[Senate Hearing 110-123]
[From the U.S. Government Publishing Office]
S. Hrg. 110-123
IOWA AND NEBRASKA VIEWS ON
FEDERAL AGRICULTURE AND RURAL
POLICIES: THE 2007 FARM BILL
=======================================================================
FIELD HEARING
before the
COMMITTEE ON AGRICULTURE,
NUTRITION, AND FORESTRY
UNITED STATES SENATE
ONE HUNDRED TENTH CONGRESS
FIRST SESSION
__________
APRIL 14, 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
Field Hearing(s):
Iowa and Nebraska Views on Federal Agriculture and Rural
Policies: The 2007 Farm Bill................................... 1
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Saturday, April 14, 2007
STATEMENTS PRESENTED BY SENATORS
Harkin, Hon. Tom, a U.S. Senator from Iowa, Chairman, Committee
on Agriculture, Nutrition and Forestry......................... 2
Nelson, Hon. E. Benjamin, a U.S. Senator from Nebraska........... 4
Panel I
Bailey, Varel, American Farmland Trust, Anita, Iowa.............. 6
Houghtaling, Debra, Executive Director, Grow Iowa Foundation,
Greenfield, Iowa............................................... 8
Killpack, Steve, Neola, Iowa..................................... 10
Petersen, Chris, Clear Lake, Iowa, on behalf of the Iowa Farmers
Union.......................................................... 12
Schuitteman, Matt, Sioux Center, Iowa on behalf of the Iowa Farm
Bureau Federation.............................................. 13
Panel II
Crabtree, John, Center for Rural Affairs, Lyons, Nebraska........ 28
Sand, Duane, Iowa Natural Heritage Foundation, Des Moines, Iowa.. 24
Schwarz, Tom, Bertrand, Nebraska................................. 26
Stroburg, Jeffrey, CEO and Chairman, Renewable Energy Group,
Inc., Ralston, Iowa............................................ 30
Wintersteen, Wendy, Dean, College of Agriculture, Director, Iowa
Agriculture and Home Economics Experiment Station, Iowa State
University, Ames Iowa.......................................... 23
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APPENDIX
Prepared Statements:
Bailey, Varel................................................ 44
Crabtree, John............................................... 49
Houghtaling, Debra........................................... 54
Killpack, Steve.............................................. 58
Petersen, Chris.............................................. 61
Sand, Duane.................................................. 65
Schuitteman, Matt............................................ 67
Schwarz, Tom................................................. 72
Stroburg, Jeffrey............................................ 75
Wintersteen, Wendy........................................... 79
Document(s) Submitted for the Record:
Nelson, Hon. Benjamin E.:
``Federal Crop Insurance--An Indispensable Program Executive
Summary''.................................................. 84
American Wildlife Conservation Partners, prepared statement...... 90
Association of Fish and Wildlife Agencies, prepared statement.... 93
``Iowa Department of Natural Resources 2007 Farm Bill
Recommendations''.............................................. 102
``Background for Proposal to Simply CSP and Address Wildlife
Resources Consistently Between States''........................ 109
IOWA AND NEBRASKA VIEWS ON
FEDERAL AGRICULTURE AND RURAL
POLICIES: THE 2007 FARM BILL
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Saturday, April 14, 2007
U.S. Senate,
Committee on Agriculture,
Nutrition, and Forestry,
Council Bluffs, Iowa
The Committee met, pursuant to notice, at 9:30 a.m., in the
Art Center Auditorium, Iowa Western Community College, Hon. Tom
Harkin, Chairman of the Committee, presiding.
Present or submitting a statement: Senators Harkin and
Nelson
Chairman Harkin. The Senate on Agriculture and Nutrition
and Forestry Committee will come to order. And I just want to
thank Mr. Dan Kinney, the president of Iowa Western Community
College for having us here, and I will yield to him the floor.
Mr. Kinney. Welcome to our campus. Again, it is not the
first time. We are proud to have you back here this morning.
And we are pleased to have all of you here this morning, and we
are pleased to hold this hearing in the art center. It has a
lot of great capabilities for lighting and sound, and so it
should really facilitate the hearing this morning.
We are very proud of this building. This building was free.
This building was built entirely by contributions from
individuals, corporations and foundations. In fact, when you
are out in the lobby, if you look at that stone wall, all of
those names on the wall are donors that provided the funding to
build this building. And certainly for an institution it is
always a lot easier to acquire a building in that manner and
certainly helpful to the institution.
We are pleased to have you here on a great Saturday
morning, and I am sure you will have a great hearing. And so
thank you for coming. And, senator, thank you.
Chairman Harkin. Thank you very much for having us. I
recognize a few people that are here in the audience, our
mayor, Tom Hanifan. I did not say hi to Tom earlier. Our mayor,
thank you very much, of Council Bluffs is here. Mel Housers is
one of our Pottawattamie County supervisors, again, I did not
get a chance to see anybody here. Mel is here. Sarah Brown of
Senator Chuck Hagel's office is here, Sarah Brown. And also
Donna Barry in the Council Bluffs office of Senator Grassley is
here. Any other elected officials that I missed? Anybody want
to run for office that----
Thank you all for being here. We will get right into our
hearing. I have a small opening statement, and I will yield to
my friend and colleague, Senator Nelson, and then we will have
our panels.
STATEMENT OF HON. TOM HARKIN, A U.S. SENATOR FROM IOWA,
CHAIRMAN, COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY
Chairman Harkin. At the outset I just want to say to all of
you that I have read every single one of the testimonies
thoroughly. And I am going to ask that you kind of keep your
comments to five or 7 minutes. Just highlight the points you
want highlighted so we can get into a discussion on that. Your
statements will be made a part of the record in their entirety.
I am hopeful we can move this along well enough so that after
our two panels, one of the things I always like to do before
when I was chair and am chair again is to have an open mic
session. So if any of you have things you want to say or
questions you want to ask for the record, we will have an open
mic after this so you can have your opportunity to do so within
whatever time constraints we have coming up to the noon hour.
With that, I just again say it is a real honor to be here
to hold this field hearing of the Senate Committee. Again, I
want to thank our good friend and neighbor and very valuable
member of our committee, Senator Ben Nelson for being here with
us today.
Let me just say on this new Farm Bill--farm bills are
broad, very broad because they encompass a lot of things.
People think of a farm bill as only pertaining to farms.
Obviously that is a big part of it. Now we are thinking about
food, fiber, energy, rural development, conservation, trade,
food assistance, nutrition programs. Covers--just covers the
gamut of everything, and now with our new mission in
agriculture, providing energy and renewable energy for America,
this is a whole new era--new area for agriculture that started
in the last farm bill in 2002.
I would always like to say that our core mission is to
promote profitability and income and economic opportunities in
agriculture and rural communities. If we do not have
profitability, if we do not have income, not much else matters
very much. So we have to have that as sort of our core mission.
But in doing that, we have to ask the question, is the best way
to do this in the future to continue to do what we have done in
the past, is that the best way or do we need to change?
Agriculture is changing rapidly.
Some of the testimonies that I have read of some of you
emphasize how rapidly the face of agriculture is changing in
America. That is why we have periodic farm bills, every 5
years, six or seven, usually five or 6-year farm bills. That is
because agriculture changes, and we have to change our
policies, programs and things to look ahead, not so much back,
but to look ahead.
Tom Schwarz who is on our panel, I do not know Mr. Schwarz,
but he raised the issue in his testimony, I will hear from him,
he wondered if it was time for a fundamental shift in farm
programs. He asked the question, is it time not to have farm
programs based on what you produce and how much you produce,
but on how you produce it. Interesting concept. For example,
take direct payments, direct payments have gotten a lot of
notoriety of late based on base acres. Sometimes those base
acres are not even being used to produce anything. They are to
produce what was produced in the past, and yet the direct
payments continue to go out. Is it wise to continue this policy
of direct payments that you get a payment--a government check
no matter how much you make? No matter how much money you make,
you still get a government check. Is that--can we still afford
to do that, or should we take some, most or all of the $26
billion that we will be spending over the next 5 years in
direct payments and shift some, most, all, however much, to
things like conservation or wild life habitat, rural
development or incentives, incentives for farmers to start
growing bioenergy crops and biomass crops and things like that
for the future of biomass and energy production. So these are
questions that we need to ask.
We need to help younger, beginning farmers find and develop
new marketing avenues, new income opportunities. We have twice
as many farmers over the age of 60 as we have under the age of
35. Well, something has got to happen here. With land prices
and rentals what they are, it is pretty tough. So how do we
provide these new economic opportunities for younger people?
Maybe part of that is rural development, new economic growth
and entrepreneurship and maybe off farm jobs to allow them to
get started. So again, we need to start thinking ahead how we
do that.
And last, we need a sound safety net. We all recognize, all
of us who are engaged in agriculture, I think even our urban
cousins recognize that agriculture is not like any other
business because the vagaries of wind, weather, pestilence and
trade and all kinds of things, agriculture is just not like any
other business. And there has always been, and there continues
to be today, a strong national base of support for some form of
a safety net for agriculture. It is the people want to have
that safety net there, and it is strong. So we just have to
think about how we do that safety net and how we fashion it.
Last, I just want to say about conservation, again, tying
into income base, but also think about conserving our water and
our water resources in this country, cleaning up our streams
and waterways, providing some benefits to the rest of society
on how we--on how we farm. Conservation Security Program and
EQIP, I will be asking questions about how those operate,
should they be combined for example. A green revolution, bio
based crops, more and more are going to be asking our farmers
to produce crops that can be used for bio based materials.
Everything from hydraulic fluid to clothing as a matter of
fact. Companies making socks out of cornstarch right now,
different things like that. All these plastic bottles can be
made now from biodegradable material now. So more and more we
will be moving in that direction.
Last, nutrition programs we cannot forget are the pride, I
think, of America. And that is that we have provided our people
with the most abundant, best, cheapest food anywhere in the
world. We have school-based breakfast and lunch programs so no
child should go hungry in America today. We have food stamp
programs. I do not know what it is in Nebraska, but in Iowa
every year the food stamp programs bring about $244 million a
year into the State. So on the one hand, it helps make sure the
people of low income get nutrition. On the other hand, it helps
make sure our agribusiness entities also are able to get a part
of that action. So the whole thing works together. We just got
to keep focused on nutrition, how we provide better nutrition
to our kids in school, how do we expand the food stamp program
to get better nutrition to people who use food stamps, getting
them into farmers markets, for example and beginning to buy
fresh fruits and vegetables and meats and things like that that
some of our farmers are using in our farmers markets.
So again, we have tried some experiments in that, and they
worked well. And we are going to be looking at perhaps
expanding those kinds of things in the present farm bill. So
that is just sort of an overview of all the different facets
that we have to wrestle with in the next few months. And we
need your input, we need your suggestions, your advice. That is
why we are having these hearings. You are out here, you see
what is happening, and we need the kind of input that you are
giving us so we can try to do our best and fashion a Farm Bill
that looks ahead five, 10 years down the pipe and makes
whatever changes need to be done to do so.
With that, I again will turn to my very good friend, and I
mean that most sincerely, except that he is a better shot than
I am. He gets better things than I do when we hunt together,
but a great friend, a great Midwestern leader in rural and
agriculture matters, former Governor of the State of Nebraska,
and I am proud that he is a member of our senate agriculture
committee, Senator Ben Nelson.
STATEMENT OF HON. E. BENJAMIN NELSON, A U.S. SENATOR FROM
NEBRASKA
Senator Nelson. Thank you very much, Chairman Harkin. That
introduction was the kind my father would have enjoyed, but my
mother would believe. So I appreciate it a great deal. And
thank you for holding this hearing here today so we can hear
from Iowans and Nebraskans about their views about the Federal
agricultural and rural policies that we will be meeting to
understand as we craft the 2007 Farm Bill.
Senator Harkin has heard me say this so many times, so many
times he may be tired of hearing it, but I am going to say it
one more time. I would like to rename the farm bill the Food
and Fuel Security Act of 2007.
What I am talking about is more than just a name change, it
is one of those changes in thinking that you address. And that
is that our agricultural economy is no longer just about food
production, it is also about fuel security as well as we look
at the opportunities that are there, particularly since the
last farm bill was drafted. And most importantly, the title
change reflects the need for policies that balance the two so
that our efforts for one do not jeopardize our goals for the
other. The livestock industry is more than slightly nervous
about the use of--the amount of corn being used and potentially
what it could be in terms of volume for biofuels.
So I start with food security because it is long been the
focus of our agriculture policy. We talk about it in terms of
farm programs, but our goal has always been to be able to
produce the food we need to eat because it is about being sure
we are independent when it comes to our food needs. Being able
to domestically produce the food Americans need is a vital
national interest and it is a security interest as well,
because if you love importing 65 percent of your oil, let me
tell you, you will love importing 65 percent of your food. So
that is why it is about being able to have food security and
fuel security as well. And you mention other efforts, feed,
fiber, that we need to keep in mind as well. And that is why we
need to ensure that our food security is taken care of as we go
into new areas.
I agree with you on the need of a safety net. We need an
effective safety net for our farmers and ranchers so that they
can make a living from farming. So it is not just a good way of
life, it is a way to earn a living as well.
And conservation, we need smart and effective conservation
policies, which I think you were so instrumental in creating in
the last farm bill and working with others to see that it will
be in this bill and we are going to have to continue to spend
time on that.
When it comes to natural disasters and drought, which are
words that Midwestern farmers are all familiar with, not only
do we need to protect and preserve the resources nature has
provided, but we also need to make sure we help producers
survive the problems and disasters that nature throws their
way.
In Nebraska this mostly means drought, Drought David, as I
call it. I found if you give a drought a name, maybe it will
have the same status as a hurricane. Because otherwise it is
hard for people to focus on what a drought is. But
unfortunately, the southwestern part of Nebraska and parts of
the western part of the State as well, Drought David is
celebrating an eighth birthday. That continued drought
situation is not something the Federal Crop Insurance Program
has been able to deal with effectively, and so we need to have
some effective way of putting aside some money for the
inevitable. It is not always going to be in Nebraska or Iowa,
it can be in the southeastern part of our country as well. We
are going to have drought. We are going to have these
conditions. Actuarially you can determine what it should be.
Even though we cannot necessarily predict where it will occur,
we can predict what the needs are.
When it comes to competition, the trend toward
consolidation in agriculture today is unsettling, particularly
in the livestock sector, and it raises concerns about
competition and the impact on producers. Nebraskans in
particular are very concerned because our corporate farming
ban, I-300, has been ruled unconstitutional by the Supreme
Court. And I support the Chairman's efforts to include a
competition title and want to work with him to get sound
polices in there that will improve competition in a way that
benefits everybody, producers, consumers and rural communities.
Which leads me to the second component of the new farm
bill, fuel security. There is a lot of interest these days, and
this farm bill needs to include wise policies that continue to
grow the industry so that we can substantially improve our
energy security including:
Diversification. Right now almost all of our ethanol comes
from corn, which is great for corn growers in both Nebraska and
Iowa, but it raises concerns for livestock producers as I
mentioned, those that use corn to produce food products. In the
long run diversification will include finding cellulosic
ethanol produced from biomass, which every corner of the
country can produce. But cellulosic is not here yet and may not
be for a few years, so we need to encourage feedstock
diversification now through crops like sorghum and sweet
sorghums and others as well.
The next generation of biofuels is upon us and we need to
look at producing the next generation of biofuels from the ag
perspective. In all the talk about cellulosic ethanol I am
nervous that I do not hear anyone talking about how we produce
the biomass we need for cellulosic. We need to figure out how
to plant, grow, harvest, transport and store biomass, whether
from field or forest wastes or dedicated energy crops.
Finally, innovation. We also need to get creative about
producing a wide range of biofuels. For example, I am working
on a bill that will encourage the production of biogas, a
natural gas substitute made from anaerobic digestion of animal
wastes. I think there is great potential to turn wastes into
energy sources, and we should creatively explore all of the
possibilities.
I want to mention rural development as well. There is great
potential for rural development through biofuels, and we all
know that food and feed production has long been a staple and a
rural economic driver. We need to make sure we take advantage
of the potential that biofuel production presents to many of
our rural communities right now while ensuring that farmers,
ranchers and rural businesses continue to benefit from our farm
policies.
I believe that our witnesses here today will provide great
insight into the issues facing our producers and rural
communities, and I hope we can incorporate their concerns and
ideas as much as possible.
So that is what we are here to discuss. And I am anxious to
hear from our friends from Iowa and Nebraska.
Once again, Chairman Harkin, I want to thank you for
scheduling and chairing this hearing and for all your work on
agriculture all the years you have been involved.
Chairman Harkin. Thank you very much, Senator Nelson. Now
we will turn to our panels. And as I said if you keep--we have
got a light system here. And then we will try to keep it within
some limits here. But first I will just introduce Mr. Bailey,
Varel Bailey, American Farmland Trust. Mr. Bailey and his son
operate corn, soybean, grass, beef, cattle, hog and sheep
operation in Anita, Iowa. He has been an agricultural policy
consultant for American Farmland Trust. He has been involved in
agricultural policymaking and Farm Bill debate since the
1970's. I can vouch for that. This is my 32nd year on the ag
committee. And since 1975 I have had the benefit of Varel's
input into all of our farm bills. So it is good to see you
again, Varel. Please proceed, and I will just go on down the
line.
STATEMENT OF VAREL BAILEY, AMERICAN FARMLAND TRUST, ANITA, IOWA
Mr. Bailey. Senator Harkin, Senator Nelson, thank you for
having me appear today. Let me just hit the high points. I
actually appear today with four hats on. One is that of a
farmer that you mentioned. The second as an ag policy
consultant for American Farmland Trust. The third is a policy
work being involved in policy for almost 35 years. And fourth
is a taxpayer. And from all of those points of view, when I
look at the opportunities here, I maintain that this Farm Bill
should create pivotal change. We only have this opportunity it
seems once every 20, 25 years to actually make significant
change in farm policy. And it seems to me the stars are lined
up right now with the budget restrictions and the prices and
everything else, it is time to make that change.
Now I am only going to read a couple sentences out of my
testimony, but there is a couple of them that I think are
really important. In this dynamic environment, and I am talking
about the changes you referred to, Senator Harkin, for Congress
to set commodity loans, target prices in the Farm Bill really
ignores reality. We have no idea what those prices are going to
be in the next few years. Further, based on our experience to
date on the suits filed against the U.S. cotton program, the
corn program and others, government warehousing schemes,
marketing loans, loan deficiency payments and cyclical payments
are going to be eliminated.
To perpetuate these programs under the guise of increasing
bargaining leverage in the WTO instead holds these negotiations
hostage and ignores the opportunities to significantly improve
taxpayers' investment in the food, fiber and fuel industry.
To me those are really critical things and really strong
drivers for change. The rest of my testimony has to do with
conservation and the commodity title.
I would put the conservation program part of the title
first, not because it is necessarily more important, but I
think that both of them need to be further integrated. Back in
1985, Senator, we started the integration with the CRP and
conservation compliance and those kinds of things. It is time
to take another look at how we integrate the conservation
program with the rest of the Farm Bill.
In my testimony I talk about how important this is on
working lands because most of the lands that are sensitive to
erosion and other degradation are actually working farm and
ranch lands. We need to improve the effectiveness of these
programs with cooperative efforts.
We have something like this in Anita, Iowa. We have Lake
Anita State Park, with pristine water. Why is it that way?
Really it was not because we had a government program. We
farmers banded together and decided we were going to protect
that lake and protect that park. And so what we need to do is
kind of take what we did there and integrate programs together
with block grants and mechanisms where various agencies and
various entities can work together to solve these conservation
problems.
We need to actually start a new program I think, and that
is a loan guarantee program. This would be an interest rate buy
down program. Three out of four farmers that have applied for
conservation assistance in the last few years have been turned
down because of insufficient money. In those cases we need to
figure out a way for government to take a few dollars and
leverage it into a lot of program. I think a loan guarantee
program would go a long way to do this.
The second change we need to do better targeting. Now, USDA
in the CRP program has really worked on the environmental
benefits index and those kinds of rating systems. We need to
take another look at those mechanisms. Again, sharpen the money
we are investing in conservation to solve really serious and
critical problems.
One of the things that really came out with the CSP program
is that we need to improve technical assistance. NRCS is
overworked. We really have not in the time that we have been
working on this, been effective in fully implementing the
technical service provided program. We need to take another
look at that.
The commodity program--I see my red light is on, and so I
will just simply say we recommend as part of this, the hole in
the safety net is that we need to move to a revenue assurance
program. The one AFT is recommending was developed by Ohio
State University. This is modeled right after crop insurance.
It is transparent. Farmers understand it. It is easy. It would
be easy to administer and implement. And it integrates with
crop insurance as well. It does not pay twice if there is a
loss. It just pays once. When I put on my taxpayer hat there is
a savings since it provides an opportunity to lift systemic
risk off the crop insurance industry. I do not know how many
billion dollars would be saved, but we are thinking there is
probably $2 billion or $3 billion there that could actually be
brought into the Farm Bill budget by lifting that
responsibility of systemic risk off crop insurance.
With those things let me wrap up and simply say that we
hear what you have mentioned about direct payments. My job as
a--working in Farmland Trust is to build coalitions between
farm organizations and environmental organizations. When I
start talking about direct payments and the environment,
believe me, it is very sensitive. And so all I can say today is
we would really like to continue to work with you and the
committee on mechanisms that make sense in transitioning the
direct payment mechanism into other mechanisms in the Farm
Bill. Thank you.
[The prepared statement of Mr. Bailey can be found on page
44 in the appendix.]
Chairman Harkin. Thanks very much for a very precise and
concise statement. Lot of things we will follow up in the
question period.
Next is Debra Houghtaling, executive director of the Grow
Iowa Foundation. Grow Iowa was established by the Southwest
Iowa Coalition, that covers about 185,000 rural people in
Southwest Iowa. It operates a wide variety of loan approvals
from various sources, including USDA. The Southwest Iowa
Coalition is one of the first economic development groups that
really started to work on a regional basis. My notes says it
was started by Austin Turner; is that right? I knew Austin very
well. Thank you very much. Debra, thanks for being here. And
again, your statement is made part of the record, and, please,
proceed.
STATEMENT OF DEBRA HOUGHTALING, EXECUTIVE DIRECTOR, GROW IOWA
FOUNDATION, GREENFIELD, IOWA
Ms. Houghtaling. Thank you, Senator Harkin, Senator Nelson,
for this opportunity to address ways in which the rural
development portion of the farm bill can help create vibrant
rural communities.
As you said, I am the director of Grow Iowa Foundation,
which over the past 11 years has invested over $5.4 million
back into rural southwest Iowa.
My comments today are going to focus really on three areas
in which I believe will help create these vibrant rural
communities. The first one is fostering regional collaboration,
the second is promoting entrepreneurship, and then the last one
is sparking private investment.
Regarding fostering regional collaboration, as you
mentioned, the Southwest Iowa Coalition really figured regional
collaboration out before it was more of a buzz word, and that
was out of necessity. Small isolated rural communities really
individually do not have a lot of power and access to
resources, but if they band together through an organization
like Southwest Iowa Coalition a constituency of almost 200,000
has a much larger voice.
I would like to talk about the proposed rural collaborative
investment program for the new Farm Bill. I think it is an
important step in fostering regional collaboration. A couple of
the most important parts about that proposal is that it allows
regions to define themselves, define the greatest needs that
they have, and also help define their own solutions. It is not
a cookie cutter, one-size-fits-all across the United States. I
would like to recommend that--that it be--that the regional
organizations be open and collaborative. I think that is one of
the things that has allowed the Southwest Iowa Coalition to
really succeed over the last 16 years is that everyone can have
a voice.
I think there is a danger in picking winners in a program
like this that grant too much power to a single purpose entity.
The second area I would like to talk about is promoting
entrepreneurship. Rural people have always been
entrepreneurial. But economic develop strategies have spent way
too much focus on recruiting big industry and manufacturing
into rural communities. And it is time to really focus on home-
grown companies that have more of a commitment to the local
community.
The opportunities have never been better for rural
entrepreneurship. Technological advances and e-commerce
industry allows somebody who lives in Greenfield, Iowa to
access global markets and employment opportunities that used to
be only available to them in major urban markets.
Because of the need for rural entrepreneurship, Grow Iowa
has joined forces with the Southwest Iowa Coalition, the
Wallace Foundation, Iowa State University Extension and
Southwestern Community College to form the Rural Development
Resource Center, which is going to provide entrepreneurial
technical assistance and market avenues for people within a 22-
county region in Southwest Iowa.
Also speaking about entrepreneurship, it is important to
talk about access to capital. Rural development has been a huge
provider of access to capital through it is rural development
programs. Grow Iowa has accessed over $2 million involving loan
fund money through rural development. The area that is missing,
however, is loans to very small businesses, which is why I
would like to propose a micro-enterprise program. It focuses on
small capital and it also has a component that allows for
technical assistance and capacity building grants, which are
critical to help small businesses succeed.
The last area is sparking private investments. Government
sources cannot be the only financial lifelines for rural
communities, which is why we need to look at different ways of
private investment. That could be rural philanthropy, equity
venture capital, financial leverage. My two asks in the area
are the first to really encourage through rural development
programs the creation of community foundations and endowments
that focus on entrepreneurial and economic development
programs. My second ask is Grow Iowa is a certified community
development financial institution. Across the United States
they have an incredible record of leveraging $27 for every
dollar investment. So my ask is really to specifically add
CDFIs as an eligible applicant for rural development programs.
So I thank you for letting me talk about rural development.
[The prepared statement of Ms. Houghtaling can be found on
page 54 in the appendix.]
Chairman Harkin. Thank you very much, Debra. When you were
talking about entrepreneurship and micro-enterprise, you are
talking to this guy right here. So I am sure he will have more
to say about that. He is our leader in that area.
Next we will turn to Steve Killpack. Mr. Killpack farms 700
acres of corn and soybeans with his father on their family farm
near Neola, Iowa. Recent graduate of Western Iowa Community
College. Thanks for being here. Please proceed.
STATEMENT OF STEVE KILLPACK, NEOLA, IOWA
Mr. Killpack. Thank you, Senator Harkin, Senator Nelson,
for letting me speak today. Kind of as I go down here today I
looked out across the landscape, and I kind of realized that
our farming operations today, although they are economically
viable, their sustainability is very limited. And kind of my
hope and my goal is that through certain programs, such as the
Conservation Security Program, that we will be able to protect
our air, our soil and our water. I believe that farmers and
ranchers who actively practice conservation should be supported
to continue promoting conservation. And I think the CSP program
was an important step in that direction to show that as a
nation we care about our resources and that we want our farmers
to care about them also.
In my viewpoint it is always difficult to look and to see
that as farmers we should be stewards of the land. And we have
this great gift and this opportunity to farm and to make a
living, but that we do not always strive to take care of our
resources. The soil is really one of these resources that
cannot be built up or, you know, it is been altered a lot over
the last 100, 150 years that we have been farming.
My hope is that through the CSP program we can divert
funding to focus on sustainable farming practices to support
clean air, clean water and profitable soil systems.
I think that direct payments and counter cyclical payments
as well as loan deficiency payments do not always promote the
best conservation minded practices. Direct payments often
support farming, you know, like you said in your opening, about
as many base acres as possible. And I think that if we could
divert some of that funding, all of that funding into the--a
program similar to the CSP program that we could really promote
the real idea of conservation and what that means. And I really
truly believe that if you fund the CSP program and continue to
support that that farmers are going to benefit from it. They
are going to have added income, and the public is going to
benefit from it from increased water quality, air quality and
soil quality as well as increased wildlife habitat.
One of the main problems I see with the CSP program right
now is that there is very little information available to
producers on what they need to do to be enrolled. And I would
hope that the goal of the CSP program is that all producers
potentially have the ability to enroll in that program. I do
not feel right now at this time that there is enough education
and enough information put forth into developing that
programming.
So that is kind of one of my hopes is that through the CSP
program, the support of our government, we will be able to
secure a future for many more generations of farmers.
And I would also like to stress the importance of
maintaining wildlife habitat, promoting habitat restoration
programs. The CRP program has always been a beneficial one to
the habitat. I do not always feel the way the CRP has been
implemented it was more soil conservation as compared to
habitat preservation. Not all of those systems are sustainable
ecosystems. They are just there to fill the need of soil
conservation.
And my last point that I would like to make is that as a
small family farm I look to see that we are going to have to
change our operation drastically to maintain our economic
viability. And I believe that is fine, that business is
changed, and we are a business. And I would hope that in the
new Farm Bill there potentially would be some support for small
business niche agricultural markets, specialty crops, and not
through direct subsidy payments, but through market assistance
programs in developing local markets in the area. And I think
there is opportunity to continue growing with organic and
locally grown food type industries. And I feel that we should
continue to improve our economy by supporting these changes.
I think there is a lot of opportunity to make a difference
right now. We do not have a--we do not always have the
opportunity to make changes, but I think with this Farm Bill we
can potentially make a big impact on the future of farmers. So
thank you.
[The prepared statement of Mr. Killpack can be found on
page 58 in the appendix.]
Chairman Harkin. Thank you very much. I really appreciate
your testimony, and we will have more questions for you I am
sure.
Next we will go to Chris Peterson, president of Iowa
Farmers Union and a family farm operation from Clear Lake,
Iowa.
STATEMENT OF CHRIS PETERSEN, CLEAR LAKE, IOWA, ON BEHALF OF THE
IOWA FARMERS UNION
Mr. Petersen. Thank you, Senator Harkin and Senator Nelson.
I hope I measure up to what the other participants have said so
far. Lot of good testimony.
I am a small independent family farmer and I am a firm
believer in the independent localized family farm structure. I
believe hands down we can raise a better, safer, higher quality
product than anybody else in this country. And I think farm
bills should be centered around that.
And somebody mentioned I-300, I think it was you, Senator,
and you know, the packer ban was struck down in Iowa, I-300,
struck down in South Dakota. I think there is lots of bad
things going on in agriculture and there is a bunch of things
we need to do if we are serious about revitalizing rural
America. One of the top things on my list is a full competition
title. It is time, we need this. Farmers are being compromised,
transparency in the market place.
I was one of the guys that paid the price and lost hogs 3
years ago, 3,000 head failed to finish. I suffered severe
financial consequences out of that deal. And there is a few
thousand--a lot of thousands of our independent pork producers
went through the same thing. And also because of that and the
monopoly, even the contract growers now are, you know, their
contracts are not the best in the world due to lack of
oversight and reform. They have been marginalized. The guy
wants to contract to rise livestock, fine, but I believe they
should get a decent price and return for their labor. And
mandatory price reporting is another very interesting thing
that needs to be redone.
Also I would hope that anti-trust and USDA and them start
enforcing anti-trust laws and packer and stockyard laws. They
are not working, revamp them and address the 21st century
standards. Again, anti-trust and competition titles is one of
my main things. We need to revitalize capitalism out here. It
is not being done.
And conservation, setting here looking at this water
quality. Clean water is an amazing thing. We need a lot more of
it on the countryside. And how you do that, number of ways. I
believe the commodity title and the conservation title need to
be tied together.
Farmers are good stewards, stewards of the land. They needs
credits and incentives to participate in conservation programs.
I believe it is critical that conservation and tillage
practices need to be tied into what commodity payments come out
here.
And moving right into the commodity program, I am a firm
believer in price payments and price caps. It is about time
that the taxpayers were--the issues of taxpayers were
addressed.
Also in the commodity title I look at three entity
loopholes in the generic certificates. I look at that as a
farmer as legitimate bank robbery. These loopholes need to be
closed, and these certificates need to be done away with.
Also we need a Farm Bill that will put a floor on the
grain. It seemed like over the years the processors and the
industrial livestock factories are getting lots of cheap grain.
They were saying--a Tufts University paper just released
entitled ``Industrial Livestock Factory Gains from Low Cost
Feed Prices 1997 to 2005,'' documents how commercialized hog
operations have saved $8.5 billion in feed costs. The boiler
industry saved $11.25 billion. Smithfield alone saved $2.6
billion in feed costs over this period of time.
We need common sense in these farms bills. We need to
quit--and the intent is well, keeping the family farmers on the
land, but we need to quit subsidizing agribusiness to the
extreme of this example. And a lot of--with Smithfield and the
other integrators, what this does is give them an edge to
compete against the independent family farmers raising
livestock or cattle or whatever.
Energy, very important. And I emphasize throughout this
Farm Bill, we got to get back to localized ownership in the
energy and all that.
Also rural economic development, we need--we need rural
economic development out here that--which is managed localized
foods, getting small businesses revitalized. This is all very,
very important to the survival of family farms in rural America
and the return of the benefit to the consumers and the
taxpayers of this country. Thank you.
[The prepared statement of Mr. Petersen can be found on
page 61 in the appendix.]
Chairman Harkin. Thank you, Mr. Petersen.
Next we will turn to Matt Schuitteman. I think I pronounced
that right. Fifth generation farmer from Sioux Center, Iowa
where he grows corn, soybeans and hogs with his father and
grandfather. Mr. Schuitteman will provide some thoughts on the
Farm Bill from the perspective of the Iowa Farm Bureau
Federation; is that correct?
Mr. Schuitteman. That is correct.
Chairman Harkin. Thank you very much, Mr. Schuitteman.
STATEMENT OF MATT SCHUITTEMAN, SIOUX CENTER, IOWA ON BEHALF OF
THE IOWA FARM BUREAU FEDERATION
Mr. Schuitteman. Thank you, Senator Harkin and Senator
Nelson, it is an honor to be here. And I am from Sioux County,
Iowa.
And as my grandpa is 81 years old we are living through the
issue of farm succession and turning over a fairly large family
business. So this discussion has always been pretty helpful for
me during this time. There has been several good points made.
I do want to touch a little bit to start with on safety
net. I would say regardless of what you think about where the
direct payments and the counter-cyclicals and the loan program
fit in, they have done a good job at least in our situation of
smoothing out our ebbs and flows of our farm income.
What I would also say from the standpoint of a young farmer
is for the young farmer, access to capital is, aside from
access to land, is probably our biggest issue. What this
program has done is provided a nice source of capital at the
beginning of the year and cash-flow for the young farmer so he
can go out and build a viable operation. Because of that I
would ask that the majority of 2002 commodity title be
preserved and that those concepts be maintained that were set
forth by that 2002 bill.
There is also been quite a bit of discussion here about
conservation programs. And Senator Harkin, you introduced the
CSP program in 2002, and that was a program that those of us in
Iowa were looking forward to utilizing. Unfortunately the
funding, excuse me, the funding fell a little short of what we
were hoping for. I think it was Mr. Bailey that mentioned that
demand for those conservation programs has exceeded the supply
of funds every year. And so we would like for efficiencies to
be obtained in those programs so that more people could have
access to those dollars.
I think a good example of that type of efficiency could be
regarding CRP. We have seen in general that farm CRP signup, in
particular in southern Iowa, has been damaging to rural
economy. I think the debate here is not necessarily about the
ability to grow row crops on those acres as much as it is the
ability to generate economic activity from those acres. Whether
that economic activity be a cow/calf grazing operation or
whether it be a cellulosic ethanol from switch grass
production, I think there is a tremendous amount of opportunity
there, and it does not necessarily have to come from row crops.
What we could really--we have seen how livestock dollars
can turn over several times in a community. But receiving a
government check does not necessarily turn over that much in
the community. So it could have a major impact on our rural
economics.
Our farmers need those opportunities. Anytime we can
increase the lands available for our young farmer, young
farmers will position themselves to take over that opportunity.
In particular we are talking about a cow/calf operation, very
much a position for a young farmer to get a start. And by
diverting some of those CRP dollars, maybe even taking some of
the CRP dollars and diverting them toward say a buffer strip
program, I have got some figures here that says if we took one-
half of the funding from current general CRP signup we could
install 33-foot buffer strips of Iowa's creeks and streams. I
think that would be a major environmental impact, and I think
it would be a good thing.
I talked a little bit about the energy title. Obviously
ethanol, especially corn-based ethanol, has had a big impact. I
myself am an investor in a local plant and have reaped the
benefits of that investment and have appreciated the
opportunity that it provided. Biofuels have had a major impact.
And Senator Nelson, I was happy to hear your thoughts on
biogas. Sioux County is the proposed home of a biogas facility.
So we are looking forward to see if that can come along and
look forward to your thoughts on that as well.
The energy efficiency grant programs have been utilized
well. I know of several farmers in Iowa who have gotten those
grants to update vent systems, dryer systems and have saved
significant energy while doing them.
One thing I would ask with this Farm Bill is that any
issues regarding animal husbandry be left out of this Farm
Bill. I do not feel like it is an appropriate avenue to address
those issues. Farmers are the best judge of a healthy happy
animal and we would like those decisions to stay with the
farmer.
With that, I see the yellow light is on. I want to thank
you again for the opportunity. I was thinking on the way down,
the good book says to whom much has been given, much will be
expected. I think in this part of the country we have been
given much as far as natural resources. And I would hope that
government can be a partner in helping us fulfill our potential
and not a restrictor. So I thank you and look forward to your
questions.
[The prepared statement of Mr. Schuitteman can be found on
page 67 in the appendix.]
Chairman Harkin. Thank you very, very much. We will start a
round of questioning. I will try to just limit myself to 5
minutes or so, something like that.
Mr. Schuitteman, I will start with you since you were last
and work back. In your testimony, I read your testimony last
evening, about--talked about taking funds from commodities.
Heard you mention that now about weakening the safety net.
I really think we need to follow-up on this because I think
it is kind of fundamental to our Farm Bill discussion and how
we do this. Is there maybe--again, because of WTO, we are going
to have to reduce our counter-cyclical program. We know that.
So maybe a smaller counter-cyclical program, but in conjunction
with crop insurance and conservation payments and rural
development initiatives and energy incentives for growing
cellulosic crops that you mentioned, maybe if you put all of
those in a package it could be a part of an overall safety net
for farmers. In other words, shifting it out of just--out of
the direct payment and the counter-cyclical, which is what we
have now, but broadening it out and putting that in this kind
of package of things that would be--would provide a safety net.
So I guess my question is, if we were able, I want to make
it very clear because I think some people misunderstood some of
the things we said in the past, I am not saying that we are
going to take $26 billion out of direct payments and give it to
the Department of Justice or Commerce or something like that. I
am just saying we are going to leave that in agriculture, but
is there a better way of allocating that money. So if we were
able to shift funds away from things like direct payments and
into these other areas like counter-cyclical supports, which we
have enough room for under WTO, conservation payments, again
with all the things I have heard here, got to have better
technical assistance.
Mr. Bailey came with this new concept that I had not
thought about before, some kind of loan guarantee-type
programs, may leverage more than what he have. Again, renewable
energy incentive payments to farmers to be growing cellulosic
crops on some of this CRP ground that contracts are going to
come up anyway. Again, would that be a more balanced kind of a
farm policy, again, putting that money out there in that way?
Just asking for your thoughts on that.
Mr. Schuitteman. I think like you said there is a variety
of ways to go about this. And a couple points I would bring up,
I talked about the capital needs of the young farmer and how
this Farm Bill, you know, was able to provide some cash up
front. Your thoughts on the safety net are good. For instance,
on our farm in 1998 it cost us about $280 an acre to grow a
crop of corn. This year it is going to cost us about $454.
Chairman Harkin. Energy price increases and stuff.
Mr. Schuitteman. Anything tied to energy and land are the
two drivers and some other technology costs, so you know, our
safety net of the 2002 bill has kind of fallen behind a little
bit. There are ways to make that up, like you say, in crop
insurance. But it is good to hear you say that we are not going
to weaken that. Just so we do not weaken that safety net. And
you know, from the young farmer perspective, as long as they
have access to capital.
Chairman Harkin. I am just asking questions, is there a
better way of doing it than what we have done in the past? I do
not know. For example, Mr. Killpack here mentioned in his
testimony, he did not quite say it, but I read it in your
testimony, in that direct payments get allocated to land prices
and get allocated to the land so rental rates reflect that so a
young farmer wanting to rent that land pays higher rental
rates, if that is put into other things, it might east the
ever-increasing rental rates that young people have to pay to
get a foothold. I do not know if you had any thoughts on that,
Mr. Killpack, or not. You mentioned that in your testimony.
Mr. Killpack. I think that at least from my perspective
that the direct payment typically is a guarantee that you can
put that much toward a rental rate of land. And I kind of felt
that if you could divert some of those funds into a program
that would be more of an incentive based, you are going to
guarantee some type of income for doing or promoting your
stewardship of the land that would benefit both the farmer and
the public in terms of, you know, improving conservation, water
quality, things like that. And I just think that the funds can
just be channeled in different ways. Not to eliminate any of
that funding, but to channel it down a different route to
promote conservation as well as the farmers' viability through
that.
Chairman Harkin. Mr. Bailey, did you have something you
wanted to--any of you just jump in, just raise your hand.
Mr. Bailey. My comment is this, and obviously you know I
worked with wheat growers, barley growers, sorghum growers like
that. And part of the sensitivity of messing around with the
direct payments, and I will kind of represent Senator Nelson's
Western Nebraska wheat guys, with declining yields and droughts
and everything, the direct payment is the only thing that these
guys have seen. And so if you start out by saying we are going
to start changing direct payments, I need to tell you the red
flags go up all over the place in wheat country, parts of
cotton country and those areas. So you are on the right track,
Senator, that the direct payment thing long term is not
politically sustainable.
Ken Cook and the environmental working group and all these
people are building a case that long term we are going to lose
direct payments one way or the other, OK. So what needs to be
done now is that a package you are talking about needs to be
developed so that the wheat guys that are getting nailed all
the time because of the environment and everything do not lose
everything. The package is rebuilt in a way that plugs the hole
in the safety net and the package basically becomes a better
investment by the taxpayers and America.
I cannot--I cannot lay out the package right now other than
to assure you we are working on it. But if you lead off too
early by saying we are going to mess around with direct
payments, the lobbyists on K Street just come unglued that
represent agricultural interest. So we need to really
concentrate on that package.
Chairman Harkin. They have been hearing me say that for
some time. So I know where--get a little unglued and stuff, but
I still submit whatever benefits, and there have been benefits
to direct payments in the past. I have no doubt about that. I
look back, so I have seen it. But with what we are seeing now,
what is happening now, something--we have got to change some of
this stuff. With that--I thought I used up my time, but my
green light does not seem to go off or something like that.
I just wanted to say, Mr. Petersen, we will have a
competition title again. As you know I put one in the last farm
bill when I was chairman and it did not succeed. I think there
is more support for it now. I think there is broader support
for that. And we will have something in there akin to a bill
that is got strong bipartisan support now, and that, of course,
we will have to work on, but it is there.
Debra Houghtaling, the one question I have about it is
what--just tell me what made it possible for the Southwest Iowa
Coalition and the Grow Iowa Foundation to work to get a large
number of communities together? This is--that is touchy work
when you do that, you know, to get different communities, they
all have their wants and things. How did you put them all
together?
Ms. Houghtaling. Well, the most important is self-interest,
is that they understand that a community of 2,000 cannot
accomplish nearly as much as bringing together a larger group.
There is multiple examples, enterprise, zone legislation, a
State prison in Clarinda where it might have only affected one
of the communities, or might have only affected half of the
communities within Southwest Iowa, but the larger group of
counties and communities all supported, you know, the
different--doing lobbying and what have you for different ideas
that benefited someone else. And that is a completely--that
kind of turns the normal economic paradigm on its head. Where
you are six miles away and I am going to compete with you for
absolutely everything, where you are 100 miles away from
something bigger, let's work together so we can access more for
not just me but all of us.
Chairman Harkin. Thank you very much. And now my light is
on. I will turn to my colleague, Senator Nelson.
Senator Nelson. Thank you, Mr. Chairman, I hope I do not
get a fast count.
Ms. Houghtaling, it is Houghtaling where I am from in
Nebraska, you made reference to the importance of rural
entrepreneurship programs, and the program we have had in
Nebraska has been very successful. I will just give a few of
the numbers to provide a base. We began by providing micro-
enterprise developments and were able to lend almost $7 million
to provide training and technical assistance to 15,000
businesses. And this is over a 10-year period. And in 2006, the
last year that we have got, each dollar of State funding for
this program leveraged over 12 from other sources, and it
helped us create or save 7,500 jobs at a cost of $43.30 per
job, which in terms of investment is a pretty small number
comparatively speaking.
You mentioned that the kind of assistance that you are
looking for would come from two sources, one is from private
sources, foundations and private groups, and the other from the
government. Do you have any idea of what it might take in terms
of dollars over, let's say, a 5-year period of the Farm Bill to
be able to have this kind of program be viable throughout the
rural parts of our country? We think about it in terms of
Nebraska and Iowa with the particular bills here, but if we are
going to do it on a nationwide basis, do you have any thoughts
about what it might take?
Ms. Houghtaling. You know, any number I would throw out
would just be a wild guess. I mean, I think the thing that is
interesting is that Nebraska is one of the very few rural
places that has really been able to do micro-enterprise well. I
am on an Iowa statewide group that is looking at the Nebraska
model and trying to figure out what can we import into Iowa to
make that successful. I would probably start to--to get that
number I would probably start to take a look at the money that
is gone into Nebraska and aggregate from there, you know,
because there is a lot of more populated rural states certainly
than Nebraska or Iowa. But I think that needs to be a starting
block to take a look at where it is been successful, and there
are not a lot of places where it is been as successful as
Nebraska.
Senator Nelson. Mr. Chairman, since we are in a business
where virtue cannot be its only reward, I have to point out
that that was a program we put in place while I was Governor. I
do not want to take full credit, I just want the record to
reflect that happened. So I think the point is well made.
If you can take a best practice approach and try to model
that which is what we have done in our bill, then other States
could begin to look at what they could do and try to replicate
it as best they can or take the best pieces of it for their
State and then expand it, because obviously, you are right,
when you said earlier that one size does not fit all. And we
have to be able to have a pattern, but to become creative as
well.
Mr. Killpack, you mentioned in your testimony that you
think that CSP should be the focus--a focus of the farm bill.
And, of course, we are facing some pretty tight budgetary
issues. If you were going to make CSP a greater focus, maybe
you could help me understand what you would--if it is going to
be the major focus and we have a limited amount of money, can
you be specific as to the kind of programs it might crowd out?
You do not have to make winners and losers here. I just wonder
what you think what program is less effective than CSP if we
are going to make that a bigger focus.
Mr. Killpack. Well, in terms of making farmers profitable I
do not really know if you could cut out one program. But in
terms of maintaining our natural resources, I think that should
be the top priority, and funds can be allocated from, you know,
direct payment, loan deficiency payments, counter-cyclical
payments into the CSP program to make it a viable program.
Because I think that--when that came out I was really excited.
The potential that was there to kind of allow the producers to
be conservation minded because it is hard to--you know, me as a
young farmer do you allocate this land to conservation
practice, or do you farm it? And in my viewpoint I always think
in terms of the spoiler first. That is just my belief. I would
rather have the soil be here for the next generation for my
kids to be able to farm, and I think that is where our focus
needs to be.
Where the funds come from I, you know, I have a few ideas,
but I hope that that is something that you can figure out and
know that the priority needs to be at sustaining our natural
resources, because once they are gone, it does not really
matter if we have got any other commodity programs or anything
like that. I mean, hands down that is the one thing that should
have priority is maintaining our natural resources.
Senator Nelson. I certainly agree with you, Mr.
Schuitteman. Do you have any further thoughts about what is
less valuable as part of it, what is most valuable, more
valuable, sort of a prioritization because that is what we are
going to be faced with.
Mr. Schuitteman. I would say generally CRP signup would be
something to look at, and more targeted CRP rather than the
whole farm. Just to give you an example, as Mr. Killpack was
talking about how we might use some of those funds. On our farm
we have begun using strip tillage for our row crops. It is a
system that is more efficient in fertilizer use, and it is a
system that is great for the soil. The equipment is specialized
and can be expensive. So any funding we could get through a CSP
or EQIP would help us get over the hump. And I think there is
probably dollars better spent there versus some of our general
CRP signups.
Senator Nelson. The CRP program was the forerunner of where
we may be heading and now we are more targeted in a more
effective use of CRP, which means there may be fewer acres
ultimately in CRP or more, but just make sure at the point of
deciding if this will qualify that if there is a better higher
use for switch grass or for other such strips as you are saying
so that we do not--we do not put all of our resources into one
program, it may be--give us the best return; is that fair to
say?
Mr. Schuitteman. When you look at conservation it is not
just a terrace or buffer strip. You got to look at it as a
production system. And any way we can produce our production
systems is going to have a bigger impact than, like you said,
the forerunners that we have had in place to date.
Senator Nelson. Going to have to be careful because all CRP
levels are going to be mad at me for even suggesting something
like that. We are really not talking about necessarily
shrinking it. What we are talking about is making sure we got
the best use. And I would imagine those in production
agriculture are interested in a better use as well,
particularly if they can get a rate of return for switch grass
or for other purposes. Perhaps they have not even thought of
the aspect of grazing, I do not know.
Mr. Bailey. I think we need to approach the CSP issue from
both sides. One side is maybe we ought to take a look at
restructuring CSP and cutting it maybe into two pieces. CSP
when it was outlined was to reward good stewardship at one
level and also provide an incentive on the other level. When
you write the regulations, write the rules, administer it and
apply it out, it is difficult to put a program together that
does both. So one way to think about that would be to take the
CSP and split it into a stewardship program. Really talking
about a green payments program here that is pretty universally
available to everyone in production agriculture. The other
piece, this is my word, so do not give it to anyone else, but
the other one is to build a super EQIP where it is an
application--program application thing where you can let
multiple producers come in and everything, but take EQIP and
retarget it and really apply money back effectively that way.
Now the other side of the question, where are you going to
get the money to do this. It is really kind of only three pots
of money that I can see right now. Reduce payments might pick
you up half a million dollars, whatever. The second one has to
do with--by going to a revenue assurance there is probably $2
billion to $3 billion that can be pulled in from the crop
insurance subsidy and no loss to the safety net when the thing
is integrated properly.
The other one is the one Senator Harkin is talking about is
direct payments. Is there a way to make the sale to make the
program such that people understand that any money coming out
of direct payments going into the land stewardship program is a
good deal for producers and a good deal for taxpayers? That is
the part of the crafting that I think is going to be difficult,
but those to me are kind of the three opportunities we have
got.
Chairman Harkin. Thank you, Mr. Bailey. If I might just
pick up on that, Varel. I think you may have a good suggestion
there. And that is to somehow take--we have got to change CSP
because--we have not had the funding and, of course, they took
the money out for disaster payments. I just want to assure all
of you that is not going to happen again.
In 2003 the first time ever in the history of our
agricultural legislation, first time ever, we took money out of
agriculture to pay for disaster, never happened before. Well, I
raised a fit about it, and then in early 2004 I got the money
put back. Then in late 2004 they took it back out again. So
lost two, won one. We are still one behind. But I think we just
got to have a understanding of those in Congress and in the
White House, no matter who it is, that a disaster is a
disaster. It is paid for by everyone. We did not go to the
people in New Orleans who suffered from Katrina, and said, OK,
we are going to put billions of dollars in it, but we are
taking out of it your highway money, we are going to take it
out of your education money and your foods stamps and all that.
We do not say those kind of things, or when a tornado hits and
wrecks a town, we do not say, now we are going to take it out
of this. No, we treat disasters as such, and we provide for
that out of general revenue.
I think it was a terrible mistake to do in 2003 and 2004
and it has really put us somewhat behind. Whether we can get
that money back or not, I do not know. I am still trying, $2.8
billion. $2.8 billion stretched out is a good sum of money.
Anyway, that is just one thing.
I am just saying that the CSP has been damaged, and then
they put in all this--I will say this, Secretary Johanns ran
around the country having these hearings all last year and came
back, and we met with him on numerous occasions, and one of the
things we heard all over the country, whether it is Idaho,
Montana or Nebraska or Iowa or Missouri, he heard about CSP.
Farmers got it. They understood it. As he said to me, he said
they were both happy and mad. They liked the concept of the
program and mad it is not working.
So we are trying to--we are going to get off that watershed
program. That watershed basis was never, ever intended in our
legislation. We are going to make it a national program. In his
proposal Secretary Johanns has asked for about five times more
money than what we have been spending on it. So I think
generally now we are going to make this thing work better.
Now what you have proposed, Mr. Bailey, is something that I
think deserves further elaboration and looking at. And that is
to, as you say, two kinds of things, green payment, a super
EQIP, maybe folding EQIP into this, making it sort of a
seamless kind of a program where you could come for your one
time thing on EQIP, which would be a waterway or whatever it
might be, and then while you are there doing that you could
just be forwarded right into an analyzed CSP-type payment. So I
think that merits a lot of consideration.
But the second thing is then, getting back to the CRP
thing. Again, I am going to ask you to comment on what I am
about to say. Seems that CRP, you have got like three general
pots. On one side you have got the gullies and the ravines and
the really bad places that are CRP that should not be farmed,
and we can bid those back in.
Senator Nelson. Highly erodible.
Chairman Harkin. Highly erodible, and not productive at all
really. So you could probably get those back in. Then on the
other end of the spectrum some of the land that is as about as
flat as this table, and that land is going to come out. As you
know, some farmers wanted to get out early and Secretary
Johanns recently announced he was not going to permit that
because of the additional corn acreage coming in. But that land
is going to come out. I mean, when the contracts are up there
is no way we have enough money to bid that back in. So that--in
between that, in between that you got the land that is
erodible, it is hilly, it can be row cropped, it is not very
productive, but if you have got $3.50, $4 corn you do not have
to be really very productive to make money on that. But it is
very erodible.
So what do you do with those contracts when they come up in
the next three, four, 5 years? Well, perhaps here is where we
blend this kind of thing. Maybe you can say to a farmer, OK,
you are coming out, I know because of crop prices you are
thinking about taking it out of CRP and farming it. But what if
we were to give you a 10-year contract and we reduce your CRP
payment down a third of what it was, but then we will give you
a CSP payment and EQIP, fold you into EQIP and CSP, and then
you can grow certain specified crops that are conserving in
nature, like switch grass, alfalfa for hay, or even do grazing
or something like that in which you could get an economic
benefit. You can go ahead and market this as long as do you it
in a conserving manner, and that is what the CSP payment is
for. Make sure you do conserve soil and water and you have
wildlife habitat. Then it might induce them to come in because,
you know, crop prices are variable. But if you can see ahead 10
years, I got the CRP, I get CSP, I get the EQIP payment, and I
can grow something that I can market, that might then keep that
CRP land in some kind of conservation use, but still an
economic benefit so we are not hurting rural communities by
just keeping it out of production. Any comments on that kind of
thing? Chris?
Mr. Petersen. Yeah, I think that idea would be very worth
pursuing because we want to grow energy crops or a small
independent family with some farmer with some cattle or a
little bit of hay ground, whatever. I see lots of opportunities
there.
Chairman Harkin. We know we can doing rotational grazing
without destroying the land. We know that. Anything else,
observations on that at all?
Mr. Bailey. Just a comment, Senator. I have been working
with Congressman Cane over the last couple of years talking
about CRP, like kind of a mechanism something like you are
talking about here. I think the key point of all of these
things is the details, and farmers are quick. You ticked off on
your fingers the different things we are going to do.
And a farmer in a matter of minutes will figure out which
is the best option for him. So the key here is that as you make
up the smorgasbord that, again it makes sense environmentally,
it makes sense economically for the producer and makes sense
for the taxpayers. So, yeah, I think we are on the right track
here. Increased flexibility, and in a lot of ways empowers the
producer to come to the agency and say, these are the things I
want to do, and I have already done an environmental index on
it, because I have got it on my PC or whatever, so this is the
way it lays out. And at that point then it is kind of almost a
bidding process the producer applies on that land rather than
just going to the agency and the agency goes down through the
checklist and says, well, this is now its source, you know. So
I think you are on right track.
Chairman Harkin. If you have got any more thoughts,
suggestions on this super EQIP, I would sure like to know them.
I think that I would like to explore this some more. I do not
know enough about it, but I would like to explore it some more.
Senator Nelson. I think my questions are pretty well
answered.
Chairman Harkin. I want to thank you all very much and we
will have our second panel come up. We will take a short 5-
minute break here before we have our second panel, and I also
wanted to introduce Eric Steiner. I did not mention Eric.
[Recess.]
Chairman Harkin. The meeting will resume its sitting and
now we have our second panel.
The same pertains here, that your statements will be made a
part of the record in their entirety. I can assure you I read
every one of them yesterday, last evening and this morning, and
will be made a part of the record in their entirety, and ask if
you just sum it up in five, 7 minutes, something like that so
we can get into a discussion with you.
First we want to welcome Dr. Wendy Wintersteen, the Dean of
the College of Agriculture at my alma mater, Iowa State. Also
serves as a director of Iowa Agriculture and Home Economics
Experiment Station at Iowa State. An entomologist by training,
and as a faculty member her research interest focuses on the
development assessment of pest management strategies, and a
great job of leading the best ag school anywhere in the nation.
Dr. Wintersteen, welcome. Please proceed.
STATEMENT OF WENDY WINTERSTEEN, DEAN, COLLEGE OF AGRICULTURE,
DIRECTOR, IOWA AGRICULTURE AND HOME ECONOMICS EXPERIMENT
STATION, IOWA STATE UNIVERSITY, AMES IOWA
Ms. Wintersteen. Thank you so much. I really appreciate
those remarks, especially given that we are so close to
Nebraska. We have a great partnership with all of the land
grant universities in the Nation and it really is that
partnership that has allowed agricultural research and
extension to serve the Nation and all the needs that
agriculture provides.
Recently one of our distinguished professors, Dr. Wally
Huffman, did a study with some of his colleagues at Yale
University, not a land grant university, but nonetheless, a
good university. I think back over the last 30 years the rate
of return to agricultural research investment was a 50 percent
annual return. I promise you there has been nothing else that
has returned that kind of investment, except maybe the
investment in some of our biofuel plants this past year.
So I am here today to speak, to strongly urge Congress to
increase its investment in research to support agriculture and
to increase support for extension programs that go hand-in-hand
with those research programs.
The USDA is the primary spending agency for agricultural
research. It spends about $2.6 billion a year in research and
its extension. Unfortunately over the last 30 years that
investment has been flat. At the same time the National
Institute of Health has received a 882 percent increase in
funding. And we have literally been flat lined, which becomes
an issue of the health of agriculture in this nation.
At the same time that our numbers have declined in terms of
research dollars, our faculty has expanded their portfolio, and
they are doing more and more to do the research on the
relationship between food and disease in humans, to look at
obesity, to use animals as models to solve critical issues in
muscle and bone health in humans.
So I would argue for an increased level of funding to
support this important program and an increased amount of
coordination between the USDA agencies that worked together
with their land grant university partners and with the private
sector in our commodity wars and various farmer organization to
really serve agriculture.
We would ask the question, is it possible to think
differently about establishing some national research centers
of excellence that would address our primary commodity issues
and also address key issue facing agriculture or opportunities.
Could we do something where we would have a center for
excellence in soybean research and extension programs? Could we
have a national center of research and extension excellence
related to advanced renewable fuels and biobased products?
Could we really finally establish an upper Mississippi basin
nutrient management environment center that would coordinate
research and extension information across the States that are
truly faced with a critical issue on water quality? Can we take
the enormous knowledge that we are gaining from genomics and
put together translational and functional genomic centers to
allow agriculture to take advantage of what we have learned
both for livestock and crop production?
There is a need for this increased partnership and a need
to support it with increased funding. And at the same time it
is critically important that our land grant university programs
through Hatch and the Smith-Lever Acts retain their support for
formula funds. It is the heart of how the system works. It is
what brings our ability to address local problems and federally
critical issues. And we do it because we have the
infrastructure in place. Without those formula funds we would
not be able to do it. And I would think it is that
infrastructure through research and extension that allows us to
address, again, local issues, rural issues, issues relating to
economic and rural development.
And I just want to mention one program today that is about
communities, about extension, a little separate from ag
research, but that is our New Horizons program that is working
with community leaders in rural Iowa to really address problems
related to poverty. That is what can be done with the
infrastructure of formula funds and that is how we can leverage
additional State dollars in that partnership.
So clearly the opportunity is tremendous. Agriculture right
now is faced with a--really a revolution of rapid change. And
it is time that we begin to address that through this increased
funding opportunity. Thank you.
[The prepared statement of Ms. Wintersteen can be found on
page 79 in the appendix.]
Chairman Harkin. Thank you very much, Dean Wintersteen. I
will want to follow up on this idea of centers of excellence
with you and see how many--what the university--how many we are
thinking about, or are some existing now.
Now we turn to Duane Sand with the Iowa Heritage
Foundation, and the environmental consultant for Norwalk, Iowa,
my neighborhood. Most of his work for the Iowa National
Heritage Foundation coordinates work on the state
appropriations Federal farm policy and model watershed
projects. I can tell you Mr. Sand has many years of experience
working with clean water and sustainable ag coalitions at both
the State and national levels. Mr. Sand, welcome.
STATEMENT OF DUANE SAND, IOWA NATURAL HERITAGE FOUNDATION, DES
MOINES, IOWA
Mr. Sand. Thank you, Senator. I am honored to be called
your neighbor, thank you. Thank you for the chance to share our
priorities and ideas that as you take on the very tough
challenges of writing a Farm Bill with the budget constraints
you have.
I will start off by saying our top priority is with the
Conservation Security Program. As the Nation rapidly moves
forward implementing a renewable fuels policy we are seeing
additional challenges to soil and water and wildlife
conservation that come along with that, and we need a
comprehensive program like CSP for working lands as the means
to deal with these additional challenges. This year I think is
the time to start looking at transitioning direct payments into
green payments if for no other reason than the inflationary
impact on land values that direct payments have in the
currently economy.
We also encourage the use of commodity payment limits as a
means to come up with some additional money for conservation.
And as you look to the future I think it is important to see
the Conservation Security Program as a key infrastructure as
the Nation takes on its challenges on climate change and global
warming.
Eventually I think the Nation will get to a point of using
carbon taxes or trading of carbon credits. And it is that
infrastructure Conservation Security Program that can make a
billion acres of private lands the key to solving a good part
of our climate change issues and mitigating those problems.
A big concern of ours right now is the conservation reserve
program and it being priced out of the land market in the corn
belt. The tremendous success of the corn belt with ethanol is
affecting land values and the baseline increase for CRP will
not come close to keeping acres in the corn belt. Iowa is the
No. 1 among the States in using CRP. Nebraska has been No. 10.
And I see nothing but a migration of those acres in contract to
other regions unless we make some changes.
A few ideas we have, one is that since contracts are likely
to be written at below market values would be good to have a
uniform discount for all regions, so all farmers and all
regions compete equitably on the general signups and the
partial field enrollments.
We believe that the conservation reserve enhancement
program is a major asset on a highlighted CRP, and that piece
should have 100 percent reimbursement because that is the one
piece that is highly targeted based on a professional natural
resource plans' priority of the States and so we urge more
support for the enhancement program.
Along that line we would hope that you could direct the
Secretary of Agriculture to put additional emphasis on very
flexible conservation enhancement programs into the corn belt
states that are going to be missing out because we have been so
successful at renewable fuels, to give us sort of a baseline
based on the historic use so there is a flexible way to get
more revenue back into the States to keep CRP active and not
have that be an inadvertent victim of our renewable fuel
successes.
We also think there is a potential under the PAYGO approach
that if USDA were to start targeting those economically
marginal lands that were costing the taxpayers money to keep in
production and to offer a transitional contract that converts
them to an economic use, such as grazing, forestry, biofuels,
biomass, that--and then takes the full credit for the savings,
the savings on the disaster payments, crop insurance subsidies,
commodity subsidies and that gets attributed as part of CRP
under PAYGO, then we would have some for actually expanding the
operation authorization for CRP. But that obviously takes a
targeted effort in our agency at USDA.
A final point is the shortfall in technical assistance and
conservation incentives is going to be real problematic as
cellulosic ethanol becomes commercially viable and spreads
across the nation. We believe that there should be a
conservation compliance requirement that if an ethanol plant is
getting a subsidy that she should take on the responsibility of
updating conservation plans and in creating a market incentive
at their plant through price or procurement purposes so that
the farmers that follow the conservation plans get a reward as
these new biomass markets are created. An example, just in Iowa
in Emmetsburg, with that first plant we need to be updating
300,000 to 500,000 acres of conservation plans to be ready when
that market opens. That would take five additional staff at
NRCS, and they are losing 45 staff this year. That is why we
need a compliance requirement to shift that to the private
sector.
Thank you.
[The prepared statement of Mr. Sand can be found on page 65
in the appendix.]
Chairman Harkin. Thank you very much. I do not know that I
understand that. I hope we get into that question.
I will yield to my friend for purposes of introduction of
our next witness.
Senator Nelson. First, I want to thank Tom Schwarz from
Bertrand, Nebraska for coming here. We have worked together on
water issues over a lot of years. Tom is an alfalfa, corn,
wheat and soybean farmer from Bertrand who has a lot of
experience dealing with water issues in Nebraska. He will be
talking about water issues and the conservation title from a
producer's perspective. Tom has a great perspective on both
farming and water issues. He is a graduate of University of
Nebraska-Lincoln with a degree in general agriculture. And he
is also a graduate of University of Nebraska Lied Program. He
has been on the Nebraska State Water Policy Task Force since
its inception, and he is a former director of the Central
Nebraska Public Power and Irrigation District.
Additionally, Tom was one of the founders of Nebraska Water
Users, a statewide organization that supports water users and
advocates on their behalf. Finally, Tom is the author of ``A
Farmers' Guide to Water Rights''. So some great expertise in
water and farming issues. I look forward to hearing his
testimony here today.
It is my understanding that Tom is joined by his wife Linda
and his daughter Becky who is a student at the University of
Nebraska in political science and that she worked with him to
help shorten his comments so that we could get done in time to
go see the Nebraska spring game in Lincoln. Tom, thank you and
welcome.
STATEMENT OF TOM SCHWARZ, BERTRAND, NEBRASKA
Mr. Schwarz. Thank you, Senator Nelson, and thank you,
Senator Harkin, for the invitation to be here. As the Senator
said, I have closely followed water issues in Nebraska over the
last 27 years. Senator Nelson and I worked together on the FERC
re licensing of the Lake McConahagy projects of Nebraska Public
Power District and Central Nebraska Public Power. That Nebraska
plan that then Governor Nelson developed eventually became the
three-state cooperative agreement which led to the settling of
that re-licensing.
Current programs in the farm bill have proven remarkably
flexible in dealing with water quantity issues. CREP, EQIP and
CSP all are proving to be valuable tools in helping develop
water quality, water quantity and in habitat. In Nebraska, the
USDA in partnership with farmers and the State are saving large
volumes of water in the Platte, Blue and Republican basins.
These have been really glowing examples of how to bring
Federal, State and local money together to achieve a common
goal. These programs continue to face new challenges, but they
also provide a platform to achieve far more in the future.
One of the biggest issues facing CREP, EQIP and CSP is
payment limitation. I have personally favored lowering the
payment limit, realizing that if we do this, large operations
may have little incentive to participate. If large operations
are to continue receiving large payments, perhaps we should
develop a two-tier limit where there would be far lower
production payments but much higher limit for conservations
payments.
Senator Harkin said, I feel it may be time to make a
fundamental shift in our farm programs. We have a window of
opportunity today with high cash grain prices to stop paying
operators based on the volume of grain produced and start
paying on production methods. If farmers' payments were tied to
their ability to reduce consumptive use of water, they would
likely make that a goal. Breaking out highly erodible land
could be discouraged and payments could be reduced or
eliminated as a penalty for this practice. Both of those
examples would at the same time save water and benefit the
natural environment. An investment of this kind in farm
programs might be widely supported by both rural and urban
America.
Conservation can also be a double-edge sword. One man's
conservation can take another's water supply. When doing an
analysis of a conservation project we need to quantify the
impact of the conservation practice to stream flow and require
an offset if the practice depletes the flow of the stream. If
such an offset were too costly in a certain area, then perhaps
this conservation measure should not be done in this particular
location. At this time we do not have the capability to do
this. Additional research to allow this type of analysis would
be very helpful.
Cropping patterns can also impact consumptive use in a
river basin. We cannot tell farmers what to plant, but it might
be appropriate to provide incentives to those who chose to
plant crops that will lower the consumptive use of water.
I would highly encourage you to support research into crops
that save water and other potential conservation practices that
may lower consumptive uses of water.
Among conservations programs EQIP has proven to be the most
useful in dealing with water quantity issues. One suggestion
for this program would be to allow longer contracts similar to
CREP. By lengthening contracts we could accomplish greater
water savings and reduce the administrative workload on NRCS.
The CREP program has also been used to reduce water use in
Nebraska. One problem we encountered with CREP was the acreage
cap for counties. I would suggest that we consider allowing
NRCS to exceed the cap in counties where the hydrologic system
is over appropriated. By definition we cannot sustain current
levels of development in those areas, so a cap really serves no
purpose.
CSP has the potential to be the most powerful conservation
program of all, but it lacks the funding necessary to make it
successful and due to its complicated nature, farmers are
reluctant to pursue it.
Speaking as a farm operator, if it takes days off work for
me to understand a program and to comply with its requirements,
I am going to be reluctant to participate. It appears to me
that the administrative requirements of this program are great
enough that I am not going to be able to comply without doing
some harm to other parts of my operation.
If I look at CSP with regard to water quantity issues, I
see a number of possibilities. Riparian management could be
used to benefit water quality, water quantity and restoring
habitat to a more natural State. Invasive vegetation is a
nationwide problem in our rivers, and CSP could be used to
assist in this area. Native vegetation can also cause water
problems if it occurs in river beds and causes flooding. These
kinds of issues could all be addressed in CSP.
Thank you for the opportunity to be here and share my
thoughts with you.
[The prepared statement of Mr. Schwarz can be found on page
72 in the appendix.]
Chairman Harkin. Now we turn to you John Crabtree,
development and outreach officer for the center for Rural
Affairs in Lyons, Nebraska. He is involved with his family's
corn and soybean farm near Dougherty, Iowa. Welcome.
STATEMENT OF JOHN CRABTREE, CENTER FOR RURAL AFFAIRS, LYONS,
NEBRASKA
Mr. Crabtree. Thank you, Chairman and Senator Nelson. I
just wanted to say I really appreciate testifying in this part
of the committee. I was born in Iowa, grew up in Iowa, lived
there for 35 years. The only thing that got me to leave was a
job in Nebraska at the center for Rural Affairs. So this is
really a great panel to speak to. I must confess particularly
Dr. Wintersteen here, I was a University of Iowa grad, though,
sorry.
Chairman Harkin. Cannot win them all.
Mr. Crabtree. The 2007 Farm Bill presents an opportunity,
and certainly this is true of all farm bills. However, the
continued consolidation and concentration in agriculture, both
at the level of production and in processing, calls for a farm
bill debate that closely examines and ultimately addresses
fundamental structural issues and long-term investments in
rural America.
Today you heard and as we go forward in this debate you
will hear a lot of stories about the chronic economic problems
that we face in many rural communities. And it is important to
consider chronic economic challenges in the drafting and debate
of the Farm Bill. But we should, however, recognize there is
hope and there are solutions to some of the challenges we face.
Senator Nelson and others testifying mentioned small scale
entrepreneurship as a proven strategy to revitalize rural
communities. It can create genuine opportunities across rural
American with the support of a modest investment by the Federal
Government.
The importance of small entrepreneurship is particularly
profound in the most rural areas. The Center for Rural Affairs'
analysis of economic conditions in farm and ranch counties of
Iowa, Kansas, Minnesota, Nebraska, North Dakota and South
Dakota found that nearly 60 percent of job growth in the 1990's
in farm and ranch counties in those States came from people
creating their own job by starting a small non-farm business.
The small entrepreneurship is the one development strategy that
consistently works in these communities.
We strongly support Senator Nelson's proposed rural
entrepreneur and micro-enterprise assistance program because it
would tap into the rural development potential of small
entrepreneurship. The program was modeled after a provision in
the Senate version of the 2002 Farm Bill, which was not in the
conference report, and also a program initiated by Senator
Nelson in his previous job as Governor of Nebraska. As the
Senator pointed out, it works. Nearly $7 million lent. Nearly
$7 millions lent over the last then years. 15,000 businesses
assisted in rural Nebraska, $12 leverage to each dollar spent.
And at $330 per job I must point out that the center for Rural
Affairs does not support micro-enterprise development and
entrepreneurship because we are nostalgic for a mainstream of
yesteryear.
This is in truth the heaviest hitter in rural economic
development. This is where jobs are created. And at that cost
and at 50 to 70 percent depending on where you go across the
country, that level of job creation, this is where rubber meets
the road in rural economic development.
In talking about entrepreneurship I think we also must come
to recognize that beginning farmers and ranchers are
entrepreneurs as well. The future of agriculture, indeed much
of the future of our rural communities, depends on the ability
of new family farmers and ranchers to get started. And if
beginning farmers cannot get started, if there is no future in
farming, then the current policy is not working. The cost of
land, either renting or purchasing land is the most significant
barrier to entry for beginning farmers and ranchers. And land
costs weigh heavily on the success of or failure of many
established small and mid-sized operations as well.
There was not the original intent of the Federal farm
programs to become the driving force behind consolidation.
Virtually unlimited farm program payments are used by mega-
farms to drive their smaller neighbors out of business.
Now although securing payment limits may be the most
difficult thing we try to do in this farm bill, it is also the
most important. In fact, without real limits farm programs work
against us.
Just a couple things quickly to point out that while it may
be difficult, the solutions are elegant. It is simple. First
and foremost, close the loopholes and make current paper limits
real. Limits should be limits regardless of how farms are
organized. With direct attribution of farm payments to a real
person and a definition for actively engaged that involves dirt
under the fingernails farm programs can work.
We urge you to say no to any Farm Bill that lacks
meaningful and effective payment limits because rural American
cannot afford another Farm Bill that undermines family farming.
Last, I just want to touch on livestock competition issues
because in many rural areas the livestock that are raised there
are only a few or even one packer or processor for a given
livestock species that buys from the farmers and ranchers. At
the same time there is been a dramatic increase in the use of
production marketing contracts. Currently fully 89 percent of
hogs are either owned outright or tightly controlled through
various contracting devices. Many farmers and ranchers face
price discrimination and severely limited market access as a
result. Congress should not let another farm bill go by without
making changes in the Packers and Stockyard Act and the Fair
Practices Act that are necessary to breathe some life and
competition back into livestock markets.
Just a couple of things real quick. Prohibit packers from
owning livestock, define undue preferences and establish that
producers need not prove anti-competitive injury to an entire
sector relating to packers and stockyard cases.
I want to end with this: It really does come down to a
question of--in a nation if packers and processors own the
control over livestock, what need is there for farmers and
ranchers? And I think if we are going to hold up the farm as
being a solution to some of the challenges of rural America,
then we need to do some of the things that you and Senator
Harkin and others have tried to do in the Competitive Fair
Agricultural Market Act, with S. 305, the prohibition of
packers owning livestock. Need to make these things into a
competition title in the Farm Bill and make it part of our
future. Thank you.
[The prepared statement of Mr. Crabtree can be found on
page 49 in the appendix.]
Chairman Harkin. Thank you very much, Mr. Crabtree.
Now we will tour to Mr. Stroburg, CEO and president of the
Renewable Energy Group in Ralston, Iowa. REG owns three
biodisel refineries located in Ralston and Wall Lake, Iowa and
Glenville, Minnesota with a total production capacity of 72
million gallons per year. Current biodisel production capacity
in Iowa is about 140 million gallons per year. So Mr. Stroburg,
welcome. Please proceed.
STATEMENT OF JEFFREY STROBURG, CEO AND CHAIRMAN, RENEWABLE
ENERGY GROUP, INC., RALSTON, IOWA
Mr. Stroburg. Thank you, Senator Harkin, and thank you,
Senator Nelson. Really appreciate the opportunity to come talk
to you about biodiesel and the biodiesel industry. Renewable
Energy Group is a roll up of all the biodiesel activities that
West Central Cooperative have been involved in since 1996. And
we build bodies of plants and build them for third parties as
well as for ourselves. And we also market the biodiesel coming
out of those plants.
The number of people that have invested in REG biodiesel
plants in Iowa exceeds 3,000. So there is more than 3,000
individual investors. Matt Schuitteman, who has talked about
investing in an ethanol plant, there are 3,000 mostly rural
farming investors who invested in these plants.
The biodiesel industry provides opportunities for rural
development. It also provides opportunities for jobs in rural
communities. These are skilled jobs. These are skilled jobs
that quite often require a 4-year degree or even an advanced
degree, so it is--biodiesel is a great rural development
opportunity.
One of the threats that we have for the growth and
development of biodiesel as an enhancement to our overall
national energy complex is an item called renewable diesel, and
this is a non-ester renewable fuel where an existing petroleum
refinery can take animal fat or vegetable fat and run it
through the existing refinery and call it renewable diesel. It
is not biodiesel by definition. It is a non-ester diesel, and
yet the department treasury has determined that they can get
all the benefits of that legislation has--provides for
biodiesel.
This is a real threat to the growth of the biodiesel
industry. It is not what was intended by the legislators when
they passed the incentives for biodiesel. It does nothing for
rural communities. It does nothing for rural development. And
maybe most important, it does nothing to expand our ability to
produce more diesel fuel in the United States.
When we build a biodiesel plant we expand the production
capacity of diesel fuel in the United States. It is been
decades since a petroleum refinery has been built. So when we
run vegetable oil through the existing refinery we do nothing
to expand our ability to produce more diesel fuel in the United
States.
Recently, I credit this first to Boston, they announced
they believed their analysis--believe that there would be a
diesel crunch about midsummer. And the reason is not because
there is not enough crude oil. The reason is there is not going
to be enough refining capacity. We need a policy that
encourages the growth of refining capacity in the United
States.
So we do believe that we need to deal with this issue of
renewable diesel, and we need to make sure the definition of
biodiesel tracks with what was the intent of the legislation.
We have had a lot discussion about ethanol today. And so
I--a great honor to be able to talk about biodiesel. There are
differences in ethanol and biodiesel. Biodiesel is a much
younger industry. We have not had the opportunity to get this
far along in the development curve as ethanol. Biodiesel is
also not as well understood by its users as ethanol is now. And
because of that we think we need--we need to make a distinction
between the consumer awareness and the policy that is going to
be required to promote biodiesel. We are in a different stage
than ethanol. We do--we do believe that we need to increase the
support for programs that target biodiesel and biodiesel
awareness among consumers as well as handlers.
The handling of biodiesel is an extremely important issue
if we are going to maintain the quality of fuel in the overall
fuel system.
Renewable Energy Group also supports the research title
outlined in Title VIII of the Farm Bill. This provides for $500
million of mandatory funding over the next 10 years. And we
think this is going to be extremely important so that we have a
collaboration between Federal and university scientific experts
which will ultimately make bioenergy most cost effective.
Feed stock supply is also an important issue for our
industry. Senator Nelson talked about feed stock
diversification. And we believe and experts believe that
biodiesel can be made from many different feed stocks.
Senator Nelson, just think about the drought area that
Drought David is causing in Southwest Nebraska and think about
maybe putting algae ponds in Southwest Nebraska. They need
sunlight. They do not need high quality water. It can even be
brackish water to grow algae. Algae in the future we believe
will be a great source of oil for biodiesel.
There are other plants that we believe could grow in more
areas where traditional feed oil plants cannot be grown.
Colorado is looking at mustard, and we think there is many yet-
to-be-discovered seeds that were not useful in the food chain
but might be very useful in the biodiesel area.
So we do appreciate the opportunity to talk about
biodiesel.
One other item I would like to touch on is just the support
to increase the transport of biodiesel in pipelines. It is been
done in Europe, and we need to have incentives that help us
encourage the pipeline industry in the United States to move
biodiesel through pipelines.
Thank you.
[The prepared statement of Mr. Stroburg can be found on
page 75 in the appendix.]
Chairman Harkin. Thank you very much, Jeff. Thought I would
just switch it here since I went first, I will try to give my
colleague, Senator Nelson, the opening line for questions.
Senator Nelson. Mr. Stroburg, let me just begin with you.
Clearly going to a crop that does not have any food value but
does have value for alternative energy is, I think, probably
consistent with what we have been saying, instead of taking
land out of production where it could be used for other
purposes, as Senator Harkin said, with perhaps a lower payment
from the government but with the expectation that if you get
into this business of producing this crop, algae, or moving
from corn to sweet sorghum, making some change that will simply
add to our fuel capacity is very important. I do not know about
algae, but I suspect since we have--we can raise salmon in
Nebraska, we might find a way to grow algae as well.
But what are your thoughts about what you could do to
create the incentive, encouragement and get reality of having
these alternative crops develop to go to creating more
biodiesel fuel.
Mr. Stroburg. One of the first steps is to have the land
grant universities of the United States, particularly the two
greatest ones, Iowa State University and University of
Nebraska, do basic research on that. There are--there are plant
species out there that have not been commercialized that our
farming community is not used to raising that move through the
university system and eventually become commercialized. That
will happen as long as we continue to support the research and
support on the other hand, the biodiesel use, because there is
nothing greater than consumer demand. And if we have consumer
demand it will get pulled through clear from the university
clear to the end users' tank.
Senator Nelson. I agree with that.
Mr. Schwarz, because of your interest in water you have
looked at a lot of different ways of conserving consumptive
use. And I still get--we grew up in the same particular area.
Bertrand is not that far from McCook where I grew up, probably
what, about 65 miles. And with all the salt cedar and other
kinds of weeds and growth that is coming up in the Republican
River Valley right along the river bed, it is changed the whole
structure, and there is a great water demand for those non-crop
weeds and growth.
I saw that there is--there was a pilot program of using
goats. I cannot make this up, I am sure. But using goats down
in certain areas that will eat those plants but would not touch
the grass for grazing cattle and other livestock. I am not
going to ask you how many goats it is going take to clear that,
but I imagine Becky could figure it out pretty soon with her
background.
What are your thoughts about what we do in the Farm Bill to
eliminate that kind of growth that, for water purposes, that
would help increase water availability going down the
Republican River, going into Kansas, to take some of the
pressure off Southwest Nebraska where otherwise, if it isn't
Drought David that will so negatively impact the economy, then
the lack of having--or having crop land taken out of production
or turn to dry land will otherwise adversely affect it? Do you
have any thoughts about that.
Mr. Schwarz. We are working in the legislature right now to
pass a bill that will begin to depress invasive species issues
and over vegetation of our rivers. Nebraska has kind of a
unique situation right now where a lot of the country is really
concerned about maintaining and growing stands of trees. We
have, because of an endangered species issue, a need to remove
a lot of vegetation from our rivers to benefit those endangered
species. Of course, salt cedar is a major water user and also
is counter to our ability to protect those endangered species.
So this bill, the idea is to eliminate these species to the
greatest extent practical on these river beds.
There are different ways to deal with these species, and of
course, one is to use chemical application and then mechanical
or non-traditional goats. Central Public Power did an
experiment on Jeffrey Island near Lexington and that area as I
recall is about 1,000 acres, and I believe they brought in
about 1,000 goats. And it was quite a sight to see. These goats
will literally climb up the salt cedar bushes, they are really
not a tree to look at them, and they will eat the vegetation
off and they prefer eating weeds. They prefer eating salt cedar
rather than the grass. They literally will leave the grass to
the last to eat. But there is not that quite much demand for
goats in the market.
So if we are going to control the salt cedar problems we
have in Nebraska, it is questionable if we could put enough
goats out there to get the job done, so probably with some kind
of a mix.
So we are going to use traditional controls. We need, and
it takes a lot of money no matter how you do this, and what we
are trying to do is utilize the EQIP program to leverage State
money to get the job done and the EQIP program right now works
perfectly for this. So that is another case where we have got a
product out there that is working and we can utilize it to do a
better job.
Senator Nelson. Congressman Osman and I at the end of the
year get some more CREP money and EQIP money to be able to do
that.
And Dr. Wintersteen, as we get better with our conservation
practices to--with strips and other grass growth might protect
the erodible acres, the good news is we do that. The bad news
is then there is less water necessarily flowing into rivers,
streams and other sources to go into the State of Kansas, which
puts us in--the better we get on conservation sometimes the
harder it is for us to make those compliance requirements.
But I appreciate very much your comments, Tom, and
continued to work. If there is something we can do, obviously
let us know. Thank you.
Chairman Harkin. Goats, have you ever tried to buy goat
cheese, it is expensive. Not kidding you. Went to the store, to
Safeway in Virginia to buy some cheese. All the goat cheese
from France, you have to look hard to find any from the United
States. Maybe there is a market there. I do not know. I am just
kidding you.
I want to talk to Dr. Wintersteen about formula funds. Now
formula funds I understand what they do. I understand how they
operate. Questions have been raised that some of the formulas
have been relayed down into 1800's, and we continue to operate
on that basis. Some have said that we should take a look at
these formulas. Formulas were laid down at the time when a land
grant college served a defined area. The land grant college in
Iowa served the needs of the Iowa agriculture. The land grant
college in Georgia served Georgia. The land grant college in
Texas served--that is how they were developed. And there was
good reason for it at the time. But it seems to me now, Iowa
State is doing research on things that are applicable to
Georgia or Texas and they are doing research that is applicable
on us. I am just wondering, is there a need to re-examine how
those formula funds are allocated?
Ms. Wintersteen. I like the formula funds. I like the way
they are now. We benefit greatly. And I just--I think this is
my opportunity. I think it is critically important to
understand that if you look at the formula, the States that are
big in agriculture, Senator Harkin, are the ones that benefit
the most from those formula funds. And they are marked clearly
in the infrastructure, in the budget of the College of Ag at
Iowa State, at the University of Nebraska. If our formula funds
would go away, if the Federal Government, which are about $5
million, the number of faculty that I would not have the
salaries to pay them would be pretty significant. So we have it
embedded in our budget, they are operationalized. It would be
extraordinarily difficult to move away.
Chairman Harkin. I am talking--I am talking about the
review process that goes into the application for formula
funds.
Ms. Wintersteen. We would certainly be happy to participate
in the review, but again, we like the number we have right now.
Chairman Harkin. I mean, I understand that, of course. It
is the same thing about a lot of things, is it time to look at
them and think about a different kind of review process. I just
say, questions are being asked about it. I think they are
legitimate questions. If something has been operating the same
way since the 1800's you have to ask the question, is it really
meeting the needs of today or what we are looking at down the
pipe or is it just a system there.
Ms. Wintersteen. And I would argue we can document for you
the outcomes of these formula funds that we would be able to
share that demonstrated impact, and again, Wally Huffman's
research that is shown that 50 percent annualized return on
formula funds is an extraordinary response.
Chairman Harkin. Again, the essence of my question is
should these funds, could these funds, these formula funds
benefit from an additional review process to insure they go to
areas of study where they are most needed, looking ahead at
what we are trying to do in agriculture in the future.
Ms. Wintersteen. And I would state that within certainly
the College of Agriculture at Iowa State University we work
with our State holder groups. We ask them for their priority
needs and we focus on those using the dollars to address the
local needs. So to me, the review, if it is done, Senator
Harkin, is a review that should be done at a local level
because this again is a partnership between the State and the
Federal Government. The formula funds and Iowa that come in at
the $5 million level approximately leverages the States'
investment to the experiment station of $31 million.
Chairman Harkin. I hate to interrupt, but maybe a change in
the review process to think about more of this money ought to
be going to biomass research or biodiesel research or to the
kind of thing Senator Nelson just brought up, maybe Iowa State
would do better under that kind of a review process. I do not
know necessarily it would do worse. Might be it might do
better. So I just ask that and I ask you because you are so
involved in this because we do want to do more money in
research. We do have to do more in research. It is a shame what
is happened to ag research in this country. And--but we also
have a reality to face, and that is we have a really limited
budget. So the question then becomes--gets to be, well, is
there a better reallocation or better way of reallocating the
moneys that we have to look at the needs of agriculture in the
future. That is really the essence. And we will be doing that.
So I welcome, you know, your input into that as we move ahead.
Of course, we will be hearing from land grant schools from
around the country of course on that issue.
Mr. Sand, I do not know if you heard what Mr. Bailey said,
he raised an interesting point about a super EQIP and maybe--I
am going to get more information from you on that, but how
would you see transitioning the CSP into the role of being the
primary working land program, which you talked about, and how
would it work with the existing EQIP program? Is there some way
of melding those two?
Mr. Sand. I really appreciated your concept that you
explained in terms of using EQIP as getting the primary
practices on the land to make people eligible for CSP and to
turn that into a seamless process from making land eligible and
then actually moving people into the full one tier at a time
kind of improvement. So we have a continuous improvement
process.
I think one of the weaknesses of EQIP is the you have been
able to access it one practice by one practice, which has been
more of a Band-Aid approach. CSP is--its advantage is hopefully
engaging more people in the conservation process, which is
critical. But it is engaging them in a continuous improvement
process, which is where we really have to be for environmental
protection. And obviously the big question is money because
farmers have been readily available to signup for CSP and been
favorable about participating.
Chairman Harkin. I think there is a lot of support if we
get off this watershed basis we have been on and make it
broader based. Also, as you know, most of the money in CSP has
been going for tier three. Well, that was never our intention.
Our intention was to reward the best obviously as an example,
but to start getting other people in at tier one and then
moving them up the ladder. And so we will be looking at that
and how we modify that in the next Farm Bill also. So I am--Mr.
Schwarz and others are interested in that area, any suggestions
and advice you have on that, I am open for too. How do we get--
focus more on tier one, getting more people into tier one? Tier
one, obviously that is cheapest. And you get more people
involved then you graduate them up to two or three, that type
of thing. But the idea of using EQIP as the basis for getting
them in and getting them the initial, you know, practice and
then moving them on through CSP. Anything you have got on that
I would sure appreciate that in the future.
I need more information, and I think maybe I will have to
lean on Senator Nelson for this, on what you said, Mr. Schwarz,
about tying payments to reducing consumptive use of water. I am
not certain how that would work.
Mr. Schwarz. Well, there are practices we can use that will
reduce the consumptive use of water. Anytime we can lower the
evaporation losses that we take on a piece of ground or through
approved crop genetics, we can lower the transpiration losses
we take on that ground. You know, we have got high hopes today
that with research that is also underway and nearing fruition
that we are going to have corn varieties that will use maybe as
much as a third less water in the process of growing it. You
know, if we can make conversions to those kinds of crops I
think it is going to benefit us all in the long run.
Chairman Harkin. Thank you very much. Last one I have, Mr.
Stroburg, moving biodiesel through pipelines. By the way,
Senator Nelson just showed me the ruling that came out of the
IRS just the other day I guess, right, on this? So obviously
this is something we are going to have to look at, this
renewable diesel thing. But question, biodiesel through
pipelines does not have the same problem as ethanol; is that
right?
Mr. Stroburg. That is right, they are moving biodiesel in
pipelines in Europe and have for years.
Chairman Harkin. Just want to make that clear.
I want to thank the panel very much, unless somebody has
one last thing they wanted to add or point to me before I move
on.
Mr. Schwarz. I guess one comment I would like to make is it
is important in our farm program, we have got to be able to
develop a farm program obviously that is acceptable to farmers,
but it is just as important that we have the ability to go to
that cab driver in Chicago and explain why we are taking X
dollars of his Federal tax money to go into these farm
programs. We have to show him that we are benefiting the
environment with that investment that he is making. We are
helping to lower his energy costs through the development of
these energy sources we have talked about here today, and that
we are providing some security that his food supply is going to
be there in the long term, it is going to be safe and he is not
going be dependent on outside countries for that food supply.
Chairman Harkin. Very good summation. I want to thank the
second panel.
Now we have some time, I am going to open it up for an open
mic. Panel, you do not have to sit there if you do not want.
You can leave if you would like. But I would like to open it up
for at last a few minutes here. We have some time for open mic.
This is an official hearing of the Agriculture Committee,
so I ask that you mention your name, where you are from and if
your name is not Nelson or Smith, you might want to spell it
out for the benefit of the recorder who is here.
Mr. Sturm has the mic and if you will just come down there
and make a concise statement, I would sure appreciate it.
Mr. Campbell. John Campbell, AGP, Omaha. Senator Nelson
came all the way across the river, and I am going to be brief
because as soon as I leave here I am going to be headed up to
Valentine for spring turkey hunting.
Senator Harkin, my written testimony, which I hope you will
put in the record, is really aimed at trying to help you head
the direction you are trying to go. And having my first Farm
Bill in 1980 I can tell you I never thought I would have said
that, but there is a huge convergence of thinking out here in
the country, which you are not going to hear from inside the
beltway. But out here there is a lot of convergence. And the
direction you are trying to take us involves changing the
momentum. In order to do that, in order to keep from just doing
the status quo, you have to burst some myths. There is a lot of
myths out there where there is factual research that can help
you along this path.
What my comments focus on today are primarily the CRP, but
all of these things weave together. So very briefly right now
today there is this debate about food versus fuel. We are using
about 15 million acres for bioenergy. At the turn of the
century we used 90 million acres. That is a DOE figure. That is
because we used hay and grain to power horses and mules and
oxen and those life machines that did our work. Well, so there
really is not much of a conflict here. But the real conflict is
not between food and fuel, but it is wildlife.
As you said, CRP is going to fall victim to the market
place if we do not do something different. And the key is
getting people inside the beltway to think about what we can do
different. And in order to do that we have to explode some
myths.
One of the myths is that CRP has been really beneficial for
erosion. It has not been. The facts are that most of the ground
is western high plains ground that was enrolled because of wind
erosion. That is not the most damaging erosion. Heat and real
erosion from water is the most damaging.
If you look at the facts, farmers through conservation
compliance and farming practices have brought more acres into
tolerance, the T level, on their own outside of the CRP than
have ever been accomplished by CRP. And it is even more
striking if you figure, as you know, out in western Nebraska
one person's soil erosion is another person's top soil. It is
totally different. We were trying to get the most ground in the
CRP for the cheapest dollars so we enrolled as quickly as
possible. So that has not been great.
Chairman Harkin. Can you sum up, please? We have got a lot
of people and I have to move on.
Mr. Campbell. Two other things, pheasant hunting, which I
know is dear to your heart, Senator Nelson, is on the decline,
hunting is on the decline. Pheasant counts are down from the
time when the CRP was established. The CRP has not been good
for pheasant and it has not been good for hunting, and you know
the reasons why. We need to redistribute that in the kind of
programs that are more widespread and less concentrated. Duck
populations, the same is true of duck populations, has not been
helpful, actually we are back to 1955 levels.
Chairman Harkin. Mr. Campbell, thank you. I have got your
thing, I am going to read it, believe me.
Mr. Andrews. David Andrews from the National Conference in
Des Moines. My question concerns the relationship between the
WTO or international trade. There is a trade section in the
Farm Bill and rural development. If--I think the WT0 is not
frozen in stone, that there are openings in terms of the
development agenda to special differential treatment developing
the country's products to geographic indicators, to special
products, there is an opening to the potential for global
agriculture that respects a greater diversity than the current
WTO seems to do.
And in the United States, the Farm Bill can assist in
further diversifying and localizing by removing road blocks to
local food procurement, to enabling meat inspection to go
forward that will allow State inspection that goes across State
borders. Why shouldn't Council Bluffs have the opportunity to
have meat produced here in Iowa go over to Omaha and satisfy
those markets? And there is some question at the USDA level on
food procurement rules. Why cannot we have the Department of
Defense purchase local foods where this is a opportunity? Can
we remove some of the obstacles to local and regional food
systems and also move the WTO to appreciate that phenomenon
too? Thank you.
Senator Nelson. I sit on the Armed Services Committee, and
we have from time to time inquired as to why the Department of
Defense or Pentagon does not take domestic products for food,
and we do not have a satisfactory answer yet. But we are going
to persist at it. And I do not know the WTO implications, but
obviously have to be considered once we are there, but you are
absolutely right. There ought to be--we do put requirements on
the Pentagon to have U.S. made products that they buy, creates
big problem because some of the internal working parts come
from other parts of the country, but it is the problem you have
with food grown here and we ought to have a priority. We have
not given up on it. It is just the Pentagon is a very difficult
place to change the culture.
Mr. Swanson. Harold Swanson, professor of the College of
Ag, started the ag department in 1970, ran it for 25 years, got
about 5,600 farmers out there that carry our brand and know how
to farm. And that picks up on what was said, that we have got
two times as many farmers over 60 than they have under 35. And
the problem, if you are going to farm, get some training, that
is what I always told my people. And we--our graduates are
very, very successful. And if we are going to--the problem is
there is no requirement, educational requirement to get into
farming. And when you look at--I remember the statistics back
then, only 10 percent of people who started farming back in the
1970's and 1980's had any training for their work. And I do not
know that it is any better than now. So the thing that I would
like to see directly for in the Farm Bill would maybe with FMHA
loans or PCA or even the credit, private credit to offer those
few years in farming some very substantial discounts on the
interest rates being a way of helping. And another thing is any
way that we can encourage people to get some training for
farming, because if once you get into a community college
program like ours here at the universities, it changes the
whole attitude of what it takes to get started farming. And it
requires just one tremendous amount of information and risk
taking. And so any way that could be put in there to help that,
that would be very appreciated. Thank you.
Chairman Harkin. Thank you.
Mr. Barry. Morning. My name is Tim Barry. I am from Council
Bluffs. Thank you for coming here today and hearing issues
about the Farm Bill. I was born and raised in a little town
north of here, Pisgah, Iowa, and my brother still farms the
family farm up there. I have been in the seed industry about 30
years. I am also on the Iowa Seed Association Board. And
agriculture is not only my business, but it is also my passion.
I also work with the Chamber here at our Ag Committee, and I am
on the extension council here in Pott County. That is what I
wanted to speak with you about today as far as support of
extension.
Dr. Wintersteen talked about from the Iowa State view, and
I am talking about from the grass roots. Extension does so many
things for communities. It brings youth 4-H and some of the
youth programs, and this is so important to our communities.
Also it is a network that is already set and up and is in
practice as far as what they do. We have experts as far as
regional experts that talk about and support some of the bases
of agriculture around our States. And it is also a system that
is across the Nation too, through the land grant colleges. So I
guess from my standpoint as an extension council member, a
grass roots type of person, I guess I hope when you go to the
farm plan and you look at funds for extension and some of the
issues in that regard, no matter how you do it, I think it is
something that helps our whole rural community and should be
part of the farm plan and do appreciate your time here today,
gentlemen. Thank you.
Chairman Harkin. I can assure you that extension service is
alive and will continue to be under this Farm Bill. I can
assure you of that.
Mr. Luckey. Bill Luckey from Columbus, Nebraska, Pork
producer in Platte County. We have hogs, my son has a cow/calf
operation. We have a small feed lot also. And we built a 2,000-
head finisher to bring one of our sons back into the operation.
So as far as entrepreneurship that is one of the things we did,
we took advantage of an opportunity and brought one of our sons
back. However, we have two more sons that might want to come
back, so I do not know what we are going to go to in order to
get them back.
I am speaking today on behalf of pork producers. And we
just want to emphasize how some of the structural changes are
always occurring in agriculture. It is particularly in the hog
industry. You know, we are not the same as what we were 20, 30,
50 years ago. There is definitely a change. As a Farm Bill
goes, we are going to have to change also.
But you stated that we are going to have a competitive
title in the Farm Bill. We want you to be extremely careful in
implementing that portion of the Farm Bill because it seems
like in so many situations we try to legislate to certain
issues, and we end up hurting some of the people that we want
to protect in the long run. So we just want to make sure that
you look at the consequences of all the legislature front to
back so you make sure you are helping the ones you really want
to help and not harming them. Thank you for having us.
Chairman Harkin. Thank you very much. Appreciate that.
Mr. Zylstra. Good morning. My name is Roger Zylstra, and I
am a grain and livestock farmer from Lynnville, Iowa. I am also
a director with the Iowa Corn Growers Association and I thank
you for this opportunity.
The Iowa Corn Growers has been working for a couple years
to identify some of the challenges with the Farm Bill and there
is four improvements that we would like to see.
We would like to see a revenue based commodity title, an
option for part of the direct payment targeted to farm and
family investments, a stronger conservation title and rural
trade organization friendly.
And you might ask why change the Farm Bill? The Farm Bill
is an investment in strengthening our economy. Congress must
make investments in programs that will enable the U.S. to keep
its edge in productivity, innovation, food security and
renewable fuels. This investment will increase the value of
farm programs, market orientation and tax dollar efficiency.
Thank you.
Chairman Harkin. You said four things, revenue issue based,
and then I got the stronger conservation. What was No. 2?
Mr. Zylstra. No. 2 is an option for part of the direct
payment targeted to farm and family investments.
Chairman Harkin. OK.
Mr. Zylstra. Part of that money maybe could be used to
invest in biodiesel, renewable fuels or conservation, just any
of those things.
Chairman Harkin. What was No. 4?
Mr. Zylstra. No. 4, we think it needs to be World Trade
Organization friendly.
Chairman Harkin. Well, we have to do that. People say to
me, do not pay any attention to WTO. Sometimes I would like not
to, but the fact is the Constitution of the United States
explicitly says that all treaties are the supreme law of the
land. So once we sign a treaty, it is the supreme law of the
land. And we did it, for better or worse, sign the WTO, so we
are part of that. So we have to be cognizant of it. It is the
supreme law of the land, and we have to operate under its
purview. So we have to be cognizant of it when we do develop
our Farm Bill, absolutely. Thank you.
Ms. Brahms. My name is Donna Brahms and I am representing
the bee keepers of the United States. I am the president of
Iowa Honey Producers, and I am also a member of the American
Honey Producers and American Bee Federation.
As you are no doubt aware there is a new and unexplained
condition known as Colony Collapse Disorder and it is wreaking
havoc in the nation's bee colonies. We are losing alarming
rates of bee colonies in the United States. Some bee keepers
have lost upwards of 90 percent of their colonies. And
America's bee keepers and their bees are an indispensable
pillar of the United States agriculture. Without honey bees we
would lose one-third of the food that we are used to eating.
Every third bite is attributable to a honey bee. If we do not
have honey bees, we are not going to be able to continue with
food as we have it now.
I am--Iowa State does no research on honey bees. There is
no school in the State of Iowa that is helping bee keepers. Not
just--I am here mainly to make sure that the research is
continued for the ARS, honey bee research labs, there is four
of them in the United States. We need to make sure that they
continue getting their research, and we would also like to ask
that implementation of the crop insurance program for bee
keepers that Congress authorized in 2002 is put in place. And I
would like to thank you for signing the letter that Senator
Baucus from Montana formed to send to the Secretary of
Agriculture. So, thank you.
Chairman Harkin. I am sure glad you are here. I am aware of
this, so is Senator Nelson. I do not know if you wanted to
respond at all, Senator Nelson.
Senator Nelson. Obviously the honey bee industry is an
important part of agriculture and the USDA needs to focus on
this right away. I mean it is critical, the problem is more
than imminent, it is upon us, and we have to react to it. And
we would like to obviously get some research, private or
public, to know what to do to stem the problem.
Chairman Harkin. I can assure you, we have--we are aware of
this, and we are pushing USDA to find the solutions through the
different centers that you mentioned, the four ARS stations--
ARS stations that are doing research on this. And it is--it
could be a devastating problem. I do not know if Dean
Wintersteen, if you have anything to add to that.
Ms. Wintersteen. I would agree that it is a crisis in
agriculture nationwide, and it is an unexplained issue, and
clearly ARS leads the way in addressing this issue through
their established program.
Chairman Harkin. I am really glad you brought that up. I am
remiss in not mentioning it. Because it is a very important
factor in agriculture. It is hit us hard just in the last few
months. Thank you.
Mr. Beckman. I am Doug Beckman from Mills County. I am an
ex-teacher and farmer from that area for a long time. I am just
glad to hear that there seems to be a lot of interest in rural
development, maintaining a part in the ag program. And I think
Iowa, the Midwest in general, is on the verge of a huge
undertaking and it is coming up in the near future if policies
and legislation allow it to happen with development of biomass
and biofuels and bioproducts that could be developed. And I
think they could get something done in our smaller rural
communities.
One of the things that is concerning me a little bit, I
know you mentioned that you think ag research money should be
increased and I would like to see our universities stay
involved in that research, especially along these new
technologies. If private business takes over that, I am sure
they are going to end up owning a lot of intellectual
properties that are not going to be available if the university
had no part in developing it. So it is a way of keeping the
public involved using our tax moneys I believe, that they can
all benefit rather than a few private individuals maybe
benefiting in the long run. Thank you.
Chairman Harkin. Very interesting concept I thought. Thank
you.
This is the time for us to move on. I have another hearing
in Sioux City this afternoon. Again, I want to thank all of our
panelists for your testimony, for coming a great distance, and
thank all of those who just added their comments here at the
end here.
As you can see, ag policy is very complex, interwoven with
so many aspects of our daily lives. We have a tremendous job
ahead of us. We have a tight budget situation confronting us. I
only wish I had--I wish we had the baseline money to operate on
this year as we did in 2002, and we do not. We are fighting to
get more. And I could not ask for a stronger ally and stronger
friend for rural America and agriculture than we have got it
Senator Ben Nelson, and I want to thank you for again being
here today and being such a great member of our Ag Committee.
Senator Nelson. Thank you, Mr. Chairman. It is been a
pleasure and a very enlightening experience to be here today.
And I appreciate your scheduling this and calling it here in
Council Bluffs.
Chairman Harkin. Thank you very much, Ben. And we will keep
the record open to receive statements, et cetera, 5 days. If
anybody has statements and stuff, they can submit it to us, we
will keep it open for 5 days. Again, we thank you all and have
a safe travel home, and the Senate Agriculture Committee will
stand adjourned.
[Whereupon, at 12:17 p.m., the Committee was adjourned.]
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A P P E N D I X
April 14, 2007
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DOCUMENTS SUBMITTED FOR THE RECORD
April 14, 2007
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