[Senate Hearing 110-43]
[From the U.S. Government Publishing Office]



                                                         S. Hrg. 110-43
 
                       COLORADO VIEWS ON FEDERAL
                    AGRICULTURE AND RURAL POLICIES:
                           THE 2007 FARM BILL

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

                                HEARING

                               before the

                       COMMITTEE ON AGRICULTURE,
                        NUTRITION, AND FORESTRY

                          UNITED STATES SENATE


                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION


                               __________

                             MARCH 12, 2007

                               __________

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


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


                                 ______

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           COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY



                       TOM HARKIN, Iowa, Chairman

PATRICK J. LEAHY, Vermont            SAXBY CHAMBLISS, Georgia
KENT CONRAD, North Dakota            RICHARD G. LUGAR, Indiana
MAX BAUCUS, Montana                  THAD COCHRAN, Mississippi
BLANCHE L. LINCOLN, Arkansas         MITCH McCONNELL, Kentucky
DEBBIE A. STABENOW, Michigan         PAT ROBERTS, Kansas
E. BENJAMIN NELSON, Nebraska         LINDSEY GRAHAM, South Carolina
KEN SALAZAR, Colorado                NORM COLEMAN, Minnesota
SHERROD BROWN, Ohio                  MICHEAL D. CRAPO, Idaho
ROBERT P. CASEY, Jr., Pennsylvania   JOHN THUNE, South Dakota
AMY KLOBUCHAR, Minnesota             CHARLES E. GRASSLEY, Iowa

                Mark Halverson, Majority Staff Director

                      Robert E. Sturm, Chief Clerk

            Martha Scott Poindexter, Minority Staff Director

                Vernie Hubert, Minority General Counsel

                                  (ii)

  
                            C O N T E N T S

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                                                                   Page

Hearing(s):

Colorado Views on Federal Agriculture and Rural Policies: The 
  2007 Farm Bill.................................................     1

                              ----------                              

                         Monday, March 12, 2007
                    STATEMENTS PRESENTED BY SENATORS

Harkin, Hon. Tom, a U.S. Senator from Iowa, Chairman, Committee 
  on Agriculture, Nutrition, and Forestry........................     3
Salazar, Hon. Ken, a U.S. Senator from Colorado..................     2

                                Panel I

Foutz, Alan, Colorado Farm Bureau................................    11
Peppler, Kent, President, Rocky Mountain Farmers Union...........     5
Peterson, Dr. Gary, Head Department of Soil and Crop Sciences, 
  Colorado State University......................................    10
Stulp, John R., Colorado Commissioner of Agriculture.............     4
Tallman, Dusty, Colorado Wheat Growers...........................     8
Welp, Alan, State Director, Colorado Sugar Beet Growers..........     7

                                Panel II

Mix, Roger, Colorado Potato Administrative Committee.............    18
Loutzenhiser, Randy, Colorado Association of Conservation 
  Districts......................................................    19
Fankhauser, Terry R., Executive Director, Colorado Cattlemen's 
  Association....................................................    21
White, Kathy, Colorado Anti-Hunger Network.......................    24
Zalesky, Doug, President, Colorado Independent Cattlegrowers 
  Association....................................................    22
                              ----------                              

                                APPENDIX

Prepared Statements:
    Fankhauser, Terry R..........................................    40
    Foutz, Alan..................................................    48
    Loutzenhiser, Randy..........................................    51
    Mix, Roger...................................................    59
    Peppler, Kent................................................    61
    Peterson, Dr. Gary...........................................    69
    Stulp, John R................................................    72
    Tallman, Dusty...............................................    78
    Welp, Alan...................................................    82
    White, Kathy.................................................    84
    Zalesky, Doug................................................    86
Document(s) Submitted for the Record:
Carl Unlaub, Farmer, prepared statement..........................    94
Central Colorado Water Conservancy District, prepared statement..    96
Colorado Coalition of Land Trusts, prepared statement............   100
Colorado Corn Growers Association, prepared statement............   102
Colorado Food Bank Association, prepared statement...............   107
Colorado School Nutrition Association (CSNA), prepared statement.   111
Colorado State Forest Service, prepared statement................   113
Colorado State Tree Farm Committee, prepared statement...........   115
Four Colorado-based Lending Institutions of the cooperative Farm 
  Credit System, prepared statements.............................   121
Liprino Foods, prepared statement................................   125
Maurice J. Mausbach, Natural Resource Specialist, prepared 
  statement......................................................   129
Progressive 15, prepared statement...............................   133
Republican River Water Conservation District, prepared statement.   136
Robert T. Sakata, Farmer, prepared statement.....................   140
Southwest Energy Efficiency Project (SWEEP), prepared statement..   144
Stewart Environmental Consultants, Inc., prepared statement......   146
The Nature Conservancy, prepared statement.......................   149



                       COLORADO VIEWS ON FEDERAL
                    AGRICULTURE AND RURAL POLICIES:
                           THE 2007 FARM BILL

                              ----------                              


                         Monday, March 12, 2007

                                       U.S. Senate,
                                  Committee on Agriculture,
                                   Nutrition, and Forestry,
                                                 Brighton, Colorado
    The Committee met, pursuant to notice, at 1:20 p.m., in the 
Waymire Dome Facility, Adams County Fair, Hon. Tom Harkin, 
Chairman of the Committee, presiding.
    Present or submitting a statement: Senators Harkin and 
Salazar.
    Senator Salazar. We are running a little bit late but we 
are ready to get started and I am going to have the Governor of 
the great state of Colorado, Bill Ritter, welcome Senator Tom 
Harkin and this Agricultural Committee Forum here today, so, 
Governor Bill Ritter.
    Governor Ritter. It is my pleasure to just have an 
opportunity very quickly to speak to you. We just spoke with 
Senator Harkin and I have to get back to the Capitol now for a 
meeting at 1:30, so I'm running a little late.
    I really want to express my appreciation on behalf of the 
State of Colorado for Senator Harkin agreeing to hold a Field 
Hearing here in Colorado, where we can articulate some of the 
issues and some of the struggles that we have had.
    In my discussions with Senator Harkin, we just talked about 
the things that have happened in southeast Colorado and the 
kind of really disasters that the farmers and ranchers down 
there have faced, some of the ways that the Federal Government 
may help. But, what we do know about Senator Harkin is that he 
had a long history. In fact, he has had 32 years on the Senate 
Agricultural Committee and such a long history of working on 
behalf of people who are ranchers and farmers in the United 
States of America, he really deigns us--with his presence here 
he deigns us with a great honor. So, let us give him a big 
hand, thank you, and have a great conversation this afternoon.
    Thank you, Senator Harkin.
    Senator Salazar. We are going to start in just a few 
seconds here. Let me just introduce Representative Kathleen 
Curry. Kathleen? Where are you? She is back there somewhere. 
Give her a round of applause.
    Let me just say at the outset, I am going to make few quick 
comments and then turn it over to Senator Harkin, the Chairman 
of the Senate Agricultural Committee to open up the hearing. We 
will hear from the witnesses. That will be short statements.
    We have two panels--let me start over. The program here for 
this afternoon is, I am going to make a few comments, open it 
up, turn it over to Senator Harkin and then we will hear from 
the first panel for, I think, three, four or 5 minutes each. 
Then we will have a short break. Then we will have a second 
panel to continue to give us some more information.
    Before I make my opening remarks on this hearing, what I 
want to do is, I want to recognize Senator Tom Harkin again as 
we begin this hearing in Colorado. He has been a part of 
writing the last seven farm bills we have had here in the 
United States of America. And, as we write this farm bill now 
in 2007, it is important to be looking to the future in terms 
of how we revitalize rural America and the opportunities that 
we have.
    And there is no one better, frankly, to lead us in that 
effort in the U.S. Congress than someone who has farming in his 
blood; who is a fourth generation Iowan; who still lives in the 
same house that he was born in; and who has been a champion of 
agriculture all across the nation. And who, today, is holding 
the first hearing on the 2000 farm bill that we are holding as 
an agricultural committee and he decided to hold that here in 
an Colorado as opposed to anywhere else in the nation. So, I 
want to present Senator Harkin.
    Just a little gift so, hopefully, he--I know he will never 
forget us because he chose us first to hold his hearing here 
across the country--but it is a book of photographs of 
Colorado, one that was put together by the famous nature 
photographer, John Fielder. It is called ``Mountain Ranges of 
Colorado'' by John Fielder and has his signature and some other 
things on it. So, Tom, thank you for being with us.
    Chairman Harkin. Well, thank you very much.

  STATEMENT OF HON. KEN SALAZAR, A U.S. SENATOR FROM COLORADO

    Senator Salazar. Let me just open it up by saying this. I 
want to want to welcome the Chairman and the ranchers and 
farmers of the rural communities who are here today. Last year 
I held a number of different sessions across Colorado in about 
nine different communities to listen to the farmers and 
ranchers of our state about what issues they were most 
concerned about in terms of agriculture. It has always been my 
view that Washington is a long ways from the people who are 
actually affected by the policies that are actually written 
there. And the best way that you can write a bill that has the 
kinds of implications that the national farm bill does, is to 
go out and listen to the farmers and ranchers and those who are 
involved in the business and are most affected by those 
policies.
    So, today is a beginning of Senator Harkin's effort in this 
Congress to write the 2007 farm bill. But what we really want 
to do today is, we want to hear from all of you who are here. 
There are a number of different things that are very important 
to us as we move forward, and I am sure we are going to get 
into those as we move forward with the panel. So, with that I 
will turn it over to my chairman, Senator Tom Harkin.

    STATEMENT OF HON. TOM HARKIN, A U.S. SENATOR FROM IOWA, 
  CHAIRMAN, COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY

    Chairman Harkin. Well, thank you very much. I guess the 
first thing I have got to do is bang the gavel and say that the 
Committee on Agriculture, Nutrition and Forestry will come to 
order. And, I want the record to show that the gavel was hit 
before Senator Salazar spoke, OK? I mean we actually got into 
official session before you spoke. I am sorry I did not do that 
before. And you can all laugh at that if you want, anyway.
    But, it is just great to be here. I want to thank Roxy 
Elliott, the Adams County current facilities technician for 
helping us here. I want to thank the Adams County Commissioners 
for hosting this. Commissioner Larry Pace. Is Larry Pace here? 
Right over here. Larry, thank you very much. And also Skip 
Fisher. Let's thank them both for helping us get this arranged 
here today. Thank you both very much.
    Of course, I want to thank Governor Ritter. I know he had 
to return back to the statehouse. And also our Ag Commissioner 
Stulp who is here. We just had a press conference. 
Representative Curry, who is the chair of the House Agriculture 
Committee.
    Now, I have a Representative Sonnenberg. Is Representative 
Sonnenberg here? Well, thank you for being here. Representative 
Sonnenberg is here. Thank you.
    And I have a Trent Bushner, Yuma County Commissioner. 
Where's Trent Bushner? Back here at the left. Thank you for 
being here, Commissioner.
    Well, I am going to ask consent that my statement just be 
made a part of the record. We are running behind time. You 
don't need to hear from me; I need to hear from you. I just 
want to say that we have--Senator Salazar and I worked together 
getting this farm bill together. It is going to be aggressive, 
progressive. It is going to look to the future. A lot of new 
things in there. We are going to move energy, big time, and 
cellulose. We are going to do a lot of things in rural 
development area, also in conservation.
    But, I would have to say that the core--the core mission of 
our farm bill is to promote profitability and income potential 
in agriculture. And that means all our farmers and ranchers. 
That means specialty crops. That means everybody that is in 
production agriculture.
    So, we need to do that and how we do that? We are going to 
be looking at how we address the next 5 years. But just keep in 
mind that our National Security demands that we get off of that 
oil pipeline; that we quit importing so much of our energy.
    We put the first ever energy title in the farm bill in 2002 
when I was chairman at that time. And we put it in on the 
Senate side and we held it, and it has formed the basis for us 
moving ahead in getting our energy needs from our land in this 
country. And we have to do that. So, aside from just food and 
fiber, we are going to be looking at fuel as a part of our farm 
bill.
    So, I just wanted to mention that. There are a lot of other 
passes of our farm bill, everything from specialty crops, to 
conservation, to all the things that are going to be done. I 
was looking at Colorado and I said, ``Colorado? Great 
diversity. Everything from fed cattle, to dairy, to sheep, to 
lettuce, to sugar beets, potatoes and peaches. You cannot get 
much more diverse than that.'' So, Colorado, aside from being 
ski country, is also farm and ranch country. And you could not 
have a better spokesman for your interests and a better fighter 
for you interests than Senator Salazar and I am just proud to 
have him on our Agriculture Committee.
    And with that, we will turn to our first panel. Now, all of 
your statements--and I read a lot of them last night--I had 
your initial statements. So they will be made a part of the 
record in their entirety. If there are one or two things that 
you want to see this farm bill do, let us have it in about 5 
minutes, if you can. And then I'd rather just have questions. I 
am sure that Ken would like to ask, and I would like to ask.

     STATEMENT OF JOHN R. STULP, COLORADO COMMISSIONER OF 
                          AGRICULTURE

    Mr. Stulp. Thank you, Senator Harkin. I, too, join the rest 
of agriculture in Colorado welcoming you and our good Senator 
Salazar for this hearing today. And I hope we have a good 
conversation about what we think is important in the upcoming 
farm bill. And we certainly appreciate the time and effort you 
have spent over your career on working for agriculture across 
this great country.
    As you pointed out, Colorado has a wide diversity of 
products that we produce, and we are quite proud of it. So, 
there is not an aspect of the farm bill that does not impact 
producers here one way or another.
    Now, we do not grow rice, cotton and peanuts, but Bob 
Sakata is working on bananas, I think. We do have a lot of 
entrepreneurs and the fact of agriculture is changing in 
Colorado. But there are some things that are still very 
important, as agricultural producers deal with the weather on a 
regular basis. And one of the first things I would like to see 
in the new farm bill is a more permanent disaster mechanism.
    We have just experienced a horrendous blizzard in 
southeastern Colorado. It may be the worst one in a hundred 
years. And we will have other disasters. We have disasters 
throughout the nation, as I know you well know. But we do not 
have a good mechanism to help livestock producers at this 
point.
    We have been frustrated by the fact that the USDA has been 
trying to apply a crop loss formula for a livestock disaster, 
and it just does not work. So, we need a permanent type of 
legislation to protect those producers that beyond their own 
ability need some assistance from the government.
    Another thing that I would like to visit with you about 
today is the specialty crop issues that are coming up in the 
new farm bill. We have a number of vegetable and specialty crop 
and fruit growers in Colorado and I do not think they are 
looking toward the traditional type of commodity program. But, 
they need additional support in areas of research and market 
development, and that research includes some disease control 
and some research at our land-grant institutions. So, I urge 
you to take a strong look at the needs of specialty crop 
producers.
    There are some issues around the allowance in the new farm 
bill of whether fruits and vegetables would be allowed on 
traditional commodity lands. I think we need to be very careful 
with that because we would not want to jeopardize one industry 
at the expense of another one.
    I have always appreciated your support for the renewable 
energy sector of our agricultural industry in the United 
States, and it has really taken off here in Colorado, too. We 
have seen a tremendous result in the price of corn, if you are 
a corn farmer, in the improved prices, as we produce a very 
clean product and help defer our need on foreign oil. It came 
at a good time because our energy prices in agriculture have 
also sky-rocketed.
    And our livestock industry, too, has been hit with these 
higher commodity prices as well as higher fuel prices. So, it 
is important that we try to develop new markets for our beef 
and our livestock producers that they too can afford these 
higher costs of energy.
    I have always pointed out to people that it is unfortunate 
in agriculture that we become somewhat cannibalistic and that 
one element of agriculture tends to feed off of another element 
of agriculture. And when you look at the take-home cost of food 
today, consumers are the best fed and, perhaps, the cheapest 
fed consumers in the world. So, it is important that we keep 
providing that and we do that through profitability that you so 
well pointed out.
    One last point on conservation. You have done a great job 
in conservation. We need to re-look at the CSP program to make 
sure it fits eastern Colorado, or all of Colorado, and that it 
is adequately funded. I think USDA spent more funds on 
advertising than they have on putting it in the ground. And so 
I urge you to take a strong look at that.
    And, again, I thank you for coming here and listening to 
our concerns. We pledge to work with you and Senator Salazar as 
you go forward with this new farm bill.
    [The prepared statement of Mr. Stulp can be found on page 
72 in the appendix.]
    Chairman Harkin. Commissioner Stulp, thank you very much.
    Let us go on down the panel here. Mr. Kent Peppler, the 
Rocky Mountain Farmers Union.

 STATEMENT OF KENT PEPPLER, PRESIDENT, ROCKY MOUNTAIN FARMERS 
                             UNION

    Mr. Peppler. Chairman Harkin, Senator Salazar, I am honored 
to have been asked here today to testify on the upcoming farm 
bill.
    My name is Kent Peppler and I am President of the Rocky 
Mountain Farmers Union. We are a general farm organization that 
represents about 25,000 family farmers throughout the states of 
Colorado, Wyoming and New Mexico. I also farm full time 30 
miles north of here at Mead, Colorado. I was on the Farm 
Service Agency State Committee during the Clinton 
administration. And I am currently representing National 
Farmers Union on the Agriculture Trade Advisory Committee in 
the Bush administration.
    Later on in my testimony, I will give the bullet points on 
exactly what types of programs Rocky Mountain Farmers Union is 
going to support, but right now I would like to talk about what 
the No. 1 issue is within the farm bill conversation.
    The No. 1 issue is money. It is imperative to the future of 
the economic health of rural America that Congress and the 
administration invest the proper amount of resources in the 
family farm agriculture in small town America. We are the key 
to National Security, energy independence, and we are the moral 
and ethic fiber that made this country great.
    At the National Farmers Union, we have committed 
significant time and money to researching the different farm 
bill proposals, and I am here to tell you that no matter how 
you crunch the numbers, a baseline or below baseline farm bill 
will not work. If we have a baseline farm budget, young people 
will continue their mass exodus from the heartland; small rural 
towns will continue to have tumbleweeds blowing down Main 
Street; and this country will become dependent on foreign 
sources for food, just are we are currently relying on oil.
    This is not a pay-as-you-go situation. If rural America is 
to survive, we need at least the 2002 budget, and more.
    The members of the Rocky Mountain Farmers Union have asked 
me to relate to all of you what we will support in the upcoming 
debate. Obviously, we support protection of the safety net. It 
is true the commodity prices are high now, but history has 
proven to us that this, too, will pass. And when it does, we 
will need a strong counter-cyclical mechanism, plus the current 
fixed payment to allow us to be viable.
    Rocky calls for a farmer-owned commodity loan or strategic 
bio-fuel feedstock reserve. Our members believe it is time for 
a permanent disaster program. That includes livestock. We have 
a disaster every year and it wastes our time, it wastes our 
legislators' time, and it wastes the taxpayers' money for us to 
continually have to go back and fight for this disaster aid.
    We support fully funding conservation programs, such as 
Senator Harkin's CSP program. It is amazing to me that we left 
$23 billion on the table in the last farm bill and somehow we 
did not get the conservation programs properly funded.
    Rocky Mountain Farmers Union whole-heartedly believes in 
the development of renewable energies. This may be the most 
exciting technology for the sustainability of family farm 
agriculture that we have seen in a generation.
    We believe in a trade title that promotes, not just free 
trade, but fair trade. We support strong public research and 
urge the finalized funding for the greenhouse complex at the 
USDA Research Center in Akron, Colorado.
    Rocky urges continuation of the crop insurance program with 
100 percent coverage, just like we have on our homes and our 
vehicles. And in times of multiple-year disasters that our APH 
yields never fall below FSA county average yield.
    Rocky Mountain Farmers Union supports rural development 
programs. We support payment limits; we support current sugar 
programs; we support full staffing of the Farm Service Agency; 
we support a dairy program that increases the viability of 
family sized producers.
    We support a National Organic Certification Costs program 
and we absolutely support food nutrition programs and urge 
Congress to make rural healthcare an issue.
    In conclusion, I would like to thank you again for allowing 
me to testify. The world has spun around many times since we 
developed our last farm bill. I believe that history has proven 
that the sustainability of family farm agriculture is the 
linchpin to the future success of our great country.
    God Bless America.
    [The prepared statement of Mr. Peppler can be found on page 
61 in the appendix.]
    Chairman Harkin. Thank you very much, Mr. Peppler.
    I did not say this earlier. These lights and green, then 
yellow. When it hits red, that is 5 minutes. So far, we are 
doing pretty good.
    Mr. Alan Welp, State Director of the Colorado Sugar Beet 
Growers. Welcome, Mr. Welp.

  STATEMENT OF ALAN WELP, STATE DIRECTOR, COLORADO SUGAR BEET 
                            GROWERS

    Mr. Welp. Mr. Chairman, welcome to Colorado.
    The Colorado Sugar Beet Growers look forward to working 
with you and your committee on developing the sugar provisions 
for the 2007 farm bill. We support the structure of our current 
U.S. sugar policy. And we continue to work to enhance the 
current program and to make our program more predictable.
    There are six observations I would like to make. First, I 
am a shareholder of Western Sugar. We are a very young co-
operative whose shareholders carry substantial debt from our 
purchases of our factory in 2002. We are currently struggling 
to maintain acres, due to the high prices of corn and the low 
prices of sugar. We have not had a support rate increase for 20 
years. Yet, our prices for our fuel, fertilizer and virtually 
all other inputs have risen dramatically. This problem needs to 
be addressed in the new farm bill.
    Second. Our prices have plunged since last summer when USDA 
announced in July a commitment to import 250,000 tons of sugar 
from Mexico, and an additional 250,000 tons of sugar from our 
WTO trading partners. This significantly oversupplied our 
market. Mexico has a short crop this year and does not have the 
250,000 pounds of sugar to import to us, so they are buying 
sugar from their neighboring countries so that Mexican sugar 
can be shipped into our market. The bottom line is, Mexico is 
shipping us sugar that they don't have and we don't need. That 
just is not right.
    This also calls into question whether Mexico will live up 
to its NAFTA obligation and will there be a level playing field 
for American sugar farmers in our own markets and in the 
Mexican market.
    Third. USDA proposes to retain the basic structure of our 
existing policy and continue to run it at no cost to the 
taxpayer. We agree. We should use the taxpayer dollars wisely. 
We do object to USDA's request that it be given sole discretion 
to reduce domestic sugar production without parameters or 
guidelines.
    Fourth. Large food manufacturers are lobbying Congress to 
eliminate the no-cost sugar policy. They want a $1.3 billion a 
year plan built around sugar subsidy checks--a plan that sugar 
farmers strongly oppose.
    Fifth. Everyone asks about making ethanol from surplus 
sugar. We view this as a limited option to be used for the 
simple purpose of disposing of surplus sugar because of 
excessive imports. Now, this will take some time to develop and 
additional incentives will be required.
    Finally, as the WTO negotiations continue, our farmers are 
deeply concerned that the developing nations that produce and 
expert 75 percent of the world's sugar, not plagued by the same 
trade rules that we do, we ask that you continue to watch these 
negotiations closely and not allow American producers to be put 
at a disadvantage.
    Thank you for the opportunity to testify, and our industry 
looks forward to working with you.
    [The prepared statement of Mr. Welp can be found on page 82 
in the appendix.]
    Chairman Harkin. Well, Mr. Welp, I thank you for a very 
concise and very well delineated problem that we have in sugar. 
I will have more to say about that later.
    Mr. Dusty Tallman of the Colorado Wheat Growers. Mr. 
Tallman.

       STATEMENT OF DUSTY TALLMAN, COLORADO WHEAT GROWERS

    Mr. Tallman. Thank you, Chairman, members of the committee. 
We appreciate you holding the meeting here today, and we 
appreciate Senator Salazar and all the work he does for 
agriculture and what you both do for agriculture. It is 
important to most of us in this room.
    Unfortunately, Colorado has had somewhat of a drought the 
last 10 years. Six out of the last 10 years, we have had below-
average wheat crops. And I guess something that has not been 
mentioned so far, we do support a disaster for the 1905-'06 
years and I know that you both have been working on that very 
hard and we hope that can continue and that we can get that 
done in the next month or two.
    As far as the farm bill and disaster payments over the last 
5 years for many of us in the room, that is what has kept us in 
business. And even with that, we have been using quite a little 
of our equity just to continue farming. For many of us, it is 
getting to the point that we cannot go on too much longer. So, 
we do have a few suggestions of improvement, I guess, on the 
1902 bill.
    We think direct payments are still, by far, the best way to 
go. We think in wheat's case, they should be increased--and I 
don't want to speak for the other crops--but a fairly 
significant increase for wheat. I think in the written 
testimony, we talked about how we came up with the figure we 
came up with. We also see a similar increase in our target 
price. In the 1902 farm bill, when the discussions came between 
the House and the Senate to conference the bill, wheat lost 
about 74 cents for a little bit, and then 62 cents in the end. 
We lost quite a little of our target price at that time.
    We see an increase in our target price. We have not used 
the counter-cyclical payment at all, partially because we have 
had small wheat crops and the price has been high. So, it has 
worked. It has worked the way it was supposed to.
    But, I think increases in the direct payment and also 
increases in the counter-cyclical, for the wheat, at least, 
would strongly help eliminate the need for disaster bills. I do 
not think it will ever eliminate completely the need for 
disaster, but I think it would help.
    Crop insurance has been a very, very effective tool for us 
to try and preserve some of our income but, as was mentioned 
before, when you have six out of 7 years of below-average 
crops--we have people, I think I have a field actually that has 
been so dry that my APH is cut by two-thirds and my crop 
insurance rate has doubled. So, I am paying twice as much for 
one-third of the insurance I was buying five or 6 years ago.
    We need to continue to work on that, and that is one of the 
reasons we suggest a higher direct payment. We think if we can 
have a higher direct payment, it covers some of that 25 to 35 
percent that we cannot afford to buy. We cannot afford to buy 
much over 60-65 percent insurance in eastern Colorado. So, a 
larger direct payment and a larger counter-cyclical target 
price would help fill that void we cannot insure.
    As far as conservation title, we thought it was a wonderful 
thing last time around. We still do. And I guess I would echo 
the thoughts that it needs to be fully funded; it needs to be 
available to every producer. Quite often, when you start 
getting environmental points and ground bid in by environmental 
points, the front range along the mountains here gets higher 
points than we do, just because they have more pressure from 
urban development. And we need to make it available so it goes 
clear out to the eastern plains and western Kansas and all 
across the country.
    It has been mentioned about a permanent disaster bill. As 
far as wheat goes, we have not decided. We cannot decide if 
that is a good thing, a bad thing--I guess we need to see some 
more information. It would ease the pressure on trying to pass 
disaster, but I do not know how you would ever decide how much 
to fund it with. So, that is still a little up in the air for 
us.
    Energy is very important to wheat, as it is to all of 
agriculture. Not only do we pay more for everything that we use 
energy for, but the promise of ethanol is out there and I think 
wheat can benefit from that, also.
    As far as the WTO negotiations, I would suggest that we go 
ahead and write a farm bill we think is the best for the 
producers and not worry too much about what WTO is. If we 
negotiate things away before we write a new farm bill, then we 
will not have anything to negotiate about and they will find 
something else they do not like.
    Payment limitations? I guess I cannot oppose payment 
limitations, but I sure would hope that if we increased direct 
payments and target prices, we could increase payment 
limitations, or at least package them somehow different. It has 
been very unfair to wheat producers who use only the direct 
payment, that is the lowest payment we have. And it has been 
kind of tough on us.
    Last, I would say that we provide the safest, most 
reliable, most affordable food supply and we need to continue 
to do that and not become reliant on foreign countries.
    Thank you, very much.
    [The prepared statement of Mr. Tallman can be found on page 
78 in the appendix.]
    Chairman Harkin. Well, thank you, very much, Mr. Tallman.
    And now, Dr. Gary Peterson, Head of the Department of Soil 
and Crop Sciences at Colorado State University. Dr. Peterson.

  STATEMENT OF DR. GARY PETERSON, HEAD DEPARTMENT OF SOIL AND 
            CROP SCIENCES, COLORADO STATE UNIVERSITY

    Mr. Peterson. Thank you for the opportunity to testify 
regarding the new farm bill. Today I am representing the 
College of Ag Sciences and the Colorado Agricultural Experiment 
Station, which is housed at Colorado State University. I would 
like to bring just a few points to your attention, many of 
which you are already aware.
    First off, publicly supported Ag research and extension has 
resulted in significant increases in productivity of farms and 
ranches and low-cost, safe, nutritious food for the consumers. 
That has been brought out many times. And recent study shows 
that the annual return on investments in Ag research is 35 
percent per year. Most of us would like to make that kind of 
money.
    So, Colorado State University strongly encourages increased 
support of Ag research and co-op extension to land-grant 
universities, especially in regard to formula funds. We have 
had level formula funding and, with inflation, that has really 
eaten into the effectiveness of that money. And, I want to 
speak to formula funding in the sense that it is the way that 
we have an infrastructure for research. And it is the way we 
can conduct long term research. When we talk about cellulosic 
energy and we talk about removing crop biomass, what are the 
effects of that on soils? You cannot find that out with a 3-
year grant. So, even though we really also like competitive 
grants, we think that formula funding is a key thing for not 
just Colorado State University, but all land-grant 
universities.
    Regarding competitive grants, NRI has been a really good 
thing. It also is underfunded. Our scientists now are writing 
proposals and roughly 8 percent of the proposals they write are 
funded. And it is not because they are poor proposals, it is 
because there is just not enough money. That is probably not 
news to you.
    Also, ARS, which is another part of USDA, really needs 
support. We have many collaborative projects between land-grant 
universities and ARS--the work at Akron; the work at Ft. 
Collins; the works in Ames, Iowa, with the National TILF Lab 
those people are cooperators, and as we talk about 
reorganization, we want to make sure that no partner is damaged 
here--when we talk about how ARS fits into the funding. These 
collaborative projects are very important.
    In summary, everything in agriculture is changing fast. 
And, I guess because I am getting older, I think it is changing 
faster than some other people and our rural communities are in 
need of help. So, investing public funds in research that will 
benefit those rural communities and Ag in general, is really 
something the country needs.
    I thank you for the opportunity to address both of you 
today.
    [The prepared statement of Mr. Peterson can be found on 
page 69 in the appendix.]
    Chairman Harkin. Thank you, very much, Dr. Peterson.
    And now we go to Mr. Alan Foutz, Colorado Farm Bureau. Mr. 
Foutz, welcome.

         STATEMENT OF ALAN FOUTZ, COLORADO FARM BUREAU

    Mr. Foutz. Good afternoon, Senator Harkin. It is indeed a 
pleasure to welcome you to our great state of Colorado. As you 
indicated in your opening, it is a tremendous agricultural 
state and we appreciate your being here. It is also a pleasure 
to be with Senator Ken Salazar. Senator Salazar, I am sorry I 
did not get to see you last week. I was pretty busy while I was 
in Washington, but I will be there the next time around.
    Senator Salazar. (inaudible) second tier.
    Mr. Foutz. I sent the second tier, that is right.
    Senator Salazar. I gave them equally a hard time that I 
give you.
    Mr. Foutz. I heard that, too.
    Colorado Farm Bureau does represent 28,000 families here in 
the state of Colorado and we are pleased today to have some 
time to spend with you.
    We do support extending the concepts of the 2002 farm bill 
into the next farm bill. However, we do feel that changes will 
be necessary and if there are changes that do happen, we think 
consideration should be given to green box compliant 
compensation programs, particularly for fruit and vegetable 
growers.
    We think we need to work some more on some working land 
conservation programs and strengthen our revenue-based, safety 
net program, direct payments and our commodity loan programs.
    As we looked at the USDA proposal that we began to see 
earlier this year, we find that the budget for that is some $10 
billion less than what was budgeted in the 2002 farm bill, and 
that greatly concerns us. Even if we take one step further and 
look at the CBO estimates that just came out this month, that 
is something that is significantly less than what was even 
proposed in the USDA proposal. So, we are very concerned about 
the amount of money that is being proposed for this next farm 
bill and the impact that has on commodity programs and on our 
disaster assistance programs.
    The recent USDA proposal calls for moving away from a 
counter-cyclical program to a revenue-based program that is 
responsive to actual conditions and still provides a strong 
safety net. Colorado Farm Bureau supports that concept. Farmers 
really need the help when Mother Nature deals them a blow and 
today's loan deficiency payment programs, and so forth, just 
simply do not do that. When prices are high, payments are low; 
when prices are low--it just does not work very well. So, we 
think we need to have some revisions there.
    One of the things we would like to see and have a 
discussion about is on payment limits. American Farm Bureau has 
taken the stand, and continues to take the stand, that we would 
not like to see payment limits. We think, if you are in 
agriculture, you are in agriculture, regardless of the size of 
operation you have. So we would really not like to see payment 
limitations.
    In addition, USDA has proposed to eliminate a provision in 
the current law governing how farmers organize their 
operations--known as the three-entity rule--and Colorado Farm 
Bureau opposes that proposal, as well.
    The USDA proposal would increase the acreage limit on 
Wetlands Reserve Program from 2.3 to 3.5 million acres. 
Colorado Farm Bureau does support the Wetlands Reserve Program. 
The program, however, should include a buy-up clause that would 
allow producers to remove those areas from the program. In 
addition, authority for the Federal Government to purchase 
permanent easements under the program, we think, should be 
terminated.
    The USDA proposal also calls for continuing the 
Conservation Reserve Program at the current acreage limit. We 
support that concept and we support continuing the CRP program. 
We do feel, however, that it is important that tenant farmers' 
rights be protected in that program. Reasonable limits on 
participation should be included to protect the economic 
stability in individual counties or regions. We have seen that 
there have been negative impacts there with the CRP program in 
our state.
    The administration's proposal also includes more than $1.6 
million in the renewable energy funding. We support renewable 
energy funding all the way from the ethanol programs with corn 
and cellulosic projects and so forth. We really do think that 
the future of agriculture is probably part of that and based in 
that.
    I could continue on several other issues, Senators, but I 
think I am going to stop here and thank you for being here with 
us today so we could have this discussion.
    Thank you.
    [The prepared statement of Mr. Foutz can be found on page 
48 in the appendix.]
    Chairman Harkin. Mr. Foutz, thank you, very much.
    Thank you all, very much. You are very concise and, as I 
said earlier, well-delineated statements. I appreciate that, 
very much.
    One of the themes that came through to me from everyone who 
spoke was this problem with disaster payments. Let me point out 
something here. In 2003, it was the first time ever--first time 
ever--that we took money out of agriculture to pay for a 
disaster. It never, ever happened before. I, and others, fought 
it like the dickens. We did not win, but we got the money put 
back.
    Then, when we got the money put back, they came back the 
next year and took it out again. So, what we have lost is about 
$4 billion that was taken out of conservation to pay for 
disaster. As I said, that has never happened before. Think 
about it this way: It would be like us going to New Orleans and 
saying, ``Well, you had Katrina. It is a bad disaster. OK, we 
will give you all this money, but we are going to take it out 
of your highway funds. We are going to take it out of your 
education money. We will take it out of your Medicare. We will 
just take it out of Federal money that goes to your state.'' We 
do not say that to anybody. No disaster--whether it is a 
hurricane, a flood, fires, droughts, whatever. Freezes. We have 
never ever said that it has got to come out of agriculture. We 
treat it as a natural disaster just like everything else.
    So, I want to make that point because we are going to work 
very hard in the farm bill to see what we can do to stop that 
from ever happening in the future. We should never allow any 
administration to come in and take money out of agriculture to 
pay for a disaster.
    So, that has kind of put us down. Put us down about $4 
billion right there and, as pointed out, USDA's budget is down 
about $10 billion. Actually, we are down about $23 billion in 
agriculture from what we were allowed to spend.
    OK, I just need to make this point very clearly. I was 
chairman for the last farm bill. We were given a budget. We 
stayed within that budget. But, because of higher crop prices, 
good conditions, we didn't have to pay out all that money, so 
we saved the taxpayers 23--well, actually about 18--it was 
about $4 billion, as I said, that they took out of 
conservation, then about another $18 to $19 billion that we did 
not have to spend. But, we could have spent.
    So, the thing about this way--we were very successful; we 
saved the taxpayers money; so now, we are getting penalized for 
it. I know that may sound familiar to a lot of you. But, we 
should not be penalized because we need this now for energy 
security; we need to put money in for our National Security 
purposes; we need to make sure that we respond to changing crop 
climates and things in this country; we need to make sure that 
we have a strong conservation program; and to make sure, as 
some of you have mentioned, our crop insurance program needs to 
be tinkered with a little bit to make sure that people can have 
coverage so that they do not get in the position that some of 
you mentioned where your productivity goes down and your costs 
go up. And that does not make any sense whatsoever.
    But, I just wanted to thank all of you for your input and 
for your statements, especially on research, Dr. Peterson. You 
are right. We need to fund research more, especially in the 
areas of energy and also specialty crops. More and more people 
in this country want specialty crops. We have to figure out how 
we can produce them, where we can produce them, and how we make 
it profitable for those who grow our specialty crops.
    And, last, I will just say this about fair trade--and that 
gets into the sugar business, too. I am all for fair trade and 
living up to our WTO commitments. Now, it was said by one of 
you that we should go ahead and write a farm bill and forget 
about WTO. I wish I could do that. I cannot. Under the 
Constitution of the United States--you can read it, it is in 
the Constitution--treaties are the supreme law of the land. It 
is in the Constitution. And we have a treat obligation, like it 
or not. And I may not like it all that well. I have to be 
cognizant of that. So does Senator Salazar.
    So, we do have to understand that we have WTO obligations 
and that we will have to draft our farm bill accordingly. Now, 
one of you mentioned looking at green box payments. Those are 
exempt under WTO,
    Now, the other thing we are going to fight very hard to do 
is, we are going to fight very hard to ensure that our programs 
for energy production--for cellulose energy production, wind 
production and things like that. And that will be in the farm 
bill, by the way--that those are also WTO compliant. Since we 
are not exporting it. We are using it here. It has nothing to 
do with trade. So, it also ought to be exempt from WTO. And we 
are going to fight very hard to make sure that happens, also. 
To make sure that they are input.
    We are also looking at conservation. Some of you mentioned 
the CSP program, how we can use that again as it was intended 
as a national program, not based on watershed. To make it a 
national program to get to every farmer. I do not care what you 
produce--whether it is lettuce, or cabbage, or corn, or cattle, 
or hogs--whatever it might be. Whatever you are producing, you 
should be eligible for CSP payments as long as you are a good 
conservationist; as long as you protect the soil and the water 
wildlife habitat.
    So, those are just some of my thoughts, listening to that--
I do have questions, but guess I used up all my time talking. 
But, thank you, very much, for your input into this farm bill. 
It is going to be a tough bill to write with the constraints of 
the budget that we have. I have no doubt that we will do all 
right, we will meet our obligations and we will most ahead 
aggressively.
    With that, I will turn to my good friend, Senator Salazar.
    Senator Salazar. Thank you, very much, Senator Harkin. Let 
me first say to the panelists, I very much appreciate the 
excellent testimony that you provided here, as well as the 
written reports that you provided to us, our committee and our 
staffs. I have an opening statement, but as Senator Harkin did, 
I, too, will submit that for the record, so I can ask at least 
one question. I also would like to say, just at the outset, 
that there are a lot of important things we are going to do in 
the Congress this year, ranging from what happens in the whole 
field of National Security and what happens with military and 
Homeland Security legislation that we are working on now. How 
we move forward with the issue of a new energy security future 
for our nation; how we deal with other very difficult issues, 
such as immigration. There are those issues that I am sure we 
will work on.
    But, one of the things that will be as important, to my 
mind, will be what we do with this 2007 farm bill in making 
sure that what we are doing is supporting the food security of 
our nation--as those of you, I think most of you have been in 
my office at one time or another--you have seen the sign on my 
desk that says, ``No Farms, No Food.'' And I think it is 
important for us to keep reminding the world about the food 
security of or country.
    Let me ask a question relating to energy. And, I have about 
three or four questions for each of you. But, what I am going 
to do, because I will not have the time is, I am going to 
submit those questions to you and your organizations and I 
would ask that you respond back to those questions.
    Let me just focus in on the question of energy. Huge issue. 
It is a big wave. It is coming across Colorado. I want Colorado 
to become very much the renewable energy capital of the world. 
Senator Harkin gave us 4 hours of his time this morning to tour 
the National Renewable Energy Lab, and I think he and I both 
came away impressed with some of the advances that are being 
made in technology. My question to each of you--and if you will 
take 20 seconds to answer it apiece--is this: How do we make 
sure that it is the farmer on the ground that ultimately 
benefits from this renewable energy revolution that we are 
seeing that is going to be pushed forward because of the 
national security, environmental security and economic security 
reasons and values that we are trying to protect here? How can 
the farmer with a small bio-diesel project or with some other 
cooperative project--how can we bring those benefits of this 
renewable energy revolution to rural America?
    So, if you will take 30 seconds apiece and we will try to 
get to you one at a time, starting with you, John.
    Mr. Stulp. I have never answered anything in 30 seconds. I 
will try.
    I think we have got to look at the Tax Codes and how the 
different credits for renewable energy are applied, and make 
those credits marketable. So, when you have a small producer--
whether it is bio-diesel, ethanol, or wind--that oftentimes 
they do not have the tax liability and they need the ability to 
market those tax credits so they can turn them into cash. I 
think that is one thing that comes to mind.
    Senator Salazar. OK. Mr. Peppler?
    Mr. Peppler. Well, I think as we go into this exciting new 
renewable energy situation, I think we need to have our eyes 
wide open and be flexible on things. And, I think as we start 
these programs, we need to call on our farmer organizations and 
talk with the grassroots people and be able to amend and adjust 
these things as we go through them.
    Senator Salazar. So, maintain some flexibility. Mr. Welp?
    Mr. Welp. Yes, sir. With the new technologies that are 
going to be coming forward, there is a whole frontier in front 
of us on renewables. How to get it into farmers' hands, that 
remains a very good question. I guess technology at the former 
level on production and how to produce for the ethanol market.
    Senator Salazar. Mr. Tallman?
    Mr. Tallman. I guess, actually in my mind, we are 
benefiting fairly significantly right now, because they are 
using so much corn in the ethanol business that it has kept the 
wheat price high. And sunflower price in our country--the bid 
on sunflowers is very good this year. So, I think it is 
actually benefiting us right now, indirectly. I think research 
is probably as important as anything else. We hear about 
switchgrass and other crops that will grow in eastern Colorado 
without irrigation. I think that would be very important to 
help us become energy-independent on the farm, too.
    Senator Salazar. Mr. Peterson?
    Mr. Peterson. I would think an educational program so that 
the farmer would understand that the productivity of their land 
could be affected by what they remove. It is important to 
return carbon to the soil. So, if the cellulosic energy is just 
removal of corn stalks, that could be really bad for Colorado 
soils. So, some caution about how we actually derive the 
cellulosic energy.
    Senator Salazar. Alan?
    Mr. Foutz. You know, I would agree with all of the comments 
made here. There is one thing I think we need to look at very 
seriously--organizationally--and that is, we are asking our 
members to be something than a producer of food and fiber. And 
for most farmers' ventures, that is a deep-set feeling. And we 
are asking them to be producers of energy. So, I think we have 
got a lot of work to do--not the mechanical issues--I think we 
have a lot of work to do to change the philosophy of how we do 
agriculture today.
    Senator Salazar. One of the concerns I have is--I am an 
unabashed advocate for what we are doing with efficiency and 
renewable energy and new technologies and will be for my seats 
on the Agricultural Committee, Finance Committee and Energy 
Committee, and hope to push that very hard over the next 2 
years. But, I also do not want to see this new wave that is 
coming across America, essentially only benefit Wall Street and 
those who can afford to put together the $100 million packages.
    So my question that I am going to keep trying to explore 
is, how do we get these opportunities down on the farm? How do 
we create, for example, a co-op among three or four farmers for 
a maybe a bio-diesel refinery that can provide the diesel, the 
fuel supplies, for those farms? How do we do the same thing 
with respect to the wind energy that is being produced so that 
we can have the kinds of credits and incentives that allow us 
on any particular farm, perhaps, to take advantage of some of 
the wind technology that is now being developed and extensively 
deployed across the country?
    So, how we get these benefits down to the farmer level is a 
big question for me. I want your help and continuing guidance 
on this issue as we move forward.
    We have lots of other questions but, I think--Mr. Chairman, 
it is about three o'clock and we have one more panel to go.
    Chairman Harkin. I am told we have a little bit of time, if 
I might just ask two kinds of questions. One general. I am 
going to go down the line, just like Ken did.
    We see the aging of agriculture in America. I see it in my 
state--all over rural America. The average age of our farmers 
and ranchers are getting older and older. Our small towns are 
drying up. And what do we do? What do we need to do?
    If we are going to look at this farm bill which addresses 
economic development, addresses the structure of agriculture--
but looking at the future--what should we be looking to develop 
as future opportunities for young people--or anyone for that 
matter who wants to get into farming or agriculture or live and 
work in rural America? I know that is broad, but I am just 
trying to get some of your best thoughts. I mean, we have got 
to do something to revitalize rural America as a place for 
young people to live and work and raise their families. And we 
need to find some way for them to get into agriculture. The 
cost now to get in is just almost exorbitant.
    What should we do? If we are looking at that down the pike, 
what should we be looking at in the farm bill?
    Commissioner?
    Mr. Stulp. I think the one thing that I would characterize 
that will attract people into agriculture would be 
profitability. The problem that we have had over the last 
several decades--it may be even more than that--is a lack of 
profitability. So, we have seen a greater concentration--in my 
own farming operation--we are farming over the tops of probably 
of probably 40 or 50 homesteads that were started by the 
Homestead Act back in the early part of the last century. And 
it was because of a lack of profitability that those people 
left. And we have seen that decline in production units going 
to larger ones. And if the smaller operator is to succeed, or a 
young person going into agriculture is going to succeed, they 
have to be able to make a profit.
    Chairman Harkin. Mr. Peppler?
    Mr. Peppler. Well, I agree with Commission Stulp. Profit is 
obviously the No. 1 issue. But, I think we also need to look at 
rural America from the social side, also, and rural 
development. We have to maintain the standard of living that is 
equal to, or better than, our urban cousins'. We need to look 
at healthcare. We need to look at public schools. We need to 
look at quality of life issues within our small communities, 
including churches, healthcare and schools.
    Mr. Welp. I do have two sons who are very interested in 
coming back into farming, but they have seen how, in the last 
six or 7 years, that the operation has struggled due to drought 
in Colorado and then the low prices. And their other concern is 
our water here in Colorado. So it goes back to profitability--
eliminating the drought would be a good idea.
    Mr. Tallman. I guess profitability would be No. 1 with 
probably anybody. I think it will attract people to come to the 
farm, if they see that they can make some money. The problem 
that we have got in eastern Colorado is, we don't have many 
young people to stay there. You were talking about your 
hometown last night--we are the same way. We have gone from 400 
kids in school--K-12--to about 180 I think it is right now. So, 
we don't have many kids to even draw from. So, we're going to 
have to draw young people from the cities to come out there and 
I think the way to do it is show them they can make some money 
and that it is a great way of life. You are your own boss out 
there. You have your own hours. You work real hard when to and 
you can take some time off when you do not.
    Chairman Harkin. Mr. Peterson?
    Mr. Peterson. My remarks are related to profitability, but 
just a little broader. There are a lot of opportunities in jobs 
where people live in rural communities and then serve 
agriculture. One of the problems we have is that the starting 
salaries of people that graduate from the College of Ag 
Sciences, is quite a bit lower than for engineering. And it is 
simply because that agriculture is not profitable enough to pay 
the salaries that some of these people need. So, it really goes 
back to opportunity and money.
    Chairman Harkin. Thank you, very much. Mr. Foutz?
    Mr. Foutz. Well, obviously I would have to say that 
profitability is probably the major issue. I had two children 
that decided not to come back to the farm. They like to live in 
the Denver and Cheyenne area. And I think part of that is not 
necessarily profitability, but it is also as someone else said, 
and that is the social activities that take place in a rural 
community. So, one of the things that we need to do is to 
somehow have a stronger rural development program so that we 
can offer services and activities in rural communities that we 
do not currently have. That would include healthcare and all of 
those sorts of things that just are not there today.
    Chairman Harkin. Well, I have just added that--I had just 
marked it off. Everybody said profitability, but I agree with 
Mr. Peppler and Mr. Foutz. You can have a lot of profitability 
out there, but if you do not have decent healthcare in rural 
America, if you do not have the schools where your kids do not 
have to ride an hour on a bus every morning in the dark and 
back home in the dark--if you have got decent shopping, 
churches--the kinds of things that make for a social 
infrastructure, you can have a lot of profitability and people 
just will not do it.
    So, I think you are all right. We have got to have 
profitability in there, but we have to think about rural 
economic development and how we do other things--provide for 
other incomes. Broadband technology, things like that in rural 
America to get those kinds of rural jobs out there for people.
    Did you have anything, Ken, that you wanted to follow up?
    Senator Salazar. (inaudible).
    Chairman Harkin. I think we had better move on. Thank you 
all, very much, for being here. We have finished our panel on 
time. I was told to finish by 2:10 and that is where we are. 
So, I thank you, very much for your input.
    I just conferred with my boss and he said that we are not 
going to take a break, we are just going to move right into the 
second panel. So, I would like to call up our second panel 
here--as soon as I find the list--Mr. Roger Mix, Mr. Randy 
Loutzenhiser, Mr. Terry Fankhauser, Mr. Doug Zalesky and Ms. 
Kathy White.
    Thank you, very much. Now, we turn to our second panel. We 
have a mix of different people and different interests here. I 
think, again, just to show the breadth of what we do in 
agriculture. We will do the same thing: the green light will 
come on, you have got up to 5 minutes, if you just begin, give 
us your best points and what you think you want us to do in the 
farm bill, and then we will open it for discussion afterward.
    If we have any time--excuse me, I am losing my voice, darn 
it--if we have any time before we have to rush to the airport 
to catch the last flight back to Washington, I would like to 
open it for any questions or comments from the audience. So, I 
am going to try to do that. I always like to do that and I will 
see if I can do that here.
    First, we will go to Mr. Roger Mix, of the Colorado Potato 
Administrative Committee. And, again, all of you. We have your 
testimonies and we have made them a part of the record in their 
entirety. If you would just sum it up in 5 minutes, we would 
appreciate it.
    Mr. Roger Mix.

    STATEMENT OF ROGER MIX, COLORADO POTATO ADMINISTRATIVE 
                           COMMITTEE

    Mr. Mix. Thank you. Good afternoon, Mr. Chairman and 
Senator Salazar. I am a third-generation farmer from Center, 
Colorado, in the San Luis Valley, the south central part of the 
state. My family farm produces certified seed potatoes and 
malting barley. Currently, I am a Director on the Executive 
Committee for the National Potato Council, and a board member 
on the U.S. Potato Board.
    I am extremely happy to be here to have the opportunity to 
speak to the specialty crop title in the farm bill. Fruit and 
vegetable and tree nut production accounts for over $35 billion 
in farm gate value annually, or 30 percent of the farm cash 
receipts on an annual basis. The specialty crop industry is an 
important sector of the United States agriculture deserving 
full and equal consideration as other agricultural sectors in 
the farm bill. In these numbers, potatoes represent 10 percent 
of that total.
    Speaking for the potato growers, we are not interested in 
direct program payments, but the type of fund we want to see in 
the farm bill is designed to build our long-term 
competitiveness and ensure sustainability for our industry.
    Some of the key priorities I would like to go over with you 
right now is nutrition programs, fruit and vegetable 
accessibility to school children; to comply with increased 
consumption of fruits and vegetables in the dietary guidelines; 
research is another one. We need significant increases in the 
amount of investment in specialty crop research.
    Another priority is state block grants. We need to expand 
this program because state departments of agriculture are in 
tune with the diverse needs of their growers to know what 
specific investment will increase specialty crop 
competitiveness.
    International trade is a big priority for us to increase 
access to foreign markets through addressing the trade barriers 
we face involving sanitary and phytosanitary issues. And of 
particular interest to Colorado is the Mexican market, which 
has already been opened, but we need to extend that market past 
the 26 kilometers. Also, a market is a Market Access Program.
    In conservation, a critical issue for Colorado and the 
western United States is a sustainable use of ground water and 
surface water for irrigation. Increased funding for the 
Conservation Reserve Enhancement Program is necessary to assist 
watersheds for Colorado and in the San Luis Valley.
    The last point that I would like to bring up is the great 
importance to the specialty crop producer is the need for 
continued restrictions on planting flexibility that prevents 
fruits and vegetables from being planted on program crop 
acreage. To allow subsidized farmers and land to compete with 
unsubsidized farmers would be an inequitable and market 
destroying practice.
    Again, thank you for the opportunity to testify today. 
Thank you.
    [The prepared statement of Mr. Mix can be found on page 59 
in the appendix.]
    Chairman Harkin. Thank you, very much, Mr. Mix.
    And now we turn to Mr. Randy Loutzenhiser I hope I 
pronounced that right--Executive Director of the Colorado 
Conservation Districts.

   STATEMENT OF RANDY LOUTZENHISER, COLORADO ASSOCIATION OF 
                     CONSERVATION DISTRICTS

    Mr. Loutzenhiser. Yes, you did, Chairman Harkin. Mr. 
Salazar, thank you for the opportunity to testify before you 
here today.
    My name is Randy Loutzenhiser and I am a dry-land and 
irrigated producer from eastern Colorado in Kitt Carson County 
and the Past President of the Colorado Association of 
Conservation Districts, and currently continue to remain as a 
Director to that board.
    We have heard of the different scenarios with regard to the 
climate here in Colorado, that it has brought in the past six 
to eight to 10 years. And we understand what the Ag economy has 
been like. Some of the things that we have not mentioned here 
today are the regulatory burden that gets placed upon 
agriculture, as well as the socio and political burden.
    I am going to take my comments in this direction right now. 
We have been in this drought; we have been burdened by the 
economy as agriculture producers; and I look at the 
conservation aspects here in Colorado and can stand upon this 
statement. In the past five to 7 years this drought has gone 
on, we have not had the erosive forces of nature that was seen 
back in the 1930's. I guess it is just a compliment that I 
would like to make toward private land owner-land stewardship 
throughout the years and what we have learned over time.
    Therefore, the preface to my comments is, and the 
foundation of this is the fact that we have established a very 
good baseline utilizing conservation program efforts and would 
continue to ask that we place an emphasis upon conservation in 
the upcoming farm bill.
    What does conservation bring to the citizens of the United 
States, to the citizens of Colorado? Well, certainly cleaner 
water through buffers, rangelands and CRP. We have arrested the 
soil erosion issues. Yeah, we continue to see soil particulate 
matter in the air, but not like, as I said earlier, what we did 
in the 1930's. It is a pathway to open space for the habitat 
caretakers for wildlife. We assist in the mitigation of 
critical species habitat. We can provide mitigation for 
greenhouse gas issues. We can provide sources of energy, both 
renewable and bio. And, then, bottom line, we are the providers 
of food and fiber.
    Going into the conservation programs, I first want to start 
out with the Conservation Reserve Program. There are going to 
be pressures upon this program, and one of those pressures is 
the resulting higher commodity prices and the alternative 
energy demand. Because of the higher prices, it is going to be 
interesting to see how FSA will continue to structure their 
rental rates to keep those lands in the CRP. Certainly in 
Colorado, in the arid climate, I think it is going to be 
interesting to see what type of role we will play in cellulosic 
energy production. Or, maybe in other words, would we be better 
off looking at possibly transitioning these CRP lands to a 
different type of working land, and that being a rangeland, 
particularly on Class 4 lands and higher? And transitioning 
those lands into a Managed Grazing Program under easement?
    In consideration of the farm bill, we also need to look at 
maybe utilizing CRP as an emergency-type tool that can be used 
in years of drought to give rangelands rest and utilize CRP 
lands for livestock production.
    The Conservation Security Program. I believe it is a 
brilliant program in concept and, certainly, as we look into 
the farm bill, maybe we need to be looking at setting the 
criteria for standard minimum qualifications at a high level 
and offer a single-tiered approach for acceptance into this 
program. The program needs to be streamlined.
    The Environmental Quality Incentives Program. We need to 
maintain the local work group latitude and area program input 
to adequately and fairly address conservation needs of USDA 
customers locally, regionally and statewide. This program 
should be a resource driven, locally led effort with sufficient 
flexibility to identify local priorities. I would ask that we 
give consideration to rangelands and water quantity as EQIP 
priority issues.
    The Conservation Technical Assistance Program is also 
another area that we need to continue to provide strong support 
in order that we can not only get the conservation programs--
those Federal programs--on the ground, but also that we can 
supply that technical assistance to those who go it alone 
without Federal assistance.
    Thank you.
    [The prepared statement of Mr. Loutzenhiser can be found on 
page 51 in the appendix.]
    Chairman Harkin. Thank you, very much, Randy.
    And now we will turn to Mr. Terry Fankhauser, Executive 
Director of the Colorado Cattlemen's Association.

STATEMENT OF TERRY R. FANKHAUSER, EXECUTIVE DIRECTOR, COLORADO 
                    CATTLEMEN'S ASSOCIATION

    Mr. Fankhauser. Thank you, Chairman Harkin. Thank you, 
Senator Salazar, for giving us the opportunity to present 
testimony today.
    I am Terry Fankhauser. I am the Executive Director for the 
Colorado Cattlemen's Association, filling in for our president 
today, who is in the midst of calving.
    I would like to point out that I think all ten titles of 
the farm bill do deal with profitability. I am a perfect 
example of that profitability as I am sitting here today as an 
executive director of an association, as opposed to a beef 
producer from Kansas and Colorado. We do operate a family farm 
and ranch in both states, but because of profitability, I 
(inaudible) farm income, it seems.
    The views I express today are based off member-voted and 
past policies of the CCA. We are a 140-year-old organization, 
the oldest cattlemen's organization in the nation. I believe 
the 2002 farm bill, which continued the ``freedom to farm'' 
emphasis, was a step in the right direction by allowing 
ranchers and farmers more leeway in choice of management 
objectives which best suit their individual operations, as 
opposed to what they could or should not grow in order to 
qualify for a government program.
    We have talked about natural disasters. Colorado has 
experienced significant natural disasters in the form of 
blizzard, drought, wildfire, things along those lines. We do 
have to answer this with a comprehensive-type program that is 
creative in solutions to assist farmers and ranchers in 
rebuilding their operations following disasters without greatly 
increasing the cost of government.
    In general, we do not need programs that become an 
opportunity to create inequities between neighbors. They should 
not become opportunities for a producer to have income over and 
above the possibility in a normal year.
    In Colorado, nearly one-half of the land mass, 33,000,000 
acres, is owned and managed by agriculture producers. These 
working landscapes truly are the front lines of conservation. 
Farms and ranches provide vast acreages of wildlife habitat, 
open space and viewsheds.
    When implementing conservation initiatives, consider doing 
everything we can to keep working lands in working hands. The 
CCA founded the first cattlemen's Conservation Land Trust in 
the nature that offers conservation easements that keep working 
lands in working hands. Two of the programs that are used in 
these voluntary conservation agreements are the FRPP and the 
GRP programs. We support those programs. There are additional 
modifications that we have outlined in written testimony that 
can be added to those. But they are programs that have worked 
very successfully in this state.
    I also want you to know that cowboys understand that farm 
policy is not just about cows. We realize there is a bigger 
picture for this committee to paint. For example, CCA is 
supportive of efforts to use agriculture in production of 
renewable energies. Production such as those using farm 
products to produce ethanol and bio-diesel are quite probably 
good ideas. CCA is supportive of ethanol production, even 
though it is raising the market price of corn, a major feed 
resource for cattle feeding.
    CCA hopes that the committee will review the entire litany 
of circumstances and implement a holistic program or holistic 
programs that do not segment agriculture from each other. 
Significant research is available from our land-grand 
universities and should be utilized.
    It would be most helpful if a farm bill would enhance our 
market access and ability to compete internationally by not 
creating more programs that must be reviewed for compliance by 
the WTO.
    CCA wishes that we could be more helpful in suggesting 
other alternatives to this farm bill, but one thing we can 
certainly say with a matter-of-factness, what should not be 
included in the farm bill is telling producers how to treat 
animals. It is my understanding that a variety of animal rights 
organizations are very interested in this farm bill.
    It is in our best interests as producers to keep those 
animals healthy and happy, and to provide them the best of 
environments. It is the only way that we do remain profitable.
    In summarization, I would like to cover just a few more 
points. Keep extraneous issues out of the farm bill. Focus on 
improving existing titles. Focus the 1907 farm bill toward 
agriculture, not in trifling with animal rights issues. 
Increase the efficiency in funding of the conservation programs 
that keep working lands in working hands. Promote private 
public initiatives as opposed to government mandates and 
increased subsidies. Preserve the right of individual choice of 
land management for water and other natural resources. And, 
finally, work to enhance out market access internationally.
    Thank you.
    [The prepared statement of Mr. Fankhauser can be found on 
page 40 in the appendix.]
    Chairman Harkin. Very good. Thank you, Mr. Fankhauser.
    Now we turn to Mr. Doug Zalesky, President of the Colorado 
Independent Cattle Growers.

  STATEMENT OF DOUG ZALESKY, PRESIDENT, COLORADO INDEPENDENT 
                   CATTLEGROWERS ASSOCIATION

    Mr. Zalesky. Thank you, Chairman Harkin, Senator Salazar. I 
appreciate the opportunity to be here today to represent the 
members of the Colorado Independent CattleGrowers Association 
and to provide comments on the 2007 farm bill.
    In our written testimony, we offered several areas that we 
would like to see addressed in the 2007 farm bill. I am just 
going to highlight about three of those areas.
    The first is the area of market competition. And Chairman 
Harkin has introduced legislation that would certainly improve 
competition in the livestock marketplace and ensure fairness 
and transparency in the sale of agricultural commodities.
    The Competitive and Fair Agriculture Market Acts of 2007 
proposes a series of changes that would curb unfair and 
deceptive market practices. Market concentration has 
systematically undermined the viability and profitability of 
independent cattle producers by denying them fundamental 
transparencies in key pricing mechanisms that create a healthy 
competition and healthy markets.
    An accepted economic theory indicates that competitive 
marketing conditions begin to erode once a four-firm 
concentration reaches 40 percent of the marketplace. Today, 
just four packing companies control more than 83 percent of the 
cattle processing in the United States.
    While concentration has accelerated, the meat packing 
industry is increasingly using non-traditional methods of 
contracting and marketing methods that further undermine the 
selling power of light cattle producers. These anti-competitive 
practices place cattle producers at grave risk, which is 
evidenced by the continued decline of producers' share of each 
retail beef dollar.
    The 2007 farm bill, we hope, would provide for effective 
and vigorous enforcement of antitrust and competition laws. I 
would submit to you today that more than evidence has been 
gathered proving GIPSA's failure to aggressively enforce 
current laws and the written testimony we submitted earlier 
cites study after study that exposes GIPSA's dismal 
performance.
    Chairman Harkin's bill would certainly address these 
crucial issues and provide for a rolling back of bureaucratic 
layers, streamlining the enforcement process and it brings 
competition issues to the forefront, which they need to be 
brought to that point.
    A second issue is on Country Of Origin Labeling. As you 
well know, COOL was mandated by Congress in the 2002 farm bill. 
But despite broad public support, implementation has been 
continuously delayed and under current circumstances is not 
scheduled for implementation until 2008.
    Senate Bill 4004 introduced by a number of senators from 
Montana, Iowa, New Mexico and North and South Dakota and 
Wyoming, would accelerate that implementation. Similar 
legislation has also been introduced in the House and we think 
that the farm bill should include language that would restore 
labeling by moving the implementation date as close as possible 
to the original date.
    In addition, the 2007 farm bill, we hope, would ensure that 
mandatory labeling is administered in a simple and most cost-
effective manner for producers, while providing the full scope 
of information to the consumer. USDA's approach to mandatory 
labeling has been one of resistance and the agency's initial 
plans for implementation have been unnecessarily burdensome.
    CICA fully supports immediate implementation of mandatory 
Country Of Origin Labeling and we urge the members of the 
Senate Agriculture Committee to do everything in its power to 
ensure the law is implemented efficiently, effectively and 
immediately.
    The last area I am going to highlight is trade. Several 
others have talked briefly about trade and its impact on 
agriculture. While we understand that farm bills do not 
typically address U.S. trade policy, we think it is important 
that during the 2007 farm bill debate that we explore more 
consistent policies for cattle and beef trade.
    Current trade policy has significant and lasting impact on 
cattle producers. It is imperative that the health and safety 
standards be harmonized globally in these trade policies and 
that further trade liberalization without implementing 
safeguards for perishable products like beef and cattle will 
further erode the markets for our domestic industry. 
Unfortunately, the safeguards that were directed by Congress in 
the Trade Act of 2002 to protect perishable products like beef 
are being compromised by the U.S. Trade representative, putting 
U.S. cattle producers at more disadvantage.
    Again, I appreciate the opportunity to be here this 
afternoon and provide comments on behalf of our members. Thank 
you.
    [The prepared statement of Mr. Zaleskey can be found on 
page 86 in the appendix.]
    Chairman Harkin. Thank you, very much, Mr. Zalesky.
    Now we turn to our last witness, who is Ms. Kathy White of 
the Colorado Anti-Hunger Network. Ms. White, welcome to the 
committee.

     STATEMENT OF KATHY WHITE, COLORADO ANTI-HUNGER NETWORK

    Ms. White. Thank you, Chairman Harkin and Senator Salazar, 
for the opportunity to speak today on behalf of the Colorado 
Anti-Hunger Network about the importance of the nutrition title 
of the farm bill.
    Our top priority for the 2007 farm bill is a strong 
nutrition title and improvements to the Food Stamp Program in 
three broad areas: adequacy of benefits; access; and 
eligibility.
    To give you a little background about the Food Stamp 
Program in Colorado I think will help you see how it is an 
important program for families, for farmers, and for Colorado's 
economy. Each month, more than 250,000 Coloradans use food 
stamps to help purchase food for a more nutritious diet. Eighty 
percent of the recipients are families with children; the 
remainder are primarily seniors and persons with disabilities.
    The average benefit in Colorado is small, like the rest of 
the nation, about $1.19 per meal. But even that amount helps 
families stretch tight budgets and use other resources for sky-
rocketing utility bills, rent, medical care and other basic 
needs.
    Altogether, in 2006, food stamps helped put over $323 
million back into local Colorado communities, as recipients 
purchased food from their local supermarkets, farmers' markets, 
and neighborhood grocers.
    In Colorado we have learned first-hand, unfortunately, the 
importance of the Food Stamp Program when our new Public 
Benefits computer system went on-line and thousands of families 
were unable to access food stamps. We saw food pantries around 
the state buckle under the increased demand for food 
assistance, and that experience has taught us that our private 
and non-profit sectors simply cannot do it alone.
    What is more, the Food Stamp Program is a model of 
efficiency. More than 98 percent of benefits go to eligible 
households, according to the GAO. And while, in Colorado, we 
have had some problems recently with our error rate, that is 
mostly due to the computer program that we implemented and not 
to the Food Stamp Program overall. So, we would look to the 
USDA for more oversight in the 2007 farm bill for computer 
programs in other states.
    By all accounts, the Food Stamp Program is an effective and 
important anti-hunger and anti-poverty tool for Colorado, but 
it can do more. The following needs must be addressed in the 
2007 farm bill.
    First, we must improve access to the Food Stamp Program by 
providing additional resources to streamline systems, simplify 
program rules and expand education and outreach. In Colorado, 
only 56 percent of eligible families receive food stamps and 
the participation rate for eligible working families is even 
lower. We normally hover below the 50 percent participation 
rate.
    Second, we believe it is imperative that Congress improve 
the adequacy of benefits. The minimum benefit is so low that it 
creates a disincentive for eligible people to navigate the 
complicated application process. One Food Bank provider serving 
the Colorado Springs area found that the average monthly 
benefit lasted a family only 2 weeks; but the application took 
8 hours and three trips to the Food Stamp office to complete.
    Moreover, the benefit continues to erode for many Food 
Stamp recipients due to the unchanging standard deduction. The 
standard deduction should be indexed to inflation so that $1.19 
does not lose purchasing power every year hereafter.
    Third for the Food Stamp Program, we should build on the 
progress made in the 2002 farm bill, thanks mostly to Senator 
Harkin, and restore eligibility to certain needy groups such as 
legal immigrants, and unemployed childless adults. We can and 
should do more for these folks who are playing by the rules.
    Our member organizations also ask that Congress direct USDA 
to revisit how volunteer hours can be used by non-profit 
agencies as a match for Food Stamp nutrition programs. At the 
present time, only public entities, like Colorado State 
University, can use volunteer hours as an in-kind match. While 
those entities do not often take advantage of the allowance, 
non-profits who are experts at recruiting and training 
volunteers and maximizing public dollars certainly could.
    As to other areas, we ask that Congress re-authorize and 
strengthen both the Emergency Food Assistance Program and the 
Commodity Supplemental Food Program. Congress could enhance the 
TEFAP program by increasing food purchases and providing a 
floor for bonus commodities similar to the fiscal year 1901-'02 
level.
    And, finally, the CSFP program is a nutrition program in 
Colorado that meets the unique needs of many seniors who, 
typically, would not apply for food stamps. Congress should 
simplify the program by allowing all clients to qualify at 185 
percent of poverty and develop a senior pilot program to see if 
our aging seniors across the country could benefit from this 
program in other states.
    Thank you, very much, for your time. And we look forward to 
working with you in the future.
    [The prepared statement of Ms. White can be found on page 
84 in the appendix.]
    Chairman Harkin. Thank you, very much, Ms. White. And since 
you were last, I will start with you. I just have one question 
I want to probe with you a little bit.
    We had this put on us several years ago and we were going 
to address it in the last farm bill but we did not but we are 
looking at it now. And that is one of the things you mentioned. 
You state that Congress should consider restoring benefits to 
unemployed childless adults who currently are limited to just 3 
months of food stamp receipts every 3 years. That is in the law 
now.
    You tell me a little bit more about this group of people 
that you know here in Colorado, what kinds of challenges they 
face. Specifically, why do you believe we should change the 
program regarding their food stamp eligibility?
    Ms. White. Well, these are primarily individuals who are 
willing to work but have low education and skills. They cannot 
quickly find a job and have not been offered a Work Fair job or 
training opportunity by the state. It also includes people who 
have recently lost their jobs due to downsizing in Colorado. We 
have unbelievable job loss--one of the highest in the country 
during the recent recession--and cannot find employment in the 
area, which we did see during the most recent recession.
    So, we would like to see less harsh rules taken to these 
families who are really struggling and are willing to work but 
just having a hard time getting back up on their feet.
    Chairman Harkin. What would you like to see? Would you like 
to have it 3 months every year? If you were writing it, how 
would you write it?
    Ms. White. I do not really have a specific proposal. I 
think that they should be eligible similar to other unemployed 
families or low income families. But, again, we have not really 
talked about specific proposals. I can certainly get you 
information about that in the future.
    Chairman Harkin. Well, give us that, because that is one 
area that we looked at a little bit in the last farm bill. We 
did not address it, but I think there is a lot of pressure 
building to do something about that group of people.
    Ms. White. Especially since the last--since the last 
recession we really did see a lot of people lose jobs all 
across the state and really have a hard time finding adequate 
jobs and jobs that pay the same amount of money.
    Chairman Harkin. Uh-huh.
    Ms. White. We are replacing jobs now, but a lot of those 
jobs are much lower-paying than the ones we saw before.
    Chairman Harkin. How do you feel about food stamp 
recipients using EBT cards at farmers' markets?
    Ms. White. We support that. And I think there is a pilot 
program in Colorado to do that and we are fully supportive of 
that.
    Chairman Harkin. I think that is one area that we are going 
to look at really expanding, also.
    Just for your information, in Iowa last year, we gave about 
a hundred of these remote controlled reading apparatuses just 
to farmers who bring produce to farmers' markets. So, people on 
food stamps--by the way, it is not food stamps, it is an EBT 
card now------
    Ms. White. Yeah.
    Chairman Harkin [continuing]. They can go and buy fresh 
produce or meat or whatever--chickens, eggs, whatever--at the 
farmers' market and the farmer can just swipe that card and it 
would deduct it right then. It was remote controlled. And we 
found that the people that use these, once they found out that 
they could go to farmers' markets, would then go there. So, I 
am happy to hear you say that you would support something like 
that. Because we found it to be very beneficial, in my state, 
anyway.
    Conservation. Mr. Loutzenhiser. I just want to ask you, on 
the Conservation Security Program. When we first drafted this 
legislation, we put it in and it was a national program. The 
administration then put it on a watershed basis. Do you feel 
that the watershed rotation for enrollment has promoted 
conservation, or would you prefer doing away with it? By the 
way, I might just add the administration's farm bill proposal 
now has done a complete 180 and they want to do away with that. 
Is that what you would like to see happen?
    Mr. Loutzenhiser. Yeah. I believe that that would probably 
be the best thing to do, because to me the watershed or that 
type of selection for this program can create some different 
inequities. And I might have some people who would disagree 
with me. But certainly, when you start talking a program that 
is supposed to reward the best for the conservation efforts 
that they have done and there is a minimum entry level into 
that program. And then you begin to recognize it on a 
watershed-by-watershed basis and a three-tiered basis, as well 
as put a ranking system------
    Chairman Harkin. Yeah.
    Mr. Loutzenhiser [continuing]. On that
    Chairman Harkin. Uh-huh.
    Mr. Loutzenhiser [continuing]. You could fall into meeting 
the minimum eligibility but not get accepted into the program 
simply because you did not rank as high as someone else.
    Chairman Harkin. Right. Well, believe me, we are going to 
work hard on changing that and any other suggestions you have 
on that, please let us know.
    Mr. Loutzenhiser. OK.
    Chairman Harkin. Mr. Zalesky. I want to ask you about 
Country Of Origin Labeling, which you say you support or your 
organization supports?
    Mr. Zalesky. Yes, sir?
    Chairman Harkin. Again, as you know, it was supposed to go 
into effect in 2004. It was put off till September of 2008. Is 
it your organization's position that you would like to stick 
with that date? In other words, to have it come into effect in 
September of 2008?
    Mr. Zalesky. We would certainly like to see it in effect by 
that time, yes, sir. If not sooner.
    Chairman Harkin. OK. Anybody else have any thoughts on that 
issue at all? Mr. Fankhauser?
    Mr. Fankhauser. We would support that as well. We support a 
mandatory Country Of Origin Labeling Program and implementation 
as soon as possible, the least cost effective way, possibly 
claim standard based. I know some of those discussions are 
going on.
    Chairman Harkin. OK. All right. Well, again, there is 
really probably nothing that we can do in the farm--it is going 
to go in September of 2008. There may be some attempts to put 
that off, but I do not think they will be successful. But there 
will probably be some attempts to do that.
    I see my time has run out. I will yield to Senator Salazar.
    Senator Salazar. Thank you, very much, Chairman Harkin. Let 
me ask a question of each of you and then we will just go down 
the road and each of you can respond.
    First, Roger, in terms of the specialty crop title. I was 
impressed by the statistics that you had, which is 30 percent 
of our agricultural production really is related to specialty 
crops. And I know down in our valley, potatoes are a big deal 
and lettuce and a few other things. Then, on the western slope, 
obviously peaches and pears and a whole host of other things 
that come from the western slope. What are the two things that 
would be most important to you that we get done in this farm 
bill with respect to specialty crops?
    That is my question to you. Think about it for just a 
minute and then give me a 30-second response.
    And then, Randy, to you, in terms of the CRP program, one 
of the concerns that I have heard in places like Kiowa County 
and other places is that we are having a negative impact on 
rural communities because you have absentee landowners in 
Dallas and Chicago and New York who come in and essentially buy 
these lands and the revenue stream goes to help those 
communities and make people there wealthier and the consequence 
of that is that the local drug store and the local shops really 
do not have the economic vitality and maybe we ought to make 
some changes on that. That is certainly something I think I 
have heard from the Cheyenne County Commissioners and the Kiowa 
County Commissioners.
    So, do you have any thoughts on how we might be able to do 
that, Terry, with respect to the comment that you made on a 
disaster program and wanting to move forward and try to 
create--I think you said a permanent disaster program but being 
cognizant of the budget issues--how would we move forward on 
that?
    And, Doug, with respect to you and Country Of Origin 
Labeling, it is a contentious issue. That is why, even though 
the law mandated it, it has not been implemented.
    So, my question to you is, what are the benefits that would 
come about in terms of a faithful, honest effort in the 
implementation of COOL?
    And then, to you, Kathy, you know sometimes when people 
talk about the farm bill, they do not realize that 50 percent 
of the approximately $100 billion that we spend on the farm 
bill will actually go into nutrition programs.
    So, my question--I assume we are going to have a large 
portion of this farm bill going into the nutrition programs--
give me two ideas on how we can make sure we are providing the 
most effective, accountable programs through nutrition in the 
farm bill that we possibly can.
    So, Roger, why don't we start with you and we will just go 
down.
    Mr. Mix. OK. Thank you, Senator Salazar. I think there are 
three important things that would probably impact the specialty 
things and that would be the research funds for both CSREES, 
which is more toward the breeding programs that is funded that 
we really need. There are programs going on and if that is cut 
back, these programs that have been funded will die out because 
there is no funding.
    Along that same line is ARS research. Co-operators also 
cooperate with the university systems to do this kind of 
research. That is also needed for research on diseases, 
insects, different topics like that.
    Another part of research would be the increase to keep the 
funding for the MAP levels. The United States Potato Board 
scores really high in that area, trying to keep our markets 
open that we do have. And that funding also goes toward opening 
markets.
    So I think those three topics would probably be the high 
ones on the list.
    Senator Salazar. Doug? Randy?
    Mr. Loutzenhiser. All right, thank you. When it comes to 
absentee land ownership of a Conservation Reserve Program 
lands, I think there comes a point when we have to look at the 
program and look at what the value to society that program has 
brought.
    We need to realize that it has to have those protections 
that have been put in place with a method that guarantees those 
protections remain there. But we have to figure out in time a 
way to transition these lands back to working lands. Keep them 
under cover; keep them in a natural resource state that has 
brought all these environmental benefits, so that those 
benefits continue to be garnered by society.
    I guess when I look at the situation of absentee land 
ownership, those lands might not even be getting managed. And 
the fact that if we can get them transitioned back into a 
working lands class via a transitional grazing program or--
maybe the first step to doing that--when we look at our drought 
situation in Colorado, let's utilize these lands for an 
exchange-type program that would allow livestock producers in 
traditional cow/calf country to be able to come in and give 
their rangelands a rest and utilize those CRP lands and 
transition them so that over time, these lands can be put back 
into the grazing land structure.
    That way, you begin to see a turn-back into the communities 
via some type of operational structure where you are buying 
inputs, again, within the community and those lands do not just 
sit there and remain stagnant. They have a productive value. 
Their resource base can be tremendous.
    Also, you look at the cellulosic energy aspect of it, can 
Colorado be a player there? Time will tell and, certainly, 
these types of absentee landowner-type CRP lands need to have a 
serious look taken in that regard, too.
    Senator Salazar. Terry?
    Mr. Fankhauser. You know disasters are going to take place 
at any--I am going to speak specifically to the cattle 
industry. At any point in time in the United States in any year 
there will be a disaster in the cattle industry. So, we as 
producers, have to learn to plan for that, in part, and we are 
accepting that.
    As we look through time in Colorado, in 2002 one of the 
best things we had available to us to recover from the drought 
was deferment of that income in livestock that we sold.
    And there is a possibility to look at that creatively. As 
it stands right now, in the IRS Code you have to replace like-
type animals that you liquidated. Why not allow--at least in 
the livestock industry usually in a disaster we are going to 
have increased purchasing of feed and things along those lines. 
Why not allow that funding to be deferred, but instead of 
replacing like-type livestock, be able to purchase feed with 
that deferred money? Then you do not see an actual cash outlay 
from the Federal Government. But what you do see is some 
incentives on a taxation basis.
    Those are the creative type things that we would offer as 
possibly looking.
    Senator Salazar. Mr. Zalesky? Doug.
    Mr. Zalesky. In relation to the benefit of the 
implementation of Country Of Origin Labeling, I would address 
two things. First of all, and foremost, we think that the 
consumer has the right to know where their food comes from. 
Unfortunately, at this point in time, consumers are misled by 
the fact that meat carrying the USDA label in the supermarket 
meat case, up to a fourth or a third of that is not U.S. grown 
beef. So, we think that is the first benefit.
    The second is to be able to, as producers differentiate our 
product in the marketplace, which believe because it is the 
safest and highest quality beef in the world, it would increase 
the demand for our product and, thereby, increase profitability 
for our producers.
    Senator Salazar. Mr. Chairman, I know my time is up, but 
could I have Ms. White go ahead and answer the question?
    Ms. White. Thank you, Senator Salazar. The two things that 
I guess we would recommend is to continue to simplify the 
program rules. The more complicated the program, the more 
(inaudible) for error. And continue to streamline processes. In 
the 2002 farm bill, there was a provision that reduced 
paperwork and office visit requirements for working poor 
households, but it failed to extend those improvements to 
households that included the elderly or disabled individuals. 
So, continuing to streamline and simplify the process would be 
very helpful, allowing participants to file over the phone, 
things of that nature.
    And, second, I think maybe creating incentives to states 
rather than punitive measures, to help them meet efficiencies 
standards and streamline administration. That was they are able 
to--they have incentive to meet greater efficiency standards 
without harming clients. Merely punitive measures basically 
just roll forward onto the client, so we see greater hardships 
for hungry families.
    Senator Salazar. If I may just--you do not have to answer 
this, but I would be interested in knowing what you mean by 
efficiency standards and examples of efficiency standards. You 
do not have to do that now, but it is something that I would be 
interested in hearing from you on.
    Chairman Harkin. Thank you, Senator Salazar. And I thank 
this panel, very much. We do have a little bit of extra time, 
so I am going to have an ``open mike'' session. Bob Sturm will 
take the mike from some place here down there. If you have a 
question, I ask you to do it succinctly. State your name--let's 
see here. What are we supposed to say for the record? Oh, yes.
    State your name, city and state. And if you represent an 
organization, say that. And just make your question as succinct 
as possible and we will try to respond. Or, if you have a 
statement, make it very succinct. And, again, I will limit it 
to just a couple of minutes to each one. But we do have about 
10-15 minutes that we can entertain some comments or something 
from anyone in the audience that did not have a chance to say 
something.
    Before we get to that, and before we close up, again, I 
want to thank some more people. Two valuable members of Senator 
Salazar's staff, Grant Lesley, your (inaudible) director who is 
back here; and also Valanna Wallach, who is the Denver office 
manager and scheduler for Senator Salazar, for getting us 
around and making sure we met our schedules. And Bob Sturm, who 
is right here, who is our Chief Clerk of the Senate Agriculture 
Committee for getting everything set up here, Bob.
    With that, like I said, state your name, city, state and if 
you represent an organization.
    Mr. Foy. My name is David Foy.
    Chairman Harkin. OK. You had better spell that for the 
recorder.
    Mr. Foy. F-o-y.
    Chairman Harkin. OK.
    Mr. Foy. Washington County Commissioner, and also the 
Chairman of the Progressive 15, which is a 15-county 
organization out in northeastern Colorado. A couple of things. 
No. 1 is: Under the CRP program there is the CRP program having 
wells retired along and adjacent to some of our streams. Those 
acres could have gone into a CRP-type program, except in 
Washington County, at least and surrounding counties, we are 
maxed out on those acres.
    So, some sort of a program to compensate those farmers that 
have to shut down irrigation wells, not necessarily to retire 
the acres but to transfer those acres into dry-land production 
or cattle production.
    Second is, thank you, very much for USDA rural development. 
I think that small units of government need to have a less 
match that they have to meet so that we can bring some of those 
society benefits that were talked about by the panel back into 
small communities. Some of those grants, we have to have 
matches for and we have to take a look at the match size so we 
can work--easily qualify for larger dollars.
    And last, being from Washington County, I want to emphasize 
the USDA ARS Research Center at Akron. We gave a greenhouse 
that has been under construction for a long time. That 
greenhouse has not been fully funded. We need a plant breeder 
to talk about developing crops that we can environmentally 
inject into our local environment out if eastern Colorado to 
maximize that cellulose production.
    Thank you.
    Chairman Harkin. Thank you, Mr. Foy.
    Mr. Slusser. James Slusser from Colorado State University, 
the Ultraviolet Monitoring Program. I have a question directed 
to Senator Harkin. What do you think are the three most 
important research areas that we ought to be looking at in 
terms of crop stress------
    Chairman Harkin. I am sorry. The three most important 
research for what?
    Mr. Slusser. Crop stress.
    Chairman Harkin. Crop Stress?
    Mr. Slusser. Yes. Abiotic factors and biotic factors that 
might affect plant growth.
    Chairman Harkin. I do not know that I am qualified to 
answer that. I mean, I am not a plant scientist. I do not know 
that--do we have some scientists around here to answer that 
question.
    Senator Salazar. James, it would be good, given all the 
work that Colorado State University as an agronomy school, as 
an aggie school, in terms of what it has done, what your 
thoughts are in terms of what we might be able to do with that? 
What are the top three from your point of view?
    Chairman Harkin. Yes. You are the expert, not me.
    Mr. Slusser. I think
    Chairman Harkin. If you do not know the answer to that 
question, I sure do not.
    Mr. Slusser [continuing]. Extremes in climate, temperature, 
drought, ultraviolet light--I think we have to be aggressive in 
developing genomic modifications that will allow us to continue 
productivity.
    Chairman Harkin. OK. OK. I understand that.
    Mr. Slusser. I did not mean to make this a loaded question 
without an answer.
    Chairman Harkin. No, I am just honest. I do not know the 
answer. But, I see what you are getting at, now. Yeah, we are 
doing research into plant genomes and how to--I mean, one thing 
that has already intrigued me is that there are plants in the 
world that utilize photosynthesis and use saltwater to do so, 
mangroves being one of the most prevalent. They grow in 
saltwater; they produce leaves. Coconut--palm trees--use 
saltwater, produce coconuts. So, if we can find the gene in 
those plants that tells that plant to separate the salt and 
everything else out and take the water--think about taking that 
gene and using that for plants that might grow crops in 
brackish areas, for example. Things like that in southeast Asia 
and places like that. Anyway, enough of that.
    MR. Weibel. Hello, I am John Weibel. I operate a 
(inaudible) beef operation in northwest Colorado near Bags, 
Wyoming. In rural development, I know the U.S. Government is 
looking at shipping beef from state-inspected plants across 
state lines. That would greatly reduce our shipping expenses, 
our transportation costs, for beef and also enhance the local 
community. There are very few beef plants left around the 
country.
    Also, another thing, we utilize interns to help with our 
labor pool and if the USDA could potentially set up an account 
for those interns that you pay them $1,000 per year for working 
with us, that can go to fund in the future when they decide 
they want to buy a farm. That might be something good for them.
    Chairman Harkin. That is a nice, good, valid suggestion. 
Thank you.
    Ms. Hendrickson. I am Callie Hendrickson, Executive 
Director of the Colorado Association of Conversation Districts 
based in Grand Junction. The one thing that we would ask for is 
that we just be able to keep the locally led concept in the 
conservation title. One size does not fit all at the Federal 
level, so we would certainly like to keep that flexibility at 
the state and local levels.
    Chairman Harkin. Well, I think we both agree on that, and 
that is what we did in the CSP program, too, was to set up 
local levels on that, too. You are right about that, Ms. 
Hendrickson.
    Mr. Lopp. Hi. My name is David Lopp. I am with the National 
Wildlife Federation and live in Boulder County. We have heard a 
lot of things today about how agriculture is one of the things 
that makes Colorado a great state. That certainly is true. 
Another thing really connected to agriculture that makes us a 
great state is our fish and wildlife populations and the great 
hunting and fishing opportunities associated with them.
    That being said, I just want to urge you to really 
prioritize the conservation titles and funding for the 
conservation titles in these programs. We have heard great 
testimony about the benefits that that has had for farming 
practices. I would like to throw in there for wildlife and 
hunting and fishing opportunities as well.
    Another specific thing I want to talk about is, we are on 
this leading edge of the bio-fuels and renewables. Revolution, 
I think you called it. And we certainly endorse that research 
into that. We want to make sure, though that in a rush to 
develop those opportunities that we do not sacrifice some of 
the conservation programs from a soil perspective and from and 
wildlife perspective.
    So, that is just one thing that the National Wildlife 
Federation and a whole host of hunting and fishing groups we 
have been working with want to make sure that we would tell 
you.
    Chairman Harkin. I will just respond to that--I am a big 
supporter of the National Wildlife Federation, a hunter and 
fisherman myself--and I think there are some win-win situations 
out there with cellulose. For instance you can have things like 
prairie grass, switch grass, things like that that provide good 
nesting areas for wildlife but still, they are cropable and 
they are conserving in nature. So, there might be something 
there that everybody wins on this one. Thank you.
    Mr. Travis. Hi, I am Galen Travis. I am a farmer--part-time 
rancher and full-time farmer--from Burlington on the eastern 
slope. I have got three things I would like to bring up.
    First of all, I would like to see any commodity-based 
payments or payment limitations, if so imposed--I think they 
should be indexed to inflation. I have not heard that. And as 
we continue through the years, as inflation increases, it is 
going to be very critical to us. Three dollar corn 20 years ago 
was a big deal. Three dollar corn recently has been good, 
compared to the last few years, but now, $3.00 corn--it is 
going to take that just to break even anymore. And I really 
think any monetary adjustments need to be made on indexing to 
the inflation factor.
    Chairman Harkin. Good.
    Mr. Travis. Second, in response to your question about how 
to keep young people coming back in and the overall answer was 
profitability--well, I agree with that, but from the aspect of 
guaranteeing profitability, I am afraid once you do that, the 
biggest operations, the big producers are going to come in and 
snarf up on that even more, still keeping it hard for young 
people to get in. I would like to see something in a tax 
incentive or some type of incentive for someone that is 
retiring to sell out to a new, young producer. Those sellers, I 
think, should have some tax incentives.
    Chairman Harkin. All right.
    Mr. Travis. And, third, just a question. What is the 
current status of the 1905-'06 disaster payments?
    Chairman Harkin. OK. Current status of the disaster 
payments is that we are working on a disaster package that, 
hopefully, we will put in the supplemental appropriations bill 
that we are going to be taking up very shortly, sometime within 
the next couple of weeks. And hopefully, we will have addressed 
that in the supplemental appropriations bill.
    Now, I told--I guess I misjudged the time. I guess we have 
to be out of here in just about a couple of minutes. So, I am 
sorry--really quickly.
    Mr. Ellis. OK. Hi, I am John Ellis from Greater 
Metropolitan Niwot in Boulder County. I just wanted to give you 
an update on the farmers' market-EBT program that we have here 
in Boulder County, Colorado. We got a grant from the USDA last 
fall and we have been able to purchase 30 EBT machines for 30 
different farmers' markets. We had a training session last 
Saturday and we are online. So far we have 21 markets signed 
up.
    One thing I would like to get some support for is the 
farmers' market nutrition program, which has been cut at, I 
think, 30-some states. Colorado would like to get involved, but 
we cannot. So, if there is some way to get some more funding 
for that, it would be great to get the rest of the states 
involved. Thank you, very much.
    Chairman Harkin. Thank you. Next.
    Mr. Thorn. Hi, my name is Robert Thorn. I am an 
administrator at North Colorado Medical Center in Greeley, 
Colorado. First, I want to thank Senator Salazar for all his 
hard work last year in soliciting us to see how the Federal 
Government and the USDA can provide greater access to 
healthcare in rural communities. I heard on Panel I 
particularly today the healthcare issue brought up and I am 
encouraging both of you to please consider any future funding 
to the DLT program for Tell medicine to allow greater access to 
healthcare for rural communities. Thank you.
    Chairman Harkin. Thank you, very much.
    Mr. Bowman. Good afternoon, I am Mike Bowman from Ray, 
Colorado, National Steering Committee for 25X1925. We thank 
you, Senator, for you and Senator Salazar's support of 25X1925. 
We are particularly interested in seeing Senate Concurrent 
Resolution 3 move through committee as soon as possible. I 
would also echo, from the National Steering Committee's 
perspective, a couple of things heard today: broadband 
deployment in rural America. It is the root of all opportunity. 
Both from a distributed generation perspective and bringing 
those social values back to the rural areas. And the increased 
funding for our land-grant universities. We believe that we 
have an opportunity to re-invent and help languoring 
universities become very significant as we create this 21st 
Century energy economy.
    Chairman Harkin. Thank you. I just want you to know, we put 
that broadband in the last farm bill--I put it in there and 
they goofed it all up and we are going to straighten it out.
    Mr. Ehrlich. Hi, I am Jim Ehrlich from the Colorado Potato 
Administrative Committee and I really want to thank you for 
being here today.
    My question is: What can we do, collectively--we are all 
here as a group representing agriculture. What can we do 
collectively to get more money into the farm bill? Because we 
are all competing for the same piece of the pie. What can we do 
to grow the pie?
    Chairman Harkin. Can I put you in charge of the Budget 
Committee?
    Oh, let's take a last question, yes.
    Ms. Walker. Hi. I am Shirley Walker from Wheatridge, 
Colorado, and, being here for agriculture, I did not hear one 
thing--and maybe it is not part of this--but the National I.D.? 
Animal I.D.?
    Chairman Harkin. Animal I.D., sure.
    Ms. Walker. Is that part of this bill or is that something 
totally separate? Because that is going to affect everyone with 
their animals and all that.
    Chairman Harkin. It might be a part of the bill. I just do 
not know yet. I do not know what the House is going to do and I 
do not know exactly how it is going to fold into our bill. But, 
it is a problem--if nothing else from a National Security 
standpoint. Some kind of a comprehensive I.D. system is coming 
down the pike. I do not know how it is going to be.
    My position is quite clear. It is that if we are going to 
have a comprehensive I.D. system, it is for the benefit of our 
country. It is for the benefit of National Security. If that is 
the case, then the cost of it should not be borne by the 
farmers. It ought to be just like the inspection service that 
we have now in our meat inspection plants and stuff like that 
is paid by all the taxpayers. So, if we do have that, it ought 
to be borne by the taxpayers of this country.
    Thanks.
    Senator Salazar. We are going to the airport and have a 
wheels up here in about an hour and a half. We have to go to 
the airport, go through security, get on a plane and get back 
to Washington to represent you on the farm bill and a whole 
host of other issues. But, let me just take a quick stab at 
just a few of these issues that were raised.
    I know the issues on the South Platte and shutting down of 
the wells has caused a tremendous hardship here in northeast 
Colorado. It is an issue that we continue to work on and, 
hopefully, there will be some way in which we can find some 
relief. I think the EQIP program and other programs that are 
out there will, in fact, be able to--we will be able to find an 
avenue to help all those farmers that have been hurt by the 
shout down of the wells in that area.
    Too, I think a number of the questions that were asked had 
to do with research. Whether it is on renewable energy or it is 
on how you maintain warehouse conditions and temperatures and 
lights in order to be able to preserve your potatoes or crops 
during the winter season, those are all based on how much 
research you are putting into agriculture. And, obviously, as 
we deal with this farm bill, that is going to be one of the big 
questions. How much money are we putting into research? I am 
one of those people that believes if we are going to find 
solutions to the new frontiers for agriculture and for rural 
America, we ought not dis-invest in the research that is going 
to help us find those keys.
    Let me just also say, I fully agree with Senator Harkin. On 
the conservation title, local-led is what makes the most sense. 
Obviously, the people on the ground are the ones who know the 
ground better than some bureaucracy in Washington or some place 
else.
    Jim, you asked a question about dollars on the farm bill, 
that is something that is going to be negotiated out here, 
probably in the next several weeks, and we will know then what 
the size of the next farm bill is going to be. And then it is 
going to be work for the next several months as we try to move 
forward as some mark-up on the farm bill that then will be 
introduced.
    Let me finally just say, I am very, very delighted that I 
am on the committees that I serve on in the U.S. Senate. There 
is not a day that I am out on that floor that I do not consider 
it to be a great privilege. In the entire history of this 
country, there have been only about 1800 people who have served 
as U.S. Senators--only 37 in Colorado--and I can tell you that 
among the 100 colleagues that I have, there are a handful of 
people who are really known as ``senators' senators.'' These 
are not people who are--let me just say they are ``senators' 
senators'' because they are so good.
    And when you look at someone like Tom Harkin from Iowa--
maybe it was because he came out of some tough times. He raised 
five children in a two-bedroom home. Probably as he was growing 
up in Iowa, he probably never imagined that someday he would be 
a U.S. Senator and, yet, somehow his life has taken him to be a 
U.S. Senator and to serve all of this country now for 30 years 
in the House of Representatives and in the U.S. Senate.
    And he is known among my colleagues as a ``senator's 
senator'' because of the high interest and expertise that he 
brings to agriculture. What he has done for this country in 
terms of healthcare. What he has done for education and 
educational opportunities for all people. What he has done with 
respect to dealing with some very difficult issues, like issues 
of disability.
    And so, as your junior Colorado Senator here today, I would 
like you in joining me in giving a good round of applause to 
someone whom I respect from the bottom of my heart and that is 
my colleague, Senator Tom Harkin.
    Chairman Harkin. I have to adjourn this thing. Thank you. 
Thank you, very much. Thank you. Thank you all, very much. 
Thank you all, very much.
    Of course, as chairman, I get the last word. And the last 
word is: Thank you, Colorado, for having the good judgment and 
wisdom to send such a caring, compassionate and tough fighter 
to the U.S. Senate like Ken Salazar. I cannot tell you how 
proud I am to serve with him and have him on the Agriculture 
Committee. He is just a valuable friend and a valuable resource 
for getting us to shape this new, forward-looking, bold farm 
bill that we are going to have this year.
    Again, I want to thank Ken for inviting me to Colorado 
today. I am told every day is like this in Colorado. He tells 
me that. It hardly ever snows out here, he says.
    But, it has just been a delight to be here. And thank all 
of our witnesses. I thank everyone for being here today. The 
hearing record will remain open for five business days for 
anyone who has additional views or comments to put into the 
record.
    Again, I thank my good friend, Ken Salazar, for his 
leadership, for his friendship, and look forward to working 
with you, Ken, in getting a really good farm bill through.
    Thank everyone who is here. Have a safe journey back home. 
The Senate Agriculture Committee will stand adjourned.
    [Whereupon, at 3:15 p.m., the committee was adjourned.]
      
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