thank you for the ability 
and opportunity to appear before you today. I thank you for all you are 
doing, and I encourage you to continue to try and push these programs 
through.
    [The prepared statement of Mr. Easley follows:]

   Prepared Statement of Hon. Mike Easley, Governor, State of North 
                         Carolina, Raleigh, NC
    I also want to thank Rep. Bob Etheridge of North Carolina and the 
delegations from across the Southeast for leading the charge in sharing 
concerns about the economic impact of the drought. They are helping 
make clear to the Congressional leadership and the President the need 
for additional Federal assistance for farmers. We appreciate your 
support.
    In many areas of North Carolina, drought conditions are the worst 
in our recorded history and the long-term forecast is for a drier than 
normal winter. Several communities have as little as 3 month's water 
supply remaining. The simple fact is that if we do not get significant 
rainfall soon, some areas may face water rationing and the possibility 
of running out of water entirely.
    Since the first signs of the drought appeared in March, we have 
urged, and in many cases mandated, residents, businesses and government 
agencies to conserve water. We have made state water conservation 
experts available to be dispatched to help water systems that need 
help.
    Today five million North Carolinians who are served by about 250 
public water systems are under some type of water restrictions, either 
voluntary or mandatory. But as you know, asking citizens to stop 
watering their lawns, taking shorter showers and avoid washing cars, is 
only one solution in a sea of problems created by the drought.
    I have warned that if volunteer and mandatory conservation on the 
local level does not work, I will be forced to declare an emergency and 
even require water rationing.
    As North Carolina is drying up, our state's number one industry is 
also suffering. Agriculture and agribusiness generate $66 billion a 
year in North Carolina and employ 17 percent of our workforce.
    Our pastures are burning up one blade of grass at a time. Our 
fields are baking one pod of soybeans; one bowl of cotton; one leaf of 
tobacco; and one stalk of corn at a time. This may not be as dramatic 
as news photos showing the wildfires in California. But the devastation 
to the thousands of hard working farm families in North Carolina is 
just as tragic. Behind every dusty field of sun-baked crops is a family 
worried if they will be able to keep the farm going for another season.
    I have waived weight restrictions for trucks to make sure hay gets 
quickly to our drought-stricken farmers. The U.S. Agriculture 
Department has positively responded to my August request for Federal 
disaster aid for farmers facing drought losses.
    Let me give you some numbers that illustrate the extent to which 
this drought has ravaged our state's top industry.
    Soybean yields are now projected to be at 20 bushels per acre. This 
is the poorest yield on soybeans since 1983.
    Peanut yields are down 800 pounds per acre from last year. This 
loss comes in a year when the North Carolina farmers planted an 
additional 8,000 more of peanuts.
    This year's corn crop was expected to be the largest in North 
Carolina in decades. Boosted by good prices and nationwide interest in 
ethanol production, our farmers planted 1.1 million acres of corn. But 
lack of rain has stunted growth and extreme temperatures have wilted 
the plants. Corn yields are now at 89 bushels per acre. That is the 
smallest yields have been since 2002. Cotton production is now expected 
to total 2,000 pounds an acre, a 51 percent drop from production last 
year.
    The drought has not been the only slap to our farmers this year. 
After an Easter weekend freeze, our apples, peaches and grapes were 
nearly wiped out. For those crops that managed to survive the freeze, 
the months without significant rain have resulted in a forecast cut to 
North Carolina apple production down to 50 million pounds from 173 
million pounds last year. Peach production is estimated at 1,000 tons, 
down 82 percent from last year. Both of these crops are experiencing 
the smallest yields since 1955.
    As I mentioned earlier, hay is a major concern for those with 
livestock. This year we are looking at production of about 897,000 tons 
of hay, a 45 percent drop from last year. Total row crop and hay loss 
as a result of the drought is unofficially estimated at $324.8 million.
    Many of our farmers do not know how they will feed their livestock 
this winter. They face the hard choice between paying for expensive hay 
from other states or selling their animals early. Many have already 
chosen to sell their cattle prematurely.
    Farmers across the state have reported that they will need 800,000 
additional bales of hay to get them through the year. During the 
drought of 2002, our state Department of Agriculture helped deliver 
10,000 bales of hay to farmers in need. But that drought only affected 
a portion of the state. This time, the need is widespread and 80 times 
greater.
    Farmers whose corn and soybean crops have been ruined by the 
drought are now, as a last resort, baling it for silage or selling it 
for animal feed. On the state government level we are doing all we can 
to help our struggling farmers. We have set up a Hay Alert program to 
get feed to farmers that need it most. Thanks to the generosity of some 
farming organizations and creativity of farmers, some families will get 
enough hay for their animals to make it through the winter.
    As the drought continues, farmers are exploring alternative 
resources for livestock water. With 71 of our counties classified as 
under exceptional drought, the most serious drought classification, 
many of our streams have stopped running and our ponds have dried up.
    The agricultural losses I mentioned earlier do not take into 
account the production cuts faced by our nursery/greenhouse industry, 
Christmas Trees, aquaculture, potatoes and sweet potatoes, and other 
fruits and vegetables. Dairies are seeing lower milk production per cow 
due to the extreme heat and water shortage. Swine and poultry 
operations have also suffered because of the drought.
    Unless we can figure out a way to make it rain and I am not joking 
here, the conservation measures, both voluntary and even ordered by 
state and local governments, probably will not be enough to revive an 
entire industry. We have already lost too much. The bottom line is that 
our farmers need more money.
    They do not need more loans that they will be unable to repay when 
their crops fail to bring in enough income. They need grants so they 
will be able to continue to farm next year and many years into the 
future.
    Thank you for your continued support in helping our farmers recover 
from this devastating drought and sustaining our state's number one 
industry.

    Mr. Hayes. Mr. Chairman, if I might?
    Mr. Etheridge. Mr. Hayes of North Carolina.
    Mr. Hayes. Governor, you have done a wonderful job of 
painting the picture. The one thing that we have left out and 
people need to really know and understand, on top of the items 
you have mentioned we had a horrific freeze back in the spring 
that got the apples, the peaches--that piggy-backs on top of 
the drought problem, making it even worse. And as far as a 
vehicle to get the money, the first readily-available--the 
first available vehicle is the supplemental, so that is why we 
are trying to go there. Thank you, Mr. Chairman.
    Mr. Etheridge. Governor, thank you for your testimony and 
we will allow the Members to have questions and let me 
personally thank you, and I will recognize myself for 5 
minutes, because we are going to restrict each Member to 5 
minutes. We don't do that to you, of course. But let me thank 
you. Thank you for your leadership, and as it has been stated, 
we wrote the President, 54 Members signed the letter that I 
sent over as a delegation from Maryland to Alabama asking the 
President to include some funding for drought assistance in the 
supplemental that is coming over. It came this week. 
Unfortunately, it was not included, so it will be up to those 
of us in Congress to find a way to include that in that 
supplemental and I think it is important. I couldn't agree more 
that food and fiber are just as important to our national 
affairs as some of the other things that we do. But let me ask 
you a question. You, in your testimony and in your written 
statement, said that the estimated loss, and I understand it is 
accumulating, was about $325 million. My question is do you 
know if in that number the green industry is included? By that 
I mean the nursery, the greenhouse business, Christmas trees, 
the aquaculture and vegetables, because a lot of times 
vegetables are not included in some of our insurance. Do you 
know if that is in that number?
    Governor Easley. I do not know for certain. I have gathered 
a lot of this information from Commissioner Troxel who has been 
accurate on this. However, I do know that most of the green 
that you refer to, the nurseries, the landscaping, Christmas 
trees, we think we probably lost 50 percent of that crop. 
However, we can't calculate a lot of this because we are not 
allowing any watering right now, so we don't know what the 
landscapers have lost. We know the nurseries are down 
substantially, 20 percent off just last month in sales, and 
they are going to have a lot of inventory that is going to be 
pot-bound. They are going to have to make arrangements for 
that. We also know that with the Christmas trees, and by the 
way, the White House will have a North Carolina Christmas tree 
this year, but the saplings in the Christmas trees 5 and 6 
years out will create a problem. That is, we lose these 
saplings this year, so in 2012 and 2013 they will not have 
anything--a product--that will have matured to sell, so all of 
that has to be accumulated a little bit later. So I think you 
are correct in assessing the number is going to grow pretty 
much in that area especially.
    Mr. Etheridge. Let me thank you for raising the issue. And 
one other point I want to make and ask you to comment on it 
because as you noted in your testimony, we got a little rain 
today in North Carolina. Thank God for that. But what we need 
to do is make people understand that that is a down payment on 
a huge deficit, and that we can't let people get into thinking 
is that the crisis is nearing an end, when we are up to 20 
inches below normal in some parts of North Carolina and most 
places we are in double-digits all over. And as I talk to 
farmers, and I am sure you hear the same stuff, the damage has 
already been done, and if you look forward, as you have 
indicated, is they start looking at putting in crops for next 
year. If we are going to have a dry winter that damage is going 
to continue to move forward into the 2008 crop and the impact 
could be even more substantial as we move forward for a lot of 
these folks who are on the edge.
    Governor Easley. I think you are exactly right. The thing 
to remember is that we can do things like take shorter showers 
and not wash the cars. Don't run the garbage disposal and don't 
run the water when you're brushing, that type of thing. But the 
farmers, they have already lost it for this year. Those numbers 
that I gave you are very real and behind each one of them are a 
lot of dollars and a lot of family farms and a lot of faces of 
people who work really hard and are outstanding citizens in 
this state and the country. But you're right. It does not stop 
there, especially for livestock. I am concerned that the lack 
of hay as well as a lack of water is going to create a problem 
as we go forward for the spring. And the baling process we have 
tried to take the corn that didn't come to yield and the 
soybeans and bale that up and get it out to the farmers and it 
looked like it was going to work well, but it is just tearing 
up the baling machines and so I don't think that is going to 
work as well as we thought it would.
    Mr. Etheridge. Well, let me thank you and my time is about 
up. Let me thank you and all the members of your Administration 
working together to help the folks in Siler City in a dire 
situation. And as you said in your testimony, it reaches much 
farther than the city and further than the people who work 
there and the farmers. It looks like with the help of your 
staff they are going to be able to start running a water line, 
I believe, tomorrow, so I thank you for that. That will save, 
hopefully, a lot of jobs and keep some farmers in business. 
With that my time has expired. I recognize the Ranking Member 
Bob Goodlatte.
    Mr. Goodlatte. Well, thank you, Mr. Chairman. Governor 
Easley, as a Virginian, I want to welcome you as a neighbor. I 
don't have any questions for you, but as a neighbor I can tell 
you that we share the same problems in Virginia. In many parts 
of the state--78 counties have now been declared disaster areas 
by the President and we look forward to working with you to 
help make sure that North Carolina farmers, Virginia farmers, 
and in about 29 other states those who have been severely 
damaged by drought, do not face the prospect of going out of 
business because of these circumstances. We will continue to 
work to write a farm bill that helps farmers address their 
long-term needs with measures to help improve their 
environmental conditions, measures to help them get good crop 
insurance and so on. But what we can't write into the law is 
the kind of rain and the kind of other weather conditions that 
farmers, who are in one of the highest risk businesses there 
is, have to deal with whether they like it or not and we can 
help them under the right circumstances. We will try to make 
sure that there is some assistance coming to them, and I thank 
you for taking the time to come up here today to impress upon 
us how serious this problem is in North Carolina and in other 
places as well.
    Governor Easley. Thank you, Congressman.
    Mr. Goodlatte. Thank you, Mr. Chairman.
    The Chairman [presiding.] I thank the gentleman. He yields 
back. The gentleman from North Carolina, Mr. McIntyre, for 5 
minutes.
    Mr. McIntyre. Thank you, sir. And thank you again, 
Governor, for coming to share your testimony with us today and 
for the action that you have taken and the folks working with 
you in North Carolina have taken across our great state. You 
mention in your written testimony that several communities have 
as little as 3 months water supply remaining, and with the 
drought affecting these rural communities' water supplies, can 
you tell us what their ability is to access other water 
supplies if things do not significantly improve during the next 
3 months?
    Governor Easley. Well, it varies from community to 
community obviously. We are in this situation just like 
everyone else. When you have a shortage of a resource you 
either have to use less or create more. It is hard to create 
more water, so we are asking people to use less and conserve 
and they are responding very favorably with a spirit of 
cooperation. But we also at the same time are waiving all the 
permits and interconnecting as many communities as we can. A 
good example would be the one Congressman Etheridge mentioned, 
Siler City. For example, they probably only have 50 days of 
water left. They are right there in Chatham County next to 
Sanford. We are getting the water system from Lee County into 
Chatham, which is a neighboring contiguous county. It takes 
about that same amount of time, about 50 days, to get the water 
system done. But what we are doing as we are working, we are 
going to try and work it 24/7 which basically cuts the time in 
half. The same time for the chicken processing plants, they are 
hauling 450,000 gallons a day in tankers up there. I am looking 
long term--quite honestly--we have a long-term plan if we have 
to go there, using the National Guard and some contracts with 
private contractors for the hauling of some water for emergency 
purposes, potable water that you can drink and use and bathe 
with. The other thing we are looking at is using waste-water. 
We call it tertiary treatment so that it is treated to the 
level that you can use it in your yard or for washing outside, 
but you wouldn't drink it. Some of our cities, like the Town of 
Terrells, has two pipes come into a home. As long as you don't 
get them mixed up, you are okay, which one is for outdoor use, 
one is for indoor use. We look at all of that long term and we 
are trying to put into place a system that works long term, not 
just solve the problem in the short term. That is what we 
started doing in 2002, and that is what we are doing now. We 
put in place then the Drought Management Advisory Council; DMAC 
is what we call it. They meet every Thursday and give us a 
report and we know exactly where every county is and what 
everybody is using, so the interconnectivity is the way to go 
so that we have every city connected with another and that is 
what we are going to continue to work on.
    Mr. McIntyre. Thank you, and if you can--you had mentioned 
earlier about the $325 million figure representing losses from 
the drought and I know Congressman Etheridge referred to that 
when you were answering his question about some of the green 
crops, agriculture, Christmas trees, fruits and vegetables. 
With the freeze that we all were concerned about originally 
back at Easter prior to the drought, do you have an additional 
figure for the general loss of crops that resulted from that 
freeze before we hit the long drought.
    Governor Easley. No, and I will tell you why is that when 
we looked at it at the time, the freeze was around Easter, and 
Congressman Shuler was up there with us when we met with the 
farmers. The problem is with that freeze you don't know how 
much damage is done to the tree, whether the sap is going to 
move or the tree is going to bear fruit when the summer comes. 
With this drought we still don't know, so we still don't have 
an accurate assessment of how much damage the freeze did, so we 
can't really figure that in at this point to how much damage 
the drought did. And with some of those apple and peach 
orchards, we don't know whether it is all freeze-related or all 
drought-related and we are trying to--but either way we are 
still gathering the numbers, but that is a particular problem. 
I just want to mention this to you. When I was up there in 
Easter, the farmers were saying to me then we don't need 
another loan.
    Mr. McIntyre. Right. Absolutely right.
    Governor Easley. We need assistance, and I know they are 
certainly not going to say now a loan would be great, so it has 
gotten pretty tough for them. And if they sell off, like I 
mentioned earlier, if they sell off--the development up there, 
everybody wants to be in the mountains. Everybody wants to 
retire to the mountains, have a home in the mountains, and the 
development is moving so rapidly I am afraid that all of these 
farms will get developed and that will be bad for our 
environment in western North Carolina. Which, as you know, is 
absolutely beautiful.
    Mr. McIntyre. Thank you, Governor, and we know we would 
like to get that grant help instead of just loans. Thank you. 
Thank you, Mr. Chairman.
    Mr. Etheridge [presiding.] I thank the gentleman. And, 
Governor, I can assure you that from this Member's standpoint 
and this Committee, we are not looking at loans. We are looking 
at assistance and that is what this hearing is about. If we can 
help people around the world; we sure can help our farmers who 
help pay the taxes in this country. I recognize the gentleman 
from Kansas for 5 minutes.
    Mr. Moran. Mr. Chairman, thank you very much. Governor, 
thank you very much for joining us and for your advocacy on 
behalf of drought-stricken farmers, agricultural producers in 
North Carolina. As a Member of Congress from Kansas, we have 
lived with this issue for much of the time I have been in 
Congress, and it is pleasing that our weather conditions are 
somewhat better this year. But the consequences of multi-year 
drought have been very damaging to the agricultural economy as 
well as the human lives of individual farmers in Kansas and 
across the Midwest, and I just want to make the remark that you 
may consider me an ally. Despite the fact that the weather 
conditions have improved in our state, we very much recognize 
the importance of the message that you bring and I am committed 
to continuing the effort to see that we not only provide ad hoc 
disaster assistance if we can expand the program that is in 
place, change the date, add additional dollars. I want to 
assist in that effort. We need to continue our effort in regard 
to improving crop insurance. Many times as I have made the 
rounds asking my colleagues to support disaster assistance, the 
answer is, ``Well, that is supposed to be taken care of in the 
farm bill.'' Well, they don't understand that the farm bill 
deals with market-related losses, ready-to-price, and the cost 
of production. Oftentimes the response is, ``But we have crop 
insurance in place that should be addressing these issues.'' We 
have seen too many times that crop insurance is inadequate in 
regard to the operations and crops that are covered and in 
regard to what happens when there are multi-year disasters. And 
what does happen is the premiums go up, the coverage goes down, 
and our farmers are left short changed. So I am committed to 
work with my colleagues from North Carolina and elsewhere to 
see that disaster assistance includes the necessary provisions 
for farmers in the South and elsewhere in the country. And, 
Governor, I apologize that on--when you are sitting there that 
I want to take the opportunity to send a message to the 
Department of Agriculture. Unrelated to the story that you 
bring, we do have a disaster program in place. It is being 
implemented at the moment in regard to livestock losses, soon 
to be implemented in regard to crop losses, and as you pointed 
out those losses had to occur before February 28 of 2007. Even 
in the implementation of the existing disaster program we have 
had significant issues and challenges related to that 
implementation. I met recently with Secretary Connor in regard 
to this issue, and I would again reiterate in the hope that 
someone from the Department of Agriculture besides the 
Meteorologists that are here that we have significant problems 
in regard to livestock. With cattle operations that are 
conducted in multiple counties, FSA has taken the position that 
you cannot receive benefits if you graze cattle in one county 
where the loss occurs, but at the beginning of the disaster 
period, January 1, they were in a different county. That's a 
very common operation in cattle operations, is to have cattle 
in one county, you move them to another to graze and FSA says 
that is not a covered practice. And I would again ask USDA to 
resolve this, and the other one that is preeminent in Kansas is 
that feed yards are being denied compensation under the 
Livestock Compensation Program because they are told they are 
in the business of fattening cattle as compared to being 
livestock producers. And so in both instances, I want to use my 
time and perhaps your time, Governor. Again, I apologize that 
it is on your time, but to express my desire to work closely 
with USDA and request they take a serious look at both these 
issues, neither one of which appear to me to be required--an 
outcome required by the law, the disaster legislation that we 
passed in this Congress. But, really the interpretations by 
USDA that are creating a lack of common sense and solutions to 
problems that livestock producers in Kansas and across the 
country face. Mr. Chairman, I appreciate you recognizing me and 
I welcome your Governor to Washington, D.C.
    Mr. Etheridge. I thank the gentleman, and the gentleman 
yields back. The gentlelady from South Dakota, Ms. Herseth 
Sandlin, for 5 minutes.
    Ms. Herseth Sandlin. Thank you, Mr. Chairman. Governor 
Easley, it looked like maybe you had a comment in response to 
Mr. Moran's point.
    Governor Easley. I just want to say one thing on two points 
if I could. One is I appreciate you taking note that the 50 
percent insurance, and we are trying to encourage all of our 
farmers to get insurance, but it doesn't always work on every 
crop. It is a lot more complicated than it would appear on its 
face. And, second, when you mention cattle, one of the concerns 
that we do have and I should mention this, this is going to be 
with all of the states, is that with the lack of cover crop and 
the reduction in hay a lot of our cattle farmers are going to 
be faced with the decision of whether to sell this herd or a 
good portion of it early, or buy very expensive hay. And if 
they do that it could depress the market by having too much 
supply and lower the prices even more for the cattle that is 
already underweight, so that is something else we have to look 
at in the future. I appreciate you giving me a chance to 
mention that.
    Mr. Etheridge. Thank you, sir.
    Ms. Herseth Sandlin. Well, Governor Easley, it is good to 
see you again. I appreciate your service and leadership for my 
maternal grandmother's home State of North Carolina, and just 
along the line of--just like in Kansas and South Dakota--when 
we look at today's Drought Monitor that dark red and bright red 
used to be right over the Great Plains and, unfortunately, has 
moved down to your region throughout the Southeast. But we 
struggled with years of severe drought as well, and as you have 
articulated for livestock producers especially younger 
producers who can't--they just don't have the savings. Well, a 
lot of the older producers don't either when you are faced with 
multi-year drought to survive until the next season and so they 
do sell off, they do cull, they do fear for what the pastures 
are going to look like in the spring. So just because you are 
getting some rain today, as Mr. Etheridge said, certainly 
doesn't address the longer-term needs of your producers in your 
rural communities across the State of North Carolina. And it is 
important that those of us that have struggled with these 
weather conditions, especially drought, which I don't think is 
viewed, unfortunately, the same as other types of natural 
disasters warranting the same kind of assistance for 
individuals and businesses to try to regain some degree of 
economic health to weather the storm, and our storm are these 
droughts. We do show support for one another in their request 
for direct assistance. Fortunately, some of my constituents 
will be getting some of the direct assistance that was 
authorized and to overcome a veto--repeated veto threats of 
this Administration included in the supplemental that also 
included war-time spending. We may be faced with that situation 
again, but I will certainly support direct assistance. Not more 
loans, but direct assistance to those who are suffering this 
drought, just as my constituents have suffered in past years. 
Like Mr. Moran, I would like to just--while South Dakota is in 
much better shape this year in terms of crops than we were last 
year, we still have isolated pockets, especially for livestock 
producers in central and western South Dakota that continue to 
struggle because of multi-year drought. But we also had--and I 
just want to bring this to the Chairman and Ranking Member's 
attention and work with them, others on the Committee, and 
USDA--from July 23 to 27 in South Dakota, northeastern South 
Dakota, we had almost this perfect convergence of weather 
conditions. Sort of a wrinkle on what Mr. Moran was saying in 
livestock. We had very high heat, very high humidity, and 
absolutely no wind. Unusual for South Dakota, but no wind, and 
that devastated a number of cattle herds because at that time 
many of the feed lots in northeastern South Dakota were full. 
They were full with fat cattle and they collapsed and they died 
due to this weather event. So we had in 5 days almost 2,600 
head of cattle in three counties die because of this heat and 
many of the individual producers literally lost hundreds each 
in their herds. And so we have again been working with acting 
USDA Secretary Mr. Connor on this situation to see what options 
are available. But, again, we want to address all of the 
concerns we have had with various types of disasters, whether 
they are widespread or more localized. Not only in the short 
term for the assistance that may be necessary to get these 
people through a tough time, but the longer-term issues of re-
evaluating how we have constructed the insurance options for 
producers. But, again, Governor Easley, we look forward to 
working with you, with your entire delegation here in the 
Congress to, again, address the short-term solution but look at 
our long-term strategy as well. Whether that is a permanent 
disaster program that is being constructed in the Senate right 
now or other options within the insurance market. So thank you 
and, Mr. Chairman, I yield back.
    Governor Easley. Thank you.
    Mr. Etheridge. The gentleman from North Carolina, Mr. 
Hayes, for 5 minutes.
    Mr. Hayes. Thank you, Mr. Chairman. Governor, as we said 
earlier, you have done a great job of outlining the severity 
and the magnitude of the drought, and you have also touched on 
some issues that I think are important as we complete the 
hearing and those are the things being done by you and 
Commissioner Troxler and all of our farm-related folks across 
the state that deal with this on the state level. You mention 
baling corn. Fortunately, with round bales you can kind of do 
that. With square bales we would have no help at all. You also 
mention how we are hauling water for poultry plants. Would you 
expand on some of the other things, particularly on livestock, 
that we are doing to demonstrate that we in North Carolina are 
doing our part and asking for Federal help is certainly 
appropriate. So if you could elaborate on a couple of those 
things that would be very helpful.
    Governor Easley. Well, one of the things that is going to 
be most helpful is getting that contingency and emergency money 
out there that the Council of State approved to get the cover 
crops out. That is critical because you have to, as others have 
pointed out, look past this month and between now and the first 
of the year to look into the spring as we know it is going to 
be a dry winter. Second, we have gone to the Golden Leaf 
Foundation, which is unique to North Carolina; paid for with 
tobacco settlement money for these tobacco-dependent 
communities. They have come up with significant money to help 
us transport hay from one part of the state to another or from 
out-of-state, wherever we can find it. I do think I ought to 
point this out to you. In 2002, I mentioned we had a pretty 
significant drought, which helped us prepare for this one, but 
I remember taking the survey of farmers and what they needed in 
hay to get through that drought, and it was 10,000 bales. We 
surveyed them in June of this year and it was 200,000 bales and 
most recently it is 800,000 bales, and we don't know where we 
would go to get that to begin with or how we would transport it 
in. So we are going to have to do something different. Whether 
it be grain or cover crops. We also, as I mentioned, have some 
plans in place. One even includes the use of the National Guard 
to try and move hay and other fodder from one place to another. 
Our Ag Commissioner, Commissioner Troxler, has started putting 
in place the baling of other products that didn't yield, 
whatever they can bale. As we talked earlier, it is difficult 
to get the baling machines, equipment to bale some of these 
products. And then when they do, it costs them more to do it 
than they can get for it, although, I think that will probably 
change as the demand grows. But we are looking at all of those 
crops that didn't make it as potential fodder for the cattle. 
We are trying to find ways to make sure, especially that the 
dairy operations get the water that they need. As you know, the 
cattle--if the cows don't get the water they can't produce the 
milk. Also, if they are undernourished and their health fails 
they don't produce nearly as much milk, so the dairy farmers 
start to go under, and then the prices of milk grow rapidly. So 
those are things that we are at least looking at at this point, 
but at the end of the day it is going to be a tremendous 
economic loss for all of the livestock industry and they are 
going to need some assistance.
    Mr. Hayes. Thank you very much, and I think all of us here, 
Mr. Chairman, thank you for having the hearing, but the drought 
is serious. The freeze added to it, but North Carolina and 
everyone are working together as a team to do our part so we 
are certainly positioning ourselves, as best we can, to get the 
help that our folks need. Thank you and I yield back.
    Mr. Etheridge. I thank the gentleman. The gentleman from 
Georgia, Mr. Marshall, for 5 minutes.
    Mr. Marshall. Thank you, Mr. Chairman. Governor, I very 
much appreciate your testimony. It seems very, very sensible, 
practical, and one of the things that you mentioned was that in 
light of the situation in North Carolina, you are waiving 
various rules that might otherwise apply with the development 
of water systems and those sorts of things. You may be 
following what is going on in Georgia, but one of the major 
disputes has to do with releases of water from Lake Lanier in 
order to keep the Chattahoochee wet and to supply water to a 
couple of endangered species down in Florida. The Alabama 
delegation has weighed in and wants the Corps to continue this 
practice. The Georgia delegation wants the Corps to stop this 
practice. Alabama and Georgia share in common two borders, two 
sides of the Chattahoochee, so Georgia's interest matches 
Alabama's interest, and yet then diverges because Georgia is 
really suffering from a major drought and Atlanta is quite 
threatened. You weren't here for earlier testimony by USDA 
meteorological experts. They anticipate, unfortunately, that 
the drought that affects North Carolina and north Georgia will 
continue for a minimum through January. That poses quite a few 
challenges for you. It poses challenges for Georgia as well, 
and one of those challenges is illustrated by an estimate from 
our Department of Natural Resources that Atlanta, the City of 
Atlanta, the metropolitan area will run out of water altogether 
in about 70 days if water consumption continues at the 
restricted levels that it is currently being consumed at 
because we have already taken an awful lot of steps to cut back 
on water use. I say all of that because of the fact that you 
mention that in your state, as an executive you are making some 
decisions to waive various rules. And I was wondering whether 
or not you have an opinion or care to voice an opinion on this 
question whether or not the Corps should continue to release 
water from Lake Lanier or instead should there be a recognition 
of the danger both economic and to human life posed by this 
particular threat, this drought, which is quite extreme and 
projected to continue and modify that practice. Stop draining 
Lake Lanier. Admittedly, that risks a couple of endangered 
species. Any opinion about that?
    Governor Easley. Well, I probably don't know as much as I 
should know to have an opinion. I do know this much. I do know 
Sonny Perdue, Governor of Georgia, and Bob Riley, Governor of 
Alabama, are both good friends of mine and good friends of each 
other, and I think this is going to have to get worked out in a 
spirit of cooperation. It would seem to me, though, that if I 
were in that situation in North Carolina, I would demand as 
much conservation as possible. All of us can conserve more than 
we are now. All of the restrictions can be higher, but 
certainly you have to make sure that people who need water get 
water. People can't live without it. Hospitals can't function 
without it. The nursing homes can't operate without it. 
Businesses can't operate without it, so the economy is at 
stake. I think that is probably where your first priority would 
have to be. Between the two states, though, my suspicion is 
that they will get something worked out and that if citizens 
are called upon and they know what to do, they are given 
something specific to do in terms of restrictions, it is 
amazing as to what they can do. They will rise to the occasion, 
so that is the way I probably would attack it. If I knew more I 
could give you a legal opinion from my days as Attorney 
General. We never did too much except fight with Virginia over 
whether they could take water from Lake Gaston, which we 
eventually lost.
    Mr. Marshall. I spent years as a law professor, among other 
things. As a property law professor, I am aware of water 
disputes. Put yourself in the position of Governor Perdue. I, 
frankly, think that if Governor Riley was Governor Perdue, he 
would be taking the exact same view. If you just took a mirror 
image of the situation and had Alabama suffering from the same 
problems that north Georgia is currently suffering from, 
Alabama's view of this would change rather dramatically, and it 
is pretty disappointing that Alabama doesn't recognize that. 
But it is appropriate, isn't it, that Governor Perdue is not 
only asking Georgians to conserve and doing what he can, I 
suspect, to encourage that and mandate it, but also asking the 
Corps to quit draining Lake Lanier. Wouldn't you be doing the 
exact same thing?
    Governor Easley. Well, I think you probably hit the nail on 
the head when you said if I was Governor Perdue I would take 
his position. If I was Governor Riley I would probably take his 
position for my state. But I still say to you, and I believe 
strongly that they will get together and work it out. But, yes, 
if I had water I wouldn't want it to get away, but I would try 
to work in a spirit of cooperation. At the end of the day we 
are all in this together.
    Mr. Marshall. Thank you, Governor.
    Mr. Etheridge. I thank the gentleman. The gentleman yields 
back. The gentleman from Florida for 5 minutes. Mr. Mahoney.
    Mr. Mahoney. Thank you, Governor, for coming up here on a 
rotten day to join us and talk about the drought. I represent a 
district in south Florida around Lake Okeechobee region and the 
impact of the drought that we are seeing right now is, in that 
part of the country, pretty dramatic. In my area it is about 40 
percent of the total agricultural receipts of the state, and 
right now just in livestock losses we are looking at about $175 
million, potentially up to 5,600 jobs lost, and we are looking 
at about a loss of $150 million in lost tax receipts, both at 
the state and local level. And just out of curiosity you being 
a governor and me being a freshman Congressman I would be 
interested to hear your thoughts on what do you think Congress 
should do in order to help states like yours and states like 
mine. I mean, what is the right action at this point in time on 
the part of Congress in a situation like this?
    Governor Easley. Well, I think if you--Congress should be 
looking at this more globally, the bigger picture from 30,000 
feet, so to speak, as to what are the implications for a region 
and for the country. I think that it is very important for 
people to understand that we have to be strong globally with 
agricultural programs, and that if we are going to attack a 
couple of problems that exist now, one of them being energy, 
then we are going to have to ask our farmers--and we did in 
North Carolina, for example--they moved to grain, to corn, 1.1 
million acres this year and away from such things as cotton and 
some other areas. Now, corn is a lot more of a risk because you 
are really at the mercy of the weather. But if we are going to 
ask our farmers to grow corn for ethanol to help us become more 
energy independent, then we are going to have to give them some 
sort of assurance that we will be there for them if the weather 
knocks it back. If you look at our cotton production, again, 
you have to look at it globally and internationally. In 
America, we only spin about 6 million bales a year, and we 
could spin about anything because we have the open-end 
spinning, the best equipment in the world. But we export a lot 
of cotton. They don't have the technology to spin the poorer 
quality, so if you look down the road on this and we don't 
support these cotton farmers now because we are looking at a 
situation where we not only have reduced yield but reduced 
quality, consequently the staples aren't long enough for the 
fiber. For those who don't keep up, if the fiber is not long 
enough you can't ring-spin it. Think of it like a washing 
machine. You get the towels all wrapped up in it and you start 
pulling one out they all come with it. The shorter the towel, 
the less likely that is going to work. That is what we are 
facing with our cotton crop. The fibers are going to be short 
this year so they might not be able to spin those overseas, and 
we don't have the capacity to spin all 19 million bales that we 
produce. Consequently, China, Pakistan, India, all of those 
countries may very well decide we just need to do our own here, 
grow our own cotton here and hand-pick it because it is going 
to be a higher-quality hand-picked and the labor is cheap. We 
could find ourselves in a difficult position not having much 
cotton in the United States. And then we are at the mercy of 
producers overseas. Companies are already having enough 
problems having to import so many products now. I would hate to 
think that we weren't able to provide for ourselves in fabric. 
Those are some of the pictures I would look at when I am trying 
to explain this to the other Members from other states that 
really don't see how this affects them, that this has to do a 
lot with the security of the United States and our ability to 
get energy independent and the ability to protect ourselves in 
our economy.
    Mr. Mahoney. And would you agree, then, that means that we 
not only have to take a look at it from the perspective of this 
Committee, but issues like the WRDA bill that is sitting on the 
President's desk right now for signing and the investments that 
we need to make in our infrastructure to ensure that we have 
the water in order to handle these situations. Because, 
agriculture really is a priority now in terms of national 
security.
    Governor Easley. Absolutely. If nothing else, we have 
learned this year that we don't have all the water we thought 
we had, that this can happen and we suffer when we are not 
prepared. We were never prepared for this. We didn't think it 
could happen. We now know it does. The rules have changed and 
if the world is changing we have to change with it.
    Mr. Mahoney. Thank you, Governor. I yield back my time.
    Governor Easley. Thank you.
    Mr. Etheridge. The gentleman yields back. Governor, let me 
thank you, again, for taking time and being here today, for 
your testimony. I can assure you that this Committee is fully 
committed within the jurisdiction of the Committee of doing 
what we can to make sure we assist the agricultural producers 
in this country, specifically in North Carolina, the Southeast, 
and some in the West as we have done others and you have heard 
the testimony of this Committee. So thank you for being 
generous, staying here when we have had interruptions today, 
and I appreciate that because I know how valuable your time is, 
so we thank you. Now the Committee will take just a few minutes 
recess while the Governor has a chance to get up and we seat 
the next panel.
    Governor Easley. Thank you, Mr. Chairman. Thank you to all 
of the Committee.
    [Recess.]
    Mr. Marshall [presiding.] The Subcommittee will come to 
order. While Mr. Etheridge is out visiting with his Governor 
and they are doing their press conference, perhaps we can move 
this along. I know the original scheduled end of the hearing 
was 1 o'clock today and people have flights to catch. I know 
that is true of Mr. Duvall. I appreciate you all waiting this 
length of time. I will read what Bob was going to read. We 
would like to welcome our fourth and final panel to the table. 
The Honorable Ken Givens, Commissioner, Tennessee Department of 
Agriculture, Nashville, Tennessee; Mr. Zippy Duvall, President, 
Georgia Farm Bureau, Macon, Georgia; and Mr. Bill McKinnon, 
Executive Secretary, Virginia's Cattlemen Association, 
Daleville, Virginia. Commissioner Givens, you could begin if 
you are ready to go, sir. I'm sorry? I should recognize the 
gentleman from Tennessee, Mr. Davis, who no doubt wants to say 
some kind words about his Agriculture Commissioner.
    Mr. Davis. Mr. Chairman, thanks very much. Obviously we 
have three individuals on the next panel that serve where the 
rubber meets the road and of those three, certainly Ken Givens 
is no exception. He is our Agriculture Commissioner, served in 
Tennessee, in the Tennessee House as Chairman of the 
Agriculture Committee there. Also Ken, as a kid growing up, as 
a family growing up, were actually share-croppers up in east 
Tennessee, and I am sure tobacco was a major part of that so we 
are very fortunate to have someone who serves in Tennessee as 
our Agriculture Commissioner that really is a part of 
agriculture. When he leaves Nashville, he will probably go back 
to doing the same things that he did before he became 
Commissioner and continues to do that, I understand, with his 
family, involved in the farming. So, Ken, it is really good to 
see you here. Thanks for agreeing to come and talk about the 
devastating effects that the weather this year, especially in 
the Southeast, has had on our farmers and our rural 
communities. Welcome.
    Mr. Marshall. Commissioner Givens and the other witnesses, 
I would appreciate it if maybe you could keep your initial oral 
testimony down to about 5 minutes, and we have your statements 
for the record. They will be included in the record. And, 
Commissioner Givens, we are delighted to have you. Could you 
please proceed, sir.

     STATEMENT OF HON. KEN GIVENS, COMMISSIONER, TENNESSEE 
            DEPARTMENT OF AGRICULTURE, NASHVILLE, TN

    Mr. Givens. Yes, sir. Mr. Chairman and Congressman Davis, 
thank you very much, and certainly do think in the next half 
hour presentation I will try to just give you the summary 
statement here. When Congressman Davis mentioned the double-
whammy in Tennessee--I didn't get a chance to talk to him--but 
I am assuming he means the freeze and the dryness that we have 
had and not the Alabama and Florida ballgame. I see Mr. Mahoney 
here and I don't see Alabama folks, but I will just proceed 
right on. It seems to me like, of course, Governor Easley did 
an excellent job in presenting basically what is going on in 
Tennessee. It has just been a terrible year and I could almost 
just say amen to his comments and move on, but I will take a 
couple, 3 minutes here because that describes their situation. 
It seems that whether you are in Georgia, North Carolina, 
Kentucky or wherever, we all have the same weather patterns and 
so we are all affected by that, so in a sense we are all in the 
same boat. Problem is that boat; we don't have any water around 
us right now. I understand the importance of moving this 
Committee along because I know you have a lot of issues to deal 
with--2007 is really a year of records in Tennessee. We began, 
as Congressman Davis indicated earlier today, in March we had 
some real beautiful weather, just unseasonably warm weather. 
Farmers got out and did what farmers do and got out and planted 
a lot of crops and then came along the April freeze and it just 
absolutely devastated us. We actually are in the second year of 
a drought situation. We had a number of drought counties last 
year, 60-some odd counties, either primary or contiguous 
counties that were determined to be agricultural disaster 
counties. And, of course, this year we have all 95 counties 
that have been so designated. Actually, I think that occurred 
back in July, so we have 95 counties, they all were an 
agricultural disaster, earlier in the year, in April when we 
had the record freeze, all 95 counties so that was what he was 
talking about the double-whammy there. We had no peaches this 
year. Our peach crop--we are not a large peach-producing state, 
but if you had several thousand peach trees like one of our 
counties, Obion County did, and you didn't have enough to make 
peach cobbler, that is a pretty big disaster right there. We 
had counties in east Tennessee, throughout the state, so we had 
no peaches. We had 100 percent loss. Our apple crop was about a 
98 percent loss. I think we had 100,000 pounds of harvested 
apples compared to last year's 10 million pounds of apples, so 
all that--all the row crops you could say the same thing from 
cotton, soybeans. Of course, we are still harvesting some of 
that stuff but we just had a devastating year. If we had to put 
a number on it, and I certainly can sympathize with trying to 
come up with a number because our crops are still being 
harvested. We don't really know what those beans will yield 
yet. We know it is not going to be very much. We know our 
cotton pretty much is--about 80 percent of our cotton is 
harvested already, but we have had some actually fairly heavy 
rains lately that damaged the cotton crop even more. Farming is 
the type of thing where you have to have rain at the opportune 
time and right now, of course, we are getting it at the very 
worst time, although, we are thankful because it will help our 
livestock industry. I am basically going to say in response to 
what the folks from North Carolina talked about, we are doing 
what we think we need to be doing in Tennessee. Our Governor, 
Phil Bredesen, has allowed us to have $26 million with which we 
are putting cost-share programs on the ground in every county 
and their site. We are helping farmers with irrigation systems. 
We are helping farmers with hay-storage facilities so we can 
better protect those resources in future years and that has 
been very successful. So we are doing our part. I am going to 
close by simply saying we do need a 2007 disaster assistance 
bill that does more than just loans. The loans could be helpful 
in some cases but we really need a direct financial package 
from February 28 through the end of this year. And, again, 
thank you very much, Mr. Chairman.
    [The prepared statement of Mr. Givens follows:]

    Prepared Statement of Hon. Ken Givens, Commissioner, Tennessee 
                Department of Agriculture, Nashville, TN
    Mr. Chairman, Members of the Committee, my name is Ken Givens and I 
serve as Commissioner of Agriculture for the State of Tennessee, and 
it's my privilege to be here this morning to offer testimony on how the 
drought is affecting agriculture in our state. Thank you for letting me 
share this information with you.
    First, I want to express a special thanks to you, Chairman 
Peterson, for your recent visit to middle Tennessee to witness 
firsthand some of the extensive damage that our horticultural industry 
has suffered as a result of weather extremes this year. Nursery and 
greenhouse products are our second leading crop and generate $273 
million in farm cash receipts annually. Like all of our farm sectors, 
the nursery and greenhouse industry has suffered a devastating blow 
from both a hard spring freeze and the drought. Because of the multi-
year investment that this sector of agriculture represents, the impact 
will be felt for years to come.
    I also want to thank and recognize Congressman Lincoln Davis for 
inviting me to report on damages experienced by farmers in all of 
Tennessee's 95 counties. Congressman Davis is a former colleague of 
mine in the Tennessee General Assembly and a fellow farmer.
    To the entire Committee, I want to thank you for focusing on this 
issue. As a former legislator who served 14 years in the Tennessee 
General Assembly and 7 of those years as Chairman of the House 
Agriculture Committee, I understand the importance of these hearings 
and appreciate the job you are doing to support agriculture.
    As a farmer, I also appreciate the fact that you recognize that our 
producers are foundational to the security and safety of our food, fuel 
and fiber system. I grew up the son of sharecroppers in Hawkins County, 
Tennessee in the northeast portion of the state, on a diversified 
dairy, tobacco and row crop farm. Today, ``diversified'' is a fancy 
term for a farm that produces many different things, but back then we 
were ``diversified'' simply because we had to scratch a living out of 
whatever we could grow and sell. As a young boy, when I wasn't in 
school, I was milking twice a day and working tobacco or whatever was 
in season at the time. Today, my family still has farming interests in 
Hawkins County where we raise beef cattle.
    As someone who grew up farming, I know firsthand how weather 
extremes can affect both row crop and livestock producers. In my 
lifetime of farming, I've never seen anything like what we have 
experienced and are continuing to experience in Tennessee.
    Actually, the drought and weather extremes we've experienced this 
year are the continuation of drought conditions experienced by several 
counties over the past 2 years. In 2005, we had 23 counties designated 
agricultural disasters by USDA due to drought and high temperatures. In 
2006, we had another 41 counties, primarily in east Tennessee and 
southern middle Tennessee, designated agricultural disasters primarily 
as a result of drought and unseasonably high temperatures.
    What distinguishes the 2007 growing season from all others is the 
fact that we've really had three disasters in one and the fact that the 
impacts have cut across all sectors of agriculture and all geographical 
regions.
    This year, early planting started off with unseasonably warm, dry 
weather--enabling farmers to get out early to prepare fields and to 
plant corn. Unfortunately, the corn crop was at a vulnerable stage of 
development when a hard spring freeze struck in early April. For a 
period of several days, Tennessee experienced record low temperatures 
statewide, not only damaging the early corn crop, but also decimating 
our fruit crops--as much as 90 percent of apples, peaches, grapes and 
berries of all kinds were lost. The freeze had a devastating impact on 
our nursery and greenhouse industry, leaving growers with millions of 
dollars worth of unmarketable trees and shrubs, representing lost 
income in many cases 2 and 3 years away. The winter wheat crop was 
severely damaged, reducing yields by 25 percent and costing producers 
more than $10 million for that crop alone.
    Livestock producers were not left untouched either. Pastures and 
hay crops were severely stunted, forcing producers to feed more hay in 
the spring than normal, depleting hay stocks in anticipation of a green 
up that never came.
    In April, due to extensive freeze damages, Governor Phil Bredesen 
asked for a secretarial designation of agricultural disaster for all 95 
counties, which was granted by USDA.
    May turned from bad to worse as we headed into the prime growing 
season with below normal rainfall, stunting development of every crop. 
The drought continued throughout the growing season as the rainfall 
deficit rose to a statewide average of 16 inches or more. And, going 
into the fall, 99 percent of Tennessee was in either a stage 3 or stage 
4 drought, with most of state rated exceptionally dry.
    There was not a sector of agriculture left unaffected. In fact, 
crop conditions and livestock conditions were compounded by record high 
temperatures during the month of August. A significant portion of the 
state experienced a record number of 100-plus degree days, making 
August the hottest month on record.
    Already stressed crops like corn, soybeans, tobacco, hay and even 
cotton, baked in the soaring temperatures. Following heavy freeze 
damages in our nursery industry, the drought further inflicted heavy 
horticultural losses as growers simply could not irrigate enough to 
protect their investment.
    Livestock production accounts for half of farm income in Tennessee. 
Cattle and calves represent the largest generator of farm income with 
annual sales of $500 million. The impacts to this sector were just as 
severe as to our crop sector.
    The spring hay cutting was drastically reduced, as much as 50 
percent, while livestock farmers were forced to feed hay in the middle 
summer to sustain their herds. In the months of June and July, 
Tennessee experienced a 60 percent increase in the sale of cattle, 143 
percent increase in the number of cows sold, compared to the same 
period last year as farmers were forced to cull herds due to the lack 
of pasture and hay. Currently, hay stocks in Tennessee are at a record 
low, with more than 80 percent rated short or very short going into the 
winter months with little or no prospect for a fall hay cutting.
    Many livestock producers have been hauling water since mid-summer 
as wells, ponds and creeks have simply gone dry. The high cost of 
transporting hay from other states and the continued stress of water 
shortages are forcing livestock producers to make hard decisions such 
as whether to sell cattle at a loss or try to survive an uncertain 
winter.
    Again, at the request of Governor Bredesen, in July, all 95 
counties were designated an agricultural disaster by USDA due to 
drought conditions.
    When all is said and done, this is likely to be the most 
devastating agricultural disaster in our state's history--an estimated 
$40 million in losses for corn, $93 million in soybeans, $22 million in 
cotton, $8 million in tobacco, $100 million in hay production. Industry 
estimates put nursery and greenhouse losses at more than $100 million, 
not to mention millions of dollars in losses in the fruit, vegetable, 
winter wheat and agritourism sectors.
    The livestock losses are much harder to calculate, but considering 
reduced milk production, lost weight gain on calves, the premature 
selling of cattle, increased feed costs and lost hay production, the 
cost to livestock producers will be in the hundreds of millions of 
dollars, not including what it will take to rebuild Tennessee's cattle 
herd in the future.
    Farm income in Tennessee totals more than $2.5 billion annually. 
With a conservative $750 million in total losses, we're talking about 
30 percent of Tennessee agricultural industry at the farm level alone. 
The impact to Tennessee's rural economy will be felt for years to come 
as this loss will ripple through local communities that depend on farm 
income.
    I'm not here today to ask for your help without first being willing 
to do my fair share and asking the same of our farmers. Tennessee has 
one of the most, if not the most generous farm cost share program in 
the nation. In 2005, Governor Bredesen established the Tennessee 
Agricultural Enhancement Program to help spur farm investment in our 
state in areas that have potential for growth and development. Today, 
with the support of Governor Bredesen and the Tennessee General 
Assembly, $26 million in annual state appropriations are helping 
Tennessee farmers improve cattle management by providing 35 percent of 
the cost of genetic improvements, cattle handling and feed equipment 
purchases, and hay storage facilities.
    We're also helping farmers diversify to new and promising areas of 
agriculture like fruits and vegetables, organics, grapes, horticulture, 
specialty livestock and agritourism. We're making the kind of 
investments that will help minimize the impacts of weather extremes in 
the future and help increase farm income.
    However, the magnitude of this disaster is beyond the state's 
ability to help Tennessee farmers to the extent that they can recover 
from these losses without financial ruin in some cases.
    The low-interest emergency loans provided as a result of the 
disaster designations granted by USDA will help and are appreciated, 
but the truth is they are of nominal benefit to Tennessee producers. We 
produce a number of non-program crops and livestock that simply are not 
supported through traditional farm programs. However, if there was a 
time for Federal assistance to help us sustain this vital industry for 
our state, the time is now.
    I am here today to ask for your support for a disaster assistance 
package for southeastern farmers. We need a disaster assistance package 
specifically for 2007 that will provide direct financial assistance to 
help farmers recover from insurmountable crop and livestock losses. 
Anything short of that would simply be another disaster for Tennessee 
and other southeastern farmers.
    Mr. Chairman, to you and the other Members of this Committee, thank 
you for allowing me to be here. On behalf of Governor Phil Bredesen, 
thank you for your support of disaster assistance for Tennessee 
farmers. Again, thank you for all that you're doing to support our 
agricultural industry. I will be glad to answer any questions that you 
may have.

    Mr. Marshall. Thank you, Mr. Commissioner, for your 
testimony. I would now like to call on Mr. Zippy Duvall who is 
the President of the Georgia Farm Bureau. Zippy is a farmer, he 
has been farming all of his life, has farmed dairy and got out 
of the dairy business, and poultry and cattle right now up in 
north Georgia. He is right in the heart of this drought 
problem. We welcome you, sir. Thank you for coming up here.

   STATEMENT OF ZIPPY DUVALL, PRESIDENT, GEORGIA FARM BUREAU 
                     FEDERATION, MACON, GA

    Mr. Duvall. Thank you, Congressman. Thank you to the 
Committee for arranging for us to be heard. We, the farmer in 
Georgia, are in desperate need of some help. But first, I would 
like to thank Congressman Jim Marshall who lives in Macon, 
where our home office of the Georgia Farm Bureau is; and also 
Congressman John Barrow who lives--his district represents the 
area where the sweet Vidalia onion is grown; and also 
Congressman David Scott, who has always been a true friend of 
Georgia agriculture. I am a third-generation dairy farmer; 
retired from that. Took on about 150 beef cattle and have four 
poultry houses. Before I got this job that was what I was doing 
and now my wife continues the farm while I work this job.
    Farmers have been adversely affected by three things this 
year, and all three of them could have stood alone as their own 
disaster. First, the untimely Easter freeze. The second was the 
wildfires in south Georgia. And the extreme drought that has 
been a record-breaking drought in our state. According to the 
University of Georgia and the Center of Agribusiness and 
Economic Development, losses from the freeze amounted to about 
$260 million. The record-breaking drought since that time has 
caused additional losses of about $800 million. The Georgia 
Forestry Commission reported losses of $60 million of timber 
caused by the wildfires and estimate the replanting cost to be 
around $30 million.
    As Farm Bureau President, I travel the state and I see 
county leaders all over the state, and I would like to take you 
from south Georgia to north Georgia and tell you some of their 
stories because I think that is what is valuable today. 
Starting in southeast Georgia, around the Okefenokee Swamp, as 
President I was flown down to Ware County to see the areas that 
had been burned. Just unbelievable destruction that went on in 
those lands, those private lands, and those farmers lost all of 
their pine trees there. While we were visiting there we got to 
visit the blueberry farms in that area. That variety of 
blueberries that was blooming at that time during that Easter 
freeze, they lost 90 percent of that variety, extreme disaster 
in that area of the state.
    Then when you move over to the southwestern part of the 
state where most of our row-cropping is done, from the middle 
part of the state down, in the southeastern part where there 
are cotton, peanuts, soybeans and corn. I talked to a corn 
farmer that said he grew a whole crop of corn under irrigation 
with one natural rain. Now, it produced well, but it took 29 
inches of water that he pumped onto it. The cost of putting 
that water on that crop was unbearable. It was just as much a 
disaster and loss to him as it was to dryland corn that didn't 
make anything. So we have disaster also in the southwestern 
part of the state.
    Moving up into the middle part of the state, I want to talk 
a little bit about pecans because, pecans, we produce more 
pecans than any other state in the United States. One of my 
friends there said that he went to bed on Friday night before 
the freeze with a million-dollar crop of nuts on the trees and 
woke up the next morning with nothing, that is how disastrous 
it was in middle Georgia.
    Moving on to north Georgia we can talk about the apple 
orchards there, and the freeze got anywhere from 85 to 90 
percent of those apples. Those farmers depend on tourism to 
come to their farms and to buy their apples and they are having 
to go as far as Virginia to buy those apples so that they can 
have apples this fall as the tourists travel through. And then 
I want to bring you home to northeast Georgia to where my home 
is. My grandfather moved there in 1936 in a muling wagon from 
Blairsville, Georgia, with one cow tied to the back. The creek 
that runs behind my house that he thought so much of, for the 
first time since my family has been on that farm, is dry. There 
is no water running in it. There are a few pools there. Our 
cattle have had no grass all year, and we have lost about 70 
percent of our hay crop. The calves that we sold off our cows 
this year were 100 pounds less than what they were this time 
last year and we have sold about 15 percent of our herd trying 
to cut it back to a manageable level.
    So that is the story of the Georgia farmer, all across the 
state and personally what I have experienced on my farm. We 
have had only about 19 inches of rain for the whole year, and 
at this point in time we should have had around 35 inches. In 
summary, the freezes, the drought, the fires have put our 
farmers in the most dire need. It is very appropriate for you 
all to look at this and see what you can do to help our 
farmers. Disaster payments--there is going to be a disaster 
somewhere in this country all the time. Georgia Farm Bureau 
supports a permanent disaster program. And amend the farm bill, 
but not by taking away from all of our regular farm programs. 
We are going to have disasters, and we need to make sure that 
agriculture is strong.
    I would like to make a comment that we also supported the 
farm bill that was marked up by the House. We appreciate so 
much the work that you all put into that. We talked a lot about 
Atlanta, Georgia, lately and heard about the endangered 
species. I tell you today, gentlemen, the endangered species we 
should be worried about is the small family farm, and I can't 
go away without saying thank you. Thank you for the opportunity 
to testify here. Thank you for hearing the voice of Georgia 
farmers. And thank you for your support, as a father, of a son 
that just spent 15 months in Iraq. Thank you for your support 
of our children that are fighting for our freedom and our 
liberties. Thank you for this time.
    [The prepared statement of Mr. Duvall follows:]

  Prepared Statement of Zippy Duvall, President, Georgia Farm Bureau 
                         Federation, Macon, GA
    Good morning Chairman Peterson, Ranking Member Goodlatte, and 
Members of the Committee. Thank you for calling this meeting and 
providing Georgia Farm Bureau the opportunity to speak.
    My name is Zippy Duvall, and I am President of the Georgia Farm 
Bureau Federation. I am a lifelong farmer from the Greshamville 
Community in Greene County, Georgia. I was a dairyman for over 30 
years. In 1986, our farm diversified into poultry, and in 2005, we 
stopped dairy production to produce beef cattle and hay. Today, we have 
a 150 cow commercial beef herd and four poultry houses through which we 
produce about a half million chickens annually.
    I would like to thank the three Congressmen from Georgia who serve 
on this important Committee: Congressman Jim Marshall, who lives in 
Macon, the headquarters of Georgia Farm Bureau; Congressman John 
Barrow, who's district is the home of our world famous sweet Vidalia 
onions; and Congressman David Scott, a true friend of agriculture in a 
fast growing metropolitan area near Atlanta.
    Georgia farmers have been adversely affected by inclement weather 
this year. Freezing temperatures during the Easter weekend caused 
losses to many crops, and the extended drought since that time has 
caused additional problems.
    According to the University of Georgia Center for Agribusiness and 
Economic Development, losses from the freeze amounted to about $260 
million. The persistent drought since that time has caused losses of 
nearly $800 million. My written comments include about twenty 
additional pages of data that graphically show how much these events 
have cost our farmers. However raw numbers only tell part of the story.
    For example, rural North Georgia's economy is based on tourism. 
Many people visit the mountains of North Georgia in the fall, and many 
apple growers tailor their operations to serve these visitors through 
pick-your-own operations, farm markets, and other retail outlets. 
Tourists expect apples, but the Easter freeze wiped out 80-90 percent 
of the North Georgia apple crop. I recently spoke to a Georgia grower 
who has resorted to buying apples to keep his market open. He said 
Virginia was the closest place where he could purchase apples. This 
grower does not have the option of simply staying out of the market for 
a season. To do so would jeopardize his orchard's shelf space in 
markets for next year.
    Beef and dairy operations have been severely impacted in ways that 
are not reflected in the numbers. Livestock producers do not have 
sufficient amounts of hay to carry their cows through the winter, and 
pastures are in such poor condition that hay was being fed during the 
summer. Some cow herds are being liquidated. Healthy calves gaining 
weight on grass is profitable for cattle producers, but without the 
grass, growers are forced to sell calves at lighter weights, which is a 
major economic loss. One north Georgia dairyman is hauling three milk 
tanker loads of water per day just to keep his cows watered and his 
dairy operational. These types of losses are not reflected in economic 
data.
    The drought has devastated hay production and quality. I spoke with 
a commercial hay grower from my home county who is unable to sell some 
of his hay because of excessively high nitrate levels due to dry 
weather. This condition occurs when plants are not able to adequately 
utilize fertilizers.
    Some crops have fared better due to irrigation, but irrigation is a 
costly proposition. As you can see from data included in this 
testimony, there have been substantial losses in cotton, peanuts, corn, 
soybeans, and vegetable & fruit crops. In addition to losses in 
production, these crops required substantially more in input costs, so 
farmers are hit on both sides of the ledger.
    The horticulture industry is often overlooked as being affected by 
the drought. There is a total ban on all outdoor watering in the 
northern half of Georgia, which includes the Atlanta area. While 
nurserymen may water their greenhouse and nursery stock, landscapers 
and homeowners cannot. As a result, there is scant demand for 
horticulture products. Nobody wants to buy a $50 tree only to watch it 
die after it is planted. Horticulture growers have greenhouses full of 
inventory but no demand for product because of the drought.
    The largest portion of Georgia's farm gate income is derived from 
poultry. If the drought continues, poultry processors may be called 
upon to curtail their use of water in processing which would negatively 
impact growers. If fewer birds are processed, grower down time between 
flocks might be extended. Even 1 or 2 additional weeks between flocks 
would have a substantial detrimental effect on growers making payments 
for poultry houses.
    In most areas of Georgia, the drought has drastically compounded 
problems begun by an untimely freeze. The purpose of my testimony has 
been to try to put a human face on these problems, to let you know that 
there is much more to this problem than the raw economic data that is 
often quoted. The data is important, and we appreciate those who 
compile it, but it is not the whole story.
    I am here today to let you know there are farmers in Georgia who 
need assistance, and I am asking for your help. That is my role as 
President of Georgia Farm Bureau.
    However, I do not know the best vehicle to provide assistance and 
support for our farmers. I know it requires 218 votes in the House and 
at least 51 votes in the Senate, so an approach that offers the 
broadest base of Congressional support would make sense.
    Given the number of disasters that are occurring across the 
country, some might argue that it is best to try to enact new disaster 
legislation. Others may insist that it is better to attempt to revisit 
existing legislation. In either case, the money appropriated must be 
sufficient to provide the funds necessary to offer meaningful 
assistance on a timely basis.
    Regarding disaster assistance, Georgia Farm Bureau supports the 
concept of a permanent disaster program being included in the farm 
bill. However, that proposal loses much of its appeal if it is funded 
through farm bill offsets. Disaster assistance should not come from 
other farm bill funds.
    Thank you for your time and consideration of this matter, and thank 
you for allowing me to testify today. I would be honored to answer 
questions if there are any on the Committee.


Marshall. Thank you, Mr. Duvall, and now I call on Mr. Bill McKinnon, 
who is the Executive Secretary of the Virginia Cattlemen's Association. 
   Mr. McKinnon.STATEMENT OF BILL R. McKINNON, EXECUTIVE SECRETARY, 
            VIRGINIA CATTLEMEN'S ASSOCIATION, DALEVILLE, VA

    Mr. McKinnon. Thank you, sir. I, and the 5,000 plus producers that 
I work for, appreciate this opportunity to address this Committee and 
relate to you some of the difficulties that livestock producers in 
southeastern states are having with this drought.
    If you take Virginia, Virginia is very much a forage-based cattle 
industry, and yet as you drive through Virginia this October most of 
the boundaries you see are brown with little or no forage on them. USDA 
estimates that Virginia's hay yields for this year will be down 15 to 
31 percent and that is largely because central Virginia had a drought 
last year, but this projection really fails to paint a clear picture of 
the current forage-feed situation in this state. Nor is it reflective 
of the extremely devastating conditions found in other southeastern 
states we have heard of this morning, such as Tennessee, Alabama, and 
Georgia. The southwestern region of Virginia, hay yields are down more 
than 40 to 60 percent from last year.
    Further exacerbating that situation is the fact that much of that 
hay was then used to maintain the cattle herds during the summer while 
the drought continued to devastate our pastures. This drought has had a 
marked effect on our producers' management decisions. Within the last 2 
months, we have increasingly heard of producers forced to sell out 
because they simply had concerns of their water supplies. The dry 
weather also forced many cattle producers to market their feeder cattle 
earlier and at lighter weights. In a normal year, many of our cow-calf 
operations would keep their lightweight calves through the winter to 
put on additional gain. Limited feed supplies are forcing those 
producers to sell their whole calf crop now, and there seems to be 
almost no local demand for those lightweight calves, again choked off 
by scarce feed supplies.
    Of most concern to us about this devastating drought is that it is 
really causing structural changes in our industry. Many cow-calf 
operators are being forced to sell off significant portions of their 
breeding cows. Virginia data indicates that during the last month 
slaughter cow marketings are up 72 percent over a year ago. In the 
southwestern part of the state, producers are selling off their cows at 
2\1/2\ times the rate they did this time last year. The vast majority 
of these cows are selling for harvest, not breeding prices since there 
is little demand for additional breeding stock in the whole of the 
Southeast. When producers are finally able to rebuild their herds, it 
will cost them at least twice as much to replace those cows as they are 
currently receiving for them. And faced with this difficult situation, 
our producers in the region are evaluating all of their options to 
secure enough feed resources with which to maintain their herds.
    We have explored the option of bringing in hay from surplus 
regions. Available hay supplies generally appear to be at least 800 
miles from the most devastated regions, putting projected hay-hauling 
cost in the $100 to $125 a ton area. That is twice the cost of the hay 
which effectively triples the cost of delivered hay to our area. Many 
cattle producers in the region who are not already supplementing their 
herds are examining the option of purchasing grain and various grain 
byproducts to extend their forage-feed supplies. The rapid rise in 
prices of grain and grain byproducts during the last 15 months has made 
this option much more expensive than in past seasons. An additional 
cost the livestock producers are yet to face is the expense of 
renovating damaged pasture lands. The thinning of our grasslands will 
reduce their productivity and render them more prone to erosion. The 
cattle producers are used to dealing with short-term dry spells and 
most of them do their best to plan for them. However, the extreme and 
devastated situation that we face now means that access to Federal 
disaster programs is essential to the viability of those many livestock 
businesses.
    The Livestock Compensation Program is of immediate concern and need 
to the region's cattle operations to help offset substantial expenses 
involved in securing additional feed. The Emergency Conservation 
Program will provide essential assistance to livestock operations in 
rehabilitating grasslands and providing water to their herds.
    Today I have discussed mainly the situation facing cattle producers 
in Virginia, fully realizing that other states may be facing more dire 
circumstances. Mr. Chairman, I appreciate this opportunity to testify 
here and explain the plight of our cattle producers. I would be happy 
to answer any questions the Committee might have.
    [The prepared statement of Mr. McKinnon follows:]

 Prepared Statement of Bill R. McKinnon, Executive Secretary, Virginia 
                 Cattlemen's Association, Daleville, VA
    My name is Bill McKinnon and I am the Executive Secretary for the 
Virginia Cattlemen's Association. The Association was organized in 1944 
to promote the profit potential of Virginia's cattle industry. The 
Virginia Cattlemen's Association's 5,000 plus members represent all 
segments of the cattle industry. I appreciate the opportunity to 
address this Committee and relate to you the impact that the current 
drought in the Southeastern states is having on the region's cattle 
producers.
    Cattle production in Virginia is very much a forage based industry. 
Typically our cattle are maintained and grown on pastures during the 
growing season and wintered on stored hay that was harvested during the 
spring and summer. Normally in October, you might drive through 
Virginia and still notice lush green pastures. As you tour Virginia and 
much of the rest of the Southeast this October you view primarily brown 
grazing boundaries with little or no forage.
    The USDA National Agricultural Statistics Service has projected 
Virginia hay yields this year to be down 15 to 31 percent. That 
projection fails to paint a clear picture of the current forage feed 
situation in the state, nor is it reflective of the extremely 
devastating conditions found in other southeastern states such as 
Tennessee, Alabama, or Georgia. In the southwestern region of Virginia, 
a major cattle growing area, hay yields are down more than 4060 
percent from last year. Further exacerbating the situation is that much 
of that limited hay harvest was then used to maintain cattle during the 
summer months while the drought continued to devastate pastures. In 
September, 86 percent of Tennessee's pastures were rated as ``Poor'' or 
``Very Poor.'' Many operations had hoped for late summer rains to spur 
typical fall pasture growth; however that moisture has not 
materialized. The limited rainfall combined with continued above 
average temperatures has forced cattle producers to continue digging 
into their already limited feed supply.
    The drought has certainly had a marked effect on producers' 
management decisions. Within the last 2 months we have increasingly 
heard of producers forced to sell cattle because of limited water 
supplies. Many shallow stock ponds, small springs, and wells have gone 
dry. Even on operations with flexible feed supplies, the owners are 
reluctant to hold their cattle inventories or purchase additional 
numbers due to their concerns over water availability.
    The dry weather and poor pasture conditions have forced many cattle 
producers to market their feeder cattle earlier than planned. In 
Virginia, we have noticed the volume of feeder cattle sales running 
nearly thirty days ahead of normal. As producers must pull cattle off 
pastures early to market them, they are selling feeder cattle at 
lighter weights. The lighter weights have resulted in reduced receipts 
per head.
    Cow-calf producers are also experiencing the impact of the drought 
when they market their calves. In a normal year, many operations would 
keep their lightweight calves through the winter to put on additional 
weight. Limited feed supplies are forcing producers to sell their whole 
calf crop now. As I spend time in livestock auctions and talk with 
market operators and buyers, there seems to be almost no local demand 
for those lighter weight calves--again fueled by scare feed resources. 
The need to market and ship these lighter weight cattle out of the 
region adversely impacts their price.
    Of most concern, the impact of this devastating extended drought is 
causing structural changes within our industry. Many cow-calf operators 
are being forced to sell off significant portions of their brood cows 
as a result of restricted stored feed supplies. Data compiled by the 
Virginia Market News Service indicates that during the last month 
slaughter cow marketings are up 72 percent over a year ago. In the 
Southwestern part of the state, producers are selling off cows at a 
rate of 2\1/2\ times that of last year. Anecdotal information suggests 
that almost all cow-calf producers in the region have either already 
made or are planning abnormally high breeding cattle sales. The vast 
majority of these cows are selling for harvest not breeding prices 
since there is little demand for additional breeding stock in the whole 
Southeast.
    It is important to recognize that it takes nearly 2 years of 
investment on the producer's part to bring these breeding animals to a 
point when they produce their first calf. A significant amount of time 
and expense is spent developing this foundation of the cow herd, and 
these animals are not readily replaceable. When producers are finally 
able to rebuild their herds, it will cost them at least twice as much 
to replace those cows as they are currently receiving for them. 
Rebuilding cattle herds to optimally utilize their available resources 
will place severe economic strain on already financially stressed farm 
businesses.
    Faced with this difficult situation, cattle producers in the region 
have been evaluating all their options to secure enough feed resources 
with which to maintain their herds. With the drought conditions being 
widespread, the normal option of purchasing local hay or other 
feedstuffs from neighbors is not an option. Given this, we have 
explored the option of bringing in hay supplies from regions with 
surplus stores. Available hay supplies generally appear to be located 
at least 800 miles from the most devastated regions. Given current fuel 
prices and the constraints of transporting hay, the projected hauling 
costs appear to be in the $100 to $125 per ton range. These 
transportation costs are roughly twice the cost of the hay, which 
effectively triples the price of shipped in hay.
    Many cattle producers in the region who are not already 
supplementing their herds are examining the option of purchasing corn 
and various grain byproducts to extend their forage feed supplies. The 
rapid rise in all grain and grain byproducts during the last fifteen 
months has made this option more expensive than in past seasons. Grain 
prices are roughly 50% higher than fifteen months ago.
    An additional cost as a result of the drought that livestock 
producers are yet to face is the expense of renovating damaged pasture 
lands. The extended dry period during the region's growing season 
caused many grass plants and legumes to die out. The thinning of the 
pasture lands will reduce their productivity and render them more prone 
to erosion. Once normal precipitation patterns return, producers will 
need to expend a tremendous amount to reseed and fertilize damaged 
grasslands to make them productive again.
    Overall, the southeastern drought is causing economic devastation 
to livestock producers on five fronts. These include forced liquidation 
of breeding herds, early marketing of lighter weight feeder cattle, 
significantly higher feeding costs, reduced prices for lightweight 
feeder cattle, and grasslands renovation costs.
    Livestock producers are used to dealing with short term dry spells, 
and most do their best to plan for them. However, during periods of 
extreme and prolonged disaster such as this, access to Federal disaster 
programs is essential to the viability of many livestock businesses 
located in the Southeast region of the country. Additional expenses for 
supplemental feed, grassland restoration, and herd rebuilding will be 
debilitating to the financial situation of cattle operations.
    The Livestock Compensation Program (LCP) is of immediate concern to 
the region's livestock operations. LCP was originally created in 2002 
as an emergency Farm Services Agency (FSA) program to provide immediate 
assistance, in the form of direct payments, to livestock producers for 
damages and losses resulting from natural disasters. Payments from LCP 
can provide crucial assistance to producers having difficulty obtaining 
feed for their livestock. Producers need to be assured within the next 
2 months that those funds could be available to offset the substantial 
expenses involved in securing their additional feed supplies.
    The Emergency Conservation Program (ECP) will also provide 
essential assistance to livestock operations. ECP provides emergency 
funding and technical guidance to farmers to rehabilitate lands damaged 
by natural disasters. The program can also be used to provide water to 
livestock in drought conditions.
    In some cases the Livestock Indemnity Program will also be crucial 
to producers as it helps to offset death losses suffered due to natural 
disasters. Anecdotal information suggests that there have been 
unexpected additional cattle death losses due to the drought. LIP is of 
paramount importance since it provides reimbursement for a percentage 
of the applicable market value of these deceased animals.
    Today, I have discussed primarily the situation facing cattle 
producers in Virginia, fully realizing that other states may be facing 
more dire circumstances. Chairman Peterson, thank you for the 
opportunity to testify here today and explain the plight of cattle 
producers in our region. I would be happy to answer any questions the 
Committee may have.

    Mr. Etheridge [presiding.] Thank you very much for each one 
of you for being here, for your comments, and I really don't 
have any questions. I think you have laid out the challenge 
that we face as a Committee in meeting the needs of all of our 
producers all across this country and specifically right now in 
the Southeast. If we faced it in the Midwest, we are now facing 
it in the Southeast and places in the far West, and I can 
assure you that this Member and, I think the Members of this 
Committee are committed to working toward the end that we keep 
food and fiber being produced in this country. And what is 
happening in Virginia and Georgia and South Carolina, Alabama 
and Maryland and Delaware the same is happening in North 
Carolina as you heard from my Governor earlier. So with that I 
will yield to the gentleman from Georgia. Mr. Marshall.
    Mr. Marshall [presiding.] Thank you, Mr. Chairman. I guess 
I am going to go ahead and be the Chairman for the balance of 
this meeting--the Chairman has to leave. Mr. Duvall, as you 
were describing the need to recognize that an awful lot of our 
small- and medium-sized family farms are themselves endangered 
species here in the United States reminded me of that joke that 
no doubt you have heard. Three Georgia farmers are sitting 
around wondering what they would do if they won the lottery, 
and one was going to buy a place up in North Carolina, quit 
farming, and go play golf; and one was going to get a boat and 
float around the Caribbean and quit farming; and the final guy 
said, ``I think I will just keep farming until the money runs 
out.'' It is a very tough occupation to be in and we are having 
a hard time attracting the next generation to the farm, keeping 
them at the farm, and on the farm. I wanted to ask you a little 
bit about the effect of having to close down a poultry 
operation like you have. There undoubtedly would be attended 
costs associated with that. It is not just making the note that 
some other things--close down, start up--and I am just curious 
to know what the impact on poultry houses would be if they 
can't get the water they need to stay open.
    Mr. Duvall. Well, obviously that the length of time between 
batches and the loss of income is going to be disastrous to 
them, but a lot of poultry farmers also use the litter that 
comes out of the houses as fertilizer. So if they don't have 
the fertilizer to put on the ground when they do get some 
moisture, they won't have the fertilization to grow the crop 
that they are going to have next year. So that is the next 
thing down when it comes from just loss of income. But the main 
thing is that most of them are small farms. Most of them depend 
on that income strictly from those chickens, and if they don't 
make that they very possibly could lose their farm and their 
homes.
    Mr. Marshall. Mr. McKinnon, is there a similar additional 
cost associated with having to scale back a cattle operation, 
having to get rid of your cows, trying to get back up to speed?
    Mr. McKinnon. It is extremely frustrating and personal. 
Zippy is a cow-calf producer. Our producers, particularly with 
a set of mamma cows, invest a lot of themselves. They typically 
invest in 10 or 20 years of genetic scientific effort in 
developing a really great set of cows. Lots of us have a lot of 
personal interest in those cows so it is a business asset. You 
bet. Replacing those cows, if we try to generate them within 
the herd, we have 2 years of investment doing that. It is not 
like we can go out at every livestock market--let us say next 
April it is green, it is beautiful in Virginia and the 
Southeast, we will have trouble even if we had the dollars to 
replace cows of the quality that we are having to dispose of 
now, so it will be a challenge.
    Mr. Marshall. Thank you. I call on the gentleman from 
Tennessee. Mr. Davis.
    Mr. Davis. Mr. Chairman, thank you very much, and I 
appreciate each of the three of you who are here that have 
testified. As I said earlier, we certainly understand what is 
going on in each one of the respected states that you are from. 
The gentleman from Virginia, as I hear you talk about beef 
cattle it reminds me of my brother, he and I have a farming 
operation. He does the farming. If you looked at my hands and 
looked at his, you would see the differences. His fingers are 
not as straight as mine and there are more calluses on the 
inside of them. And we have a beef cattle operation with about 
185--did have mamma cows--and we have reduced that now by 
almost 80 and may reduce even more. You can't feed $70-a-roll 
hay to a cow or to cattle and expect to survive another crop 
year, so we have had to dispose of many of those. And we 
started out not with a pure-bred herd which we still don't 
have. We use pure-bred and registered Angus bulls for the mamma 
cows that we have, but over the period of the last 10 or 15 
years we have actually done a lot of crossing ourselves to get 
a more-muscle cow and one that would give more milk. Basically 
we have had Simmental and Limousin influence for the muscle and 
we have had some girt, or India breed, for milk. We have had 
some pretty good cows. We have had to sell some of those. We 
literally have now sold almost--the milk cows provide some help 
for us. A lot of farmers are doing the same thing. We will 
survive. My brother is 66, but there are a lot of farmers out 
there who are young and who cannot overcome this. I mention 
that because I know that as we look at this year's loss that we 
have had, it is pretty devastating. But what will happen on 
down the road? Not just next year and the year after next. In 
our case, we will be okay because we are keeping some heifers, 
and we will keep that foundation herd. We won't have to go out 
and buy new registered cattle or higher-breed cattle. We have 
done pretty well over the last 15 years building that herd that 
we have. Mr. Givens, I am going to direct this question 
probably at you. In Tennessee we have had the Tennessee 
Agriculture Enhancement Program that had done a lot to help 
maybe some of our farmers build sheds to actually house hay. 
Most of us now use rolled-hay. It is easier to handle. It takes 
equipment; we don't have as much man-power there. With that 
program, how has that impacted our farmers and if we were able 
to maybe get some funds from other sources, Federal sources, to 
help with that. We have storage bins, but we don't have much 
for hay storage. And the second part of the question is that 
how do you--what type of impact do you see happening over the 
next several years as a result of the drought that we have 
experienced. Mr. Duvall, good to see you here, the Farm Bureau. 
The Tennessee Farm Bureau headquarters is in my district as 
well, in Columbia, Tennessee, so we welcome you here too.
    Mr. Givens. Congressman Davis, let me take the second 
question first as far as the impact that it is going to have in 
future years. Obviously what we sell in Tennessee, what we sell 
from all of our crops now is about $2.5 billion. The University 
of Tennessee economists say that those monies roll over about 
five or six times in the rural economy, so we are talking about 
a multi-billion dollar impact this year. If I had to put a 
number on what our damage is thus far, without having all the 
information, it is probably about $750 million, so you can, 
very quickly, that we have probably got a $3 or $4 billion 
impact just this year. I think what none of us can really 
know--we haven't talked much as far as Tennessee about the 
damage to our timber industry and our forest lands. We are 
going to have some serious impact as far as diseases, wildfire. 
We are having a lot of timber loss already. We don't know how 
much of that is going to recover and don't really know what is 
going to happen there. Chairman Peterson came down with you in 
middle Tennessee and you talked about the horticulture industry 
and what damage and what long-term affect that has, so it is 
almost mind-boggling. We are actually doing more in grape 
production now, and we have a lot of grapevines that just 
didn't make it through the freeze and really won't know until 
next year whether or not that is going to fully recover. And 
even the blueberries that the gentleman from Georgia talked 
about is devastating, and we don't know what permanent damage 
that has done. So it is a multi-year event. There is no 
question about that. Replacing cattle, we have had 143 percent 
increase in the number of breeding cows that have been sold on 
the market, and it takes 3 years from the time you birth a 
heifer or whatever to have something to sell from that, so that 
is a 3 year proposition when you sell that cow off. If you 
replace that cow with a heifer you are going to be 3 years 
getting money back on the ground. It is going to have a great 
effect. As far as the Ag Enhancement Program you are asking 
about, we were able to come back and get some monies and put 
back in the budget with the help of Governor Bredesen and the 
General Assembly, so this year we had $26 billion so we are 
doing our part in Tennessee to encourage farmers to do those 
things that will help preserve forages. We have a hay-storage 
facility program where a farmer can get up to 35 percent of the 
cost of building a hay-storage building and we all know as 
farmers that you are going to lose about a third of your hay if 
your hay is stored outside, so we are having great success in 
that. Specifically, there is a loan program through Farm 
Service Agency that allows farmers to get a loan for grain-
storage facilities and if we could have some interpretation or 
legislation that allowed those hay-storage facilities to be 
included as a commodity that fit that loan program we could do 
some wonderful things, not only in Tennessee but around the 
country.
    Mr. Davis. Mr. Givens, thank you. I know my time has about 
run out, but I----
    Mr. Marshall. Your time is run out.
    Mr. Davis.--as we talked a moment ago about critters, I 
always favor people over critters and I think watering people 
is more important than watering critters.
    Mr. Etheridge [presiding.] I thank the gentleman. The 
gentleman's time has expired. He yields back. Just for our 
witnesses, we have a vote on right now. Mr. Barrow, do you have 
a question?
    Mr. Barrow. I'll be brief, Mr. Chairman, if I may. Mr. 
Duvall, thank you for coming. I appreciate you being here. 
Thank you also for speaking for all of Georgia agriculture, not 
just the sector you are closely affiliated with. And also I 
want to thank you for your comments about the notion of 
permanent disaster relief. I think we can all agree that is an 
important thing, but it is a very bad idea if it is going to 
come at the cost of production support. The last thing we want 
to do is provide relief in disaster if we have taken away the 
support that we need to keep folks in production in the first 
place, so thank you for honing in on that point. Just a quick 
question or report on the status of things back in Georgia. I 
gather that the peanut crops, most of it has been dug and 
looking pretty good, and give us a report on cotton and then 
help us understand what the production losses are for folks in 
these areas. Even when yields are good we have production 
losses that are just eating people alive, so if you could give 
us some feedback on that.
    Mr. Duvall. The peanut crop has been dug and most of it has 
been harvested. Dryland peanuts in most of the state are in 
really bad shape and didn't do very well, and dryland cotton 
didn't do well at all either. Anything that was irrigated was 
there and produced pretty well but at high expense. I would 
like to make one statement if you would allow me: that people 
in Georgia, one out of six jobs in Georgia is related to 
agriculture. One out of six, and we are still the economic 
engine in \2/3\ of the counties in our state, so when we talk 
about rural economic development, this is a vital issue that 
the farmers are able to survive and stay on. So I salute you 
all for looking into this problem.
    Mr. Barrow. Well, thank you for coming and being a part of 
this hearing. Mr. Chairman, I yield back.
    Mr. Etheridge. I thank the gentleman. Let me thank our 
panelists. Thank you for coming. Thank you for your patience 
today, for being here. I know you have a tight schedule too and 
you have planes to catch, but let me thank you. We have a vote 
on in about 5 minutes, so let me thank you. Under the rules of 
the Committee the record of today's hearing will remain open 
for 10 days to receive additional material and supplemental 
written responses from the witnesses to any question posed by a 
Member to the panel. This hearing of the Committee on 
Agriculture is adjourned.
    [Whereupon, at 1:58 p.m., the Committee was adjourned.]


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