[Senate Hearing 110-233]
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2008

                                                        S. Hrg. 110-233

    HARVEST OVER THE HORIZON: THE CHALLENGES OF AGING IN AGRICULTURE

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

                                HEARING

                               before the

                       SPECIAL COMMITTEE ON AGING
                          UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                             WASHINGTON, DC

                               __________

                             JUNE 21, 2007

                               __________

                            Serial No. 110-9

         Printed for the use of the Special Committee on Aging



  Available via the World Wide Web: http://www.gpoaccess.gov/congress/
                               index.html
?

                       SPECIAL COMMITTEE ON AGING

                     HERB KOHL, Wisconsin, Chairman
RON WYDEN, Oregon                    GORDON H. SMITH, Oregon
BLANCHE L. LINCOLN, Arkansas         RICHARD SHELBY, Alabama
EVAN BAYH, Indiana                   SUSAN COLLINS, Maine
THOMAS R. CARPER, Delaware           MEL MARTINEZ, Florida
BILL NELSON, Florida                 LARRY E. CRAIG, Idaho
HILLARY RODHAM CLINTON, New York     ELIZABETH DOLE, North Carolina
KEN SALAZAR, Colorado                NORM COLEMAN, Minnesota
ROBERT P. CASEY, Jr., Pennsylvania   DAVID VITTER, Louisiana
CLAIRE McCASKILL, Missouri           BOB CORKER, Tennessee
SHELDON WHITEHOUSE, Rhode Island     ARLEN SPECTER, Pennsylvania
                     Debra Whitman, Staff Director
            Catherine Finley, Ranking Member Staff Director

                                  (ii)

  
?

                            C O N T E N T S

                              ----------                              
                                                                   Page
Opening Statement of Senator Gordon Smith........................     1
Opening Statement of Senator Herb Kohl...........................     2
Prepared Statement of Senator Robert Casey.......................    11

                                Panel I

Keith Collins, chief economist, U.S. Department of Agriculture, 
  Washington, DC.................................................     3

                                Panel II

Barry Beshue, president, Oregon Farm Bureau, Boring, OR..........    23
John Rosenow, farmer affiliated with the Wisconsin Academy of 
  Sciences, Arts and Letters, Cochrane, WI.......................    30
Derek Godwin, staff chair and Watershed Management Extension 
  Specialist, Oregon State University Extension Service, Salem, 
  OR.............................................................    37
Isaac Kershaw, Ph.D., Ohio State Department of Education, Career 
  Tech and Adult Education, Columbus, OH; representing Future 
  Farmers of America.............................................    42

                                APPENDIX

Prepared Statement of Senator Ken Salazar........................    47
Responses to Senator Casey's Questions from Keith Collins........    47
Responses to Senator Casey's Questions from John Rosenow.........    51
Responses to Senator Casey's Questions from Isaac Kershaw........    52

                                 (iii)

  

 
    HARVEST OVER THE HORIZON: THE CHALLENGE OF AGING IN AGRICULTURE

                              ----------                              --


                    THURSDAY, JUNE 21, 2007
                                       U.S. Senate,
                                Special Committee on Aging,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 11:02 a.m., in 
room 325, Russell Senate Office Building, Hon. Gordon H. Smith 
(ranking member of the committee) presiding.
    Present: Senators Kohl, Casey, and Smith.

  OPENING STATEMENT OF SENATOR GORDON H. SMITH, RANKING MEMBER

    Senator Smith. Good morning, ladies and gentlemen. We 
welcome you all.
    I am grateful to be here with my colleague, Senator Kohl, 
who is the Chairman of this Committee. The way he and I 
operate, we do it in a very bipartisan way and tend to see 
these issues not as Republican or Democrat, but as issues that 
affect older Americans.
    There has not been too much discussion on the aging 
demographics of American agriculture. So I look forward today 
to a productive discussion with our panelists.
    I want to extend a personal welcome to two Oregonians who 
are here: Barry Beshue of the Oregon Farm Bureau and Derek 
Godwin of Oregon State University. We congratulate the Beavers 
on their progress in the World Series. [Laughter.]
    As Congress moves forward with Farm Bill proposals, it 
might be worth considering how many farmers will be around 10 
years from now and how old they will be. Right now, nearly a 
quarter of farm operations in the country are 65 years of age 
or older. That contrasts with only 8 percent of that age class 
in non-agricultural industries.
    That statistic becomes even more significant when we look 
at the shrinking number of farms in America. In 1930, there 
were over 6 million American farms. In 2002, there was one-
sixth of that number. Clearly, farms are either consolidating 
or disappearing altogether. Young people are either not 
entering the business, not taking over the family business, or 
both.
    This trend has something to do with how hard it is to be a 
farmer these days. In the West, farmers do not just have to 
deal with crops and fuel prices; they also have drought and 
wildfire and endangered species to deal with.
    But why should we care? Well, we should.
    First of all, agriculture remains a unique part of this 
country, a land blessed with fertile soil and good climate. 
Americans once believed that rain follows the plow. The dry 
corners of my State, however, disprove that theory, but not the 
interest and intransigence of the American farmer.
    The U.S. Capitol is adorned with images of wheat and 
tobacco. ``America the Beautiful'' speaks of amber waves of 
grain and the fruited plain.
    I love the quote of Thomas Jefferson, who spoke of the 
virtues of American agriculture. Wrote he, ``Those who labor in 
the earth are the chosen people of God, if ever he had a chosen 
people, whose breasts he has made his peculiar deposit for 
substantial and genuine virtue. It is the focus in which he 
keeps alive that sacred fire, which otherwise might escape from 
the face of the earth.'' The importance of American agriculture 
can also be described in more tangible terms. There is a 
national security interest of a country that can and does 
produce its own food supply. The U.S. produced a record amount 
of food in 2006.
    We also imported a record amount of food, with imports 
continuing to close in on that gap. Recent stories of tainted 
food from foreign nations remind us of why our agriculture and 
our health and safety standards are important.
    Last, so many of the communities in my State are rural and 
based on a farm economy of one sort or another. As farms 
dissolve and children move away, those communities suffer.
    Again, I look forward to hearing more from our panelists 
about these issues and what options we, as a Government, have 
to turn to in order to turn the current trend around.
    With that, I turn to the Chairman, Senator Kohl.

        OPENING STATEMENT OF SENATOR HERB KOHL, CHAIRMAN

    The Chairman. Well, we thank Senator Smith for holding 
today's hearing on the challenge of aging in agriculture.
    Welcome our witnesses and look forward to their testimony.
    In my own State, this is an especially important topic 
because, in Wisconsin, the average age of farmers is 53 years. 
It is critical that the decades of knowledge and experience of 
these farmers is not lost.
    Wisconsin has 76,000 farms, a very, very high number of 
farms, and they generate more than $51 billion annually in 
revenues. So, being the largest industry in our State, it is 
not only a serious workforce issue, it is a critical issue for 
the entire economy of our State.
    We are truly at the front line in facing the challenge of 
aging in agriculture. Wisconsin is preparing to meet this 
challenge.
    We will hear today from John Rosenow of the Wisconsin 
Academy of Sciences, Arts and Letters.
    The academy spent the last 2 years researching the future 
of farming and rural life in Wisconsin. Academy members met 
with hundreds of Wisconsin farmers and conducted six regional 
forums throughout the State to identify problems and 
opportunities. Their comprehensive study has resulted in more 
than 80 recommendations for action items to be undertaken by 
policymakers, communities and citizens.
    We look forward to hearing the details of their important 
work today from Mr. Rosenow, who operates a very successful 
family farm in our State.
    As a Nation, we must address our rapidly aging farming 
communities. As you will hear today from Mr. Rosenow, without 
things like good schools, good jobs, affordable health care, 
our rural communities will lose their vitality.
    I strongly believe that continuing this vitality will 
require continuing intelligent Federal involvement, and I 
believe it is necessary for the Federal Government to help 
rural life if we expect rural life to continue to thrive and 
grow.
    Again, I thank Senator Smith for raising this issue today 
in this Committee. I am delighted to have this distinguished 
group of witnesses assembled to explore these issues and offer 
solutions that, hopefully, will allow our Nation's farmers and 
our rural communities to continue to exist at a level of 
prosperity in our country.
    Thank you so much.
    Senator Smith. Thank you, Senator Kohl.
    We had scheduled to have Chuck Connor, the deputy secretary 
of Agriculture, with us today, but he has been called to a 
meeting at the White House, and it is a higher pay grade than 
Senator Kohl and I have, but we are very grateful that Keith 
Collins has come in his stead. He is well-equipped to address 
this issue.
    Keith, we thank you for your time, your presence and your 
competence on these issues.

   STATEMENT OF KEITH COLLINS, DEPUTY CHIEF ECONOMIST, U.S. 
           DEPARTMENT OF AGRICULTURE, WASHINGTON, DC

    Mr. Collins. Well, thank you very much, Senator Smith, 
Chairman Kohl. Good morning. It is nice to be here.
    I do want to begin by saying that Secretary Connor regrets 
that he is not able to open this important hearing this 
morning. As you noted, some serious issues have arisen that 
have compelled him to stay back at the department this morning, 
and I thank you for permitting me to pinch hit for him this 
morning.
    Mr. Chairman and Mr. Smith, USDA very much appreciates the 
chance to talk about issues related to older farmers and 
ranchers in American agriculture. Agriculture today is 
undergoing some very significant and rapid changes. We have 
sharp growth in international trade, we have new production and 
processing technologies emerge almost daily, and we have had 
this remarkable increase in the demand for biofuels. All of 
these things are presenting new economic opportunities.
    The past few years have generally been prosperous times for 
American agriculture, and we expect another above-average year 
for farm income in 2007. Higher incomes and rising land values 
have added substantially to the wealth of producers.
    At the start of this year, U.S. farm equity, or net worth, 
totaled $1.7 trillion. That is up half a trillion from just 3 
years ago. Stronger economic returns to farm production are 
important for attracting people new people into farming and for 
keeping current young farmers in operation.
    But hoping for prosperous times may not be enough to deal 
with the advancing age of our farmers. The average age of 
primary farm operators, which partly reflects the rising 
average age of our population as a whole, has increased nearly 
5 years, from 50.5 years in 1982 to 55.3 years in 2002, the 
last agricultural census year.
    As Mr. Smith noted, the primary operator on nearly one-
fourth of all farms with $10,000 or more in annual sales was 65 
years of age or older in 2002.
    The rise in the average age of primary operators reflects 
both a decline in the number of young farmers and an increase 
in the number of older farmers. The continuing decline in the 
number of younger farmers has raised concerns that insufficient 
new entrants will be available to replace a large and growing 
number of retiring farmers.
    I want to emphasize that there is no evidence that a 
shortage of farm operators has caused or is likely to cause in 
the near future reduced production and higher prices of U.S. 
farm commodities. There is evidence that there are a 
substantial number of young farmers present on farms, although 
they do not serve as the primary operator. These secondary and 
third-level operators in many cases represent future primary 
operators.
    While there appears to be no impending slowdown in farm 
production resulting from the advancing age of primary farm 
operators, there are important concerns about how the upcoming 
intergenerational transfers may affect the future structure of 
agriculture.
    Primary operators 65 years of age or older own over one-
fourth of farm assets and one-third of the total acres of land 
in farms. Ultimately, these assets will be sold or passed on to 
their heirs. Selling or leasing these assets to existing 
operators would raise concerns about consolidation and its 
effects on the structure of agriculture, local economies and 
rural landscapes.
    Over the past two decades, there have already been 
substantial declines in the number of mid-sized farms and 
increases in the largest size farms.
    The divergence between the number of younger new farm 
entrants into production agriculture and the exit of older 
retiring farmers and the potential barrier to entry of new 
farmers created by rising farmland values and the rising 
complexity of farm production today are factors behind interest 
in policies to encourage entry into agriculture and to assist 
in the intergenerational transfer of assets from one generation 
to the next.
    The USDA has a number of ongoing programs to help older 
farmers and to encourage beginning farmers, and there are many 
wonderful private-sector programs and dedicated professionals 
involved in helping farm businesses prosper and transition.
    Our efforts at USDA range from programs supported through 
the Cooperate State Research Education and Extension Service 
that help older farmers and their families improve their 
business and their family planning. We also support 4-H and its 
9,000 members that teach young people leadership, citizenship 
and life skills. We assist FFA and its 500,000 members which 
orient young people toward careers in agriculture. We have also 
targeted our credit programs and our other assistance programs 
to beginning farmers.
    Today, I would also like to highlight the opportunity we 
have with the 2007 Farm Bill to address the challenge of 
effectively transferring today's farms from one generation to 
the next.
    The administration is recommending a broad package of 
changes to several Farm Bill titles that provide additional 
support to beginning farmers and ranchers. You may have seen 
our book, which I will hold up for you. It is 183 pages of Farm 
Bill ideas, and we have a special section on beginning farmers.
    As part of our proposals, we suggest for the commodity 
title that beginning farmers receive a 20 percent increase in 
their direct payment rate for 5 years. That would add an 
estimated $250 million to new producers' incomes over the next 
decade.
    Under the conservation title in our proposals, we are 
recommending that 10 percent of Farm Bill conservation 
financial assistance be reserved for beginning farmers as well 
as socially disadvantaged producers under what we are calling a 
new conservation access initiative.
    As part of the credit title, we recommend prioritizing 
USDA's direct operating and farm ownership loans to first meet 
the needs of beginning and socially disadvantaged farmers. We 
also recommend enhancing the existing beginning farmer and 
rancher down payment loan program to help ensure the success of 
the next generation of production agriculture.
    Of course, we know that the Federal, State and local 
Government programs alone cannot ensure that older and 
beginning farmers can successfully meet all the life challenges 
found in farming. Private-sector efforts are critical. Market 
incentives from a strong farm economy are essential.
    Nevertheless, the 2007 Farm Bill provides an excellent 
opportunity, an opportunity we should not chance missing, to 
improve the effectiveness of our collective efforts.
    Thank you, Mr. Chairman.
    Senator Smith. Thank you, Mr. Collins.
    You mentioned, and I referred to it as well, the number of 
farms declining. What about the acreage under cultivation? Is 
that declining?
    Mr. Collins. There has been a general trend over the last 
decade of a decline in the number of acres planted to principal 
crops and a slight decline in the total number of acres in 
farms. It looks like this year, in 2007, that is going to 
reverse itself. It will see an increase.
    Senator Smith. Is that due to food and fuel now being an 
option for farmers?
    Mr. Collins. That is the primary reason, yes.
    Senator Smith. Are more farmers taking land out of the 
Conservation Reserve Program as a result of that?
    Mr. Collins. Not yet. We have about 36 million acres in the 
Conservation Reserve Program.
    Senator Smith. Do you expect that that will happen?
    Mr. Collins. I expect that that will happen. Over the next 
four years, between 2007 and 2010, we have about 12 million 
acres under contracts that will terminate. What gets planted 
depends on what we do at USDA: Will we hold more open 
enrollments, more signups, and how frequently will we do that? 
We will give people an opportunity to put that or other land 
in, and, of course, the rental rate we offer is an incentive to 
do that. It will depend on whether farmers pick that up or not.
    Senator Smith. With the improvement in farm economies 
through so much of the country, I am wondering if that is a 
category that will really be in decline and then the amount of 
acreage will be dramatically on the increase.
    Mr. Collins. Our current projection is that the 37 million 
acres would fall to around 32 million acres in the Conservation 
Reserve Program (CRP) over the next several years.
    Senator Smith. From 40 to 32?
    Mr. Collins. From 37 to 32.
    Senator Smith. From 37 to 32.
    Do you have any bias or preference for encouraging more 
land to go under cultivation, come out of the program? I mean, 
does the administration have a policy on that?
    Mr. Collins. The administration's articulated policy is 
that there will be no open enrollment in 2007 because of the 
record high prices we expect for many commodities. The 
Secretary has indicated he is reserving judgment at this point 
on whether he will hold another signup in 2008. We do----
    Senator Smith. It seems to me that the farmers would rather 
farm, and if they have options that are profitable, that ought 
to be encouraged because the Nation needs the food and the 
fuel, and the competition between the two is certainly 
squeezing the food chain.
    Mr. Collins. I think you make a very good point. It is a 
point that I have made from an economic point of view. There is 
also, on the other side, a very strong conservation movement 
that would like to retain the environmental benefits that have 
been achieved under the program as it now exists. So those two 
needs have to be balanced.
    Senator Smith. Sure.
    I want to ask you about imports. Despite the improving farm 
economy, imports continue to be on the rise. We are at about a 
50-50 point between domestic and foreign food production. I am 
wondering if you see any reversal on that, or is USDA concerned 
that we are going to become a net food importing nation?
    Mr. Collins. Well, that prospect has been before us over 
the last several years, and, in fact, if you go back two or 
three years ago, many people were projecting, within the next 
few years, we would become a net importer. In fact, that has 
not happened, and the gap between exports and imports has 
widened a little bit.
    This year, we expect about $77.5 billion worth of 
agricultural exports and around $70 billion in imports. So 
there is a spread of nearly $8 billion at this point. Now that 
is way down from $25 billion to $30 billion that it was in the 
mid-1990's.
    So imports have grown faster than exports. Over the last 
couple of years and probably the next couple of years, it looks 
like they are probably going to grow together, so I do not 
really expect them to cross.
    Senator Smith. As we contemplate this issue of the older 
farmer I live in rural Oregon, I am surrounded by farmer 
neighbors, and many of their kids go off to Oregon State and 
other places, and they go into fields.
    Do you think if the dollars improve that that will do the 
job and get more of them to look to agriculture as their daily 
bread as well? I suspect that is a central key.
    Mr. Collins. I am a market-oriented guy, and I think that 
when the rates of return in some investment go up and exceed 
the rates of return in other investments, then assets move into 
that, both human capital and in physical assets. So I think 
that that could help solve the problem.
    The question is, though, what does that structure of 
agriculture look like as that occurs? Are the assets that are 
moving into agriculture existing farmers that are getting much, 
much bigger and foreclosing on the opportunity of current farm 
children to farm?
    There is a question about what that structure of 
agriculture would look like, and I think that is why, even 
though we do not perceive of an insufficiency of people willing 
to farm, we are concerned about giving people--young people, 
people that live on farms and people that do not live on 
farms--an opportunity to have a chance in agriculture.
    So, yes, I think a market rate of return can be a powerful 
incentive for generating production, but I also think that 
there are also social and other issues that have to be dealt 
with here as well that motivate the reason for policies and 
programs.
    Senator Smith. Now, as you contemplate a new Farm Bill, I 
am sure you know that one of the biggest costs in running a 
farm is just compliance with regulations. Is there anything you 
are planning to do or prepared to propose to streamline 
regulation, reduce it, eliminate it where possible, to help, or 
do you see the regulatory burden just growing and growing?
    Mr. Collins. Well, the regulatory burden has grown. USDA is 
not a large regulatory agency with respect to farmers. In fact, 
through our Natural Resources Conservation Service we provide 
the tools to farmers to help them meet regulations that 
generally come from the Environmental Protection Agency or the 
Department of Interior Bureau of Land Management and so on.
    I would say that one development that we have seen, and 
something that we have proposed in the administration's Farm 
Bill proposals, is to try and rely more on markets to deal with 
environmental regulation. I mean, the clearest example we see 
today is the voluntary market for greenhouse gas offsets that 
revolves around the Chicago Climate Exchange.
    We have a proposal to broaden that dramatically and to get 
the regulatory agencies to come to the table, USDA and the 
other regulatory agencies, to come to the table and agree on 
how activities of farmers--ecosystem services they are called, 
like mitigating greenhouse gas emissions--how these ecosystem 
services could be used to comply with regulations.
    That way, farmers, in fact, might be able to get paid for 
an ecosystem service that a public utility or an electrical 
generating plant would use to meet an environmental regulation. 
So we have a broad-based proposal that looks at both farm 
regulation as well as societal regulation that would get 
farmers an opportunity to be a solution for people who are 
being regulated and earn an income at the same time. It is kind 
of a creative idea.
    Senator Smith. It is. This is my last question. I will turn 
it over to the Chairman. But I am wondering--and I do not know 
the answer to the question I am about to ask you, but when it 
comes to global warming and providing carbon sinks, what 
captures more carbon, fields left idle or fields under 
cultivation? Is there a difference between one crop versus 
another?
    Mr. Collins. Oh, there is definitely a difference between 
one crop and another, and the answer to that question is, it 
all depends. You can, certainly, through cultivation, 
dramatically increase carbon sequestration, but if you left the 
field idle and you did not tend it and it did not have a good 
cover crop, it would lose organic matter and would be a net 
emitter.
    So with using the right crops, the right cover crops, the 
right rotations, the right tillage practices, you can restore 
soil carbon and you can sequester greenhouse gases, and if you 
look at----
    Senator Smith. That would be an argument on the side of 
taking land out of CRP, an environmental value on the side of 
the economy.
    Mr. Collins. Well, the extreme case, of course, is that you 
cultivate the land by planting trees, and then you can get the 
most carbon sequestration.
    Senator Smith. We are big on that in Oregon. [Laughter.]
    Thank you very much.
    Senator Kohl.
    The Chairman. Thank you, Senator Smith.
    Welcome to you, Mr. Collins. I have had the opportunity, as 
you know, to work with you now----
    Mr. Collins. Yes, sir.
    The Chairman [continuing]. For many years, and you are a 
great, great asset to the USDA and a great asset to our 
country. I have always found my interaction with you to be 
extremely positive and informative, and it is good to see you 
here today.
    Mr. Collins. Well, thank you very much, Senator Kohl. That 
is a nice compliment.
    The Chairman. Mr. Collins, one of the things, of course, 
that the farmers talk about is the ability to pass on their 
farm to their heirs, and in that connection, they talk about 
the estate tax exemption, and many of those who are pushing for 
total abolition of the estate tax refer to ranchers and farmers 
as being key in this area.
    I think, to some extent, it is really not true, but do you 
think in order to put this aside entirely in terms of the 
estate tax impacts on small ranchers and family farmers, we 
might increase the exemption from what it is today, which I 
believe is $2 million, $4 million a couple, to maybe $4 million 
or $5 million so that, in fact, we would put 98 or 99 percent 
of all family farms in this country out of the reach of the 
estate tax?
    Mr. Collins. I cannot state what the administration's 
position on that would be, but my view on this would be that 
that would be a very positive thing to do. At one time, that 
unified credit exemption was as little as, what, $650,000, very 
burdensome for many, many family farms. I think, as you raise 
that up, you do resolve a problem that farms would face in 
transitioning from one generation to the next.
    So I do not know if that is going to resolve the issue and 
take it off the table, but I think it would be a very positive 
step for farmers.
    The Chairman. Thank you. I agree with that, and I think we 
need to move in that direction.
    Mr. Collins, there is always a debate when we set a Federal 
budget, particularly farm policy. There are those who believe 
there are fairly generous farm policies and rural expenditures 
already important to our country in terms of trying to keep 
rural America alive, growing and thriving, and there are others 
who believe that the market should more or less run its course 
and have its impact and we here in Washington setting Federal 
policy with tax dollars should more or less not get overly 
involved in that whole discussion.
    Many of us, and I am one of them, believe that if we are 
going to see our rural economy and rural life continue on and, 
hopefully, grow, then there has to be some level of Federal 
involvement, things like good schools, helping to create jobs, 
health-care benefits, Internet connection, you know, cable 
kinds of setups. These things cost money, and these things take 
some level of Federal tax expenditure.
    Where do you fall in terms of your philosophical thoughts 
about how important it is, A, to keep our rural life thriving 
and growing, including agriculture, of course, which is the 
foundation of rural America, and that we should be willing to 
spend a certain amount of tax dollars to encourage this?
    Mr. Collins. Senator Kohl, I personally and as representing 
the Department of Agriculture, I can say the Department of 
Agriculture feels very strongly in favor of the sentiment that 
you just expressed. The Department of Agriculture is 
responsible for coordinating rural development across the 
Federal Government. We are dedicated to the mission of trying 
to increase economic activity in rural areas.
    Yes, there can be a debate about whether you should let the 
market take its course. I mean, that debate is often framed in 
terms of people versus place. Do you invest in people, such as 
equipping them with better human capital, more skills, more 
education and let them go where they want, or do you invest in 
place to give people that live in a certain area an economic 
opportunity that would parallel those that might live in 
suburban or urban areas.
    I think the answer to that is you do both, and in the 
Department of Agriculture, we do both. As you know, we have a 
vigorous rural development program that invests in things like 
you talked about: broadband connections, rural community 
infrastructure, water and sewer systems and libraries and 
health-care facilities and firehouses. We provide lending for 
all of those things, and we think those are all very important 
to help develop the network of infrastructure on which rural 
businesses can prosper and provide rural jobs and rural growth 
and economic employment opportunities for rural people.
    We target a lot of our programs to the areas of the country 
where poverty levels are the highest, the persistent poverty 
counties of our country, and so we think that from both an 
economic and a social perspective that we ought to be investing 
in rural America. That is why Farm Bills have a rural 
development title, and we think that is very, very important, 
and we have proposals as well in our Farm Bill proposal to 
expand our funding of our rural development activities.
    So I would say the position you voiced is one that we 
subscribe to very strongly.
    The Chairman. I thank you very much. Thank you for being 
here.
    Thank you, Senator Smith.
    Senator Smith. Thank you, Chairman Kohl.
    We have been joined by Senator Casey of Pennsylvania.
    Senator, if you have an opening statement or questions for 
the witness, we welcome those.
    Senator Casey. Thank you, Senator Smith and Chairman Kohl.
    I do not have any questions for Mr. Collins in the interest 
of time. I am sorry I missed your presentation. If we have 
something that we could submit for the record by way of 
writing--and just some brief comments to open because I know we 
want to transition to a new panel, and I know we got notice 
about votes, too.
    Just very briefly, I want to thank the Chairman for calling 
this hearing, and with unanimous consent, I will ask that my 
full statement be made part of the record.
    Senator Smith. Without objection.
    Senator Casey. But I did want to say how appreciative I am 
to be on this Committee and also to be able to participate in 
this hearing because I come from a State where agriculture is 
not just an important industry or an important economic sector; 
it is the dominant one in large measure. Millions of people 
affected by what happens on our farms and what happens to our 
farm families, dairy being a huge component of that.
    All of the issues that have been discussed already today 
and will be discussed in the second panel about the aging of 
our workforce, and in particular the aging of our farm families 
and farmers have a tremendous impact on Pennsylvania, so we 
need to focus on this, and I am grateful that this hearing 
calls attention to that challenge, especially in the context of 
our dairy farmers.
    It is very difficult to do the work. It is very difficult 
to get the capital to acquire the land. We see this firsthand 
in Pennsylvania.
    So I am grateful for this opportunity. I want to thank the 
Chairman, and I also want to thank Senator Smith for allowing 
us to come together today.
    By the way, this is the first time I have been in this room 
for a hearing, in this historic hearing room, so thank you very 
much.
    [The prepared statement of Senator Casey follows:]

             Prepared Statement of Senator Robert P. Casey

    Mr. Chairman, thank you for holding today's hearing on the 
challenge of aging in agriculture. As you may know, in my home 
state, agriculture continues to be the number one industry. 
Dairy is our largest agricultural segment, accounting for 42% 
of all agricultural revenues.
    Unfortunately, the impact of aging in agriculture and the 
difficulties facing young farmers pose an all too real threat 
to the continued success of our dairy industry. Pennsylvania 
continues to lose between 250 and 350 dairy farms every year 
due to farm sellouts and retirements. While the vast majority 
of Pennsylvania dairy farms are family operations, younger 
generations are increasingly reluctant to work the long, hard 
hours required when they see their parents doing this same work 
and not being able to make ends meet.
    New start-ups of dairy farms typically number less than 30 
per year. One reason for this is that the cost of purchasing 
land is extremely high, making it nearly impossible for young 
farmers to start new operations. All told, between 1995 and 
2004, Pennsylvania saw a 29% reduction in the number of dairy 
farms.
    Pennsylvania's situation is not unique. Nationally the 
average age of farmers continues to increase as fewer young 
people choose farming as an occupation. At the same time, the 
number of farms and farm acres continues to decline.
    American farming has reached a critical threshold. We must 
find solutions to reduce these trends, to encourage our young 
people to seek careers in agricultural production. Likewise, we 
must ensure the availability of incentives to ensure 
agricultural production remains a viable occupation for young 
farmers.
    I again would like to thank the Chairman for calling this 
hearing. I look forward to hearing the testimony and working 
with my colleagues to find solutions to these challenges.

    Senator Smith. Thank you, Senator Casey. Yes, this is a 
very historic room, and it is appropriate for the Aging 
Committee to be here.
    Thank you very much, Keith Collins, for your time and your 
testimony today.
    Mr. Collins. Thank you very much.
    [The prepared statement of Mr. Connor follows:]
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    Senator Smith. We will call up our second panel.
    It consists of Barry Beshue, president of the Oregon Farm 
Bureau; Dr. Ike Kershaw, Department of Education of the State 
of Ohio, representing the Future Farmers of America; Derek 
Godwin, staff chairman and watershed management specialist from 
Oregon State University; and John Rosenow, a farmer affiliated 
with the Wisconsin Academy of Sciences, Arts and Letters.
    I will give everybody fair warning. Apparently, they are 
going to have a couple of votes here. We will try to get 
through all of your testimonies and questions, if we can, but 
appreciate your time here. We want to give you the time that 
you have prepared to present. Any abbreviation you can do, we 
appreciate that, too. All of your testimonies will be fully 
included in the record.
    Barry, welcome.

   STATEMENT OF BARRY BESHUE, PRESIDENT, OREGON FARM BUREAU, 
                           BORING, OR

    Mr. Beshue. Chairman Kohl, Ranking Member Smith and Senator 
Casey, I want to thank you for the opportunity to testify 
before you today. My children are pleased that I was actually 
able to comment on something for which I am eminently 
qualified, and that is getting old. So they sent my 
congratulations along and their thanks to Senator Smith.
    It is a privilege to represent all members of the Oregon 
Farm Bureau and the agricultural community in the great State 
of Oregon. Oregon Farm Bureau is the largest agricultural 
organization in the State, representing all aspects of our 
industry. Consequently, our industry and our interests are wide 
and diverse.
    However, among those many interests of the farmers and 
ranchers in Oregon, there is one key element that ties us all 
together, and that is the desire to keep agriculture 
economically viable, passing down our family operations to 
future generations, and to continue to provide Americans with 
the safest food and fiber in the world.
    More often than not, the general public regards the Farm 
Bill as the only legislation affecting the agricultural 
industry. What most do not understand is that nearly every 
aspect of public policy decisions has a significant impact on 
agriculture. These issues, most outside the scope of the Farm 
Bill, and the effect on future and beginning farmers are what I 
would like to focus on today.
    As an ambassador for Oregon agriculture, I am deeply 
concerned about the future of our industry. In Oregon, 29 
percent of farmers are over 65. A full 81 percent are 45 years 
old or older, with only a quarter of a percent being 25 years 
old. I doubt this is significantly different than the national 
statistics.
    Farming is not easy. There are no guarantees, no paychecks 
every 2 weeks, little stability, and it is extremely expensive 
to start. These statements probably beg the question, why in 
the world would anyone want to be part of the industry? The 
answer is clearly the shear love of the land.
    Environmental conservation is of the utmost importance to 
farmers and to ranchers. It is too often that farmers and 
ranchers are labeled as anti-environmentalist. I am here to 
clarify that and tell you that farmers and ranches are directly 
involved in the protection and the utilization of the 
environment surrounding it.
    Preservation of land and conservation of other natural 
resources is necessary if we are to live and professionally 
thrive. However, increasing and unnecessary regulations on the 
industry continue to force established farmers and ranchers out 
of business. That is not much of an incentive for a young 
person.
    For example, the Agricultural Protection and Prosperity Act 
of 2007 currently circulating through Congress regarding the 
Comprehensive Environmental Recovery, Compensation & Liability 
Act is critical to future producers. I do not believe it was 
ever the intention of Congress for CERCLA to apply to manure. 
The law clearly exempts the application of chemical fertilizers 
containing the same constituents as manure, which occur 
naturally in the environment. Furthermore, animal agriculture 
operations are already regulated under the Clean Water Act, the 
Clean Air Act and various State and Federal laws to protect our 
environment.
    Regulations in areas such as animal agriculture are also a 
critical disincentive for new entrants and encourage aging 
operators to exit earlier. For example, over the last decade, 
Illinois lost half of its livestock operators, and the burden 
and costs associated with environmental regulation were no 
doubt a factor in those decisions.
    In many cases, the loss took the form of a 55-year-old 
operator exiting now rather remodeling facilities and changing 
operating procedures radically. Most of what would have been 
the natural replacement of exiting operators was also cutoff by 
the complicated regulations governing new farmers and entrants.
    The agricultural industry continues to educate Congress on 
animal rights groups, their strategies and their ultimate goal 
of ending animal production for food. Not only would this have 
a devastating economic impact, but also the public campaigns on 
behalf of these groups provide the public with misinformation 
and half truths. The mission of our industry is to educate 
Congress and the public on animal rights issues, as well as to 
provide tools to assist in State and local animal rights 
legislative and regulatory challenges.
    This is not a large versus a small farm issue, or better 
put, a corporate versus family farm issue. The statutes current 
reporting requirements and liability thresholds for non-
agricultural release or emissions of regulated substances are 
extremely low. Virtually any agricultural operation producing, 
storing and/or using animal manure could and likely will be 
held liable.
    Oregon is a specialty crops State. We are famous worldwide 
for our fruits and vegetables as well as our tree planting and 
nursery industry. It is a very competitive and fragile industry 
impacted by spikes in planting, production and weather. Most 
importantly, the availability of labor is critical to any 
specialty crops operation. Again, the unpredictability and 
uncertainly of the labor force is not an enticement for young 
farmers.
    American farmers and ranchers face a catch-22 when 
verifying the status of their workforce. It is illegal to 
knowingly hire someone who is not authorized to work, but the 
employer is limited in what he or she may ask for to determine 
who is authorized.
    I commend the efforts of the Senate regarding bipartisan 
comprehensive immigration reform. Your hard work would provide 
relief from labor shortages. It is critical that comprehensive 
immigration reform legislation get signed into law this year.
    If, however, President Bush ends up signing into law a bill 
that does not fully address agriculture's labor needs, 
economists estimate that up to $9 billion nationwide in annual 
production is at risk of being lost to foreign competitors. 
Oregon agriculture is estimated to lose nearly $5 million 
directly.
    A successful comprehensive immigration reform must include 
a reliable verification system, border security, adequate 
transition provisions and a viable long-term guest worker 
program.
    The estate tax is a tremendous burden on farmers and 
ranchers. Individuals, family partnerships or family 
corporations own 99 percent of the 2 million farms that dot 
America's rural landscape. Farms face a common problem of being 
land rich and cash poor.
    The burden of the estate tax, which can be as a high as 45 
percent, often forces young farmers and ranchers to sell land, 
buildings or equipment needed to operate their businesses just 
to pay this egregious tax burden. When farms and ranches 
disappear, the rural communities and businesses they support 
also suffer.
    The average estate tax payment in 1999 to 2000 was the 
equivalent of up to 2 years of net farm income. Roughly twice 
the number of farm estates paid Federal death taxes compared to 
other estates in the late 1990's. Moreover, the average farm 
death tax is also larger than the tax paid by most other 
estates.
    Congress voted to end death taxes in 2001. Unfortunately, 
the bill's provisions expire in 2011, requiring Congress to 
pass additional legislation to make death tax elimination 
permanent. I urge the Senate to take up companion legislation 
to H.R. 2380 permanently repealing the inheritance death tax.
    Finally, I would be remiss if I did not mention the 
reauthorization of the Secure Rural Schools Act is essential, 
and I probably could not go home if I did not. This funding is 
vital for the education of children in Oregon and across the 
country.
    More than 100 years ago, Congress recognized that these 
rural communities and counties with federally owned forestland 
within their boundaries would not be able to provide basic 
services because of the reduction and the resulting loss of 
property tax base.
    Congress also recognized that national forests exist for 
the benefit of an entire Nation and, therefore, the entire 
Nation has a role in maintaining the health of our forests and 
their surrounding communities. Well-funded, well-educated rural 
communities are critical to an agriculture future.
    This is an exciting time for United States agriculture, but 
so much of what happens in these halls has a direct impact on 
the industry. As farmers and ranchers continue to utilize 
cutting-edge technology, yields will increase while maintaining 
our international reputation of providing Americans with the 
safest low-cost of food in the world.
    It is with sincere gratitude that I thank you not only for 
the opportunity to share with you the many challenges facing 
our young farmers and ranchers today, but also for the great 
work that you folks do day in and day out.
    Thank you.
    [The prepared statement of Mr. Beshue follows:]

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    Senator Smith. Thank you, Barry, for that excellent 
testimony.
    Why don't we just go down the row? John Rosenow, why don't 
you take it over?

STATEMENT OF JOHN ROSENOW, FARMER AFFILIATED WITH THE WISCONSIN 
      ACADEMY OF SCIENCES, ARTS AND LETTERS, COCHRANE, WI

    Mr. Rosenow. Thank you for inviting me. I am John Rosenow, 
a dairy farmer from Cochrane, WI. I appreciate this opportunity 
to speak to the Committee today in my role as a leader in the 
Future of Farming and Rural Life in Wisconsin's two-year study.
    The Future of Farming project is the current public policy 
initiative of the Wisconsin Academy of Sciences, Arts and 
Letters. I have co-chaired the production agriculture segment 
of the study.
    I have chosen to be involved in this project because I am 
one of those rural folks. My entire life has been devoted to 
agriculture, and it has been very good to me as a business and 
as a way of life. I am now 57 years old and, over the years, 
have gained some insights that may be of value.
    Agriculture is dynamic. Our farm has changed from 50 cows 
to 500, from one employee to 19, from all English-speaking to 
only half native speakers, and there are fewer and fewer of us. 
I could just ride it out and retire and move south, but I think 
things can be done to revitalize rural America. I am here today 
to explain how we have approached this in Wisconsin.
    The Future of Farming and Rural Life initiative began in 
2005 with the mission to create a fact-based process that would 
stimulate thought, conversation and action on the important 
issues in farming and rural life in Wisconsin.
    To gather maximum expert and grassroots input, we held six 
regional forums around the State in a 2-day statewide 
conference to stimulate learning and engagement. The pending 
final report is based on 83 recommendations. Implementation of 
those recommendations represents a commencement to a rural 
renaissance in Wisconsin.
    Organizations committed to rural development are currently 
seeking funding from foundations and Government agencies to 
work on specific project recommendations. These efforts will 
create what we hope will become a model rural development 
program.
    Included in the materials I have submitted for the 
Committee's review is a video that illuminates the role of 
immigrants in farm labor today. There is considerable 
information on the project Web site and in the submitted 
materials, including the draft recommendations.
    In our limited time today, I would like to touch on just a 
few of the things we learned.
    There is considerable poverty in rural Wisconsin, and that 
affects rural communities in many ways. Conversely, there are 
farmers who have accumulated some wealth as well, usually tied 
up in land.
    Health care is a major, perhaps the greatest, concern among 
rural residents. Almost one-third of Wisconsin farmers have no 
insurance or only catastrophic insurance. Of those with 
coverage, 36 percent secure it through off-farm employment. In 
many cases, the off-farm insurance does not cover farm-related 
injuries.
    Rural citizens are less healthy as they delay or avoid 
professional care. The Future of Farming study concludes that 
all citizens are entitled to access to high-quality, affordable 
health care and better preventive care.
    Wisconsin needs to re-think its education system and 
develop alternate funding strategies. With decreasing school 
enrollments and resources, fewer rural students may be able to 
compete for higher education or desirable employment.
    Some school districts with large immigrant populations are 
experiencing rapid growth which aids their funding resources. 
For example, since the first of the year, Arcadia has seen a 
growth of 159 students in a district with 986 students in all 
grades.
    Rural communities are hampered by inadequate access to 21st 
century jobs and leadership for economic development. 
Inadequate access to high-speed Internet and telecommunication 
services slows economic development, innovation, 
entrepreneurial behavior and educational services.
    In contrast to this, there are 11 telephone cooperatives 
that serve a portion of rural Wisconsin. These co-ops provide 
all their subscribers with the latest in Internet services.
    Wisconsin's biggest agricultural asset is its diversity. 
Thoughtfully preserving working lands is critical to our State. 
Vulnerable mid-sized farms urgently need public policy 
attention.
    The emerging bioeconomy holds great promise in Wisconsin. 
Wisconsin farms are now truly dependent upon immigrant labor. 
An effective documented worker program and sensible immigration 
laws are crucially important to the dairy and food processing 
industries.
    My own example is instructive. In 1998, I hired my first 
immigrant from Mexico. This was a difficult decision. I did not 
want to do this. I wanted to hire locally. I did not want to 
hire Spanish-speaking people I knew nothing about. I had no 
choice as the labor situation became very tight. My experience 
with reliable, hard-working Latinos has been very positive. 
Today, most dairy farms in Wisconsin with employees have 
Mexican help.
    Along with many others, I have founded an organization 
called Puentes that provides language and cross-cultural 
training and links us employers with the families of our 
Mexican employees. This unique approach has been very 
successful in making employers caring and benevolent rather 
than the established exploitive stereotype.
    This is what I hope you take away from this conversation. 
The people living in rural Wisconsin and America are no longer 
all Northern European, white, 3rd and 4th generation Americans. 
There is a new diversity to rural America which creates both 
opportunities and challenges.
    Conditions are ripe for a rural renaissance, which is in 
the interest of all citizens, regardless of where we live. 
Results of the Future of Farming study are applicable 
elsewhere.
    Throughout the Future of Farming project, we heard from 
citizens that they need the tools for rural development. 
Congress can support those efforts with policy and funding.
    Thank you.
    [The prepared statement of Mr. Rosenow follows:]

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    Senator Smith. Thank you very much, John.
    Derek Godwin.

STATEMENT OF DEREK GODWIN, STAFF CHAIR AND WATERSHED MANAGEMENT 
    EXTENSION SPECIALIST, OREGON STATE UNIVERSITY EXTENSION 
                       SERVICE, SALEM, OR

    Mr. Godwin. Thank you.
    I know this might be a little difficult for Senator Smith, 
but I would like for you to imagine yourself as a farmer in 
Oregon. You probably grow grass seed, vegetables, stone fruits, 
Christmas trees or nursery stock. You would make decisions on 
when to plow, plant and harvest, how much fertilizer to apply 
and when, and methods to eradicate a variety of pests or fungi.
    You make decisions on who to hire, how to train them, what 
jobs could be contracted, what equipment to purchase or lease, 
and you would hope for good weather and high yields and 
reasonable prices for your products in order to pay the bills 
and make a living.
    So then imagine your business as family owned, and you live 
where you work. You cannot get away from your work. There are 
decisions and work on evenings and weekends. These decisions 
are made with your spouse and family, causing tension and 
stress.
    Now I do not know about you, but my wife and I argue about 
where furniture is located in our living room and the bushes we 
plant in the backyard. So I have a hard time imagining making 
family decisions and work decisions on the family farm.
    But, despite the many challenges facing family farms, I 
believe it is this very structure that has made agriculture in 
America so successful. It is the ties to the land that ensure 
that land, natural resources and communities are protected and 
sustained.
    So, no matter what the future holds for agriculture and 
whether it is moved toward organic markets or niche markets or 
new products, success will come because we have supported 
families on farms.
    Now one piece of information that was part of the 2002 
Census of agriculture that I have not heard this morning was 
that only 9 percent of the just over 2 million farm operations 
have multiple operators that span two or more generations, and 
this means that the overwhelming large majority of operations 
do not have a younger generation in place in which to transfer 
the operation.
    So how do we keep the family and family farms for our 
future? First, I would like to identify a few things that are 
preventing young people from staying on the farm.
    One is profitability. Decision makers and consumers alike 
are sort of stuck on cheap food as a goal, both in the local 
super market and as a way to compete in foreign markets.
    Second is the difficult access into farming. In reality, 
you are either born into it or marry into it. Small farms are 
an option, but small farms have a hard time surviving and are 
often highly leveraged and are often subsidized by off-farm 
income.
    Third is the estate taxes. They are a major burden facing 
the intergeneration transfer of a farming operation. A farm may 
be asset heavy, whether it is profitable or not, and the last 
transfer between the parent and offspring can still be heavily 
taxed, so much so that the heirs often go into debt or sell 
large portions of the property to pay the tax bill.
    So these three reasons are tangible barriers to choosing 
farming for a career, but you also have long hours, low pay, 
isolation, working with your parents, few vacations and 
weekends off, and to paraphrase a local farmer: How are you 
going to keep them down on the farm after they have seen what a 
job at Microsoft pays?
    So let's see. What are some solutions to resolving these 
issues?
    One is explore alternative ways to help farmers remain 
competitive locally. In Oregon, we are having some success with 
marketing local products to support local farmers, and I have 
seen more educated shoppers in the supermarkets choosing these 
local products as opposed to the cheaper alternatives from 
other countries.
    Oregon is also pushing State-funded schools to use locally 
grown products over the cheaper foreign grown products.
    Second, eliminate or drastically restructure the estate tax 
to not penalize families who want to transition their ownership 
and keep the farm a farm.
    Third, look for ways to make access into farming a reality 
for more young people. Even young farmers who are taking over 
the business from their parents may not be able to do it 
because the equipment and operation is outdated and they cannot 
afford to pay for the modernization. Assistance could be 
provided through low-interest long-term loans, and it could 
also be supporting the education of young people who plan to go 
back to the family farm.
    The fourth, on a smaller scale, I would like to see agri-
business, agricultural organizations and non-profits and even 
local farmers take a more direct role in nurturing those young 
people who want to get into and remain in agriculture. These 
avenues could include working with local FFA Chapters, 4-H 
Clubs, community colleges and universities, and they should be 
available for internships, work-study programs and job 
shadowing.
    Finally, I would like to see support groups and networks 
created that link schools and organizations together with farm 
families. These networks would help farm families facing these 
challenges.
    One example of supporting this type of network in educating 
farm families is OSU's new education program entitled Ties to 
the Land: Keeping Forests and Farms in the Family. The 
essential premise of Ties to the Land is that a successful 
succession plan is dependent on how a family effectively 
communicates and follows a fairly simple process in creating a 
transition plan.
    So Ties to the Land guides the family through a 10-step 
planning process which incorporates effective communication 
techniques, helps them set goals, create business entities, set 
employment policies, assessing reasons why to keep the property 
in the family, having fun on the property and creating a 
governance structure that will survive the parents passing.
    So, in closing, I commend this Committee for identifying 
these critical issues facing agriculture, farm families, rural 
communities and society in general, and exploring possible 
solutions to support our future.
    Thank you.
    [The prepared statement of Mr. Godwin follows:]
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    Senator Smith. Thank you very much, Derek, for that 
excellent testimony.
    Isaac Kershaw, you are going to get the last word. The vote 
has started, but we are going to hang here with you. We 
apologize we do not have time to do the vote and Q&A, but 
Senator Kohl and I will submit written questions to you for 
your consideration.
    Mr. Kershaw. I will try to be quick.
    Senator Smith. OK.

  STATEMENT OF ISAAC KERSHAW, PH.D., OHIO STATE DEPARTMENT OF 
   EDUCATION, CAREER TECH AND ADULT EDUCATION, COLUMBUS, OH; 
             REPRESENTING FUTURE FARMERS OF AMERICA

    Mr. Kershaw. Well, good morning, Ranking Member Smith and 
Chairman Kohl. It is a pleasure to be here today. I appreciate 
the opportunity to address the Committee on behalf of the 
National FFA Association and the National Council for 
Agricultural Education.
    Today, I would like to share with you our insight regarding 
issues associated with aging farmers and ranchers and the 
challenges facing young people who have a desire to enter 
production agriculture.
    The retirement of aging baby boomers and the graying of 
American farmers rightly raise significant questions: Who will 
farm the land? Will we have enough young people willing to 
enter the field in the future? Will they be successful? With 
respect to agricultural education, who will prepare them?
    Those familiar with agricultural education know there are 
currently more than a million students in our public schools 
preparing for careers in agriculture, food and natural 
resources. A half-million of these young people are members in 
FFA, an organization dedicated to developing the potential of 
students in leadership, personal growth and career success, all 
of which is an integral part of an agricultural education 
program.
    A rising FFA membership is at the highest point in 28 years 
and suggests increasing interest by students in agricultural 
careers. Some 12,000 teachers in 7,200 schools work with these 
students every day, helping them discover their talents, 
explore opportunities in agriculture and channel their efforts 
for career preparation. It is a system that has served 
generations of the Nation's farmers and ranchers, and today it 
is bringing the best and the brightest to agriculture.
    Agricultural education programs are designed to create 
awareness of opportunities in agriculture, to motivate young 
people to begin their preparation for a lifelong career in 
agriculture, and to prepare them with the knowledge and skills 
necessary for success in higher education and on the job.
    Students explore careers and begin to understand that 21st 
century agriculture is a global enterprise based in science, 
which demands continued growth in discovery and application. 
Many of these young students choose to pursue careers in 
farming and ranching. Many others might take a different path 
in an agriculture career, but all are related to the science, 
the business, the technology of agriculture. All are tied to 
food, fuel, fiber and the management of our natural resources.
    I submit we have an ideal system in place to produce the 
results we seek. Agricultural education and FFA have the 
ability to attract, motivate and help prepare the next 
generation of agricultural leaders, managers, scientists and 
producers. But we will best serve the interests of agriculture 
and the Nation if we can dramatically expand the reach of this 
program to more of our Nation's high schools.
    The agricultural education community is in the process of 
implementing a plan of action designed to significantly 
increase the number and the quality of agricultural science 
programs in the country. Working under the direction of the 
National Council for Agricultural Education, we have adopted a 
long-range goal to increase the number of programs from 7,200 
today to 10,000 by the year 2015. This ambitious effort is 
viewed as a key strategy for attracting the talent and 
commitment of those who will keep American agriculture thriving 
and productive.
    We know that significant financial resources are necessary 
for young men and women to enter careers in production 
agriculture. It will require a comparable investment in 
education for them to acquire the knowledge and skills 
necessary to be successful. So this should be seen as a great, 
necessary investment in our national future.
    The focus of the Special Committee on Aging, to facilitate 
an effective transition to a new generation of agricultural 
producers, is timely and critical. The more students we get 
through our educational pipeline, the greater the number 
prepared to successfully fill the shoes of the farmers and 
ranchers who preceded them.
    But we need help with this endeavor in terms of research 
and program innovation. We need more investment through 
education and agricultural appropriations. We need language in 
the Farm Bill and in educational policy that strengthens the 
role of agricultural education and FFA in securing the future 
agriculture base of the Nation.
    There is a real opportunity for the Federal Government to 
take an active role as we move forward with the initiatives of 
having 10,000 quality agricultural science programs by the year 
2015.
    So, Mr. Chair, Mr. Smith, I certainly appreciate the 
opportunity to address this Committee and wish you the best in 
your deliberations.
    [The prepared statement of Mr. Kershaw follows:]
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    Senator Smith. Thank you so very much. That was 
outstanding.
    Would you agree, Isaac, that if the dollars get better, all 
of these programs in place, we will get more students and then 
more kids on the farm?
    Mr. Kershaw. Absolutely.
    Senator Smith. Any final comments, Senator Kohl?
    The Chairman. An excellent hearing, excellent testimony, on 
a very, very important question, not only, of course, 
agriculture, but rural American in its entirety is the subject 
of what we are talking about, and I think all of us agree it is 
worth preserving and worth investing in, and you are here today 
to testify to that.
    We appreciate your coming, and we will get back to you with 
our questions.
    Senator Smith. Thank you all so very much for your time and 
your attention to this important issue and sharing your 
excellent testimony with us.
    We apologize that the leadership of the Senate does not 
check with the Aging Committee before they schedule votes. So 
that will truncate this session a bit.
    But, with that, our thanks.
    We are adjourned.
    [Whereupon, at 12:03 p.m., the Committee was adjourned.]
                            A P P E N D I X

                              ----------                              


               Prepared Statement of Senator Ken Salazar

    I would like to thank Chairman Kohl and Ranking Member 
Smith for holding this important hearing.
    As a member of the Senate Committee on Agriculture I can 
say that this is an issue that continually comes up in 
discussions about the future of agriculture. Over the last year 
I have traveled to every corner of Colorado conducting ``Farm 
Bill Listening Sessions'' to hear directly from agricultural 
producers about what they are looking for in the 2007 Farm 
Bill. One of the ``big picture'' issues that I hear from 
Coloradans is that we must work to revitalize rural America so 
that our young people in our rural communities do not dismiss 
the idea of taking over their family's farm or ranch as well as 
the need to draw new blood into agricultural careers.
    The current data on this issue is a stark reminder of the 
need to act. Nationally, there are about twice as many farmers 
over the age of 65 as there are under the age of 35. In 
Colorado the average age of our principal operators is 55 and 
rising.
    So, the million dollar question is how do we revitalize 
rural America and reverse this trend? I don't think there is an 
easy answer and I look forward to hearing from our witnesses on 
this topic.
    In my mind, I believe that part of the answer lies in 
taking advantage of opportunities that are being created by 
renewable energy.
    That is why I introduced the 25 by 25 resolution that lays 
out a goal of producing 25% of our country's energy needs by 
renewable energy by 2025.
    A University of Tennessee study projected that this goal is 
achievable and will generate over $700 billion in economic 
activity and create 5.1 million jobs by 2025, mostly in rural 
areas. That is serious rural development. I, and the 33 
Senators who have co-sponsored this resolution, were able to 
add that resolution to the Energy Bill that is on the Senate 
floor this week. I believe this Energy Bill is a great step in 
the right direction for renewable energy and rural America.
    Americans are sick and tired of depending on foreign 
countries for our energy needs and they are demanding action to 
change the status quo and Congress has noticed. The country is 
ready to take the next step in developing renewable energy and 
Rural America stands to benefit more than any other part of our 
country.
    It is imperative that we seize these opportunities as they 
are presented and I look forward to working with my colleagues 
here and on the Agriculture Committee to do just that to 
revitalize rural America.
                                ------                                


       Responses to Senator Casey's Questions from Keith Collins

    Question. The USDA, in its 2007 Farm Bill proposal, has 
proposed several measures dealing with payment increases and 
loan incentives to provide additional support to beginning 
farmers and ranchers. What other types of incentives, besides 
those proposed by USDA, would be effective vehicles to bring 
more young people into careers in farming and agriculture.
    Answer. As noted in your question, the Administration's 
2007 Farm Bill proposal recommends a broad package of proposed 
changes to several Farm Bill titles to provide additional 
support to beginning farmers and ranchers. These proposals 
include changes to the commodity, conservation, and credit 
titles identified in the written testimony of USDA Deputy 
Secretary Conner for the June 21, 2007 hearing.
    We believe these changes are the most cost-effective ways 
to bring more young people in careers in farming and 
agriculture. However, we would encourage Senator Casey to share 
any ideas he may have with the Department in an effort to 
address this important issue.
    Question. The rising costs of health care and insurance 
coverage are critical concerns for farm families, causing large 
numbers of farmers to choose minimal insurance coverage or no 
coverage at all. How large an impediment is this issue in 
recruiting and retaining America's farmers?
    Answer. Market incentives augmented by Federal and State 
programs will determine the future supply of farmers and 
ranchers. If farm production provides a sufficient return, 
capital investment and people will enter production 
agriculture. Low rates of return will discourage investment and 
cause farm failures.
    Nevertheless, there are a number of issues concerning the 
adequacy of the future workforce needed to farm the nation's 
agricultural lands. The decision to enter or remain in farming 
is influenced by several factors. Perhaps the greatest barrier 
to enter farming is the high price of land. Farmland values 
have been steadily increasing for many years, but jumped 15 
percent in 2005 after a 21 percent increase in 2004, adding to 
the cost of entering farming. Between 2002 and 2006, the 
average value of farm real estate increased 57 percent. These 
figures indicate that access to capital for the purchase of 
land, buildings, and equipment may be significant hurdle for 
many young farmers.
    Health care and insurance coverage are also concerns. Data 
collected by USDA's Economic Research Service (ERS) as part of 
the 2005 Agricultural Resource Management Survey (ARMS) 
provides additional insights into farmers' health insurance 
choices. The 2005 ARMS found that almost 85 percent of farm 
households had full health insurance, 7 percent had a portion 
of household members covered, and 6.5 percent had no coverage. 
For those farm households that had health insurance, 50 percent 
of farm households received health insurance through off-farm 
work of the farm operator or operator's spouse (table). Another 
44 percent of farm households received health insurance through 
private insurance or public insurance (e.g., Medicare, 
Medicaid). Only 6 percent of farm households received health 
insurance through the farming operation. The data suggest that 
health insurance is important to farm families but is likely 
more important in the decision to have one family member work 
off-farm rather than for the entire family to leave farming.

     Sources of Health Insurance and Health Care Expenditure of Farm
                               Households
------------------------------------------------------------------------
                   Source of Health Insurance                    percent
------------------------------------------------------------------------
Insured through operator or spouse off-farm work...............       50
Insured through private health insurance.......................       22
Insured through public health insurance........................       22
Insured through farming operation..............................        6
------------------------------------------------------------------------

    Question. How can we better educate and train our young 
people to prepare them for careers in farming and agriculture?
    Answer. There are many ways to better educate and train our 
young people to prepare them for farming and agriculture. One 
tangible way is to continue to support the 4-H program. 
Participants benefit from a variety of activities intended to 
foster the development of life skills and competencies through 
participation in activities focused on science, engineering, 
and technology (SET); citizenship; and healthy living.
    Today there are about 6.5 million children aged 5 to 19 
participating in the 4-H program, an increase from the 5.7 
million children that were participating a decade ago. However, 
only about 12 percent of eligible children participate in the 
4-H program. 4-H is trying to double the number of members and 
the SET Task Force has an initial goal of providing high-
quality SET experiences to 1 million new students by 2013.
    Another program that helps improve agricultural education 
is Agriculture in the Classroom coordinated by USDA. Its goal 
is to help students gain a greater awareness of the role of 
agriculture in the economy and society. The program is carried 
out in each state, according to state needs and interests, by 
individuals representing farm organization, agribusiness, 
education and government. USDA supports the state organizations 
by helping to develop Agriculture in the Classroom programs, 
serving as a central clearinghouse for materials and 
information, encouraging USDA agencies to assist in the state 
programs, and coordinating with national organizations to 
promote the goal of an increased awareness of agriculture among 
the nation's students. Please see: http://www.agclassroom.org/.
    Question. According to the Agriculture Census, the U.S. 
lost over 16 million acres of farmland to development and other 
nonagricultural purposes between 1997 and 2002. If this trend 
continues, how will U.S. agriculture production, and in turn, 
food prices, be affected?
    Answer. Shifting farmland to urban and nonagricultural 
purposes, historically, has posed no threat to U.S food and 
fiber production. For example, research conducted by USDA's ERS 
has shown that between 1997 and 2002, U.S. total cropland area 
declined about 3 percent to 442 million acres, the lowest level 
since USDA began compiling this statistic in 1945. However, the 
value of U.S. crop output in 2002, measured in real (inflation-
adjusted) terms, was 2.6 times higher than in 1948, although 
the value of aggregate input use declined over this period. 
Therefore, although cropland was declining, increasing 
productivity allowed U.S. farmers to produce more crops with 
less land. In addition, the greater use of nonland capital and 
materials like energy and agricultural chemicals has 
substituted for land and labor. Increases in yields, due to 
improved seeds and other technological changes, have also 
raised output. For example, from 1945 to 2002, average corn 
yields quadrupled, while real prices received for grains fell 
by 80 percent. As a result of rising productivity, despite a 
smaller land area devoted to crops, U.S. agricultural output 
continues to grow and consumers continue to pay lower real 
prices.
[GRAPHIC] [TIFF OMITTED] T9864.026

        Responses to Senator Casey's Questions from John Rosenow

    Question. The USDA, in its 2007 Farm Bill proposal, has 
proposed several measures dealing with payment increases and 
loan incentives to provide additional support to beginning 
farmers and ranchers. What other types of incentives, besides 
those proposed by USDA, would be effective vehicles to bring 
more young people in careers in farming and agriculture.
    Answer. Agriculture is very capital intensive and the 
transfer of assets from one generation to another has 
historically been done within families. The parents usually 
provided loans for the new generation to begin creating some 
equity. Modern systems especially in livestock require more 
investment than most families can provide so new business 
structures are used such as partnerships, limited liability 
companies or corporations. Favorable tax policies for farmers 
or reduced regulations by government in these structure issues 
will go a long way to providing opportunities for the next 
generation.
    Question. The rising costs of health care and insurance 
coverage are critical concerns for farm families, causing large 
numbers of farmers to choose minimal insurance coverage or no 
coverage at all. How large an impediment is this issue in 
recruiting and retaining America's farmers?
    Answer. This is vitally important. Our Future of Farming 
study found this to be the number one issue for rural families 
across the state. Due to the high cost of health insurance and 
the deductibles, many farm families have made conscious 
decisions to have one spouse work off the farm for health 
coverage. When one spouse works off the farm, he/she can 
contribute less to the farming operation and the tendency to 
keep farming declines, resulting in more flight from farms by 
children and the farmers themselves. Lack of insurance also 
delays or prevents farm families from seeking routine or 
preventive care of treatment for injuries, leading to more 
advanced illnesses when professional care is sought, and 
ultimately shortened careers.
    Question. How can we better educate and train our young 
people to prepare them for careers in farming and agriculture?
    Answer. Education for careers in agriculture is not limited 
to academics. Experience is almost as important. A program that 
utilizes the experience of existing successful farmers in 
educating the next generation would help a lot, perhaps in 
mentoring relationships, on-farm internships, or by utilizing 
successful active or retired farmers as integral resources or 
contributors to classroom programs in different areas of 
expertise. It is also important for the next generation of 
farmers to have training in business and financial planning and 
personnel management. Increasing choices about expanding 
specializing, or converting to other operational types mean 
that farmers need to be able to make knowledge-based decisions. 
The growing trend toward using non-family labor requires more 
sophisticated people management skills.
    Question. According to the Agriculture Census, the U.S. 
lost over 16 million acres of farmland to development and other 
nonagricultural purposes between 1997 and 2002. If this trend 
continues, how will U.S. agriculture production, and in turn, 
food prices, be affected?
    Answer. I believe that advances in production resources and 
practices will continue to outpace the loss of farmland as it 
has in the last 50 years. However, critical farmland needs 
protection. Wisconsin and other states are identifying and 
targeting critical agricultural lands and developing and 
initiating tools to protect them. State and federal programs, 
like the federal Farm and Ranch Lands Protection Program, are 
urgently needed. Wisconsin is losing farm land at one of the 
highest rates in the U.S. Changing this pattern requires 
education of the general public about the consequences to them 
of fragmenting or paving over productive agricultural land and 
ongoing meaningful dialogue between competing stakeholders to 
recognize that not all farm land is equally valuable and not 
all can be saved.
    Question. As a dairy farmer, do you feel that the dairy 
industry faces any unique challenges in dealing with farm 
succession and an aging farm workforce?
    Answer. Dairy has entered a stage many call a revolution. 
Old barns and practices are being replaced by very different 
barns and ways of doing things. Early adapters are finding good 
profits while late adapters and ones who have not changed are 
struggling. This means that a limited number of dairies are 
prepared for the future with adequate capital to grow with 
emerging technology.
    The future in dairying is thus a structure of more than 
family. It means combining resources with neighbors, adding 
outside investor capital and developing the human resources. 
Immigrant labor will milk a greater percentage of cows at an 
expanding rate which will mitigate the aging of the owners and 
managers. For example, my father was physically unable to 
continue farming much past 65 while with our 19 employees doing 
a lot of the hard work, we can continue longer. This allows 
more equity to be built up to help transfer the assets to 
future generations. Productive learning experiences for this 
generation of migrant workers can lead from labor to management 
to ownership in succeeding generations--just as was the 
progression for previous generations of immigrants.
    If the Federal government recognizes this, policymakers can 
aid in the development of programs to assist the transition. Of 
course, a sound approach to immigrant workers would be the most 
helpful.
                                ------                                


       Responses to Senator Casey's Questions from Isaac Kershaw

    Question. How can we better educate and train our young 
people to prepare them for careers in farming and agriculture?
    Answer. Increasing student access to quality secondary and 
postsecondary agriculture programs will help to address the 
shortfall of young people interested and capable of entering 
farming and agriculture. There are several things that can be 
done to significantly strengthen the quality of and increase 
the capacity of programs that prepare students for careers in 
agriculture, food and natural resources.
    Quality Instructors. Quality programs cannot be sustained 
without quality educators. There is a shortage of agricultural 
educators across the country. This shortage is not anticipated 
to diminish anytime in the near future. Thus, there is a need 
to support teacher education institutions in their efforts to 
recruit and prepare young people to teach agriculture. At the 
same time it may be necessary to invest in alternative ways to 
attract and prepare qualified individuals, who have experience 
and education in agriculture, into the teaching profession.
    Attainment of the right knowledge and skills. There is a 
need to support the development of technical content standards 
that clearly identify what students should know and be able to 
do in order to be successful in the agricultural career of 
their choice. This includes the technical, academic and general 
workforce development skills that form the basis of a wide 
range of careers in agriculture. The National Council for 
Agricultural Education is currently trying to raise the funds 
and build the partnerships necessary to develop the content 
standards related to careers in agriculture, food and natural 
resources.
    Curriculum Development. There is need to support the 
development of instructional materials that enhance a teacher's 
ability to facilitate learning. The National Council for 
Agricultural Education is partnering with agribusiness and 
state government to develop a science based curriculum to 
better prepare students for careers in agriculture that are 
deemed to be in high demand and highly skilled.
    Measurement of Knowledge and Skill Attainment. The 
availability of industry based certification assessments that 
are applicable to secondary and postsecondary programs in 
agriculture is very limited. Students, school districts, state 
departments of education, and the business community all stand 
to benefit from the use of quality assessment instruments that 
effectively measure student competence.
    Students stand to benefit from the use of certification 
examinations when such tools provide feedback on level of 
competence and offer a means to demonstrate to others that 
significant levels of achievement have been met. Of particular 
value is the portability of industry certifications among 
businesses across a state and throughout the nation.
    Innovative Program Design including Alignment with 
Postsecondary Programs. Support is needed to explore and 
implement new and innovative program models in agricultural 
education. It is necessary to rethink how agricultural content 
is delivered to students who are enrolled in schools that have 
not been traditionally served through agricultural education. 
It is essential that secondary agriculture programs coordinate 
their efforts with their postsecondary counterparts so that 
students benefit from a seamless educational program.