[Senate Hearing 110-184]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 110-184

                  2007 FARM BILL: EXPANDING MONTANA'S
                       AGRICULTURAL OPPORTUNITIES

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

                             FIELD HEARING

                               before the

                       COMMITTEE ON AGRICULTURE,
                        NUTRITION, AND FORESTRY

                          UNITED STATES SENATE


                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION


                               __________

                              JULY 2, 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
                    Jessica L. Williams, 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):

2007 Farm Bill: Expanding Montana's Agricultural Opportunities...     1

                              ----------                              

                          Monday, July 2, 2007
                    STATEMENTS PRESENTED BY SENATORS

Baucus, Hon. Max, a U.S. Senator from Montana....................     2
Tester, Hon. Jon, a U.S. Senator from Montana....................     5

                                Panel I

Arganbright, Darin, President, Montana Grain Growers Association, 
  Carter, Montana................................................    10
Gray, Colette, Great Falls Opportunities, Inc., Great Falls, 
  Montana........................................................    12
Merrill, Alan, President, Montana Farmers Union, Great Falls, 
  Montana........................................................     9
Quinn, Robert, Montana Organic Association, Polson, Montana......     6

                                Panel II

DeBruycker, Brett, President, Montana Cattlemen's Association, 
  Dutton, Montana................................................    23
Hinnaland, Dave, Montana Wool Growers Association, Circle, 
  Montana........................................................    21
Roth, Steve, President, Montana Stockgrowers Association, Big 
  Sandy, Montana.................................................    22
Taber, Jim, Chairman, Young Farmers and Ranchers, Montana Farm 
  Bureau, Shawmut, Montana.......................................    19
                              ----------                              

                                APPENDIX

Document(s) Submitted for the Record:
Alternative Energy Resources Organization, prepared statement....    48
Chester Irrigation Project, prepared statement...................    49
Ducks Unlimited National Priorities for the 2007 Farm Bill.......    51
Dutton State Bank, prepared statement............................    52
Montana Association of Conservation Districts, prepared 
  statements.....................................................    54
Montana Bankers Association, prepared statement..................    55
Montana Grain Growers Association, prepared statement............    56
Montana Pork Producers Council, prepared statement...............    58
Montana Salinity Control Association, prepared statement.........    61
Montana Women Involved in Farm Economics, prepared statement.....    65
National Center for Appropriate Technology, prepared statement...    69
National Congress of American Indians, prepared statement........    70
Sage Creek Watershed Alliance, prepared statement................    92
Two Rivers Economic Growth, prepared statement...................    95
USA Dry Pea & Lentil Council, prepared statement.................    98
Various farmers and citizens from Montana, prepared statements...   104




















 
                  2007 FARM BILL: EXPANDING MONTANA'S
                       AGRICULTURAL OPPORTUNITIES

                              ----------                              


                          Monday, July 2, 2007

                              United States Senate,
                                  Committee on Agriculture,
                                   Nutrition, and Forestry,
                                                    Great Falls, MT
    The Committee met, pursuant to notice, at 11:00 a.m., in 
the Great Falls Civic Center, Hon. Max Baucus, presiding.
    Present or submitting a statement: Senators Baucus and 
Tester.
    Senator Baucus. The Senate Agriculture Committee hearing 
will come to order.
    We are very honored to have the second of the Committee's 
two field hearings, the second hearing here in Montana, the 
only other State that has two.
    Before I begin, I am just very honored to introduce just a 
wonderful man. He is a farmer in his own right. He is very 
popular. I do not know another governor in our country who is 
more popular than ours. So let us give a big round of applause 
to our governor, Governor Schweitzer.
    [Applause.]
    Governor Schweitzer. I want to welcome two great United 
States Senators back to Montana. Montana is well served having 
Max--I do not know how these things work in Washington, DC, but 
apparently the Finance Committee is the Committee that actually 
writes the checks. Max is Chair of the Finance Committee. So 
Montana is well-served.
    Having Max on the Finance Committee and the Agriculture 
Committee is very important and it shows. Because having this 
hearing in Montana, giving you producers an opportunity to talk 
about what we need in the next farm bill.
    And having Jon Tester and Max Baucus, both of them from an 
agricultural background here in Montana, both knowing farming 
and ranching, we have never been better served in the United 
States Senate.
    That being said, we have got some great challenges, as you 
know. In the livestock industry we have concerns about trade 
issues, breaking down some of those walls, making sure that we 
are protecting the health of our livestock in Montana. 
Obviously we have concerns because in Montana we have led the 
Nation in finding new ways of growing crops. Leading in pulse 
crops, for example. And finding ways of producing organic crops 
so that we can add more value to the crops that we are 
producing.
    Montana, we were just with a group of buyers from Taiwan. 
We were just in Kalispell with the Wheat Associates. And we are 
recognized, not just in this country but around the world, as 
the highest quality wheat anywhere.
    Now that does not come just by standing still. That comes 
because we have had a great breeding program that has 
concentrated on high quality, high gluten wheat. So that we can 
export to these markets all over the world.
    Now here is the challenge. The Administration says that we 
are going to produce 35 billion gallons of biofuels. That is 
the goal. And I have done a little math and I know that if we 
converted all of the acres of wheat, all of the acres of corn, 
and all of the acres of soybeans that we export currently, we 
may get to 35 billion gallons.
    So the only way you get to that level would be the so-
called cellulosic ethanol. I do not know how many years we are 
from that, 10, 12, 15. But when we get there, then it allows 
for opportunities in native grass, CRP, wheat straw, barley 
straw, wood chips. All of those are great opportunities.
    And I understand that this farm bill is going to have a 
provision to invest a great deal of money in developing 
cellulosic ethanol.
    So once again, it is great to see--as I look around the 
room, we were talking before, seeing so many good friends from 
every corner of Montana. And not just every corner 
geographically, but seeing the livestock industry, the wool 
growers, the grain growers, the pulse growers, the organic 
growers, and having every sector of Montana's agricultural 
community here helping these two United States Senators develop 
farm policy that will be Montana's farm policy.
    As you know, there is competing interests. Soybean farmers 
want one thing, the corn farmers want something else. And 
cotton always needs more than they have coming.
    [Laughter.]
    Governor Schweitzer. We do not have any cotton farmers. We 
are okay with that, aren't we?
    [Laughter.]
    Governor Schweitzer. So having two powerful United States 
Senators going to bat for the interests of wheat and barley and 
grain growers, pulse growers, livestock industry, Montana has 
never been better served.
    And thank you for bringing this hearing to Montana. I 
suppose I should welcome Senator Harkin's staff here who is 
the--I guess he is the Chair of the Agricultural Committee.
    Senator Baucus. He is.
    Governor Schweitzer. He is a good friend and he will be 
watching out for Montana's interests, because Max is good 
friends with him.
    Thank you very much, and welcome everybody.
    Senator Baucus. Thank you, Governor, very, very much. 
Appreciate it.

   STATEMENT OF HON. MAX BAUCUS, A U.S. SENATOR FROM MONTANA

    Senator Baucus. Good morning everybody. I want to welcome 
all of you to today's Agriculture Committee hearing on the farm 
bill.
    Today's hearing is likely to be the final hearing before 
the next farm bill is written. There were a lot of hearings in 
Washington, DC and several around the country. This is probably 
going to be the final Committee hearing.
    I am pleased to announce that Montana, as I mentioned 
earlier, was one of only two States to host two farm bill 
hearings.
    It is also great to have with us Jon Tester. Senator 
Tester--and I do not think anybody in the Senate has more 
firsthand knowledge of agriculture than does Jon Tester, and I 
very much appreciate him joining us.
    I want to give special thanks to the witnesses that are 
here today. You represent Montana's farmers, ranchers, and 
nutrition experts. I look forward to your testimony very much. 
Your testimony will be very important to members of this 
Committee and we thank you for taking the time and the effort 
to give it.
    I also want to thank everybody who has taken time to come 
here today. You have very busy schedules. You have a lot to do. 
We thank you very much for your participation.
    Before we get started here, I wanted to take a moment to 
reflect on the passing of a great Montanan. Everyone here today 
knew Nancy Peterson. She was raised just north of here, on the 
edge of our State's golden triangle. For more than 30 years 
Nancy dedicated herself to agriculture in Montana, working 
2,500 acres North of Havre, serving as an advocate to so many 
Ag organizations, including the Grain Growers and the Farmers 
Union, serving as chair of the FSA State Committee with Brian 
Schweitzer and Bruce Nelson, and heading up the Montana 
Department of Agriculture.
    Nancy brought her love for the land and the people who work 
it into everything she did. We will miss Nancy very, very much. 
Let us give a moment of silence for Nancy Peterson.
    Senator Baucus. Thank you very much.
    President Eisenhower once remarked that 'Farming looks 
mighty easy when your plow is a pencil and you are 1,000 miles 
away from the cornfield.' That is a direct quote from President 
Eisenhower. He was responding to critics of his program to 
provide price supports for struggling farmers during the post-
war period. Growing up in a farm community in Kansas, 
Eisenhower appreciated the vital and difficult work farmers do 
to keep food on America's table.
    Today we hear similar criticism on the front pages of 
Eastern newspapers. Negative articles frequently refer to 
protectionist policies intended to shield farmers and ranchers 
from competition and to raise consumer prices. The articles 
waiver between portraying farmers and ranchers in completely 
opposite ways, either the corporate businessman leaching off 
the Government dole, or the hayseed farmer unable to compete 
without a handout.
    These portrayals are disappointing to me and disheartening 
to rural America. I know that in this high-tech age it is 
tempting to downplay the importance of those who put food on 
our table and clothes on our back, but the better part of 
history should teach us to avoid that temptation.
    One common attack on U.S. farm policy is it is no longer 
for the family farm and ranch but rather has become corporate 
welfare. But even the most basic research quickly uncovers that 
nearly all producers in America are family farms and ranches, 
not corporations and conglomerates. And it is often overlooked 
that American consumers today spend a lower percentage of their 
disposable income on food than do consumers elsewhere around 
the world.
    In fact, American families are the only families in the 
world who spend less than 10 percent of their disposal income 
on food. The only families in the world.
    Clearly, many of these critics would benefit from some time 
in a wheat field outside of Carter or a ranch in the 
Bitterroot.
    As everyone knows, agriculture is vital to Montana's 
economy and heritage. It is the financial engine that drives 
our State's economy. One in five Montanans works in agriculture 
or a related field. Each year Montana ranchers and farmers 
produce $2 billion of the finest and highest quality 
agriculture goods produced anywhere in the world. Our State 
ranks first nationally in the production of certified organic 
wheat, third in wheat and barley, in the top six in beef, lamb, 
and honey.
    Because agriculture is so important to Montana, it is 
important for the Senate Agriculture Committee to hear directly 
from Montana's farmers and ranchers, not just the echo chamber 
in Washington, DC and one-sided news reports.
    Things have changed dramatically since we wrote the last 
farm bill. This farm bill will be unlike any in the recent 
past. There are more competing interests and the budget is 
tighter than ever. Difficult choices will be inevitable. The 
upcoming farm bill must be well thought out and tailored to fit 
the changing needs of America's and Montana's farmers and 
ranchers.
    Today we have a distinguished panel of witnesses to help us 
answer the tough agriculture policy questions. Those answers 
will help guide this Committee as it looks to reauthorize the 
farm bill.
    The first panel will discuss the commodity, conservation 
and nutrition titles. As we write the upcoming farm bill, the 
commodity title could be the most difficult. I look forward to 
hearing from Montana producers on the best way to provide a 
safety net for agriculture.
    Often overlooked, the nutrition title contains over half of 
the farm bill spending. It is important that these programs 
work well for Montana's families.
    The second panel will discuss livestock issues and I am 
especially interested in hearing the panel's views on country 
of origin labeling, interstate shipment of meat, and animal ID.
    Once again, I am glad we have the wide range of our 
agriculture community represented here today. I look forward to 
hearing your testimony. I very much value your input to provide 
guidance as we work with the Agriculture Committee on the next 
farm bill.
    I would now like to introduce a person we are very proud of 
both here in Montana, especially those of us close to Chester, 
and also in Washington, DC who are getting to know Jon very 
well. We are very honored to have as a part of this hearing 
somebody who really knows agriculture very, very well and who 
is cutting a wide swath in Washington, DC That is Jon Tester.

   STATEMENT OF HON. JON TESTER, A U.S. SENATOR FROM MONTANA

    Senator Tester. Thank you, Max.
    First of all, I want to thank you for all the work that you 
have done in setting this hearing up and all of the leadership 
you provide in Washington, DC on a myriad of issues, including 
agriculture policy.
    I also want to welcome the folks from Senator Harkin's 
office and Senator Chambliss' office. I appreciate your bosses 
sending you to Montana to hear from the good folks in the 
agriculture community here in Montana.
    I also want to thank the folks who have come here to 
testify and those of you who have come to listen. It is 
important that the policies that we develop in Washington, DC 
really work for Montanans and for this country. And it is 
through hearings like this one that we get the feedback that we 
need to get a farm bill that works.
    And it is important to know that those of you folks that 
are not on the panel, we have staff members here and we are 
here. So you should have the opportunity, at least to a certain 
extent, to visit with us about certain issues that you care 
deeply about, even if it is not covered on the panel. And if 
not, then you can drop us a line or give us a call.
    Most of you folks know, as Max alluded to, that I am a 
farmer. We have been coming back every weekend to do policy 
work in the State of Montana, but also to help my son-in-law 
and daughter take over the family farm. It is indeed a 
challenge, as you all know. My grandparents, as I suspect many 
of yours, came to this country when the grass was tall and 
created communities. I am very, very thankful that my kids are 
able to come back to the farm. It is something that I know my 
grandfather and grandmother would be very, very proud of.
    But I have also seen firsthand how difficult it is for the 
next generation to move onto the land. If my wife and I would 
not have had the support from our parents and grandparents, we 
would not have been able to start. And I think that is even 
more true today.
    The folks in this room know how difficult an occupation 
that agriculture is. We are dependent on many forces that we 
cannot control: weather, insects, fuel prices, markets. There 
was a report that recently came out of the Washington Post back 
in April and it had some disturbing facts in it. It said that 
three times as much of the USDA rural development money went to 
metropolitan areas over 50,000 people than went to poor and 
shrinking communities like, I might add, the majority of those 
in Eastern Montana. And that is really not how the program was 
designed to work.
    Disaster has hit Montana hard in recent years due to 
drought and storms like the one that recently hit Valley County 
in Eastern Montana. And our disaster assistance program has 
been inconsistent and unpredictable.
    Fuel costs have created incredible hardship, not only on 
the price of gas and diesel, but also on the prices of 
chemicals and fertilizers. Not to mention that Montanans get 
doubly hard when hit with the fact that we have to pay freight 
both ways. Which could lead me to a discussion on freight 
rates, but that is probably for another hearing and another 
time.
    Even with all of these potential negatives, I am actually 
very, very positive about the future of production agriculture 
and about the potential of the effectiveness of this farm bill. 
I think we have some incredible opportunities in helping 
America become more energy independent, by growing our energy 
through the production of oilseeds, biofuels, biolubricants, 
for plants for cellulosic ethanol. And who would have ever 
thought that wind would have been an asset, wind for electrical 
production?
    I think big markets can open up to put more money in 
producers' pockets. Conservation programs can be revamped to 
focus on working lands. And our safety nets can be improved to 
bring more consistency and reliability to the farm economy.
    We need to facilitate more open market competition, both 
within this country and globally. We need to work on programs 
that actually facilitate adding value to our agricultural 
products right here in Montana, as well as rural areas 
throughout the United States.
    We can head in the right direction for better profitability 
in production agriculture with this farm bill if it is 
constructed properly, with your help. That is why I am very 
grateful that you have showed up today. With your input, we can 
have a farm bill that creates opportunities for folks involved 
in family farm agricultural production, and move it forward, 
can maintain this country's food security well into the future 
and promote energy independence through home-grown fuels.
    I really look forward to the panelists and I look forward 
to having a few questions when the panels are done, too.
    Thank you very much, Senator Baucus. And thank you all for 
attending.
    Senator Baucus. Thank you, Jon. I very much appreciate your 
participation in this hearing. You have got a lot to add.
    I would like to welcome our first knowledgeable and 
dedicated panel of witnesses. Our first witness is Robert Quinn 
representing the Montana Organic Association.
    He will be followed by Alan Merrill who is President, 
Montana Farmers Union.
    Third is Darin Arganbright, President, Grain Growers.
    And also, the fourth witness on the panel is Ms. Colette 
Gray. She is the community advocate for the Great Falls 
Opportunities, Inc.
    Thank you all very much. Your statements will all be 
automatically included in the record. However long they are, 
they will be included. I would encourage you to limit your 
remarks to about five minutes. Let's go down the line there and 
start with you, Bob, and then we will take it from there. Then 
I will have some questions, Jon will have some questions.
    Basically just tell it like it is, do not pull any punches. 
Let us know what you think. This day is gone after tomorrow. So 
all the very best.

STATEMENT OF ROBERT QUINN, MONTANA ORGANIC ASSOCIATION, POLSON, 
                            MONTANA

    Mr. Quinn. Thank you very much, Senator.
    My name is Bob Quinn. I live and work on a 2,800 acre 
fourth generation organic family farm southeast of Big Sandy in 
North Central Montana.
    Today I am representing the Montana Organic Association, 
which has a membership of over 200 farmers, consisting of the 
vast majority of organic farmers in the State. I thank the 
Committee very much for the opportunity to be here, the first 
time that the organic segment really has been invited to 
participate and testify, and we very much appreciate that.
    Senator Baucus. Jon might have something to do with that.
    Mr. Quinn. Thank you, Jon.
    As you know, for the past several years, organic 
agriculture has been the fastest growing and the most 
profitable segment of agriculture in the Nation. Our farm has 
been 100 percent organic for over 20 years now. Besides grains, 
we grow oil seeds to fuel our farm. In fact, it is my goal to 
be 100 percent fuel self-sufficient in two more years, not only 
for diesel but also for lubricants. We are heading down that 
road.
    We also grow dry land potatoes and dry land squash for 
local markets. This year we are experimenting with tomatoes and 
onions on a saline seep to see if we can turn that liability 
into an asset.
    One of our goals is to reduce our dependence on Government 
support programs by growing high value crops with specific 
health benefits. As you probably know, Montana--and we have 
already heard this--leads the Nation in the number of acres of 
organic wheat production. Organic is no longer a niche but is 
now being studied or introduced by most of the largest food 
handlers and processors in the Nation.
    With that said, you should also know that the demand for 
organic crops now exceeds the supply, to the point that this 
increasing demand is drawing supply from outside of our 
country. This is sending money out of the country that could be 
going into the farmers' pockets right here in our own Nation.
    What is really fueling this demand? And why are our farmers 
not meeting it? There are both negative and positive forces 
driving demand for organic products, I believe. On the negative 
side, there is the concerns of pesticide residues in our food 
and the growing concerns about allergies and other health 
problems related to GMO foods.
    On the positive side is the noticeably better flavor of 
organic foods. And now research is clearly documenting the 
presence of significantly higher levels of anti-oxidants in 
these foods, which contribute to better health.
    As far as production goes, I can tell you from my own 
experience that organic production is more profitable than 
conventional agricultural production. I believe this new 
possibility could revitalize rural Montana and rural America 
and bring back youths to the farms and the country who now 
leave because they see no hope and no opportunity in rural 
America and in rural Montana.
    If organic agriculture holds so much promise, then why is 
there not more conversion to it in Montana and surrounding 
States? I think the major problem is lack of information and 
technical support.
    This brings me to the first and biggest need I see for 
organic producers that could be addressed in this farm bill, 
and that is a need for research where the new focus is on 
sustainable organic cropping systems, locally produced 
biofuels, and study of functional foods which could replace 
expensive drugs.
    Some States, such as Minnesota, have established an organic 
research farm to study some of these questions. Why can't we do 
that throughout the country with a national initiative? 
Farmers, both organic and conventional, could be taught how to 
substitute green manures best suited for their region for 
commercial fertilizer.
    If food were considered our medicine and medicine were our 
food, then some of the health care dollars could be diverted to 
food, the return to the farmer could be increased to the point 
where there would be less dependence on Government support 
programs and they could eventually be eliminated.
    Countless millions have been spent to develop GMO crops 
which most of our customers in Asia and Europe do not want 
because of their health concerns. And recent research has 
started to substantiate that concern. Why not put at least as 
much research dollars into the study of functional foods, 
organic and locally grown, which have a growing demand, not 
only here but throughout the country.
    My second concern is crop insurance. Currently, organic 
producers pay a 5 percent penalty just because they are 
organic. I feel it is time that that penalty be dropped.
    There is also a crying need for data collection to produce 
actuary tables. And since organic crops are sold at higher 
prices than conventional crops, why can's we have insurance 
systems similar to that that are put together for malt barley?
    The third concern is the cost of transition from 
conventional to organic production, which takes three to five 
years. The EQIP program could help with that.
    And last is the concern for the cost of certification 
itself. This particularly is problematic for small vegetables 
growers. The cost of certification in Montana has gone from $90 
to over $600 now that the Federal rules are in place. For those 
who are doing small vegetables who have to be certified if 
their gross sales are over $5,000, that is problematic.
    In conclusion, in two days we will be celebrating, once 
again, our Independence Day. I think it is time for farmers to 
declare independence, too, independence from high cost of 
foreign and domestic fuel, independence from high-priced 
fertilizer, independence from foreign food imports. And 
finally, independence from large Government support programs.
    These days we hear a lot of talk about homeland security. I 
am here to tell you that locally produced fuel, fertilizer and 
fuel is homeland security and we just ask the Committee for 
their help in accomplishing those goals for agriculture today.
    Thank you, very much.
    Senator Baucus. Thank you very much, Robert.
    Alan, you are up.

 STATEMENT OF ALAN MERRILL, PRESIDENT, MONTANA FARMERS UNION, 
                      GREAT FALLS, MONTANA

    Mr. Merrill. Thank you, Senator Baucus, Senator Tester, for 
being here. I am the Montana Farmers Union President, Alan 
Merrill, from Big Sandy. I am, too, following in right behind 
Bob here and Senator Tester, I am an organic farmer and I have 
been at it for about nine years.
    One of the best things that has happened in the last couple 
of months is that my son, Nathan, has decided to come back and 
farm, which is a good thing. That is a young person coming back 
to farm.
    I farm with wife, Laurie. And my daughter is in Iraq right 
now. She is serving as military intelligence just south of 
Baghdad, so that is where she is. It is kind of interesting.
    In a nutshell, Montana Farmers Union believes that if the 
next farm bill includes the following provisions that farmers, 
ranchers and rural communities will be a part of an economic 
climate that will permit family-based agriculture to flourish: 
a farm income safety net that includes counter-cyclical 
payments indexed to the cost of production to support family 
farmers during periods of low commodity prices. Full funding 
for the Conservation Security Program and increases in the 
funding for the Natural Resources Conservation Service. A 
strong nutrition title to help provide basic food and nutrition 
needs for all citizens in need. A renewable energy title that 
makes energy independence a national priority. One that puts 
farmer, rancher and community ownership of renewable energy 
first, one that encourages value-added projects including 
ethanol, biodiesel, and farmer and commodity-owned wind energy.
    And finally, in that area, we need a permanent disaster 
program, funded from the general treasury, not taking off from 
something else that is already in the farm bill. That is what 
really hurts.
    I talked to a couple of FSA offices. They all have records. 
Since 1999 they have kept records for all farmers and ranchers. 
And so they have the records and they say it would be very 
simple to do a permanent disaster, built right in. Well, not 
simple, but kind of simple.
    Senator Baucus. Simple enough.
    Mr. Merrill. Fuels from farm, renewable energy from farm-
generated operations is one of the most exciting opportunities 
to happen in farm country lately. Here in Montana, we are 
enthusiastic about renewable energy opportunities, particularly 
wind and biofuels, as Bob just mentioned.
    In fact, right now, at this point, we are having a tour, 
Montana Farmers Union is having a tour out at one of our 
members, going through camelina. He has got a crusher going. He 
has got everything going. So it is a very positive, uplifting 
thing.
    Other things that the Farmers Union would like to support 
is going back to the permanent disaster like National Farmers 
Union--and I know you both know Tom Bias. Montana Farmers Union 
thinks permanent disaster assistance is a critical part of an 
adequate safety net and should not be conducted in its current 
ad hoc fashion.
    The counter-cyclical proposal, combined with the permanent 
disaster component better addresses producer needs and still 
leaves financial resources available for such priorities as 
renewable energy, conservation, specialty crop, producers, 
rural development, and research.
    Here is the neat thing: Montana Farmers Union, along with 
National Farmers Union, I would like to take a moment to 
discuss carbon credits and the Carbon Credit Trading Program, 
on the CCX, there is a growing public concern about global 
climate change. In response to that, the program is a voluntary 
private sector approach to conservation that allows producers 
to earn income in the carbon credit market for storing carbon 
in their soil through no till production, forestry, and 
pasture. National Farmers Union acts as the aggregator of the 
credits for our members and the credits are then traded on the 
Chicago Climate Exchange.
    One thing I know that Steve Roth will get into it, but 
Montana Farmers Union emphatically wants to get COOL going. We 
have to get it going. I am an organic farmer. Senator Tester 
and Bob Quinn right here will tell you how many records we have 
to keep. We have to keep them to be organic. Ranchers could do 
the same thing.
    So with that said, one thing that I really would like to 
stress, and I have talked to you both, Senator Baucus and 
Senator Tester, is that we have to get together as farm 
organizations. If we do not, if we are separated in everything 
else, you quoted that to me in your office on a fly-in March. 
You said that. We have to be together, on the same page.
    So with that said, thanks a lot.
    Senator Baucus. Thanks, Alan, very much.
    Darin.

   STATEMENT OF DARIN ARGANBRIGHT, PRESIDENT, MONTANA GRAIN 
              GROWERS ASSOCIATION, CARTER, MONTANA

    Mr. Arganbright. Thank you, Senator Baucus and Senator 
Tester.
    For the record, my name is Darin Arganbright. I am a third 
generation wheat and barley grower from Carter, Montana. And I 
currently serve as President of the Montana Grain Growers 
Association.
    Thank you for the opportunity to be here today to talk 
about the challenges facing Montana's wheat and barley 
producers.
    I would like to outline some of the major issues facing 
Montana's wheat and barley industry and what Federal farm 
policy can do to better help Montana producers withstand the 
challenges to their industry.
    In particular, I would like to talk about the 2007 farm 
bill and outline some of the areas where Title I Federal farm 
bill spending would best benefit Montana producers.
    The Montana Grain Growers Association realizes that 
Montana's wheat and barley industry is suffering from both 
lower net returns and lower levels of support than other 
program crops. Federal farm policy that provides an equitable 
safety net for wheat growers will be key to the future of 
Montana's wheat and barley industry.
    Over the term of the 2002 Farm Bill, our membership has 
seen some price increases for their world-class products, 
particularly in the last 12 months. While this has been very 
good news for growers, this increase has not kept pace with the 
extraordinary increase in the cost of inputs we have seen over 
the past four years. These input costs and the inability to 
pass them along are a tremendous threat to the future of 
Montana's grain industry.
    Since 2002, the last time Congress examined comprehensive 
Federal farm policy, a Food Ag Policy Research Institute 
published in April of 2006 estimated that fuel prices have 
increased 113 percent and fertilizer prices are up 70 percent. 
As of last week, those figures have probably been outdated, as 
they have gone much higher since then.
    A 2007 farm bill safety net that takes into consideration 
these increasing costs of production will be very important to 
Montana producers.
    The direction we have been given from our membership is 
straightforward and unmistakable. The highest priority for 
producers continues to be the direct payment. The direct 
payment has long been looked at as the primary safety net for 
Montana wheat and barley producers. The direct payment has also 
been instrumental in giving producers a bankable source of 
income from which their lending institutions have been able to 
provide operating funding during years of drought or distress.
    For many Montana producers, the direct payment has 
literally been what has put food on their family's table when 
their crops have been small. I can speak for that.
    The direct payment also provides Montana producers the 
stability and flexibility to expand that with alternative crops 
and take the risks necessary to unleash the potential that our 
State's producers could realize in renewable energy production. 
Montana producers have steadily increased the number of acres 
dedicated to crops that can be used for renewable energy, such 
as ethanol and biodiesel. This trend will only continue with 
the support of the direct payment.
    A healthy crop production economy also encourages value-
added businesses to establish in Montana. The three Great Falls 
mills, Pasta Montana, as well as the ADM malt plant all 
increase the local economy in a big way and exist because of 
commercial crop production.
    MGG also believes it is possible to provide an equitable 
safety net for growers while at the same time avoiding 
potential challenges created by our Nation's WTO obligations. 
The direct payment also accomplishes these goals.
    Montana Grain Growers have received little or no benefit 
from two key commodity program components of the 2002 Farm 
Bill, the Counter-cyclical Program and Loan Deficiency Payment 
Program. Severe weather conditions, most notably the drought in 
Eastern Montana the past two years, have led to significantly 
lower yields and even total failure. The LDP program is useless 
when you have no crop.
    In 2002 the target price for the Counter-cyclical program 
for wheat was also set considerably lower than was justified by 
indicated market conditions. This low target price has led to 
little or no support for wheat and barley in the form of 
counter-cyclical payments.
    While MGG understands the needs of producers of other 
crops, it is critically important for wheat and barley growers 
to be in an equitable position relative to other programs 
crops. Basing the target price off the relative costs of 
production will be critical to achieving equity and balance 
within the various program crops.
    MGG members also oppose payment limitations. While we 
understand this is and has been a very heated issue, we cannot 
support any type of means testing in farm policy, especially 
since payment limit proposals in the past have always targeted 
the direct payment more than the counter-cyclical or loan 
payments. This is unfair to wheat producers who rely on the 
direct payment.
    If we have learned anything from our dependence on foreign 
oil, it is that we should never be reliant on a foreign country 
for our Nation's food supply. The recent alarming food scare 
involving Chinese flour should serve as a wake-up call to us 
all that preserving and protecting our Nation's food supply 
should never be in question.
    For a very small slice of the Federal budget, less than 
one-half of 1 percent, and only 35 cents per day for every 
family in America, U.S. agricultural policy delivers 
substantial benefits and an unsurpassed level of food safety to 
consumers while at the same time conserving our Nation's 
precious agricultural resource base.
    Thank you again for the opportunity to be here today. I 
look forward to working with you as the 2007 Farm Bill is being 
written, and I look forward to answering your questions.
    Senator Baucus. You bet, Darin. All of you have been very, 
very helpful over the months, years. I just cannot tell you how 
much I appreciate your very direct help, all of you. It just 
has been terrific.
    Colette.

  STATEMENT OF COLETTE GRAY, GREAT FALLS OPPORTUNITIES, INC., 
                      GREAT FALLS, MONTANA

    Ms. Gray. Thank you. Senator Baucus and Senator Tester, for 
the record, my name is Colette Gray and I am community advocate 
here in Great Falls, Montana at Opportunities, Incorporated.
    I come before you today to testify on the nutrition title 
of the 2007 Farm Bill and its impact on Montanans that I come 
in contact with through my job. I know that most people are 
here testifying on the producing side of agriculture but I 
would like to address the food insecurity of the Montana 
families on the receiving end of this process.
    Many people do not realize that food stamps, commodities, 
and WIC, which is Women Infants and Children, are all USDA, 
United States Department of Agriculture, programs that help 
reduce hunger and improve food security. These are not welfare 
programs.
    Families that come to our agency to pick up emergency food 
baskets from our emergency services department, these are 
usually working families that currently receive food stamps and 
WIC but still need help making that food stretch until the end 
of the month because of rising housing costs, heating costs, 
and transportation costs.
    The food stamp program is very important to these families 
but there are rules in the program that make it hard for 
families to get enough food stamps. For example, the current 
$175 credit for child care is usually only one-third of the 
amount that it takes to keep a child in a daycare setting while 
working one full-time or two part-time jobs.
    We also see many senior citizens that come for emergency 
food baskets. Usually these folks are also receiving Meals on 
Wheels, commodities every other month, and in many cases food 
stamps. Our seniors are less likely to apply for food stamps 
because they have heard that after the paperwork is done they 
may only receive $10 a month, which is indeed the minimum food 
stamp amount.
    Many seniors in Montana are very proud people and they 
still equate being on food stamps with being on the dole. Even 
though they struggle with low Social Security checks, high 
heating costs, and Medicare D programs with doughnut holes, 
they are reluctant to apply for food stamps.
    My agency is currently involved in a coordinate outreach 
program for food stamps with the Montana Food Bank Network, the 
Montana Council on Homelessness, and the Montana Department of 
Public Health and Human Services. We recognize the need that so 
many in Cascade County have to get food stamps for their 
family. We need your help to make this program more accessible 
to those who need it.
    I would like to share four suggestions that I would think 
would help fight hunger in our communities. They are, number 
one, improve the adequacy of the benefit. The average food 
stamp amount is $1.02 per person per meal and the minimum $10 
monthly benefit is inadequate for dietary needs.
    Number two, there are barriers to access which must be 
reduced. Unnecessary paperwork or streamlining the eligibility 
and investing in outreach efforts would help.
    Number three, expand the eligibility by changing resource 
limits, including legal immigrants and indigent jobless people 
seeking employment.
    Number four, stop the erosion of the food stamp benefits 
which are shrinking in value each year by indexing the size of 
the food stamp benefit to the cost of living.
    In closing, most people are only on the food stamp program 
for an average of two years, as they work towards self-
sufficiency. The food stamp program pumps $89,953,948 into the 
Montana economy, and that is with the current participation 
rate of 58 percent. This benefit is going directly to retail 
grocers and now, with the onset of the EBT or electronic 
benefit transfer card, food stamps are being used at farmer's 
markets and support local farmers.
    Thank you for giving me the opportunity to voice my 
concerns and offer suggestions.
    Senator Baucus. Thank you, Colette.
    I would just like to ask, at the top, to the producing 
organizations a basic question about priorities.
    As you know, when this country passed the last farm bill 
there was about $80 billion over the life of the program that 
was not 'paid', that is it was added to the budget deficit. 
That is $80 billion added on to the farm bill compared with the 
prior period.
    This time around, the amount that the Budget Resolution of 
the Congress has provided for is about $20 billion, much less. 
To make matters worse, according to the Congressional Budget 
Resolution, it has to be 'paid' for. That is, if we have $20 
billion extra on top of the current so-called baseline, then we 
have to figure out how in the world we are going to find an 
additional $20 billion over five years? And part of that 
question is what are the priorities?
    A lot of questions here, as we balance things. One that 
comes to mind, there's a permanent disaster assistance that 
comes to mind. There is the time/cost of production to the 
counter-cyclical provision that the organizations have 
mentioned. To say nothing of the nutrition title which also was 
included in the farm bill.
    So I was just curious what you--we need a little guidance 
here. I forgot to mention conservation, too, the conservation 
provisions that a lot of us want.
    We all want a lot and, in a certain sense, need a lot. 
There are real legitimate needs here. The question is if we 
have to make some choices here what are the most important 
changes do you think that we should make?
    I know you do not want to say it totally, because you want 
it all. I do not disagree with that. But when push comes to 
shove, when the final decisions are made not too long from now, 
we are going to have to make some choices.
    So I would just like some general guidance as to what you 
think we should do? Anybody who wants to pipe up and try to 
answer that?
    Mr. Quinn. Senator, I will pipe up.
    As I mentioned, I think research is really, really 
critical. And that could take a very small percent. If we only 
had 5 or 10 percent devoted to the future. I am really 
interested in long-term visionary goals that would help us for 
many years and generations set opportunities for agriculture. I 
realize that most of it has got real needs and needs to be 
fixed. But if we ignore looking at long-term solutions for 
health care and using food to solve some of that, if we can.
    Senator Baucus. I agree with you. To some degree some of 
the members of the Agriculture Committee are a little nervous 
with all that, although they very much support research, 
because when you authorize research dollars--this is a lot of 
Inside Baseball stuff back in Washington, DC--but the 
Appropriations Committee just takes that for other purposes.
    Mr. Quinn. There has to be some kind of stop on that. We 
have seen it in Montana.
    Senator Baucus. It has got to be locked-in research 
dollars.
    Mr. Quinn. That would be a big help.
    Senator Baucus. Other thoughts?
    Mr. Merrill. I am going to throw a question back to you two 
Senators. Point of interest, and everybody has their own 
opinion about the Iraq War and everything else. But there is a 
lot of money going over there; correct? Everybody knows that.
    My question is, is that one of the stumbling blocks on the 
2007 Farm Bill? I mean, that is not an ignorant question. I am 
not being stupid.
    Senator Baucus. I am just chuckling because this is 
wonderful. Ordinarily at these hearings it is kind of a one-way 
street. Frankly, I am glad you are asking some questions.
    Clearly, that is a huge factor. It is huge. This country is 
going to be spending close to $1 trillion over 10 years in 
Iraq. It is a factor. It is a factor.
    Mr. Merrill. That was my question.
    Senator Baucus. But given that, what guidance do we have 
from you? What are the priorities? What do you think they 
should be?
    While you are thinking about it, I will turn to Darin.
    Mr. Arganbright. Obviously, my testimony is very favorable 
to the direct payment for a variety of reasons. It is clear 
that we do have this $20 billion deficit because we did come in 
under budget with the 2002 Farm Bill. I do not know the exact 
number, but I would be willing to bet that wheat shared a big 
part of that. And we would like to see that inequity addressed.
    However it is done, I think our preference would either be 
a higher direct payment or more of a good target price for the 
Counter-cyclical Program.
    Senator Baucus. Would that be geared to the cost of 
production? Do you want that?
    Mr. Arganbright. Yes, absolutely, the target price should 
be based off the cost of production of all of the program 
crops. The problem with Olympic average price is wheat has 
historically had a lower Olympic average price than the other 
crops and that is one of the problems.
    Senator Baucus. Give me an idea to the degree to which rice 
and cotton are getting a better deal. Just flesh it out a 
little bit, please. Just tell me a little more about what is 
going on there, and evidence that that is the case. That is, 
that wheat and barley are not getting a square deal, at least 
on direct payments there, counter-cyclical, compared with those 
two other commodities.
    Mr. Arganbright. That is a fair question.
    In regards to direct payments, wheat is actually fairly 
competitive. Where they have lost ground is in the loan rate 
and the counter-cyclical target price.
    We would prefer to see the inequity addressed in the 
counter-cyclical payment because with the loan rate, as you 
well know, if you do not cut a crop you do not get an LDP 
payment. So we think the counter-cyclical would be more 
beneficial to Montana producers long-term.
    Senator Baucus. My time is running out here, but let me ask 
you, Colette, you gave four recommendations. It is tragic. It 
is currently, as you said, $1.02 per meal is all the benefit 
that people get. It is not indexed and the assets are not 
indexed. That is low, and the paperwork, et cetera.
    But if you were to also give us, in a sense, some direction 
and priorities among those four recommendations, which one 
would you weight a little more? Just some guidance here.
    Ms. Gray. I think probably the adequacy of the benefit. 
When Bob was talking about health care being connected to food, 
it is a big part of it. A lot of these are young families just 
starting out or elderly folks. That is a time when nutrition is 
very important. And that $1.02 per person per meal or the $10 
per month just does not meet dietary needs.
    And so I think that is probably the biggest one, is that 
while those folks are out there, most of them are working 
families.
    Senator Baucus. Is it true that those low numbers force 
people to buy unnutritious foods, that is high in sugar 
content, starch that tends toward obesity and so forth? Is that 
accurate?
    Ms. Gray. And also non-organic foods because of the fact 
that the organic foods are more expensive. So they are trading 
off the dietary needs of nutrition for what they can afford to 
get some food on the table.
    Senator Baucus. I have a lot more questions to ask but my 
time is up.
    Senator Tester. Just real quickly, as long as you are 
warmed up, Colette, we will just start with you.
    How big is your region?
    Ms. Gray. We do the six counties around Great Falls?
    Senator Tester. How many participants do you have in the 
program?
    Ms. Gray. Actually, the food stamp program is not our 
program. It is with the Office of Public Assistance. But right 
now we are doing as pilot project helping more people apply, 
because recently, about two years ago, it was about 54 percent 
of the people that are actually eligible were getting the food. 
We have increased that to 58 percent now. But it is still not 
as high as it could be.
    Senator Tester. When was the last time that $1.02 a meal 
was adjusted?
    Ms. Gray. It has not gone up, to the best of my knowledge--
and I would have to look it up and get a good answer to you. 
But to the best of my knowledge, it has not been changed since 
1996, when they did the--
    Senator Tester. Since 1996. Is there any group around that 
you know of that has done--this kind of dovetails off of Max's 
question--work on health in regards to those high sugar foods?
    Ms. Gray. We don't.
    Senator Tester. Because there is not a lot of protein in 
$1.02 a meal.
    Ms. Gray. Statewide there is a program with the MSU 
Extension Offices that helps people buy better foods, budget 
better, and cook more nutritious, a program that helps them do 
the shopping and the cooking.
    Senator Tester. Okay, that is fine. Thank you very much.
    Darin, very quickly, the target price versus the counter-
cyclical payments and the Olympic average and all of those good 
things, what would you use? If you were Tom Harkin and you 
could put the figure in, what would you use for the target 
price? Where would you go to get that number?
    Mr. Arganbright. I would base it off the ERS, Economic 
Research Service, cost of production for wheat in the United 
States.
    Senator Tester. How much bigger would that be? How much 
more--what is the target price right now? Can you tell me?
    Mr. Arganbright. The current target is $3.92.
    Senator Tester. What would it be if you use the ERS?
    Mr. Arganbright. The number we have come up with is $5.29 
using ERS numbers.
    Senator Tester. How often is that--I do not mean to give 
you 20 questions, but how often is that adjusted, the ERS 
figure?
    Mr. Arganbright. I believe it is annually but--
    Senator Tester. It is annually adjusted. Okay. So that 
could be plugged into the bill, in fact.
    Mr. Arganbright. Absolutely.
    Senator Tester. That is good enough. I do not mean to run 
on here because we will have to move to the next panel.
    But Alan, you talked about a permanent disaster program and 
you said that the FSA office that you have talked to said it 
could be easily done. How would that be based? Would it be 
based on if you got below the average yield in a county and it 
was declared a--how would that be done?
    Mr. Merrill. That is correct.
    Senator Tester. That is how it would be done?
    Mr. Merrill. That is correct.
    Senator Tester. If there was a disaster situation in a 
particular region?
    Mr. Merrill. Yes.
    Senator Tester. And it did not meet county average----
    Mr. Merrill. Yes.
    Senator Tester. There would be a payment bumping up, based 
on a target price for that one?
    Mr. Merrill. Yes, that is correct.
    Senator Tester. Good enough. Thank you.
    Bob, in regards to importation of food, which is kind of--I 
think it bothers all of us as far as not being able to raise it 
here. In the organic market, is that due simply to lack of 
production? Or is it due to--are there price factors involved? 
Or do we not have the correct trade agreements? Or are we not--
there are a lot of factors out there.
    In your assessment, is it mainly due to a lack of 
production at the farm?
    Mr. Quinn. Well, the problem has been that the organic 
demand has continued to grow at an extremely high rate and the 
organic production has not followed suit. As it starts to 
accelerate even more--I mean, Wal-Mart has come in now, and 
some very big players that we did not expect this soon, I 
guess.
    That has put a demand on all of the supply that cannot be 
met and it is coming in from other countries. There has not 
been enough transition fast enough to meet it.
    Senator Tester. As Senator Baucus pointed out, I want to 
thank all of you for taking the time to be here and prepare 
your statements and going out to your membership and coming 
forth with ideas that can help improve it. It has been very 
valuable. Thank you very much.
    Senator Baucus. I just have a very basic question with 
respect to the permanent disaster program. I understand the 
estimates are it would cost about $1 billion a year, and that 
would be a five year or six year farm program, $5 billion or $6 
billion.
    Going back to my basic question of what is more important, 
as you know, we usually have passed an ad hoc disaster 
assistance and it just covered one out of three years. In 
earlier years, several years ago, when we passed one it just 
basically said even if you had two consecutive years of drought 
or disaster, you still could not get--you were only covered for 
one. These usually do not turn out too well, these disaster 
programs that Congress eventually passes.
    I have to tell you, it is pulling teeth, trying to get 
members--first to get the leadership of the House and Senate to 
bring them up. Then they have got to be added on to a pretty 
strong horse that is going to pass, otherwise they tend to 
falter and die.
    But that sort of begs another question, and that is just 
the cost. I know you do not want it, nor do I want it, taken 
out of the program. So that would be an additional $5 billion 
or $6 billion.
    But again, something in the news, it is something your 
organizations and your membership faces and I need a little 
guidance here, the Committee needs a little guidance, of the 
degree to which this is so important that maybe some other 
efforts might not get as much assistance as permanent disaster.
    I know you do not want it out of the farm program, so we 
can add on.
    And as you also know, southern States are not too wild 
about this because they do not get--they are a little 
different. They do not get the same disasters that we get. They 
do not have the same drought conditions basically with cotton, 
rice and so forth, as we get in our part of the country.
    So just your thoughts, anybody who wants to address that.
    Mr. Arganbright. I guess I could speak first.
    Disaster is not something we are opposed to, disaster 
program. The trade-off, of course, is going to be paying for 
it. It is going to be problematic to trade off, everybody keeps 
looking at the direct payment, to trade off something you can 
count on--as I have in previous years when we had droughts--to 
switch over to something you may never see income from is a 
difficult job.
    Senator Baucus. Any other thoughts, anybody? Robert, Alan, 
anybody?
    Mr. Quinn. I do not know why an insurance program could not 
be beefed up, Senator, to help in the interim. If it is a 
choice, that would be better than nothing.
    Senator Baucus. We will just double the crop insurance you 
are getting. The 5 percent add-on, we will just double that.
    Mr. Quinn. Very good.
    Mr. Merrill. Aside from providing money, you know, if it 
brought the troops home several months earlier, you could do 
the calculation real quick and have your extra $20 billion just 
like that. There is a lot of money going out, that we 
mentioned. We really need--we have demands at home that are 
really important. And I know that there are demands overseas, 
but we do not want to be bleeding--
    Senator Baucus. Those are very good points. Jon.
    Senator Tester. The problem with drought is that usually 
you get in these doggone cycles and it is not just one and two 
years, it is three years in a row. And then the crop insurance 
tanks as do all those kind of safety nets that are there.
    I think, Bob, you brought up a good point. In lieu of 
something that cost $1 billion, if we were to be able to bump 
up that insurance program so that we would not use all of your 
yield base because of repeated drought years, that might be 
something to think about.
    The other thing is the $2 billion a year--and I am talking 
about money being available--it is $2 billion a week going out 
the door for the war. But it is also an $8.6 trillion deficit 
that has been run up over the last 15 or 20 years that tends to 
make people who have to balance books look twice.
    Senator Baucus. Great. Thanks very much, all of you. Feel 
free to contact the Committee to add more testimony if you want 
to, and certainly me personally and Senator Tester personally. 
But thanks very, very much.
    Thank you.
    The next panel, the first witness Jim Taber, Chairman of 
the Young Farmers and Ranchers, Montana Farm Bureau; Mr. Dave 
Hinnaland, on the Board of Directors of the Montana Wool 
Growers; Steve Roth, President of the Montana Stockgrowers 
Association; and Brett DeBruycker, President of the Cattlemen's 
Association.
    Okay, Jim, you are on.

 STATEMENT OF JIM TABER, CHAIRMAN, YOUNG FARMERS AND RANCHERS, 
             MONTANA FARM BUREAU, SHAWMUT, MONTANA

    Mr. Taber. Thank you, Senator Baucus, Senator Tester.
    My name is Jim Taber, as you said, Farm Bureau and Young 
Farmer and Rancher Chairman. I am a fourth generation cattle 
rancher from Shawmut, Montana.
    I would just thank you for the opportunity to speak on 
livestock issues.
    Three of them that I would like to speak on is country of 
origin labeling, the Packers and Stockyards Act, and a national 
identification system, and follow that by a discussion on young 
producers.
    As far as country of origin labeling, the Montana Farm 
Bureau supports a country of origin labeling program that is 
market driven, consumer friendly using science-based labeling 
of agricultural products, and funded at the Federal level.
    COOL legislation should include the following points, which 
are further detailed in my written comments: an establish a 
recognizable national logo and a definition of country of 
origin labeling, meaning born, raised and process in the United 
States.
    As far as the Packers and Stockyards Act, American Farm 
Bureau policy book states that we support legislation on a 
State and national basis establishing GIPSA as the overall 
authority and provider of oversight to ensure livestock 
contracts are clearly written, confidentiality concerns are 
addressed, investments are protected, enhanced price 
transparency exists, and price discovery and contractors honor 
the terms of the contracts.
    Two legislative changes that the Farm Bureau supports are 
legislation providing mandatory arbitration so that producers 
are not prevented from going to courts to speak out against 
unfair actions by companies; legislation allowing meat and 
poultry inspected under State programs which are equal to 
Federal inspection and approved by USDA to move on interstate 
commerce.
    We are aware that Senator Baucus is currently sponsor such 
legislation and we feel that Montana will greatly be impacted 
by this.
    As far as a national identification system, we support 
establishment and implementation of a voluntary animal ID, 
capable of providing support for animal disease, control, and 
eradication while protecting producer privacy and producer 
ownership of their data.
    We support the following guidelines for a livestock 
identification program: before a voluntary program can be 
considered, we must pass confidentiality language to protect 
producers. The program be simple and inexpensive.
    We urge the USDA to conduct a full cost analysis study of 
the NAIS program, as Farm Bureau remains concerned about three 
major issues that will affect success. The first is cost. How 
much will the program be to each producer? And that the 
producer should not have to bear all of the cost.
    Confidentiality. Who has access to the data under NAIS? And 
can producers be assured protection from unintended use of the 
data they submit?
    One good thing about that would be that it would be for a 
non-profit private company.
    Liability. Are producers appropriately protected from the 
consequences of the actions of others after the animals are no 
longer in their control?
    Moving on to the beginning farmer and rancher, the Farm 
Bureau supports the continuation of the conservation cost-
shared differential for young and beginning farmers that exists 
in the current farm bill of 90 percent through the EQIP 
program.
    We are also encouraged and hopeful about Senator Baucus's 
possible provision for the CRP contracts contained in Senator 
Harkin's bill where the producer could get two additional CRP 
payments if it was turned over to a beginning farmer and 
rancher.
    Another important area is the definition of what is a 
beginning farmer. Is it someone that has been on a family farm 
and now started off on their own? Or if he is a rancher? That 
language needs to be worked on.
    One thing that our committee is trying to come up with is 
possibly a tax incentive for an older, retiring producer that 
would turn over to a younger producer and have the opportunity 
to have a tax break so that he could literally sell his place 
for less and give the young producer a chance to be able to 
start out. Because you know, as anybody, the urban sprawl and 
land costs, 1031 exchanges, have really hampered how a young 
producer can really get into it.
    Most producers now are in their 50s and 60s. I know in my 
own area there is about 10 of us left in about a three county 
area. I believe that something really needs to be established 
in this farm bill to help young producers get started. Without 
that, American agriculture is going to be headed down.
    I thank you for the opportunity.
    Senator Baucus. Thank you, Jim.
    Dave.

STATEMENT OF DAVE HINNALAND, MONTANA WOOL GROWERS ASSOCIATION, 
                        CIRCLE, MONTANA

    Mr. Hinnaland. Thank you, I am Dave Hinnaland, a fourth 
generation producer. And on behalf of fellow sheep producers of 
Montana, I appreciate the opportunity to discuss our Nation's 
ag policy with you.
    I am currently on the Board of Directors for the Montana 
Wool Growers and have recently been appointed to the Predator 
Committee of the American Sheep Industry.
    My family and I run a cattle, sheep, and small grain 
operation west of Circle. To supplement our ranching habit, we 
also run a small trucking company in Circle. Sheep have and 
will continue to be a large part of our operation.
    Some of the key issues facing the sheep and wool industry, 
the LDP on wool, the National Sheep Industry Improvement 
Center, predator control, ewe lamb retention program and 
prescribed grazing for weed control.
    I am pleased to comment on the positive impact of the 
current farm bill as it included the new Wool Loan Deficiency 
Program, which provides the only safety net for wool producers. 
While nine loan rates are available, essentially all wool LDP 
applications are in one non-graded rate category. The research 
provided in 2002 by the Food and Agriculture Policy Research 
Institute supported $1.20 per pound base loan rate. However, 
legislation lowered the base to $1.00 per pound with a budget 
score of $20 million annually.
    In the four years that this program has been in effect, it 
has never come close to the $20 million budget mark. I would 
encourage the Committee to reauthorize the wool LDP at a base 
loan rate of $1.20 per pound in order to provide the benefits 
the program originally intended.
    The National Sheep Industry Improvement Center, as 
established in the 1996 Farm Bill, provided loans and grants to 
business ventures where normal commercial credit or funds were 
not available. The program is not for individual producers or 
for the purchasing of sheep or land, but rather for projects to 
strengthen sheep business such as wool warehouses, lamb 
slaughter, processing ventures, et cetera. We would urge the 
reauthorization of this program, as it expired in the fall of 
2006.
    Predator control is a major concern of sheep producers in 
Montana. As we fight an ongoing battle with coyotes throughout 
the State and as wolves are ever increasing their territory, it 
is of utmost importance to the industry that we continue to 
receive protection from these and other predators so our 
operations may remain profitable.
    I feel the ewe lamb retention program played a major role 
in stabilizing U.S. sheep numbers. After several years of 
decline, 2004 marked the first growth in the U.S. sheep 
inventory. We grew our industry again in 2005, the first year-
on-year increases in numbers since 1987-1988. Industry growth 
improves competitiveness for all segments of the industry, from 
lamb feeders to lamb meat companies, wool warehouses, the wool 
mills, feed suppliers, trucking firms, and shearing companies. 
Reinstating the ewe lamb retention program would help us to 
continue to grow the U.S. sheep industry.
    In regards to the prescribed grazing, sheep have proven to 
be very beneficial in the control of noxious weeds. We believe 
the farm bill should address programs and direction to support 
prescriptive grazing projects with sheep and goats. Scientific 
studies and on-the-ground experiences have clearly demonstrated 
that livestock are a promising tool in the battle against weeds 
on pastures, rangelands, and in our forests.
    I see a win-win situation for all involved to have noxious 
weeds going in one end of a sheep and organic fertilizer coming 
out the other.
    Thank you for the opportunity to provide the sheep industry 
priorities.
    Senator Baucus. Thank you, Dave for a little levity, too. 
Appreciate that, very much.
    [Laughter.]
    Senator Baucus. Steve.

   STATEMENT OF STEVE ROTH, PRESIDENT, MONTANA STOCKGROWERS 
                ASSOCIATION, BIG SANDY, MONTANA

    Mr. Roth. Senator Baucus, Senator Tester, thank you for the 
opportunity to speak. On behalf of the Montana Stockgrowers 
Association, my name is Steve Roth. I am a cattle producer from 
Big Sandy.
    Montana Stock Growers' philosophy has always been one of 
limited Government involvement and--
    Senator Baucus. Pull your microphone up a little closer. 
That helps, so everybody can hear. I should have done that 
earlier, but at least we will start now.
    Mr. Roth. We believe in limited Government involvement in 
market-driven systems. Government programs, such as cost-share 
programs, tax incentives, and funding of education and research 
are some of our primary concerns. We feel that there are a few 
points we would like to bring up that can be addressed by the 
farm bill.
    First of all, I would hope that the next generation is what 
ranching in Montana is all about and what the farm bill is 
about. Some of the programs that are out there, such as EQIP, 
are very well-intended programs and work for the benefit of the 
producers. But in some cases they discriminate against other 
producers and it would be nice if EQIP was more predictable.
    With regard to mostly grazing and haying of CRP, we would 
hope that the Farm Service Agency, the local committees could 
make those decisions.
    With regard to Yellowstone Park brucellosis, the elk and 
bison herds of the Greater Yellowstone area contain the last 
reservoir of Brucella abortus in the United States. The control 
of this disease as cost the U.S. taxpayers and ranchers 
millions of dollars. The stockgrowers fully support the signing 
of the memorandum of understanding by the United States 
Department of Agriculture, USDA, and the Department of 
Interior, which directs USDA's Animal and Plant Health 
Inspection Service as the lead agency in developing and 
implementation of the brucellosis elimination plan for the 
Greater Yellowstone area.
    Let me just stop there and say that our priority should be 
the eradication of brucellosis in the Yellowstone National 
Park's bisons and the Greater Yellowstone area elk, providing 
for a clean and healthy environment that benefits both 
livestock and wildlife.
    We would also like to see that the research and education 
portion of the Montana State University's bioscience complex be 
funded.
    In the endangered species, we would ask that you take 
caution when considering programs such as EQIP which have the 
potential to adversely impact participants neighbors since 
wildlife recognize no property boundaries.
    In the area of noxious weeds, this is a huge economic 
impact to ranchers and others. And we would ask that a great 
deal of emphasis be given to the area of biological control of 
noxious weeds.
    Animal identification. Montana Stockgrowers has long 
recognized the importance and the need for a national livestock 
ID system for better livestock control and diseases 
surveillance. Montana Stockgrowers want a system that operates 
at a minimal cost, and protects producer confidentiality, while 
recognizing the hot iron brand as a method of cattle 
identification. A Government database would be cumbersome and 
likely to grow into a large bureaucracy.
    With regard to country of origin labeling, Montana 
Stockgrowers has expressed strong support for a practical, 
cost-effective, country of origin labeling program. Current 
mandatory COOL statute and proposed USDA rules are confusing, 
discriminatory and potentially costly for Montana cattle 
producers. Voluntary COOL has provided no incentives to foster 
implementation thus far. Therefore, we must find a way to make 
certain this law will be amended so it helps and does not 
hinder Montana's cattle producers.
    With regard to renewable energy, we must hope that in this 
rush for alternative energy sources that one hand does not bite 
the other and that we take into consideration what is done for 
one group may adversely affect another. We strongly support our 
Nation's commitment to reduce dependence on foreign energy.
    Research and education, we certainly would like to see the 
continuation of a regional pilot program with regard to 
stewardship for those of us who are trying to steward the land 
as one of the last unaltered resources that this country has.
    In conclusion, I would like to thank you for this 
opportunity and again remind you there is a delicate balance in 
this whole agricultural community that we live in. What you do 
to one area may affect another one. We hope that the farm bill 
process will attain profitability and economic stability to 
Montana's cattle producers.
    Senator Baucus. Thank you, Steve.
    Brett, you are on.

 STATEMENT OF BRETT DeBRUYCKER, PRESIDENT, MONTANA CATTLEMEN's 
                  ASSOCIATION, DUTTON, MONTANA

    Mr. DeBruycker. Senators, thank you. I am Brett DeBruycker, 
a farmer and rancher from Dutton, Montana. I will not bore you 
with the details about what we do up there, but we have a 
purebred Charolais herd and we--
    Senator Baucus. Go ahead and give us more details now.
    [Laughter.]
    Mr. DeBruycker. We feed quite a few cattle north of Choteau 
as well as in the Midwest of the State.
    I am President of the Montana Cattlemen's Association, the 
fastest growing cattle organization in the State. I am very 
appreciative of this opportunity.
    The issues that I was asked to address today, I will try to 
skim over fairly quickly rather than read the testimony.
    Mandatory COOL, there is really not much more to say than 
the time is now. We have got a law in place from the 2002 Farm 
Bill. We have been getting stonewalled for five years now, if 
not longer. And we hope that you will take this seriously and 
find a way to fund it in this farm bill.
    As well as that, we need some Congressional oversight and 
some producer input into the rules making process. It is 
obvious that USDA has a bit of a track record with COOL and we 
hope that the funding will be followed with some oversight.
    It is time to be honest with our consumers and give them 
the opportunity to make informed decisions about what beef they 
want to buy and serve to their families.
    On the issue of linking animal ID with country of origin 
labeling, I cannot think of a more ridiculous way of going 
about things. There is really no need for that. They are two 
completely separate issues. There is no need to link the two 
together.
    Country of origin labeling is a marketing issue, which is 
used to create a situation where your consumers are informed. 
And animal ID is an animal health issue. They are two 
completely different things that do not need to be connected. 
This idea has really been brought forth by the opponents of 
country of origin labeling and they are using this to weaken 
the implementation of COOL.
    When you have your discussions in D.C., I would hope that 
you remember three things: One, that the vast majority of 
consumers and producers do support mandatory country of origin 
labeling. The vast majority of producers are not in favor of an 
ID system. And also one little fact that often gets overlooked 
is that there are State and national organizations that stand 
to profit from an ID system. So please keep that in the back of 
your minds.
    In regards to competition, Montana Cattlemen's is always in 
favor of finding new ways to create competition for its members 
and for Montana producers. We all know there is four major 
packers in the country and they control well over 80 percent of 
the kill capacity. We do support a competition title in this 
next farm bill and hope that it will address certain things 
such as market transparency and complete price reporting of 
forward contracts.
    A way to enhance competition is through the interstate 
shipment of meat. Now how to look at that is you need to step 
back and realize that in the 1967 and 1968 Meat and Poultry 
Acts there was--I am going to run short of time here.
    Senator Baucus. Go ahead.
    Mr. DeBruycker. In the 1967 and 1968 acts, the Federal 
Government decided that the States needed to have a certain 
level of inspection for their meats and poultry. That is a good 
thing. We all need to be on a level playing field. So they set 
a minimum level with which they need to adhere to.
    But then also in those acts, they restricted those States 
from only in-state commerce. So we cannot ship outside the 
State, even though we are still meeting--even though our in-
state packers and processors are meeting these high levels that 
are set upon us, we cannot ship out of the State.
    So it is important that you take a serious look at that, 
because Montana has some of the most top quality genetics in 
the United States, as well as the world. And so it is time to 
allow these producers a chance to capture some of the market 
share that is out there to get.
    One of the things that MCA did in the last legislative 
session here in Montana is we helped pass the Montana Certified 
Natural Beef Program. And that is why we feel this interstate 
shipment of beef is so important, because we think this is a 
way that through this bill and State certification we can use 
interstate shipment of meat to enhance our market share.
    When you really break it down, it is really just an issue 
of fairness. Are we going to continue let big business rule 
this shipment of beef and meat? Or are we going to allow 
entrepreneurs and small businesses and small packers to begin 
to take part in this process and realize some gains?
    So again, thank you.
    Senator Baucus. You bet, Brett. Thank you.
    I will start with you, Jim. What is it basically going to 
take to make sure that beginning farmers, young farmers here in 
our State, see a future in agriculture? What does it really 
come down to? Bottom line, a couple three things, so we are not 
just going on the edges but just hey, this is what it takes to 
get young folks interested.
    Mr. Taber. When a young producer goes to the bank to get 
money, the first thing they want is collateral. And how can you 
have collateral if you do not have anything? So that is why I 
think the tax incentive for an older producer, where a mediator 
between an older and a younger producer can get together over a 
period of three to five years and work together on turning that 
place over where the older producer can have that tax credit 
and make it more feasible for the younger guy to get started.
    Because with land prices and machinery costs, all of that 
stuff together, a young producer without--like in my situation, 
being in a family situation, you cannot make it work.
    Senator Baucus. So it is a little bit similar to the CRP 
idea that you discussed and the legislation we are all talking 
about here?
    Mr. Taber. Yes.
    Senator Baucus. Namely, two years payment to someone who 
gives up his contract earlier for a younger farmer, so long as 
it goes into production.
    Mr. Taber. Sure. Myself, I am personally against CRP 
because there is land out there that is holding where a young 
producer cannot get hold of it. And 1031 exchanges kind of do 
that, too. Them items are good in certain circumstances, but 
for young producers, they hold them back.
    Senator Baucus. It is amazing. I think our State has what, 
somebody knows much better than I, about 5 million acres in 
production, agricultural production. Grain anyway, wheat. I 
guess it is wheat. Is that correct? I see Darin back there.
    But about 3 million in CRP. What is the acreage in CRP? We 
have 3.5 million in CRP, the second largest State in the 
Nation. It is a blessing and it is a curse, in some ways.
    But you basically think that giving younger farmers, 
beginning farmers, some kind of transition from older--it does 
not have to be older, just existing operator, to help him or 
her transition to a beginning or younger farmer.
    Mr. Taber. I think there is some opportunity there because 
of the biodiesel coming on. If that ground was available to get 
them back to producing something.
    Senator Baucus. Let me ask others the same question. This 
comes up so often in our State, it is hard for younger folks to 
get going here.
    Brett, you do not have quite as much gray hair as some 
others there. Your thoughts.
    Mr. DeBruycker. You know, I think that Jim is on to 
something there, as far as with the banks. They need to do 
something--there needs to be something a little more on FMHA 
office to where it is a little bit easier for young farmers to 
go in and get some beginning farmer loans.
    Today disaster loans are not that difficult to come by but 
the young farmers, there is certain criteria that you need to 
meet and it is pretty easy to get tossed out of that and miss 
your chance.
    Senator Baucus. Steve or Dave, thoughts on how to get the 
things really interested for younger folks, beginning farmers?
    Mr. Roth. I think there are some good ideas here. And also, 
you could possibly do something like a conservation easement 
for those people, for someone selling out, like Jim mentioned, 
a tax credit. But then that would have to stay, obviously, in 
that particular business.
    And also, the paperwork that is burdensome for people that 
are going to FSA office and try to get a loan on cows and 
everything, it is unfathomable how much paperwork there is to 
fill out. If you could do something there, that would help.
    Senator Baucus. Dave, your thoughts?
    Mr. Hinnaland. I guess I do not have--there has been some 
good response. Like in our country, a young producer with no 
equity virtually has no chance to get their foot in the door at 
the price that the ranches are bringing down there, be it 
outside interests for the hunting or someone that wants to put 
it back into production agriculture, boy they have a tough road 
ahead of them.
    Senator Baucus. You have given us some thoughts. There are 
some ideas there we can work with.
    While we are talking about COOL, your thoughts on what we 
do about it. As you know, if we do nothing it automatically 
goes into effect in 2008. So some suggest maybe we should wait 
until 2008 and it goes into law. Others suggest no, let us get 
this going earlier. Let us work with it and let us get it 
passed.
    You addressed this, Brett, some want to tie it to some kind 
of a national ID program. But we all want COOL, especially 
given all of the reports in the news with all of the products 
coming in from overseas, various countries coming into America 
from lots of countries which will go nameless at this point.
    But it is a huge issue because the world has become so 
globalized. And to make it even more complicated I think a lot 
of importers that are bringing food products to the United 
States push other countries to cut corners. They may not 
directly, but indirectly have that effect as the importers are 
trying to import products as cheaply as they possibly can. So 
even more than ever, we must have COOL passed into law.
    But again, your advice. Do we wait to 2008? Do we tempt 
fate a little bit and try to change it, make it work better? 
You might have some ideas, Brett. I assume nobody there 
disagrees with Brett when he says do not tie it to any national 
ID system. But a little guidance gain on COOL and what we do 
about COOL at this point.
    Mr. DeBruycker. I would address that. We have got the law 
and it is in place.
    Senator Baucus. You are talking about mandatory COOL.
    Mr. DeBruycker. Mandatory COOL. That is right.
    We have got the law. What we need are the rules. The 
Montana Cattlemen's Association is okay with the idea of 
waiting until September of 2008 when it is due to become law. 
But let's make sure we have rules in place beforehand and let's 
make sure we have got the funding in place beforehand so that 
we are not stonewalled again for another five years.
    That would be the biggest thing is to make sure that USDA 
does it right and there is some Congressional oversight.
    Senator Baucus. That is a very good point. When you 
mentioned that point, Brett, I thought boy, that guy is right. 
Because left to its own devices--I am not being critical to the 
USDA, but left to its own devices, it is probably getting 
pretty bureaucrat, a lot of unnecessary complications.
    Anybody else, thoughts on COOL?
    Mr. Taber. I would just have to echo Brett's opinion.
    Senator Baucus. Your thoughts on brucellosis? What is the 
best way to eradicate brucellosis, so we are just not spending 
all of our time working about this. What do we do?
    Mr. Roth. Well, we test and slaughter.
    Senator Baucus. What is that?
    Mr. Roth. I think we need to test and slaughter. Ted Turner 
has done it. It is biologically possible and it is not going to 
be something that happens overnight. But it is certainly in the 
best interest of everyone, I believe, the wildlife community 
and everyone, to eradicate that reservoir of Brucella in the 
bison herd and then we can argue some things about it.
    But I think hopefully risk management does not become the 
modus operandi and we forget about eradication. I believe 
eradication is ultimately the solution.
    Senator Baucus. Dave.
    Mr. Hinnaland. I guess I would like to see maybe the Park 
Service handle their bison a little bit more like we have to 
handle our livestock on our ranches. If they have got a 
problem, it needs to be addressed. It is a very serious issue, 
the brucellosis. I do not know, I guess it comes down to, I 
guess in my own opinion, I think they got too darn many buffalo 
up there to sustain what they have now. It is a very tough, 
complex issue.
    Senator Baucus. So you want more wolves?
    [Laughter.]
    Mr. Hinnaland. No.
    Senator Baucus. Sorry, I could not resist.
    [Laughter.]
    Mr. Roth. Senator Baucus, we would just hope that the 
Federal Government would recognize their responsibility for 
their wildlife, their diseased wildlife.
    Senator Baucus. Good point. I am sorry.
    Jon.
    Senator Tester. I do not know if I can follow that.
    First of all, Jim, I appreciate the work with--well, all of 
your work. But the young farmers issue is a big issue. We are 
getting fewer and fewer of us and soon there may be not enough 
to sustain our food security. So I appreciate it.
    I guess the question that rattled around in my head 25 
years ago is the same question that rattles around in it today. 
And that is what the definition of a beginning farmer is. It is 
really difficult to know.
    The other question becomes, and this is not new, is if you 
give tax relief, what happens if it is a rigged deal? You know 
what I mean, they get tax relief and they dump it off to 
somebody else and never had the intention of farming.
    I think, Senator Baucus, your traditional payments after 
the CRP is a terrific idea.
    Are there any groups around that are working on a 
definition that you heard of that really can work?
    Mr. Taber. This idea kind of stemmed from a pilot program 
that is taking place in Iowa with small family-owned dairy 
herds. They did some studies and that kind of stuff.
    The main thing is you have to have a mediator between the 
two parties and make sure that they are locked together and 
that the older producer is secure, just like you are saying, so 
that the younger guy cannot get it for a couple of years and 
then turn around and dump it. So there has to be some set 
guidelines.
    As far as the definition of a young producer, that is 
pretty tricky. At this time, I could not give you an exact 
definition what it should be.
    Senator Tester. I did not expect that.
    Mr. Taber. As far as the policy now, I think it needs to be 
worked on just because young producers that are in a family 
business, if they decide to go off and start on their own, they 
are not eligible for any help.
    Senator Tester. I certainly applaud your efforts and keep 
working. If you come up with some stuff, be sure and make sure 
that folks know about it because it is important.
    Dave, aside from the wolves eating the coyotes, which we 
went from there to bison, I would just ask you, the point about 
eating noxious weeds and creating good fertilizers is a good 
point.
    Is there any way to expand prescribed grazing to make that 
even more available? This is also an issue, I think Steve kind 
of talked about it, with the biological weed control.
    Mr. Hinnaland. To expand it? I guess I would like to see 
some monetary benefits where it would make it practical to 
bring some sheep and goats in to a project. If they could be 
included in your farm bill, be it trucking expense to move them 
in, herder expense.
    Senator Tester. Is the Forest Service or the BLM working 
with sheep producers?
    Mr. Hinnaland. Yes, there is sheep on public lands doing 
weed projects. Yes, in some instances.
    Senator Tester. How broad is that? Is it just a pilot 
project? Is it pretty extensive?
    Mr. Hinnaland. It is not very extensive. I guess to quote a 
project off the top of my head, I am drawing a blank. But there 
has been some talk back and forth.
    Senator Tester. Maybe we ought to expand on that.
    Steve, Max and I were in the restaurant in the Capitol, it 
was pretty well reported on, actually. Max had a hamburger and 
it had Kobe beef on it. I said no, Max, it is--
    Senator Baucus. It did not say that, the menu called it 
Kobe beef.
    Senator Tester. I said it just must be the process. It has 
got to be American grown in our Nation's capitol, for goodness 
sakes. Well, Max did a little investigation and presto-chango 
it was, indeed, out of Japan.
    There are instances of that on the East Coast all over. I 
have stopped in a restaurant and they asked me if I wanted 
chicken or beef on my taco. I said where did the beef come 
from? And they said Australia, and were proud of it. It was a 
little bit disconcerting.
    But the question is with COOL. If I heard your testimony, 
you said that there was some discrimination that could happen 
with COOL and it would actually--and I do not want to put words 
in your mouth--and it could actually be detrimental to 
producers. And that is not what Max or I are up here for. When 
it comes to production agriculture, we want to give them every 
advantage in the marketplace possible.
    Specifically, is that something you see out there for 
country of origin labeling, as a detriment? I would actually 
see it as a market advantage for producers, if consumers knew 
where their meat came from. I know I would. I would buy it out 
of the shelf if it said--more than just a USDA stamp, if it 
said American produced beef.
    Mr. Roth. Senator Tester, I could not disagree with you in 
any way there. I think the disadvantage that our producers are 
concerned about is that we are not margin operators. We are--in 
the production chain we are price takers and not price setters. 
Any cost that is incurred at every level of production has a 
tendency to fall to the bottom, and that is kind of where we 
are now would be one of the concerns we have as far as--Dean 
Folkvord who runs Wheat Montana did a survey one time before he 
started this. He went out and surveyed people, would you buy 
Montana-produced bread that was produced by Montana wheat? And 
they said oh yes, we will.
    But when he put it on the shelf and Sweetheart bread was 
three cents less, they brought the Sweetheart bread.
    But that is not to say, we are in favor of country of 
origin labeling. We just hope it is implemented in a way that 
does not adversely affect our producers.
    Senator Tester. It is creative marketing, I think. Folkvord 
has done pretty well.
    Mr. Roth. I think it is Starbucks that is doing it.
    Senator Tester. That is true.
    Brett, when you talk about the meat inspection, not being 
able to ship meat out of State--between States--I was under the 
assumption, correct me if I am wrong, that the State inspection 
standards were equivalent with the Federal standards. Are they 
not?
    Mr. DeBruycker. The minimum is set by the Feds and the 
States have to meet that minimum. But the majority of States 
have a higher level of inspection standards.
    Senator Tester. Than the Federal. So there is really no 
reason not to allow the cross-state border shipment?
    Mr. DeBruycker. The only reason is to limit 
entrepreneursialship.
    Senator Tester. Sounds like a good idea for a bill. We need 
to get that fixed. That is big.
    As I said to the previous panel, I appreciate you folks 
coming up here and preparing and really giving us your 
perspective on the ag bill. It is tremendously helpful and I 
appreciate all the work you are doing for the State. Thank you 
very much.
    Mr. Roth. Senator Tester, this happens not only with what 
Brett is talking about with meat inspectors, but also with 
State veterinarians and with weights. You can haul 62,000 
pounds out of Montana but you cannot haul it into Minnesota.
    Senator Tester. Gotcha.
    Senator Baucus. Thank you.
    Dave, just a couple of examples of how the Rueben Center 
funds really work and have results would make a difference. I 
am asking because when we go to the Committee we want to have 
some good examples why this is a good deal here and we ought to 
have it. So you have to rattle off maybe one or two points.
    Mr. Hinnaland. I do not, to my knowledge, I do not think 
there has been any money come back directly to Montana 
producers. There has been surrounding States with Montana 
producers involved. I believe there is a Wyoming lamb coop that 
took advantage of that with some Montana producers involved.
    I believe the last monies that were available was going 
towards the LRP lamb program to start that up. I guess I do not 
know where that sits right now. But something like that would 
be very beneficial to the producers. As the lamb market has 
peaks and valleys, they do all right during the times of the 
peaks but it is a little rough in the valleys. One of them 
programs really would be beneficial in taking some of the 
volatility out of the market.
    Senator Baucus. Did it not also provide some funds to 
develop some underwear and some--
    Mr. Hinnaland. The military, sure. The military is a big 
user of U.S. wool.
    Senator Baucus. That was developed with this program?
    Mr. Hinnaland. Yes, it was and it was very well received. 
There were some military people at the Helley Ranch in Dillon a 
few years ago. We talked with them and they were very pleased 
with the product. It was very well received.
    Senator Baucus. Thank you. Jon.
    Senator Tester. Just one more question that came to my 
mind. A few months ago I spoke with some people who were not 
affiliated with any particular farm group, they were just 
producers, they were ranchers.
    Senator Harkin is very is very intrigued with the 
Conservation Securities Program and about taking it from pilot 
level and fully funding it. These ranchers, and I could not get 
any specifics out of them, said that the CSP program has worked 
pretty well for farmers but it has not worked real well for 
ranchers. I do not exactly know, I assume it was because they 
were not eligible.
    Can you guys shed any light on that? I am not in an area 
personally that is in one of those pilot projects. There is one 
north and around, but not in my area. I was just wondering if 
you guys had any awareness of the CSP pilot programs and how 
they do or do not work for ranchers.
    Mr. DeBruycker. I am not in one of the watersheds but go 
ahead.
    Mr. Taber. I am not in the watershed either, but I do know 
something.
    Senator Tester. Go ahead.
    Mr. DeBruycker. Forgive me, but what I understand is some 
of the rules are--for ranchers, the ideal thing that CSP wants 
is for you to alternate grass pastures each year. This is just 
one example. But there are different varieties of grass. And 
some varieties need to be grazed at certain times of the year. 
So if you have to alternate no matter what, to stay in 
compliance with the program, it seems a little bit out of 
whack.
    Another thing, and I do not know the exact specifics, but 
it has to do with if you have a couple of horses and you keep 
them in this pasture by your house all year long, that can 
throw you out of compliance. It is just little compliance 
issues like that is the way I understand it.
    Senator Tester. Good.
    Senator Baucus. Thank you very much. This is very helpful. 
It makes a big difference.
    Your statements, again, will be in the record and we will 
look at it. Clearly, you are going to give us more thoughts as 
we get closer to make some provisions in the farm program. So 
keep in touch. Thank you very much.
    The next portion of our hearing today, this is for all of 
you to participate.
    Before we get there, though, I want to thank Jon Urban and 
Ann Haslett from the Agriculture Committee for helping us. 
Where is Jon? Stand up. Give them a round of applause. They are 
working hard for you.
    [Applause.]
    Senator Baucus. Give them a good Big Sky welcome for coming 
to our State.
    We want as many people to speak as we can possibly 
accommodate here but we only have about 30 minutes. So I want 
everybody's statement to be restricted to two minutes.
    Now do not be too surprised if somebody comes up with a 
gentle little nudge and tells you that your two minutes is up. 
There is the gentle nudger right there. He is a very good guy. 
Russ Sullivan is his name.
    So all of you interested in speaking, just come on up to 
the microphone. Russ will give you the microphone for you to 
speak two minutes. Give your name and so forth, so we can have 
idea who you are.
    If there is not time for everybody--before I get to that, 
when you finish, if you have any written statement, give it to 
Christina Davis. Where is Christina? There is Christina. Give 
your written statements to Christina.
    And then after that, if there is not time left, do not 
worry. The record is going to be open until Friday. So you have 
got time to get your written testimony in.
    It is first come, first served. We have a line here. 
Anybody who does not want to testify?
    Mr. Zerbe. Senator Baucus, Senator Tester, my name is Grant 
Zerbe. I produce cereal grains and pulse crops in Northeast 
Montana, near Lester. Today I am testifying on behalf of the 
U.S. Dry Pea and Lentil Council. Montana ranks second in 
production of dry peas and lentils in the United States with 
over 300,000 acres planted this year.
    Our organization would like to thank Senator Baucus and the 
Senate Agriculture Committee for creating the marketing loan 
LDP program in 2002. The program has provided needed safety net 
for producers of dry pea, lentils, and chick peas.
    In the 2007 Farm Bill, we support continuing the current 
pulse marketing loan LDP program. We ask for an increase in the 
small chick pea loan rate to reflect market prices. We also ask 
Congress to establish a marketing loan program for large chick 
peas.
    Pulse crops are grown in rotation with wheat, barley, and 
minor oil seeks. Each crop in the rotation has a direct payment 
except for pulse crops. We support the creation of a direct 
payment for dry peas, lentils and chick peas equal to the 
direct payment received for wheat.
    The counter-cyclical program provides an additional safety 
net to producers facing low market prices. We support the 
creation of a counter-cyclical program for dry pea, lentils, 
and chick peas. We ask that the pulse crops be treated equally 
to those program crops with an effective counter-cyclical 
program.
    Producers need planting flexibility to respond to market 
signals. Currently, chick peas are classified as a vegetable 
crop and are not eligible to be planted on farm program base 
acres. We ask Congress to include chick peas as an eligible 
crop in the new farm bill.
    In summary, the U.S. dry pea, lentil, and chick pea farmers 
believe the 2007 Farm Bill should continue the current pulse 
marketing loan program with the addition of large chick peas. 
We ask that this safety net for pulse crops be expanded to 
include direct and counter-cyclical program and the inclusion 
of chick peas as an eligible crop to be planted on farm program 
base acres.
    I would like to thank the Committee for the opportunity to 
present this testimony. A copy of my testimony was provided to 
the Committee.
    Senator Baucus. Super. The lady to give it to is Christina. 
Everybody give your testimony, please, to Christina. Wave your 
hand, Christina. Wave big. There is Christina.
    Okay, Ron.
    Mr. de Yong. Senator Baucus, Senator Tester. My name is Ron 
deYoung. I have a farm near Kalispell, Montana.
    Senator Baucus, I would like to address your first question 
that you put out on choices. Like everyone, I would like a 
stronger conservation title. I would like a stronger energy 
title. I would like to put more research dollars into organic. 
I would like more dollars into nutrition, but there are 
choices.
    In the process of doing all that, I urge you not to 
diminish the safety net in the commodity title. Now everybody 
gets a little bit comfortable when these prices come up. But 
their input costs come up with them, as Darin pointed out. And 
as soon as the industry gets comfortable with the supply of 
corn and wheat and soybeans, those prices are going to back 
off. And they do not have to come down very far and they hit 
those higher input costs. And as soon as they do, hundreds of 
farmers are going to be put out of business.
    So number one choice is do not diminish the safety net in 
the commodity title.
    Now a more specific answer would be that I was pleased the 
House Subcommittee passed an extension of the current farm bill 
with minor changes. I believe with the current budgetary and 
political environment, that might be the best option we are 
going to have in the short term. The minor changes, of course, 
would have to include strengthening the safety net for wheat. 
Because as Darin pointed out, we definitely got the short end 
of the straw in the safety net for wheat. That might be the 
best we can do in the short term.
    And then we need to start thinking right away about the 
long-term. In the long-term I think the correct direction to 
head is to take those three income payments and turn them into 
one income payment based upon cost of production. Because 
basically what they are trying to do anyway with those three 
payments is cover enough cost of production so that when you 
hit your cycle lows you do not lose hundreds of thousands of 
farmers.
    So if we can combine them into one and do some creative 
thinking and combine a disaster program in with it, I think in 
the long-term that is what we need to do. But we probably 
cannot do that in the short term.
    Senator Baucus. That is interesting. I appreciate it. 
Thanks, Ron. I appreciate it. Thanks, Ron. There is Christina, 
do not forget.
    Mr. Stoner. John Stoner, I am a farmer from Havre, Montana, 
past president of the Montana Grain Growers.
    I do not want to go over what Ron just said, but I do want 
to reiterate the need for the direct payment. Right now we have 
great rainfall in Montana and the crops look pretty good in 
most parts of the State. But we all know--and we have record 
high prices right now. But those are probably not here to stay, 
the record high prices. And right now, with the high cost that 
we have, you need both high production and high prices to make 
ends meet.
    Put the payments in perspective, average farmer in Montana 
probably receives a direct payment of about $9 to $15 an acre 
versus $200 an acre costs. It is only about 4 to 7 percent 
covering the costs. It is not very much at all. But sometimes 
it is just enough to get us over the edge.
    So we have to maintain that direct payment and we have to 
have a target price based on costs of production.
    One other thing I wanted, thank you for the thank you that 
you had in the paper. That was excellent, talking about 
agriculture and the success story that we really are, that we 
really supply the highest quality, the safest food at the 
lowest price of any industrialized country. And we have done 
that through conventional ways.
    We have done that with also protecting our environment. We 
go through practice like no till operations. We have reduced 
our soil and water erosion, increased our soil production, and 
also increased organic matter.
    Do not divert money from Title I to go to renewable fuels. 
We are excited about renewable fuels and we want to see it 
happen but we cannot divert money from it.
    No base and yield updates.
    And producers must be given credit for conservation 
practices that we have instituted before. CSP has got to be 
made eligible for all producers, rather than just a select few. 
It is a great program. Make it work.
    Senator Baucus. Thanks, John. You are welcome for the thank 
you. I just think the rest of the country just does not 
understand and recognize just how much agriculture has 
contributed, and especially how the cost of production has gone 
up, and up, and up, and up, and up, and up. Basically prices 
have been pretty flat, it has been okay in the last year. But 
as you said, it is not going to stay there forever. The whole 
country owes all of you in agriculture a big thank you.
    I made that point recently, a few days ago, and I wrote a 
little article about it. I have got copies in the back of the 
room. I just think it is important. The more people understand 
how important what you all have done for so many people in this 
country.
    Mr. Smith. Senators, my name is Gerald M. Smith. I am a 
farmer and rancher. I am also the Chairman of the North Central 
Montana RC&D and the Vice President of the Montana Association 
of RC&Ds.
    I agree with everything that I have heard here today. I 
just wanted to call your attention. The RC&D Councils in 
America, and in Montana, are funded through the NRCS and 
through that conservation part of your farm bill.
    Two years ago we were receiving $15,000 in our little RC&D 
from the Federal Government to maintain our office and pay for 
staff travel. We do 10 counties. Last year it was $11,250. This 
coming year it is $10,000.
    Everything else is going up and we are going to continue to 
do the best job we can to service those people in those 10 
counties. I just wanted to call that to your attention.
    There is 435 RC&Ds in the United States. I do not know what 
all of their funding are but in Montana they have reduced down 
to $10,000 per year. So with a big State and nine RC&Ds to 
cover all those counties, I just wanted to call that to your 
attention and hope that you can keep us in mind.
    Senator Baucus. Good, Gerald, appreciate that. Thanks, 
Gerald, very much.
    Mr. Barngrover. Senator Baucus, Senator Tester, my name is 
Jim Barngrover. I am the Program Manager for Agriculture and 
Food Systems with AERO, the Alternative Energy Resources 
Organization.
    My first comment, and probably most important, is we need a 
vision of where we are going with agriculture in the United 
States. I think Bob Quinn is right, that we really need to put 
some money into research for sustainable and organic 
agriculture. It has been very limited in terms of what the 
Federal Government has supported.
    Along with that, we also need to reauthorize ATTRA which is 
affiliated NCAT in Butte. Their appropriations have been 
substantially curtailed, they have laid off people, reduced 
hours.
    They provide technological and informational services to 
sustainable producers throughout the United States. It is not a 
big budget item but it is one that I think is really critical 
and one that affects us here in Montana.
    Along with that, other policies that we would really 
support as AERO are ones that promote locally grown food, and 
also looking at getting food to farmer's markets, increasing 
food stamp benefits to recipients, farm to college programs or 
farm to school programs. And lastly, we also support 
reciprocity between Federal and State meat inspection. I think 
that should be a doable one.
    Thank you, very much.
    Senator Baucus. Thanks, Jim, very much. Thank you.
    Mr. Headstrom. Thank you. My name is Steve Headstrom. I am 
Vice President of the Montana Association of Conservation 
Districts, a local rancher from Raynesford, Montana.
    I would like to thank you for this opportunity to share the 
views of Montana's local conservation districts regarding the 
2007 Farm Bill.
    There are 58 conservation districts in Montana, at least 
one in every county. Similar entities are set up across the 
country. In the U.S. there are nearly 3,000 conservation 
districts that are helping local people conserve land, water, 
forest, wildlife, and natural resources.
    We share a single mission to coordinate assistance from all 
available resources, public, private, local, State, and 
Federal, in an effort to develop locally driven solutions to 
the natural resource concerns.
    We support voluntary incentive-based programs that 
represent a range of options providing both financial and 
technical assistance to guide landowners in the adoption of 
conservation practices, including soil, water, and air quality, 
providing habitat and enhanced land management.
    There are several issues we would like to discuss quickly 
here. Number one, working lands focus. MACD supports the 
highest priority for the conservation title of the farm bill, 
to focus programs and funding on working lands conservation.
    Number two, decline in county EQIP allocations because of 
special EQIP projects. There has been a reduction in county 
EQIP allocations because EQIP is spending on special 
initiatives in Montana. While these special projects are 
laudable goals, CDs are concerned that it is coming at the 
expense of local priorities around the State. We would like to 
see as much EQIP funding as possible distributed among the 
counties to be focused on local priorities.
    The importance of technical assistance as the basis for all 
conservation efforts. There is a critical need for the adequate 
funding of conservation technical assistance. In order to 
maximize the effectiveness of financial assistance received by 
producers, they need quality technical assistance.
    In addition, many producers who do not participate in 
financial assistance programs rely on technical help still to 
ensure that they are putting quality practices on the land. It 
is a combination of the two that make America's conservation 
and delivery system effective and efficient.
    Also, we are concerned with the CSP. We believe that there 
has to be some improvements in that and producers out there 
need to know what the program is calling for before we can even 
begin to sign up.
    We are also interested in the CRP issues because the money 
does not seem to be going into the proper lands. There needs to 
be some redirecting there.
    So thank you very much.
    Senator Baucus. Thank you, Steve.
    Mr. Harwood. Good afternoon, Senators. My name is Richard 
T. Harwood. I am a farmer in North Central Toole County, which 
is not part of the rain belt in Montana this year.
    I am rising as kind of a heretic right now. I am a member 
of the Grain Growers but they are literally my fallback 
position, not my first choice.
    I would like to see the United States economy, as a whole, 
improve to the point where farming can get its entire income 
from sales of our products. I think the easiest way to do that 
is to change our tax policy, namely throw out the income tax 
and go to the national sales tax such as currently being 
proposed by fairtax.org.
    It would have a great deal of benefit to agriculture 
because that particular one throws out the estate tax as well, 
and puts it as part of it.
    The Government will always be behind the curve on tax 
policy because the economy simply moves too fast.
    If you took all of the Internal Revenue Service agents and 
put them on the border as Border Patrol, you would probably be 
able to monitor all of the foreign agriculture products coming 
in under COOL and take care of that problem.
    Thank you.
    Senator Baucus. Appreciate your thinking out of the box. 
Thank you very much..
    [Laughter.]
    Mr. Liebert. I would like to thank Congress for coming to 
listen to the people and the producers, especially you guys 
because I know you get your hands dirty.
    My name is Richard Liebert, third generation rancher and 
U.S. Army Retired. I know you have been around sheep, Max, and 
I know what you do, Jon. So it is important that you are here. 
In fact, I should be on a hot bucking horse swather right now, 
but I think it is good to be in this cool environment, talking 
to you guys.
    I would like to stress something you have always said, Max. 
If you want to get action, be a member of a producer 
organization. I am a member of Farmers Union, though some of 
the opinions I may express are my own. I am a member of AERO, I 
have also been in the wool growers but I got out of that 
business.
    I have never been in the FFA but I would like to be in the 
FFE club, which is the food, fiber and energy club. That 
farmers and ranchers in the rural electric coops can be members 
of providing energy back into the grid. I think we need a new 
REA, rural energy act. Not a rural electrification act. Because 
70 years ago FDR, in the midst of the Great Depression, took a 
bold step and established the Rural Electrification Act. It 
brought a profound change to farms and ranches. I think it is 
that time now. The RUS, the USDA and Congress needs to get 
behind that, and follow along in your footsteps with the EQIP 
program for energy, that you proposed, Senator Baucus. I do not 
know where that is.
    But I think we need to make a bold step like they did in 
the Great Depression. If they could do it then, we should do it 
now.
    I understand also about unintended consequences because I 
also ranch. The corn prices are going up, so we create certain 
consequences. But I think wind, solar, biomass, crushing 
camelina, those things are great. And I think Bob Quinn for all 
his efforts.
    Finally, we need to get behind this, a rural energy act 
that all of Congress can embrace. I know other staffers are 
here so they can take it back to the other States.
    Finally, I would ask Congress to heed the OMB White House 
and put the money into renewables. Let private investors take 
the financial risk of investing in coal-fired plants. Let's put 
the money into renewables and other things we have talked about 
today.
    So I thank you and I am going to go back to my swather.
    Senator Baucus. Thank you, Richard. Actually, I am kind of 
envious of you, going back to your swather. I appreciate it.
    Ms. Hucke. Senator Baucus, Senator Tester, my name is 
Angela Hucke and I, too, like your daughter, Senator Tester, am 
working on taking over our family farm with my husband, just 
outside of Geraldine.
    Mr. Baucus, when you were talking about what young people 
need to see an opportunity to expand or an opportunity to come 
back to the farm, we need to be able to expand. And part of the 
problem of being able to expand is the CRP program.
    When Jim said he is not a fan of the CRP program, a lot of 
the people in the room went oh jeez, we have to have CRP. But I 
am not a fan of it either.
    Part of the problem with CRP is it has become a retirement 
program for older farmers rather than a conservation program. 
So that is one of the problems that I see with young farmers, 
as well as being able to get the funds and what not to be able 
to expand.
    Senator Baucus. Thank you, Angela.
    Mr. Molinario. Good afternoon, Senators. My name is Martin 
Molinario. And together with my wife Tony and son Damon, we 
have a grain farm in Choteau County, Montana raising primarily 
winter wheat and spring wheat.
    I have been a full-time grain producer for over 42 years 
and I can truthfully say I would not be in business today 
without the USDA payments received throughout those years. I 
know most of my neighbors have experienced the same scenario.
    Several situations which have caused these payments to be 
so critical include the Government grain embargoes, poor grain 
yield and low grain prices, a good crop and low grain prices, 
low grain yield and good grain prices, and other weather 
related problems such as hail and freeze damage.
    I want to be on record stating too much moisture has never 
been a problem in this farming career.
    I have been waiting to feed the world since the Russian 
grain deals of 1974, hoping for a consistently decent grain 
price year after year. And I am still waiting for that.
    One thing that has been increasing is my operating 
expenses. Fuel and fertilizer prices have more than doubled in 
recent years, and the price of equipment--even used equipment--
is outrageous. The projections for these major expenses is to 
increase further. Can I plan on the present high grain prices 
to be here later this month and next when I harvest? Or for 
next year's crop? The answer is no.
    The only time I recall two years in a row of good grain 
prices was 1974 and 1975. This present scenario occurs once 
every 10 to 11 years and is usually weather-related.
    The recent problems with imported food items, whether it be 
for human or animal consumption, should raise a red flag to the 
American consumer about food safety and a safe, reliable 
supply. The budgeted amount of funds set aside for U.S. 
producers is a very, very minor sum compared to the whole. And 
not all of these funds are distributed every year. They are 
cheap insurance to maintain our abundant food supply.
    The U.S. consumer does not want to have the same scenario 
as our energy supplies.
    As for the amount of payments I receive, if I have a 
profit, part of those funds go back to the Federal treasury as 
taxes. What a deal for the American public.
    I am not in favor of taking funds from direct payments and 
place them in more conservation programs. These do not work for 
all producers. For example, I inquired about the EQIP program 
for conservation tillage or no till farming, which most 
producers have been practicing for years. Since I was already 
doing this, I did not qualify.
    I inquired about the CSP program. About half the farm is in 
the Teton drainage, which may qualify some year, while the 
other farm half is in the Missouri River drainage, which I was 
told will probably never quality for CSP because of its 
drainage size. Producers with all of their land in the Missouri 
drainage may never participate in this program.
    In summary, I hope I have explained how important the USDA 
program has been through the years, both in keeping the U.S. 
producer in business through disastrous times, whatever their 
cause, and supplying the American consumer with a safe and 
reliable supply of food and fiber.
    This support should be continued and even increased to give 
some relief to increasing expenses which are beyond our 
control.
    Thank you for this opportunity.
    Senator Baucus. Thanks Mark, very much. Appreciate it. 
Thank you, Martin.
    Ms. Daugherty. Senator Baucus, Senator Tester, my name is 
Linda Daugherty. I have been a Ducks Unlimited volunteer for 
over 25 years and am currently serving as the Ducks Unlimited 
Montana State Chairman.
    Ducks Unlimited membership is over 700,000 with over 6,500 
members in Montana alone. DU members come from all walks of 
life and many of our most avid members are farmers and 
ranchers.
    I am here today to talk about the importance of continuing 
WRP and CRP in the 2007 Farm Bill. Since 1990, WRP has restored 
more than 2 million acres of wetlands on marginal farmland, 
providing critical habitat for waterfowl and many other 
wildlife species. WRP is integral in helping to offset the 
80,000 acres of wetlands that continue to be lost in the U.S. 
each year.
    WRP has been one of the most successful Federal wetlands 
conservation programs, providing a voluntary, non-regulatory 
incentive-based program for private landowners, farmers and 
ranchers, and values of wetlands on their property.
    WRP provides societal benefits such as improved water 
quality and quantity, reduced flood damage, groundwater 
recharge, and enhanced fish and wildlife habitat.
    Producer demand for this program outstrips available 
funding by at least three-to-one. If funding is not provided, 
Congress is telling landowners that being a good steward of the 
land is less important than plowing crops on marginal lands.
    The U.S. Fish and Wildlife Services estimates that 7.8 
million acres of CRP in the prairie pothole region adds a 
minimum of 2 million ducks to the fall flight each year. Most 
of these acres consist of large contiguous blocks of grassland 
cover interspersed with an abundance of prairie wetlands. 
Contracts on nearly 6.4 million of the 7.8 million acres are 
set to expire between 2007 and 2010.
    Though it is apparent that CRP is a critical component of 
the landscape, it is currently under threat. As work continues 
on the 2007 Farm Bill, it is critical that we promote waterfowl 
conservation programs that contribute to the economic viability 
of America's farmers and ranchers and a healthy environment.
    We must also ensure conservation programs provide private 
landowners with viable financial incentives to restore and 
protect large tracts of grasslands and wetlands that benefit 
North American waterfowl and our landscape.
    I encourage all folks here today, if you feel as I do, to 
contact your Senators and Representatives to let them know your 
thoughts on these important issues.
    In conclusion, I would leave you with this one thought: 
farm the best, conserve the rest. Thank you.
    Senator Baucus. Thank you, Linda.
    I remind everybody to please keep your comments two minutes 
out of respect for everybody else who wants to speak. Thank 
you.
    Mr. Lane. Senators, I am Tom Lane from Livingston, Montana, 
a rancher.
    When this immigration bill did not pass the other day, all 
of our crew except one are all Mexicans. If we lose our Mexican 
crew, we are out of business because we cannot hire any help. 
We have had a terrible time trying to keep everybody going with 
one thing and another until these folks come on the scene.
    I was wondering why a rancher could not bond these fellows, 
put up the $5,000 apiece or whatever bond would be required 
that we will keep these people in our employ and that they will 
be law-abiding citizens or something to that effect so we are 
not worried about losing these fellows.
    There has got to be something done. I am sorry that the 
immigration bill went down. I hope it can be resurrected 
because we need them.
    Another thing I was concerned about was the horse slaughter 
bill. We cannot kill horses anymore now. I know what is going 
to happen. You are going to see a lot of those horses out there 
being starved to death. People cannot pay $150, $175, $200 to 
get them slaughtered again--to get them slaughtered once, I 
meant to say.
    But anyway, it is--something has got to--I do not know what 
is happening in the judges. I see they tore down the bill there 
with the BLM and they went to a lot of trouble with the 
committees and one thing and another. And a judge in Idaho, 
Windmill or something like that, decided that there is an 
injunction, he filed an injunction against the BLM enforcing 
these regulations because some environmental group did not 
think they met the EPA and NEPA and all them things.
    The judges are having a lot of sway in what we are having 
to say anymore. And I hope to gosh somebody can rein them in 
and let us get back to business.
    Thank you.
    Senator Baucus. Thank you, Tom.
    Mr. Sanders. Senator Baucus, Senator Tester, my name is Bob 
Sanders. I am the Manager of Conservation Programs with Ducks 
Unlimited and I live in Elliston, Montana.
    I just wanted to underscore our State Chairman, Linda 
Daugherty's comments regarding the loss of wetlands in the 
United States. Currently, we are losing about 80,000 acres of 
wetlands annually. We are also losing our native grasslands and 
possibly CRP lands.
    Montana is the third largest duck producer in the Nation. 
CRP, actually one in five ducks in the Nation is produced on 
CRP lands. Very critical habitats for waterfowl as well as a 
wide variety of upland birds and other wildlife.
    And we all benefit from having wildlife on the landscape, 
open spaces, good water quality, all the benefits that wetlands 
provide. Farm bill programs such as CRP and wetland reserve 
programs provide those for us.
    One of our strongest and our strongest allies in 
conservation are the folks sitting right here, are the ag 
producers. I think we share a common goal of keeping grass on 
the landscape, especially with the ranching community, keeping 
those landscapes intact and productive. I just encourage you to 
strongly consider the conservation portion of the upcoming farm 
bill when you pass that legislation.
    Thank you.
    Senator Baucus. Thank you, Bob, very much.
    Mr. Hubbard. My name is Paul Hubbard. I am with the 
Community Food and Agriculture Coalition in Missoula County.
    If the goals basically here are for people to have healthy 
foods and for farms and ranches to be viable businesses, then I 
would hope this farm bill would approach them not as separate 
goals but as the same goal. And that is if we can build more of 
a regional and local food economy, then we all win. Farms and 
ranches retain more of the food dollar. As you know, more and 
more of the food dollar goes towards marketing and 
transportation. And consumers get a much healthier product.
    So an example of that specifically is Farm-To-School. 
Missoula County has piloted this project. Kids are getting 
local food in their school meals and they are eating more 
fruits and vegetables. And it is coming straight from Montana 
farms and ranches. So it is a win-win situation.
    Another example is, as you guys are sitting in D.C., seeing 
Japanese beef on the menu, most of the time when I go to a 
restaurant in Montana, people look at me cross-eyed when I ask 
where the beef is from. It is very difficult to get a Montana 
burger here. That is because we lack infrastructure.
    In bringing the consumer and the producer close together, 
as close as we can--obviously, we will have to export plenty--
but the closer we can bring them the better. And looking at the 
infrastructure specifically is a place where we lack.
    Yet it is also an opportunity because we do not have to go 
to these Smithfield-esque just enormous operations that, 
unfortunately, plague many communities in the Midwest, North 
Carolina, where fertilizer basically becomes a pollutant. We 
can look more at community-based systems, what type of 
infrastructure will help our communities in bringing the 
consumer and producer closer together.
    Senator Baucus. Thank you, Paul.
    Mr. Nolan. Good afternoon, Senator Baucus, Senator Tester. 
My name is Jim Nolan from the State Department of Public Health 
and Human Services.
    I just wanted to call to your attention a draft proposal 
that USDA is floating that they would like to have included in 
the farm bill that would drastically alter the way they fund 
one of our major nutrition programs, the food distribution 
program on Indian reservations.
    Our initial analysis of the proposal would indicate a cut 
of about 40 percent for Montana. Although I am not too 
concerned that that language will not get in the farm bill, I 
am concerned that even if it does not they will try to do this 
administratively, a course they have already undertaken.
    This program serves about 3,000 families a month and we 
would ask for help in making sure it does not happen.
    Thank you.
    Senator Baucus. Thank you, Jim.
    Ms. Hollingsworth. Hi, I am Marcia Hollingsworth. I live on 
a farm/ranch operation. I also sit on a national committee 
called CARET, Council for Agriculture Research Extension and 
Teaching.
    We are about to celebrate the 4th of July. Years ago I was 
talking with different people and they mentioned to me how 
democracy is directly connected with ag, this makes me a wreck.
    But anyway, I do feel that our national security depends 
upon a strong agricultural system. Agriculture is our food 
security and I think in years to come will soon be our energy 
security.
    I would like you to play close attention to the research 
and education title in the farm bill. I think it is extremely 
important to keep our land grants strong to address the needs 
here in Montana. We support the formula funding and I do ask 
that there be increases there to keep up with the pace of 
inflation.
    The land grant to Montana, I think, is an essential partner 
in keeping this industry a strong and viable industry.
    Thank you.
    Senator Baucus. Thanks, Marcia, very much.
    Mr. Meyers. Senator Baucus, Senator Tester, thank you for 
holding the field hearing here in Great Falls and the 
opportunity to talk to you. I am Larry Myers. I am from 
Glasgow, Montana. I am with Two Rivers Economic Growth. I 
currently serve as the Executive Director for St. Mary 
Rehabilitation Working Group.
    Three months ago, the Bush Administration proposed its new 
farm bill for 2007. And in it had a $1.75 billion 10-year 
cooperative conservation program called the Regional Water 
Enhance Program, RWEP. It is aimed at improving water quality 
and water conservation on working agricultural lands on a 
regional scale.
    This program is included in the redesigned EQIP program or 
EQIP, as we know it today.
    I would like to encourage you to take good strong 
considerations of this, as it appears to have some benefits to 
all of us in Montana dealing with water. We either have too 
much or we do not have enough or whatever.
    Senator Baucus. It is usually not enough.
    Mr. Meyers. Unless it comes in a rather large quantity like 
it did in Valley County on June 16th, which is another issue.
    Anyway, dealing with and working with the Family Farm 
Alliance, which is a grass roots organizations for family 
farmers, ranchers, irrigation districts over the 16 Western 
States, this project or program seems to have some benefits but 
there are some cautions that we have identified that need to be 
considered.
    One of them is administrative costs associated with any 
work performed by the NRCS should be capped at a reasonable 
level.
    The second one is the role of the Bureau of Reclamation and 
how that agency coordinates with NRCS and the implementation of 
this program in Western States must be thought out thoroughly 
and should be complemented and coordinated philosophy.
    And then number three, limitations should be established to 
ensure that these monies truly benefit agriculture and not 
urban municipalities with relative token amounts of 
agricultural lands or hobby farms within their boundaries.
    The fourth thing for consideration, the program should 
provide assurances that the intent is not to reallocate water 
away from agriculture. It must also recognize the traditional 
differences of Federal agencies to State water allocation 
systems.
    Lastly, the thing that I would like you to encourage 
considering in the farm bill, and it has been mentioned here by 
the panel, is some kind of a permanent disaster fund. And I 
think that is echoed timely with what happened in Glasgow and 
Valley County.
    Thank you very much.
    Senator Baucus. Thank you, Larry, very much. Thank you.
    Mr. Omland. Senator Baucus, Senator Tester, my name is Rich 
Omland. I serve as the Bishop of the Montana Synod of the 
Evangelical Lutheran Church of America, the largest Protestant 
denomination in Montana. Along with our brothers and sisters in 
the Montana Association of Churches, the Roman Catholic 
communities, and other Protestant groups, thank you for being 
here today.
    Many of our members and our congregations are in rural 
communities and small towns all across the State and all across 
the Nation. So we have a heart in what is going on in this 
bill.
    A couple of things I want to just say. First of all, to all 
the producers, the women and men in this community who are a 
part of the caretaking of the soil and the land of this good 
earth. That is part of what God is up to and we thank you for 
your participation in that. Hopefully you see that bigger 
picture that goes on.
    Secondly, we want to just continue to remind our Government 
and remind our producers to have a heart for the poor and the 
folks that we produce food for. We think that is terribly 
important and we want to encourage you to think about how those 
resources are allocated, that we not forget the least among us.
    We thank you folks who work in agriculture on all of our 
behalfs.
    And gentlemen, thank you for being here, as well.
    Senator Baucus. Thank you, Richard, very much.
    That is a good finish, a good summary.
    Thank everybody for coming.
    Before we adjourn here I just want to again thank those 
from the Agriculture Committee who are here. Also, everybody 
here at the Civic Center who has helped make this room 
possible. A lot of people behind the scenes make a lot of 
things happen.
    Again, thank all the folks that came, the witnesses, 
everybody who stood up to speak. It is all very, very 
important. It is part of the larger mosaic and it will help, I 
know, Senator Tester and certainly help me and other members of 
the Ag Committee as to what to do next as we put together this 
farm bill.
    Thank everybody, very much. I might add, too, that if you 
have written statements you want to add, or additional 
statements, additional testimony, additional points that you 
may have, you can mail them to Brandon Willis. Brandon, can you 
please stand?
    This is Brandon Willis. He is my ace top hand in 
agriculture. He does a great job. His e-mail address is 
[email protected].
    The hearing is adjourned.
    [Whereupon, the Committee was adjourned.]
      
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                              July 2, 2007




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