[Senate Hearing 110-344]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 110-344
 
                       NOMINATION HEARING OF THE
                     HON. EDWARD T. SCHAFER, TO BE
               SECRETARY, U.S. DEPARTMENT OF AGRICULTURE

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

                                HEARING

                               before the

                       COMMITTEE ON AGRICULTURE,
                        NUTRITION, AND FORESTRY

                          UNITED STATES SENATE


                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION


                               __________

                            JANUARY 24, 2008

                               __________

                       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/Chief Counsel

                    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

                              ----------                              
                                                                   Page

Hearing(s):

Nomination Hearing of the Hon. Edward T. Schafer, to be 
  Secretary, U.S. Department of Agriculture......................     1

                              ----------                              

                       Thursday, January 24, 2008
                    STATEMENTS PRESENTED BY SENATORS

Harkin, Hon. Tom.................................................     1
Baucus, Hon. Max.................................................     4
Brown, Hon. Sherrod..............................................    12
Casey, Hon. Robert P. Jr.........................................     7
Chambliss, Hon. Saxby............................................     2
Cochran, Hon. Thad...............................................     8
Coleman, Hon. Norm...............................................     9
Conrad, Hon. Kent................................................    14
Dorgan, Hon. Byron L.............................................    15
Klobuchar, Hon. Amy..............................................    10
Lincoln, Hon. Blanche L..........................................    13
Lugar, Hon. Richard G............................................     5
Nelson, Hon. E. Benjamin.........................................     5
Pomeroy, Hon. Earl...............................................    16
Roberts, Hon. Pat................................................     6
Salazar, Hon. Ken................................................     8
Thune, Hon. John.................................................    11

                                Panel I

Schafer, Hon. Edward T...........................................    18
                              ----------                              

                                APPENDIX

Prepared Statements:
    Cochran, Hon. Thad...........................................    42
    Crapo, Hon. Mike.............................................    45
    Salazar, Hon. Ken............................................    46
    Schafer, Hon. Edward T.......................................    51
Document(s) Submitted for the Record:
    Committee questionnaire and Office of Government Ethics 
      Executive Branch Personnel Public Financial Disclosure 
      Report filed by Hon. Edward T. Schafer.....................    56
Associated Milk Producers Inc., written letter of support for 
  Hon. Edward T. Schafer.........................................    80
National Association of Manufacturers, written letter of support 
  for Hon. Edward T. Schafer.....................................    81
State of North Dakota Office of the Governor, written letter of 
  support for Hon. Edward T. Schafer.............................    82
Question and Answer:
Harkin, Hon. Tom:
    Written questions for Hon. Edward T. Shafer..................    84
Baucus, Hon. Max:
    Written questions for Hon. Edward T. Shafer..................    85
Brown, Hon. Sherrod:
    Written questions for Hon. Edward T. Shafer..................    86
Casey, Hon. Robert P. Jr.:
    Written questions for Hon. Edward T. Shafer..................    88
Crapo, Hon. Mike:
    Written questions for Hon. Edward T. Shafer..................    91
Grassley, Hon. Charles:
    Written questions for Hon. Edward T. Shafer..................    92
Leahy, Hon. Patrick J.:
    Written questions for Hon. Edward T. Shafer..................    94
Nelson, Hon. E. Benjamin:
    Written questions for Hon. Edward T. Shafer..................    97
Roberts, Hon. Pat:
    Written questions for Hon. Edward T. Shafer..................    99
Salazar, Hon. Ken:
    Written questions for Hon. Edward T. Shafer..................   101
Schafer, Hon. Edward T.:
    Written response to questions from Hon. Tom Harkin...........   106
    Written response to questions from Hon. Max Baucus...........   107
    Written response to questions from Hon. Sherrod Brown........   108
    Written response to questions from Hon. Robert P. Casey Jr...   109
    Written response to questions from Hon. Mike Crapo...........   113
    Written response to questions from Hon. Charles Grassley.....   114
    Written response to questions from Hon. Patrick J. Leahy.....   117
    Written response to questions from Hon. E. Benjamin Nelson...   122
    Written response to questions from Hon. Pat Roberts..........   125
    Written response to questions from Hon. Ken Salazar..........   127



                       NOMINATION HEARING OF THE
                     HON. EDWARD T. SCHAFER, TO BE
               SECRETARY, U.S. DEPARTMENT OF AGRICULTURE

                              ----------                              


                       Thursday, January 24, 2008

                                       U.S. Senate,
                                  Committee on Agriculture,
                                   Nutrition, and Forestry,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 3:36 p.m., in 
room 328-A, Russell Senate Office Building, Hon. Tom Harkin, 
Chairman of the committee, presiding.
    Present or submitting a statement: Senators Harkin, Conrad, 
Baucus, Lincoln, Brown, Nelson, Salazar, Casey, Klobuchar, 
Chambliss, Lugar, Roberts, Cochran, Coleman, and Thune.

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

    Chairman Harkin. Good afternoon. The Senate Committee on 
Agriculture, Nutrition and Forestry will come to order.
    This afternoon, we meet for a hearing on the nomination of 
Edward T. Schafer, former Governor of North Dakota, for 
Secretary of Agriculture. I welcome to the Committee Governor 
Schafer. I also want to recognize and welcome your wife, Nancy, 
and your daughter, Kari, as well as a good number of North 
Dakotans who are here with us this afternoon. Of course, you 
are flanked by our distinguished colleagues, Senator Conrad, 
Senator Dorgan, and Congressman Pomeroy.
    It is a fact too seldom fully appreciated, I think, that 
the responsibilities of the Secretary of Agriculture touch the 
lives of all Americans and millions of others around the world 
on a daily basis. Each and every one of us depends on our food 
and agricultural system and have a vital interest in the wide 
range of activities at the Department of Agriculture.
    In my State of Iowa, strong, forward-looking leadership at 
the Department of Agriculture is critically important. 
Agriculture is the cornerstone of our economy. We treasure our 
way of life in our small towns and rural communities. We 
understand the true value of soil and water and other natural 
resources. We are committed to conserving them and improving 
them and saving them for future generations. We are optimistic 
about our growing role in producing energy and bio-based 
products for the future.
    So it is encouraging, Governor Schafer, that you also come 
from a State with similar deep connection and appreciation for 
agriculture and rural communities. I commend you for the pride 
you take and the inspiration you draw from your family's 
heritage in agriculture and rural communities. Your experience 
as Governor of North Dakota should serve you well as Secretary 
of Agriculture.
    Among your key responsibilities is faithfully carrying out 
the laws that Congress writes and the President signs. 
Currently, we face a big challenge in completing a new farm 
bill for you to implement. The Senate and House of 
Representatives have each passed their versions of the farm 
bill. Both bills have significant improvements and reforms to 
benefit agriculture, rural communities, and our nation as a 
whole.
    In our Senate bill, we continue and improve a solid farm 
income protection system. We make critical new investments to 
preserve our resources, promote rural energy initiatives, 
alleviate hunger and malnutrition, and boost the economy and 
quality of life in rural communities. Unfortunately, we do not 
yet have the support of the President for funding the critical 
forward-looking investments crafted by the Agriculture 
Committees and approved by both the House and the Senate. We 
have a good deal of hard work and negotiation with the White 
House ahead of us on the new farm bill. Yet with my colleagues 
and with my Ranking Member, Senator Chambliss, with our two 
counterparts on the House side, we have begun to work together. 
I believe that we will reach agreements and we will have a bill 
for the President in short order.
    For Governor Schafer, we look forward to working with you. 
We are counting on your help in working out differences in 
order to enact a new, sound farm bill for our nation.
    Again, we welcome you to the Committee. We look forward to 
your testimony.
    I will now turn to our Ranking Member, Senator Chambliss.

  STATEMENT OF HON. SAXBY CHAMBLISS, A U.S. SENATOR FROM THE 
                        STATE OF GEORGIA

    Senator Chambliss. Thank you very much, Mr. Chairman, and 
Governor Schafer, welcome to the Agriculture Committee. I am 
very pleased to see that you are surrounded by three folks who 
know and understand agriculture. Senator Dorgan and Senator 
Conrad, obviously I have had the pleasure of serving with over 
here, and my good friend, Earl Pomeroy, I had the pleasure of 
serving with for 8 years in the House and working very closely 
with all three of these gentlemen for what we know to be the 
best agricultural products produced in the world today. I am 
pleased that they are here to show their support to you.
    First of all, I want to show you something. This is a bag 
of Georgia peanuts, Governor, and----
    [Laughter.]
    Senator Chambliss [continuing]. You all don't grow many of 
these in North Dakota. I hope you don't start growing any, 
because we certainly can't grow wheat, soybeans, and corn the 
way you do in North Dakota, but we grow a darn good peanut and 
I want to make sure you get plenty of them at your office to 
start you off right.
    [Laughter.]
    Senator Chambliss. And we will even throw in some Diet 
Cokes.
    [Laughter.]
    Senator Chambliss. Mr. Chairman, I do thank you for holding 
this important hearing to consider the nomination of Governor 
Edward Schafer for the position of Secretary of the United 
States Department of Agriculture. It is a credit to you and 
your staff in the middle of farm bill negotiations that you 
have taken the time to attend to this important business, and I 
look forward to reporting the nomination favorably out of 
committee and quickly approving the nomination on the Senate 
floor. A swift confirmation will ensure that the Department of 
Agriculture has the necessary leadership to fulfill its mission 
on behalf of the American people.
    Governor Schafer, I congratulate you on the nomination by 
the President. I would also like to welcome your wife, Nancy, 
and your daughter, Kari, to the hearing today. I understand and 
regret that your children Tom, Ellie, and Eric couldn't be 
here, but certainly they are all justly proud of you and I 
commend them for their great support of you. I hope your visit 
today will be a short yet productive one, and I am certain it 
will. I know it is a proud day for you and your family and for 
the entire State of North Dakota.
    The Senate is pleased that the President has extended his 
confidence in you and provided us with an opportunity to fill 
this critical position in timely fashion. Your predecessor, 
Secretary Johanns, established a high standard for the position 
of Secretary, and certainly Chuck Conner has served admirably 
as Acting Secretary in his absence.
    As every member of the Senate Committee on Agriculture well 
knows, the position of Secretary is critically important not 
only to America's agricultural producers, but to every U.S. 
citizen that consumes products that our farmers produce. 
Arguably, no member of the President's cabinet has a greater or 
broader responsibility than the Secretary of Agriculture. From 
overseeing the major commodity and conservation programs to 
administering the food and nutrition programs, the Secretary of 
Agriculture touches almost every sector of our society today.
    Our most basic strength as a nation resides in our ability 
to produce a safe and affordable food supply. We are blessed 
that we can share this bounty not only with our citizens, but 
with other nations, as well. American agriculture is at a 
critical intersection and you are coming in at a very critical 
time, with the promise of a new farm bill in one direction and 
the uncertainty of government inaction on the other. Unless 
Congress and the administration can work collaboratively to 
pass a farm bill, our farmers and ranchers, despite the high 
prices they currently enjoy, will be forced to go to their 
lenders without the strong backing of the Federal Government. 
In today's uncertain economic climate, it would be 
irresponsible to abdicate our responsibilities to rural America 
in the pursuit of legislative options that do not enjoy broad 
Congressional support.
    As you know, the U.S. Senate overwhelmingly passed the 
Senate version of the farm bill in a strong bipartisan way 
under the leadership of Senator Harkin. Such broad support of 
farm policy is unprecedented in the Senate's long history. It 
is our hope to pass a farm bill and have it signed into law in 
the short term so that we can then turn toward the important 
business with the Department of Agriculture of implementing 
that farm bill.
    The fact that the President nominated you speaks to your 
high level of qualification to assist us in the final stages of 
the farm bill process and furthermore represent our farmers and 
ranchers around the world in critical trade negotiations.
    So Governor, I will submit the rest of my statement for the 
record, but I just want you to know that we really do look 
forward to moving this nomination, to working very closely with 
you as we complete the conference process on the farm bill, and 
look forward to working with you on the implementation of that 
farm bill.
    Thank you, Mr. Chairman.
    Chairman Harkin. Thank you, Senator Chambliss.
    Normally, the Chair would recognize the Senators in the 
order that they come, but I think today, since this is a 
nomination hearing, I would go back and forth, one side to the 
other, and I know Senator Baucus has a scheduling problem 
anyway. Any comments, if you keep them relatively short, I am 
sure would be appreciated by our nominee and all, so I would 
recognize Senator Baucus.

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

    Senator Baucus. I thank you, Mr. Chairman. I thank the 
indulgence of my colleagues and I will be quite brief.
    Governor, I very much welcome you to Washington to your new 
job and I especially compliment you on the choice of Nancy----
    [Laughter.]
    Senator Baucus [continuing]. A Turner, Montana, lady, next 
to North Dakota--not too far from North Dakota, a little closer 
to Canada, but a little closer to North Dakota, and so you are 
flanked not just by two great Senators and a great House 
member, but also by your wife, who very much understands 
agriculture and I know will be a very strong advocate for 
agriculture in your household, so I thank you very, very much.
    You in your prepared statement said that Abraham Lincoln 
called the Department of Agriculture ``The People's 
Department.'' I just might say that sometimes we wonder here if 
the Department really is still the People's Department based 
upon what your predecessor sometimes said. It seems to many of 
us that the Department has been a little more concerned with 
Washington Post and Wall Street Journal editorials than it is 
with real folks, the farmers and ranchers in our States. So if 
the Department really is the People's Department, and I think 
that is an apt quote, we clearly want it to remain the People's 
Department, and that is farmers and ranchers, not East Coast 
editorial writers.
    I am also a little concerned, frankly, that when the 
Secretary, your predecessor said that there was no need for an 
agriculture disaster assistance title that is in this farm 
bill, there clearly is because you never know when disaster is 
going to strike. If the title is already in place in there, I 
think it just helps our farmers and ranchers have a sense that 
they can continue to farm and that their livelihood, that they 
can stick with it.
    I am also a little concerned when your predecessor wanted 
to close a lot of Farm Service Agency offices. The number of 
offices to be closed--announced to be closed in Montana--is 
about 1.2 percent of the State FSA budget, but it would close 
about 14 percent of our State's offices. As you know, in the 
farm bill we have said, no, no, we are not going to close most 
of these FSA offices. We put a little limit on it so that the 
closures are more related to efficiency and not as widespread 
as is in the bill.
    Further, we are a little concerned when the President says 
he is not going to sign a farm bill that is one penny over 
baseline, yet his own budget baseline is $8 billion over. It 
just seems to us that--and we urge you when you are confirmed 
to go back and review that position so that when you are 
standing up for farmers and ranchers, that maybe you modify 
that statement along the lines that make more sense for 
agriculture.
    Finally, I just wanted to thank you very much and remind 
you, and I know Nancy is going to remind you, that agriculture 
is our most important industry in Montana. I am sure she has 
deep roots still in Turner. Welcome, and I just tell you to 
fight for agriculture and work very closely with this 
Committee. The farm bill, as you know, passed by 80 votes--79 
votes. We put all politics aside totally. This is a totally 
nonpartisan bill. We want to do what is right for agriculture, 
and I very much know that you will approach your job in very 
much the same fair mind.
    So thank you very much and I wish you good luck.
    Mr. Schafer. Thank you, Senator.
    Chairman Harkin. Thank you, Senator.
    Senator Lugar?

  STATEMENT OF HON. RICHARD G. LUGAR, A U.S. SENATOR FROM THE 
                        STATE OF INDIANA

    Senator Lugar. Thank you very much, Mr. Chairman, and 
welcome, Governor Schafer. Congratulations on your nomination. 
I would just encourage you to work with the President, to work 
with the cabinet. We are in difficult times economically in our 
country and job creation in agriculture is as important as job 
creation everywhere else. Stability of rural banks and our 
countryside is going to require teamwork with the Secretary of 
the Treasury, Commerce, as well a the administration. So you 
come in at a time of crisis, but it is very important that you 
be confirmed quickly so that we have a seat at the table and we 
look forward to working with you.
    Mr. Schafer. Thank you, Senator.
    Chairman Harkin. Thank you very much.
    Senator Nelson?

 STATEMENT OF HON. E. BENJAMIN NELSON, A U.S. SENATOR FROM THE 
                       STATE OF NEBRASKA

    Senator Nelson. Thank you, Mr. Chairman. I, too, want to 
express my congratulations and appreciation for your 
willingness to take on a very difficult responsibility at a 
difficult time. You are stepping into the middle of a process 
because of the departure of your predecessor and I am hopeful 
that as you step into this, as we have discussed, that you will 
find that you can be a partner with the Chairman and the 
Ranking Member of this Committee as well as with the House 
committees and work together with us as committees to bring 
together a farm bill or a Food and Energy Security Act for 2007 
so that we can move forward in so many different areas.
    I know that there is a lot of frustration with the closure 
of the ten FSA offices in Nebraska. We didn't feel that that 
was done in an appropriate fashion any more than we think it 
was in other States. It was not well thought through. I hope 
that because of the inclusion of that in the farm bill, that 
you will look at that very carefully when you get into the 
office to work with us, given that legislation.
    I have expressed to you my concern about how we can work 
together to put more pressure on certain Asian countries with 
respect to the exporting of our beef. We run into challenges, 
continuing challenges in Japan to get to the level of exports 
that we were before the BSE scare, and the same thing is true 
in the Republic of Korea. I have worked very closely with their 
Ambassadors. I felt that I did not have adequate support from 
the USDA in that effort. I would have to describe the effort 
that I saw as anemic, at best. I think if you can help us in a 
robust fashion, we can make the difference not only with 
respect to beef, but with other areas of trade that involve 
agricultural products.
    There have been improper payments. I think you have 
probably followed that. A person doesn't have to know much 
about Lexis or Nexis to find out if somebody is alive or dead, 
certainly with respect to the payments. Now, we have put that 
language into the bill even though it was not necessary to be 
in the bill, but it was almost like saying, and this time we 
mean it. Get it right. So you are going to have us looking over 
your shoulder from time to time saying, now are you getting it 
right?
    But I think you can see that there is a great deal of 
comity--sometimes comedy as well--but comity within this 
Committee, different ideas about how to go about things, but a 
generally positive atmosphere with which to work.
    So what I would like to say is you don't have to be caught 
in a vise. You can escape the vise by becoming a partner with 
this Committee and I hope you that you will find a friendly 
partnership with us. We intend for that to be the case, and 
from our years together as Governors and neighbors, you know 
exactly how to do that and I am looking forward to working with 
you. My congratulations again to Nancy and to your daughter and 
to the North Dakotans for this nomination. I hope we can get it 
done quickly.
    Mr. Schafer. Thank you.
    Chairman Harkin. Thank you very much, Senator Nelson.
    Senator Roberts?

STATEMENT OF HON. PAT ROBERTS, A U.S. SENATOR FROM THE STATE OF 
                             KANSAS

    Senator Roberts. Yes, thank you, Mr. Chairman, for 
scheduling this hearing so quickly upon our return, and 
hopefully Congress as a whole will move as expeditiously this 
year, not only on the stimulus package but the farm bill, as 
well, and the whole series of issues where we have to move.
    I am really pleased to be here today on behalf and to lend 
my support for our nominee. I know that we have met on many 
occasions and discussed agriculture program policy, and so I 
simply associate myself with the very good remarks of my 
colleagues.
    Being from North Dakota, I think we have to underscore that 
he has a solid understanding of the importance of agriculture, 
and in particular the importance of production agriculture. I 
am always amazed lately that, I don't know, for some reason, 
about the lack of understanding over the value and the 
contribution of production agriculture to our society today. 
This is something that has to be worked on over time.
    We really need somebody, as has been referred to, with a 
healthy dose of common sense to be the lead spokesman for U.S. 
agriculture, standing up to attacks on our farm programs from 
those who either don't appreciate it or don't understand that 
America's farmers and ranchers still produce the safest and 
most abundant and affordable food supply in the world. They 
produce not only for our country, but for a very troubled and 
hungry world.
    You are riding with the Conrad, Dorgan, and Pomeroy posse, 
and they know that and they have been outstanding spokesmen and 
champions for production agriculture. They have been singing 
that anthem ever since the Sons of the Pioneers sang for Roy 
and Dale.
    [Laughter.]
    Senator Roberts. That may date Earl a little bit, but I 
don't know.
    And so I hope you are up for it, Governor. I have a 
question over direct payments, but I will yield at this time on 
behalf of other members and we will wait for the questions. 
Welcome aboard.
    Mr. Schafer. Thank you.
    Chairman Harkin. Thank you, Senator Roberts.
    Senator Casey?

STATEMENT OF HON. ROBERT P. CASEY JR., A U.S. SENATOR FROM THE 
                     STATE OF PENNSYLVANIA

    Senator Casey. Mr. Chairman, thank you very much. Governor, 
thank you for your willingness to put yourself forth as a 
nominee for this office. We appreciate that and we appreciate 
your service as Governor of your State. It is a commitment that 
I know that your family makes, as well. We are grateful for 
that. And as Senator Roberts and others have said, you have got 
quite a team around you, two distinguished Senators and a 
member of the House with you. It is quite a line-up. You have 
got a good team around you.
    I want to thank you, also, for taking the time to sit in my 
office back in early November to talk about some of the 
challenges that Pennsylvania faces. It is a major, really, the 
No. 1 industry in our State. We talked at that time about 
dairy, and people on this Committee know that I have talked a 
lot about this, but the cost of production for dairy farmers is 
a huge concern and you know as well as I do, these people, 
these families lead lives of struggle, very difficult lives 
when the cost of everything in their life that is relevant to 
their cost of production is going through the roof, feed and 
fuel and other costs, as well. I will have a number of 
questions probably for the record to submit to you to answer.
    I guess one thing that is looming over this hearing today, 
and I think any of our discussions about the country, about our 
economy, even in the context of short-term economic challenges, 
is the farm bill. We are very concerned about it, and I am not 
just concerned, we are disturbed by the President's veto 
threat. I know you will be asked about that today and we would 
ask you to talk about that in terms of responding to your sense 
of that, why you think he is headed in that direction. If he 
is, I hope he changes course.
    But we are very concerned about that and very concerned 
about, after all the work that got done in this Committee by 
our Chairman and Ranking Member and everyone at this table, and 
some did a lot more than others. So many people worked very 
hard. The staff worked month after month at times when it 
seemed the thing was doomed and it would come back to life and 
it got done in a bipartisan way. So we are very concerned about 
the unraveling of that bipartisan consensus by an action that 
the President would take.
    So we would ask you to speak to that, but we are just 
grateful that you would put yourself forward as a nominee and 
we look forward to hearing your responses to questions. Thank 
you very much.
    Chairman Harkin. Thank you, Senator Casey.
    Senator Cochran?

 STATEMENT OF HON. THAD COCHRAN, A U.S. SENATOR FROM THE STATE 
                         OF MISSISSIPPI

    Senator Cochran. Mr. Chairman, thank you. We appreciate 
your holding this nomination hearing in such a timely manner. 
It is important, as we all realize, for the position of 
Secretary of the Department of Agriculture to be filled as we 
negotiate a conference agreement with the House on the farm 
bill. I hope the Committee and the Senate will take prompt 
action to approve this well-qualified nominee as the new 
Secretary.
    Mr. Chairman, I ask unanimous consent that the balance of 
my remarks be printed in the record
    [The prepared statement of Hon. Thad Cochran can be found 
on page 42 in the appendix.]
    Chairman Harkin. Thank you very much, Senator Cochran.
    Senator Salazar?

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

    Senator Salazar. Thank you very much, Chairman Harkin. Let 
me first congratulate Governor Schafer and let you know that 
you are surrounded by three people who I consider to be 
champions for rural America and champions for agriculture. /
Senator Dorgan, Senator Conrad, and Congressman Pomeroy bring 
that voice to what I sometimes call the forgotten America in a 
way that is unequal here to the U.S. Senate and to the U.S. 
House of Representatives. So you have surrounded yourself with 
some supporters.
    Therefore, I think that your nomination here is not in 
question, but you do have, I know, some challenges ahead, I 
think especially when you look at the fact that you will have a 
very short time, frankly, to be in the position of Secretary of 
Agriculture, and so I want to say just two or three things and 
I will submit my formal statement for the record.
    The first is, like with all of us, your Department affects 
my State in a very significant way. We have 31 million acres of 
farmland and ranchland. In addition, we have 31,000 farmers and 
ranchers. In addition to that, there are about 14 million acres 
which are under the jurisdiction of USDA which are either 
Forest Service, U.S. National Forests, or grasslands. So you 
affect a huge percentage of the lands in my State and there 
will be a host of issues that we want to work with you on.
    Two priorities for me, just off the box, I join the rest of 
this Committee in saying we need to get that farm bill done and 
we need to get it done very soon and we need the administration 
to be helpful to us as we get that across the finish line. I 
think that coming in when you have 1 year left, it would be a 
great thing if what you can do is to help us implement the 
bill. You know, it is one thing to pass a bill. It is another 
thing to make sure that it gets implemented in the right way, 
and hopefully you can join the rest of us in being Ambassadors 
for what I consider to be one of the best farm bills that I 
think this country has ever seen.
    Finally, in my State, with respect to Forest Service lands, 
we are getting eaten up by a beetle called the bark beetle, 
which has attacked about 1.5 million acres of lodgepole pine. 
It is having a dramatic effect throughout the Western slope. It 
has spread out into Wyoming and into Utah and even up into 
Idaho, and so it is an issue that I have worked on for several 
years and I will look forward to working with you on that, as 
well.
    Thank you, Mr. Chairman.
    [The prepared statement of Hon. Ken Salazar can be found on 
page 46 in the appendix.]
    Chairman Harkin. Thank you very much, Senator Salazar.
    Senator Coleman?

 STATEMENT OF HON. NORM COLEMAN, A U.S. SENATOR FROM THE STATE 
                          OF MINNESOTA

    Senator Coleman. Thank you, Mr. Chairman. Mr. Chairman, 
thank you for holding this hearing and your efforts to move 
this nomination along. I am thrilled that our neighbor, my 
neighbor and friend has been nominated by the President to be 
Secretary of Agriculture. I wholeheartedly support this 
nomination and I look forward to us moving it quickly. We need 
you now.
    It is great to have somebody from our neighborhood who 
understands the concerns and needs of certainly our folks in 
the Red River Valley, some of the special needs they have when 
natural disaster strikes, but just across the border. As former 
Mayor of St. Paul, I think history shows that it was actually 
North Dakotans who may have founded my city, so there is a 
long-term tie there.
    It has been mentioned about the bipartisan nature of this 
Committee. With all the bickering that goes on in Washington, 
with all this kind of negative partisan divide, this Committee 
has been a haven, a safe haven from that. Senator Conrad's 
leadership on the farm bill, working with those of us on the 
other side of the aisle, and that was never an issue was what 
is right for farmers, what is right for American agriculture. 
That relationship goes across the board with Senator Dorgan and 
Congressman Pomeroy. So it is a special place and I think you 
bring special qualities to that.
    I have often found that a key to negotiation is two things, 
humility and a capacity to listen. I have a friend of mine, 
Ward Braham, who told me a story one time that he was on a 
flight coming back to Washington. He sat down next to this guy. 
They had this tremendous conversation the whole flight and they 
kind of became good buddies, and at the end of the flight, he 
got up and said, well, what do you do, and the response was, 
``I am Ed Schafer. I am the Governor of North Dakota.'' He 
never bothered--didn't start his conversation with his 
position. He sat there and listened with a sense of humility 
and created a relationship.
    We are going to be in the midst of some negotiations of a 
farm bill and I think it requires a good listener. It requires 
a sense of humility. The administration doesn't always get it 
right, and perhaps we don't, either. But I think you bring 
those qualities, and then perhaps most important, where I 
started, as someone who cares deeply about American 
agriculture, and certainly from this Senator's perspective has 
a unique understanding of the needs that we have.
    So I think we have found an individual, Mr. Chairman, who 
has all these qualifications and I hope we move this nomination 
along very quickly. Thank you, Mr. Chairman.
    Chairman Harkin. Thank you, Senator Coleman.
    Senator Klobuchar?

STATEMENT OF HON. AMY KLOBUCHAR, A U.S. SENATOR FROM THE STATE 
                          OF MINNESOTA

    Senator Klobuchar. Thank you, Chairman, for holding this 
hearing. Congratulations, Governor. I noticed that the Chairman 
has made sure that all of your neighbors are here at the end of 
the table, with Minnesota and South Dakota. It may have had 
something to do with seniority, but we are here for you.
    [Laughter.]
    Senator Klobuchar. I actually was thinking about our common 
border in North Dakota and seeing all these fine Senators and 
Congressman Pomeroy up here, a story that I think I told 
Senator Conrad, and that was when I first started running for 
the U.S. Senate. I called Collin Peterson. I didn't know him 
very well and I said, if I drive 4 hours to Detroit Lakes, will 
you meet with me for 15 minutes? He said, OK. I said, we will 
talk agriculture policy. I said, OK. I drive there. I met with 
him for about an hour and I had this chart that I had put 
together of all the direct payments and countercyclical 
payments and I was trying to figure out how it all worked and 
he finally said, ``You know what? The farmers just want a fair 
deal. No one understands this stuff except ten people in the 
country and nine of them live in North Dakota.''
    [Laughter.]
    Senator Klobuchar. So I decided that four of them are right 
here up at this table.
    [Laughter.]
    Senator Klobuchar. As you know, Governor, Minnesota is the 
sixth-largest agricultural producing State in the Nation and 
the fourth-largest represented on this Committee. We care a lot 
about this farm bill. So my message to you is that we have to 
get this farm bill done.
    I have heard it not just from farmers in our State. I went 
to 47 counties over the recess, from Southern Minnesota way up 
to--I am going to attend Senator Conrad's marketplace event up 
in Grand Forks, and I heard it again and again. But I also 
heard it from people who were in non-agriculture jobs, in 
smaller towns who are seeing this revolution that the 2002 farm 
bill produced. And I also heard it from hunters at the National 
Pheasants Forever event, who really want to get this done.
    And I would add one thing. I know we talked and you pledged 
to continue to work with us on some of the subsidy reforms, 
especially the amendment that I had for the AGI reform, as we 
go forward and I hope that will be part of the conference 
discussions and discussions with the White House. I think the 
money should be going to family farmers, so thank you very 
much.
    Mr. Schafer. Thank you, Senator.
    Chairman Harkin. Thank you, Senator Klobuchar.
    Senator Thune?

STATEMENT OF HON. JOHN THUNE, A U.S. SENATOR FROM THE STATE OF 
                          SOUTH DAKOTA

    Senator Thune. Thank you, Mr. Chairman, and Governor, 
welcome to the Senate----
    Mr. Schafer. Thank you.
    Senator Thune. And to the Senate Agriculture Committee, 
where you find out that even though you are the star of this 
hearing, you have to listen to all of us talk before you get 
your chance.
    [Laughter.]
    Senator Thune. And to be accompanied with fully one-half of 
the Dakota Caucus in the Congress, and Earl and I were--I wish 
I could say 2 percent of the House when we were the Dakota 
Caucus over there, but we could have had our meetings in a very 
small room.
    I do think that when you represent our area of the country, 
you have a great appreciation for the importance of 
agriculture. I think in South Dakota today, the wind chills 
were 30 below and the actual temperature was about seven below 
and I suspect it is even colder than that in North Dakota, but 
people in our----
    Senator Conrad. No, no, it is not.
    [Laughter.]
    Senator Thune. Once again, Conrad is trying to manipulate 
the numbers, but----
    [Laughter.]
    Senator Conrad. South Dakota payments just went down.
    [Laughter.]
    Senator Thune. But in any event, I think you have to be a 
tough breed to live in the Upper Midwest and this farm bill is 
really important. It is important that we get it done, and I 
think you know that. I know the administration has not been 
happy with some of the provisions in either the House or the 
Senate bill or how it is paid for, for that matter. But I know 
one thing is certain and that is that we need to get a bill 
through. Our farmers and ranchers need it, not just in the 
Dakotas but all across this country and I think we have struck 
a very good balance in a strong bipartisan bill here that 
addresses those needs.
    One of the issues, of course, that I visited with you with 
when you were in my office was the importance of renewable 
energy in that whole equation now and how that has dramatically 
impacted prosperity in agriculture in places like the Dakotas 
and it importance. Senator Nelson and I worked closely on some 
provisions in the energy title of the farm bill that I think 
will help move forward, advance biofuel, cellulosic ethanol, 
and I think that there are some great opportunities there, and 
so that is why moving this bill is important not just from the 
food and fiber standpoint, but also from the fuel standpoint. I 
know that we are going to count heavily on your negotiating 
abilities because they will be tested based on some of the 
differences that exist between us and the White House on the 
bill.
    The other thing I will mention just briefly, because it is 
an important part of this farm bill, as well, is the 
conservation title and the sustainability of agriculture is--
that title is so critical to sustainability of agriculture. I 
believe that farmers and ranchers are great stewards of the 
land. I also think that they are being asked to do more and 
more to maximize their production and we have got to give them 
the tools that they need so that they can manage and care for 
those lands. It is really important in our State from a 
wildlife habitat standpoint, as well. So many of the provisions 
in this farm bill are very good for conservation and I hope we 
can keep those in the final bill.
    I would just conclude by saying again that we welcome your 
willingness to take on this position and look forward to moving 
very quickly to get you confirmed. Mr. Chairman, we hope that 
that will happen soon and we will be able to move the 
nomination to the floor of the Senate and get you up and going 
on the job, and hopefully you can work with us to get a farm 
bill passed. Thank you.
    Chairman Harkin. Thank you, Senator Thune.
    Senator Brown?

STATEMENT OF HON. SHERROD BROWN, A U.S. SENATOR FROM THE STATE 
                            OF OHIO

    Senator Brown. Thank you, Mr. Chairman. Governor, nice to 
see you again. Thank you for joining us. My only real advice 
would be to listen to one of the best delegations here, your 
two Senators and your Congressman, who have been great 
advocates for North Dakota and for family farmers around our 
country.
    Just a couple of things briefly. I held a series of 
roundtables with farmers in all parts of my State last year and 
one of the ideas that came out of that is something that 
Senator Roberts and many of us worked on and the Chairman did, 
on the whole issue of average crop revenue, to build the kind 
of revenue protection that we need, as you and I spoke about. 
That is part of the farm bill. We reached a compromise that I 
think will work and I am hopeful that we can continue to work 
together on that as the farm bill is signed into law.
    Second, I would add the importance of the nutrition title. 
Senator Lugar and Senator Lincoln and I have worked on both 
food bank and food stamp provisions. We are trying to get just 
some only $40 million into the stimulus package or something 
soon to help sort of bridge the gap, with food banks under more 
duress, they will tell you around the country, than at any time 
in the last 20 years, to help them in the time between now and 
the time the farm bill is signed into law. So your support--I 
talked to the Secretary of the Treasury about that--your 
support there would be helpful.
    I welcome you and look forward to working with you in the 
year ahead. Thanks.
    Mr. Schafer. Thank you, Senator.
    Chairman Harkin. Thank you, Senator Brown.
    Senator Lincoln?

 STATEMENT OF HON. BLANCHE L. LINCOLN, A U.S. SENATOR FROM THE 
                       STATE OF ARKANSAS

    Senator Lincoln. Thank you, Mr. Chairman, and a special 
thanks to you. Glad to be back. I enjoyed our visit yesterday, 
Governor. Thank you so much for coming by. I am pleased to 
welcome you to the Committee today and congratulate you on your 
nomination and look forward to working with you and certainly 
gaining a better understanding of your approaches and how you 
intend to tackle this job. Coming from a seventh-generation 
Arkansas farm family, it is near and dear to my heart, as you 
saw yesterday, and I look forward to seeing how you will 
approach so many of the issues that we face in this country.
    I certainly want to thank our colleagues there, Senators 
Conrad and Dorgan and Congressman Pomeroy, who I came into the 
House with, for their introductory statements. Senator Conrad, 
in particular, has been a great colleague to work with in 
crafting this year's farm bill. He has made a great effort to 
craft a bill, I think, that really meets the diversity of our 
country, our farmers, and we appreciate that and look forward 
to continuing that work in what comes through the conference.
    Governor Schafer, just one quick thing. I tried to make 
this point yesterday and you were enormously patient and 
listened to what I had to say. You are going to be entering 
this position at a critical time. We work a lot on the 
Agricultural Committee throughout the 5 years or 6 years of a 
farm bill, but critically bringing a farm bill to the floor and 
getting a bill to the President is enormously important. It is 
a time when we come together to try to create a final farm 
bill, and as the country approaches what I think is somewhat of 
a worrisome milestone in our history, because projections are 
showing us that in the next couple of years, more than likely, 
we are going to see for the first time in the history of our 
country a trade deficit in agriculture. We are seeing ourselves 
in the circumstances of an unbelievably competitive marketplace 
globally and our hope is that we can certainly provide the kind 
of support that growers need.
    I believe one of the most important goals that we have in 
striving to bring together a farm bill that is worthy of the 
people that we serve here in this country is ensuring a safe 
and domestic supply of food, and to achieve that goal, we 
really worked to provide our domestic growers with a basic 
safety net that all of those growers can work with so that they 
are able to compete in an already very heavily distorted world 
market, and there are lots of charts that show us that.
    We are excited about what we can do and hope that you will 
take every effort to engage yourself in this. I think maybe at 
some point, you can fill in for us what that engagement is 
going to be in terms of the farm bill, so we look forward to 
it. Thank you.
    Mr. Schafer. Thank you, Senator.
    Chairman Harkin. Now, I get to recognize a senior member of 
this Committee, also Chairman of the Budget Committee, and I 
might say, Governor, one of the real architects of the farm 
bill that we have before us now, and of course past farm bills, 
but especially this one. I can say without any fear of 
contradiction that without his help, we wouldn't have had the 
kind of budget that we needed and the money that we needed and 
working on helping us get all the numbers lined up and getting 
everything put together so that we had that great 79 to 14 vote 
on the Senate floor. Of course, I refer to our great friend and 
our great colleague, Senator Kent Conrad.

STATEMENT OF HON. KENT CONRAD, A U.S. SENATOR FROM THE STATE OF 
                          NORTH DAKOTA

    Senator Conrad. Thank you, Mr. Chairman, and special thanks 
to you for your gracious willingness to move this hearing up. 
We would very much like to have the nominee, Governor Schafer, 
be able to enter the chamber for the President's State of the 
Union with the rest of the cabinet. I deeply appreciate, Mr. 
Chairman, what you have done to make that a possibility.
    I also want to thank our Ranking Member, Senator Chambliss, 
for his accommodations and his support of the nomination. We 
certainly appreciate that. It is really my privilege to present 
our Governor, our former Governor of North Dakota, Ed Schafer, 
the first North Dakotan ever nominated for the position of 
Secretary of Agriculture. That is a great honor for our State 
and the people of North Dakota are enthusiastic and excited at 
the prospect.
    I should, as part of full disclosure, indicate that the 
Governor and I for many years were brothers-in-law, so I 
consider him family, and I would ask my colleagues not to hold 
that against him.
    [Laughter.]
    Senator Conrad. The circumstance that we face here is a 
very important one because all of you know, who have labored so 
hard to produce a farm bill that came out of this Committee 
without a single dissenting vote--I don't remember that ever 
happening before, and I have been through four farm bills 
here--and then to go to the floor and get a vote of 79 to 14 
with four Senators who were absent announced in favor of the 
bill, that would have given us 83 votes. You have to go back a 
very long time in the history of this country to find a 
bipartisan support of that magnitude for any farm bill. I think 
it is a testimony to the work of this Committee and really the 
extraordinary work of every member of this Committee.
    If there was ever a team effort, it was this farm bill, and 
the people in this room, I would say to you, Governor, each and 
every one of them played a key role in the deliberations of 
this bill. So often, you have a few people that are really 
active. Not on this Committee. Every single member really 
contributed to this bill.
    This is a critical time, because we have passed the House, 
we have passed the Senate, we are in Conference Committee. We 
face the Presidential veto threat. It is very much my hope that 
Governor Schafer will help bridge the divide, because this is 
critically important legislation for the country.
    Our economy is in trouble. We are in the midst of writing a 
stimulus package. There is, I would submit, no more important 
piece of legislation in terms of stimulus for this economy than 
this farm and energy legislation that is before the Congress 
now. And so we are going to need your help, and I am confident 
that working with Governor Schafer as Secretary of Agriculture 
and with the White House that we can come to an accommodation 
that is a responsible and principled compromise.
    With that, again, my colleagues, I want to commend Governor 
Schafer to you. And again, I want to thank Chairman Harkin for 
your very rapid and again gracious response of my request to 
move this hearing up so that he would at least have the 
possibility of going into that chamber with the rest of the 
President's cabinet.
    Chairman Harkin. Thank you very much, Senator Conrad.
    And now our other colleague, the esteemed Senator from 
Congress, Senator Dorgan, Chairman of Indian Affairs, also a 
colleague of mine on the Appropriations Committee, where he 
chairs the Energy and Water Appropriations Subcommittee. But I 
can also tell you he is an individual who constantly keeps tabs 
on agriculture on our committee and is always involved on the 
floor and in all our deliberations when it comes to 
agriculture. So again, we again welcome our colleague, Senator 
Dorgan, to the Committee.

  STATEMENT OF HON. BYRON L. DORGAN, A U.S. SENATOR FROM THE 
                     STATE OF NORTH DAKOTA

    Senator Dorgan. Mr. Chairman, thank you very much and 
thanks to the Committee members for hearing us. It is obvious 
to all of you, I hope, that we North Dakotans are very proud 
that President Bush has nominated one of our own to be 
Secretary of Agriculture and I am here to offer very strong 
support for the nomination of Ed Schafer to be the new 
Secretary.
    Governor Schafer, as you know, has served two terms as 
North Dakota's chief executive. He, I think, has firsthand 
experience on many of the issues that confront us at the USDA. 
Rural development, trade, energy, conservation, farm policy, 
all of these are issues that he has dealt with. So he brings, I 
think, a lot of experience to the job. Governing a farm State 
like North Dakota has prepared him well for this job.
    I might say that in all the years that we have worked 
together and I have observed Ed Schafer, only on one occasion 
did I observe him actually shrinking from a challenge and that 
was because he served as Governor in a neighborhood where our 
neighboring State, Minnesota, decided to elect a professional 
wrestler as Governor----
    [Laughter.]
    Senator Dorgan.--Jesse Ventura--and then Minnesota 
residents decided to begin wearing T-shirts that said, ``Our 
Governor can beat up on your Governor.'' North Dakotas in 
response began to wear T-shirts saying, ``Our Governor says, 
prove it.''
    [Laughter.]
    Senator Dorgan. Governor Schafer seemed sensibly 
uninterested and nervous about that.
    [Laughter.]
    Senator Dorgan. But we have worked together. The three of 
us have worked with Governor Schafer and we are here to say 
this is an important job. But even more important than that, 
this is an important time. We have got to get a farm bill done. 
And you know, this is not about a bunch of us with blue suits 
and bright lights. It is about a family that gets up this 
morning at 5:30 to do chores and living out there under a yard 
light and wonders whether there is going to be a decent safety 
net when trouble comes. That is what this is all about.
    So this is so important. I hope you will move immediately 
to approve Governor Schafer's nomination. To his wife, Nancy, 
and Kari, I think it is important to say, thanks for being 
willing to serve your country. It is not just the nominee, but 
the family. I think it is important to say, as well, that 
public service honors the commitment we make to our country's 
future. I think when people come to this table as a cabinet 
nominee and present themselves and say, ``I am willing to 
serve,'' I think it inspires this democracy of ours.
    So the Committee can advance that cause of inspiring 
democracy today by moving quickly to approve this nomination of 
Governor Schafer to the post of Secretary of Agriculture.
    Chairman Harkin. Thank you very much, Senator Dorgan.
    We welcome to this side of the Capitol our colleague, 
Congressman Pomeroy, again a member of the Agriculture 
Committee in the House, but also a member of the very powerful 
Ways and Means Committee.

 STATEMENT OF HON. EARL POMEROY, A REPRESENTATIVE IN CONGRESS 
                 FROM THE STATE OF NORTH DAKOTA

    Mr. Pomeroy. Mr. Chairman, it is a great pleasure to be at 
the Senate Agriculture Committee. I feel very at home here. I 
have got Senator Nelson, with whom I worked on State insurance 
regulation, and Senator Lincoln, Senator Roberts, Senator 
Chambliss, Senator Thune, and Senator Brown, all of whom we 
worked with in the House. I wondered what happened to you all. 
I see you are doing well.
    [Laughter.]
    Mr. Pomeroy. You seem to have found one another. I----
    Senator Roberts. It is assisted living.
    [Laughter.]
    Mr. Pomeroy. Well, let me get to the point of the hearing. 
I think that it is a deep honor for North Dakota to have one of 
its own, Governor Schafer, nominated to be Secretary of 
Agriculture. You know, North Dakota is agriculture. Agriculture 
is North Dakota. It is the biggest part of our economy, always 
has been, and I think it always will be.
    So it is impossible to serve as Governor of North Dakota 
without being thoroughly familiar with agriculture, family 
farming, the core of production agriculture in our country, how 
these rural economies depend on the family farmer, how the 
family farmer stakes all at the beginning of a crop year to 
vagaries of weather or markets, and how the Federal Government 
has to play a role in helping these farmers navigate those 
unavoidable risks in order to keep family farming as the 
centerpiece of U.S. agriculture production.
    You know, as I think about the years where we served as a 
Congressional delegation with Governor Schafer, those were some 
wild times. You could call him the Disaster Governor, not 
because he was a disaster but because North Dakota seemed to 
have nothing but during those 8 years. We had drought. We had 
flood. We had fire. We had eight Statewide disasters. It is 
very appropriate that Mayors of Grand Forks and Fargo are with 
us in this hearing today because of the critical leadership the 
Governor provided, working with the delegation during those 
years on the deep problems faced by each of those major cities. 
Senator Thune was certainly an important part of our effort in 
the House and North Dakota will always be grateful to you, 
Senator, for the role you played in those critical days.
    Well, Governor Schafer also saw during the 1990's not just 
natural disasters, but markets that were really something and 
the trouble we had when we had a farm bill that didn't respond, 
a price support safety net during years of market collapse.
    So I think that the Governor is going to bring a wealth of 
real practical agricultural experience into this position, in 
addition, the management experience of having run a State, a 
$4.2 billion budget, 12,000 employees. I note that during his 
time, he had a pilot initiative to revitalize rural 
communities, led a trade missions to China. These are all 
wonderful points of prior experience to bring to the position 
of Secretary. I know that he will bring common sense real 
priorities into that job and I hope that he is given enough of 
an operating margin so he can bring his own leadership to bear.
    Like Senator Conrad said, at this hour when we need to find 
some common ground, I think that Governor Schafer, hopefully 
soon to be Secretary Schafer, can help us find it. I am going 
to be a conferee on the farm bill representing Ways and Means, 
so I look forward to working very directly with you as we get 
this farm bill done.
    I apologize for needing to leave early. The last plane to 
North Dakota leaves in a few minutes, and I need to be on it. 
But I appreciate very much you listening to me. It is great to 
see you all again. Thank you.
    Senator Conrad. Mr. Chairman, might I just say that on that 
plane with Congressman Pomeroy, after agreement with Governor 
Schafer, will be roughly 80 percent of the farm program 
benefits.
    [Laughter.]
    Senator Conrad. We look for some fair distribution, but----
    [Laughter.]
    Chairman Harkin. Thank you all very much. Senator Dorgan, 
Senator Conrad, Congressman Pomeroy, I know you all have busy 
schedules. We thank you for being here. You are welcome to join 
us if you like, but you will be excused to continue your work 
at other places.
    Governor Schafer, required of all nominees, would you 
please stand and raise your right hand.
    Do you swear or affirm that the testimony you are about to 
provide is the truth, the whole truth, and nothing but the 
truth, so help you, God?
    Mr. Schafer. I do, so help me, God.
    Chairman Harkin. Thank you. And one last question, it is a 
mandatory one. Do you agree, Governor, that if confirmed, you 
will appear before any duly constituted committee of Congress 
if asked to appear?
    Mr. Schafer. I do, Mr. Chairman.
    Chairman Harkin. Thank you very much. Governor, thank you 
very much again for listening to all this. You can see that 
there is obviously an intense interest in this position by this 
Committee and a willingness and a hope to work with you to get 
our farm bill through and signed by the President and to get it 
done in timely implemented.
    So with that, again, I welcome you to the Committee. We 
have your statement that will be made a part of the record in 
its entirety and you may please proceed as you so desire.

 STATEMENT OF HON. EDWARD T. SCHAFER, NOMINEE TO BE SECRETARY, 
                 U.S. DEPARTMENT OF AGRICULTURE

    Mr. Schafer. Thank you, Mr. Chairman. I am pleased to be 
here. It is an honor to appear before your committee today. I 
especially want to thank Senators Conrad and Dorgan and 
Representative Pomeroy for your very kind words. It is 
gratifying that while we have differed politically at times, we 
have been able to work together for the good of the great State 
of North Dakota. Over the years, to all of you, I have 
appreciated your advice and counsel and friendship, and it is 
indeed an honor to have Team North Dakota introducing me here 
to the Committee this afternoon.
    I am extremely thankful that my wonderful spouse, Nancy, is 
here with me today. I love you, dear. Among her many roles in 
my life, she remains an important connection to farm issues, 
having been raised on a small grain and livestock farm in North 
Central Montana. Her example of growing up with no running 
water, sleeping on the living room couch as her bed, and 
swimming in the stock tank, to becoming the First Lady of North 
Dakota is inspiring and it is a great example of the values and 
the character that are instilled by a rural lifestyle.
    Our youngest daughter is here with us, also. Thanks for 
being with us, Kari. We really appreciate her being here. Our 
other children, Tom and Ellie and Eric, couldn't join us, but 
they are gathered around their televisions. Hi kids.
    [Laughter.]
    Mr. Schafer. I would also like to take this opportunity to 
personally thank the 640,000 citizens of North Dakota, as they 
are my supporters, the shapers and encouragers in my life. 
Since this hearing room is a bit small to invite them all here 
today, I have to settle for thanking them from afar.
    Mr. Chairman and esteemed members of the Committee, you 
have all seen my resume, so I won't use the Committee's time to 
discuss at length my life's professional experience, which I 
believe well qualifies me for this position. However, I would 
like to speak briefly about the question most of you asked me 
when we met face-to-face prior to this hearing. Why do you want 
to be Secretary of Agriculture? Answering this question is a 
good way to start this hearing. How I arrived here today and 
the path I took through life will, I believe, explain why I 
want to lead the United States Department of Agriculture.
    The first part of my answer comes from Senator Dave 
Durenberger and a saying that he was given at his swearing-in 
ceremony here in the Capitol. It reads, the sign of God is that 
we will be led where we do not expect to go. I believe God 
prepared me for this assignment and led me here, and for that, 
I am grateful.
    The second part of my answer starts with a shipbuilder. I 
bet you didn't expect that in front of the Agriculture 
Committee hearing here, but my maternal grandfather arrived on 
our shores in 1901 from Denmark with seven cents in his pocket, 
the clothes on his back, and this very ring that I wear today. 
He eventually arrived in Western North Dakota, not to build 
ships, but to homestead a quarter section of land. His 
shipbuilding skills did come in handy when he needed to put up 
a barn that looked an awful lot like an upside down boat.
    But he was committed to making a better life for himself 
and his family and he became a good farmer and with my 
grandmother, Johanna, raised seven children there. He had no 
idea of the influence he would have on generations to come, and 
unfortunately, he didn't live to see me elected as the 30th 
Governor of the great State of North Dakota or nominated to be 
Secretary of Agriculture. He probably wouldn't have believed 
it, either, but I do believe he would be proud.
    On the other hand, my paternal grandfather died when my 
father was 16 years old. Dad decided then to move off the farm 
and staked out a life in town. As a traveling salesman, he 
discovered a better way to clean and shine linoleum and started 
selling Gold Seal floor Wax door to door. Harold Schafer's 
customers were people living in farmhouses that dotted the 
land. When business built up, the first store accounts were 
small rural hardware stores, lumberyards, and grocery stores. 
His business success was based on the economy generated by 
agriculture.
    From both sides of my family, I am a product steeped in 
agriculture tradition and economy. In my work as Governor, I 
developed a passion for the rural community because I saw the 
value that people living there bring to our republic. There is 
no doubt in my mind that the agrarian community produces people 
with the virtues of courage, hard work, justice, honor, truth, 
and hardiness, the cornerstones that hold up the United States 
of America.
    By the grace of God, I have grown up in this free country, 
the progeny of a homesteader and a businessman. I have had the 
privilege of carrying the opportunities of my education, 
experience, and heritage to a long and successful career in 
both the public and private sectors of our society.
    When President Abraham Lincoln founded the USDA in 1862, he 
called it ``The People's Department'' because of its ability to 
improve the lives of so many Americans in so many different 
ways.
    I arrive here today with my heart in agriculture and my 
foundation in business, a combination that I hope you will 
agree is a perfect fit for the rigors of administrating and 
managing the USDA.
    I want to express my appreciation to President Bush for 
nominating me to lead this important agency, and if I am so 
honored to be confirmed by the U.S. Senate for this job, I 
pledge to work with each of you and this Committee during these 
exciting times for agriculture.
    If confirmed, I look forward to having the opportunity to 
stand beside what I know already to be the great employees of 
the USDA, to help enhance our country's vibrant agriculture 
economy, advance renewable energy, and protect America's safe 
and low-cost food supply. I will devote myself to improving the 
nutrition and health, enhancing rural infrastructure, promoting 
good stewardship of our National Forests, and conserving our 
natural resources. And finally, if confirmed, I pledge to work 
tirelessly to ensure that the USDA programs are administered 
efficiently and effectively, and most important, with fairness 
and equality. The American people deserve no less from the 
People's Department.
    Mr. Chairman and members of the Committee, to start this 
journey, I humbly ask you for your support for confirmation and 
I look forward to serving the people of the United States of 
America. If in some small way I can contribute to the 
preservation and protection of our foundational strength 
through agriculture, then in the end, I believe I will have 
done my job well.
    Mr. Chairman, I submit my comments for the record. Thank 
you again for the opportunity to appear before you today and I 
look forward to answering your and the Committee's questions.
    [The prepared statement of Hon. Edward T. Schafer can be 
found on page 51 in the appendix.]
    Chairman Harkin. Thank you very much, Governor.
    We will now start a round of 5-minute questions. I will, 
after my questioning and the Ranking Member's, I will recognize 
Senators in order of appearance, and it will be as follows: 
Senator Conrad, Senator Roberts, Senator Lugar, Senator 
Salazar, Senator Thune, Senator Coleman, Senator Klobuchar, and 
Senator Lincoln, in order of appearance that came to the 
Committee.
    Governor Schafer, again, we are not expecting you to answer 
in great detail program and policy questions that you will have 
to delve into as Secretary. You will have to take more time to 
get up to speed on that. We understand all of that. But it 
does, I think, seem reasonable to ask you some of your views on 
the Federal Government's proper role in our food and 
agriculture system and in rural communities.
    For example, just a broad opening question, what do you 
believe should be the role of the Federal Government in 
providing financial assistance to farmers and ranchers?
    Mr. Schafer. Thank you, Mr. Chairman. I appreciate the 
question because it is really why I am here today and so 
pleased to have been nominated for the Secretarial position. I 
believe that the USDA is a strong advocate for agriculture. 
They have delivered the safety net programs responsibly and 
efficiently to the farmers, ranchers, and land owners of this 
country.
    You know, as always when I speak to farmers around, they 
say, well, I am not so sure I like government in my business 
and I would like to be able to operate more on my own, and also 
they talk about the importance that the agriculture programs 
bring to them. I think it is important to note that the 
government and through the taxpayers of the United States of 
America provide good support programs, not only for farmers and 
ranchers, but provide nutrition, nutrition assistance, 
inspections, providing a safe and clean and constant food 
supply. The government, through the USDA in this case, 
certainly operates well and efficiently in that arena.
    So I believe that the role of the USDA is to bridge that 
gap between the government programs that are put forward by the 
policymaking branch of government to the people who are 
actually working the land, who are depending on the safety net 
programs and support programs, and those people of the United 
States who are often forced to partake in the support programs 
out there for their everyday lives. If we can at the USDA 
bridge the gap between the government and the people who depend 
and rely on the programs, I think we will have done our job 
well.
    Chairman Harkin. Thank you. Governor, in 1997, you wrote a 
letter as Governor of North Dakota to President Clinton urging 
him to sign a bill providing agriculture disaster relief to 
farmers from North Dakota and other States affected by long-
term droughts and other weather problems. The cost of that bill 
was $8.4 billion. It was designated emergency spending. It did 
not require a budget offset.
    Over the last several years, President Bush has 
consistently demanded cuts in other farm programs in order to 
pay for agriculture disaster assistance. On two occasions, farm 
bill funding was taken away to pay for disaster assistance. As 
everyone heard me say any times, over $3.9 billion was taken 
from conservation program for disaster payments and was never 
replaced.
    Given this history, could you enlighten us as to what your 
current view is on the need for budget offsets for disaster 
assistance programs.
    Mr. Schafer. Thank you, Mr. Chairman. I appreciate the 
question involving my writing a letter to the agency, because 
as Governor of North Dakota, I interacted with the programs 
often and I did write a letter to President Clinton not once 
but many times. As noted, we had several disasters in North 
Dakota during my tenure. I also wrote letters to the agency 
encouraging the delivery of programs in special ways in 
disaster conditions.
    As Governor of the State of North Dakota, you know, it was 
easy to be a champion for my State and to talk to the leaders 
of the farm and ranch groups, to talk to individual farmers and 
ranchers, and to understand the need for this disaster 
assistance, and I was glad so to write that letter.
    Now, if I am confirmed, I move into the national arena and 
no longer would champion any State-specific needs but look at 
the overall policy and the needs of this nation. Importantly, 
disaster safety net programs are a part of past farm bills and 
need to be a part of future farm bills. I understand that 
through the negotiations and conversations and debates that 
have taken place between the legislative branch and the 
executive branch that there are some differences of opinion 
about disaster, and as I stated, you know, there are the 
different views that I have been catching up on and briefed on 
and certainly seen in the news.
    But importantly, I believe that a good farm program needs 
to have a safety net for the risk of doing business as farmers. 
I will look forward, if I am confirmed, to working with you to 
help bridge the gap or narrow the differences between the 
executive and legislative branch, to come to a conclusion, to 
sign a farm bill that is appropriately paid for by the citizens 
and takes care of farmers and ranchers and land owners in this 
country in an appropriate manner that includes a safety net 
that allows them to operate and to do business well.
    Chairman Harkin. Thank you. I see my 5 minutes is up. 
Senator Chambliss?
    Senator Chambliss. Thank you, Mr. Chairman.
    Governor, the farm bill that we passed out of the Senate 
has a provision in there for disaster which is a very unique 
approach, a very different approach. It is funded by not 
raising taxes on the American people and I urge you to take a 
quick look at it as soon as you occupy the office so that as we 
go through the conference process that you will be very 
familiar with that and can render the good advice that I know 
you are prepared to give to the White House.
    Speaking of that, we originally dealt with Under Secretary 
Keenam as a part of writing of the Senate farm bill. Now that 
we are into conference, as expected, Acting Secretary Conner 
has been our main contact at the White House. Now you are going 
to be the third voice of reason injected into the process and 
we certainly look forward to that.
    As you might can imagine, cotton is a very important crop 
to my home State. Cotton production has changed over the years, 
as has the market and destination for cotton, but it still 
remains just a critical crop from the standpoint of growth as 
well as economic production in the United States.
    Ten years ago, Europe accounted for a significant share of 
world trade and now consumption to the region accounts for 
relatively little with respect to cotton. By contrast, Asia now 
accounts for more than half of the world's cotton mill use. 
Because the market continues to evolve, Cotton Outlook, the 
leading commercial provider of international cotton market 
information and analysis, will discontinue the North European A 
Index values beginning August 1, 2008. This will require a 
change in how the Department determines the adjusted world 
price for the Upland Cotton Marketing Loan Program.
    The Department has the authority to make appropriate 
adjustments for determining and calculating AWP and my question 
to you is will the Department and you as the head of the 
Department ensure that an accurate world price is discovered in 
the absence of a North European index and base the 
determination on publicly available price information? And can 
you give us the assurance that this transition will be made 
seamlessly, in a manner that will maintain the confidence of my 
producers as well as the entire cotton industry that they have 
in USDA's administration of the cotton program?
    Mr. Schafer. Thank you, Senator. I appreciate your 
confidence in me, and I would note that earlier today, I was 
admiring myself in the mirror and have the nice white cotton 
shirt on. That made the image pretty good.
    [Laughter.]
    Mr. Schafer. But I appreciate the question and it is 
something that I am anxious for, because if I am confirmed, I 
really am looking forward to getting to the agency. There are 
many people over there who are steeped in agriculture policy 
and direction and I really look forward to getting fully 
briefed on the issues, especially with cotton. As you know, 
being from a Northern State, I don't have as much background 
and experience in cotton and some other Southern crops, but I 
look forward to the opportunity of working with you and 
checking out those peanuts and getting up to speed on the 
issues. So I would look forward to getting to the agency, 
finding out the intricacies of the details and working with you 
to move forward.
    Importantly, I believe that the role of the USDA is to 
deliver the policies, programs, and directions from this body 
as best as possible. If I am confirmed, I will lead an agency 
that is responsive to you, that has built a partnership with 
this Committee so that we can look at those issues and 
difficulties.
    I would also note that when speaking with the President, he 
asked me to get involved in trade issues. As these trade issues 
come to the forefront, I look forward to working with the White 
House on international trade, how they affect crops and 
cropping patterns in the United States as well as 
internationally, and would seek your advice and counsel as we 
move forward.
    Senator Chambliss. And when you get home tonight, check 
that label to make sure that is U.S. cotton that your shirt was 
made from.
    [Laughter.]
    Senator Chambliss. Over the last several years, I have come 
to have a passion in something Republicans--you might be 
surprised--have a significant interest in. Part of it is due to 
my friend, Senator Lugar, but we have a great network of food 
banks in my State that serve such a critical function. As a 
part of the work that our food banks do all around the country, 
USDA, in particular this Committee, has been involved in the 
Emergency Food Assistance Program and providing excess 
agricultural products to those food banks. There have been some 
years when we haven't been able to provide as much as we would 
want to. Now, as we are in the midst of a slow-down in the 
economy of this country, I think this is the kind of issue that 
strikes at the heart of what USDA should be involved in and 
what the Senate Agriculture Committee should be involved in, 
and as a result of the efforts of this Committee, we are with 
our farm bill.
    But I would just simply ask you to commit to working with 
the relevant agencies at USDA to continue to look at innovative 
ways to help provide excess agricultural products that are 
available to these food banks around the country.
    Thank you very much, and we look forward to moving your 
nomination.
    Mr. Schafer. Thank you, Senator.
    Senator Chambliss. Thank you.
    Chairman Harkin. Senator Conrad?
    Senator Conrad. Thank you, Mr. Chairman. One thing I would 
like my colleagues to know is a little bit more about the 
background of the Governor. We grew up together, just blocks 
apart. His father was the most successful businessman in our 
State as I was growing up. I had Mr. Bubble bubble bath and 
Snowy bleach. Those are names that I think most everybody 
recognizes. But more than that, his father----
    Senator Chambliss. Were they taking neighborhood bubble 
baths? Is that what----
    [Laughter.]
    Senator Conrad. These Georgia peanut guys--we are always 
having trouble with them.
    His father was also the most generous philanthropist in our 
State, and never for publicity's sake. I can remember when I 
was of college age, Harold Schafer invited me to his office and 
asked me if I needed help going through college. It turned out 
in my case we did not, but I know that he did that for dozens 
of young people in my hometown, outside of our hometown, helped 
people go through school. When people had a problem in their 
families or tragedy, often the first person on the doorstep was 
Harold Schafer to help out quietly. It says something about the 
quality and the character of the family that he comes from, so 
I think people should know that.
    On a specific note, we are working right now as we move 
through the Conference Committee with the special challenge of 
the question of new revenue. Our bill is over the so-called 
baseline. The administration's own bill is $8 billion over the 
baseline, not surprising, because we have written this farm 
bill with $17 billion less in the baseline than we wrote the 
last bill. So if we are going to have, for example, a strong 
energy provision, we are going to need revenue to do that. If 
we are going to deal with the other demands in terms of 
nutrition and safety net, there is going to have to be some new 
revenue.
    I just say, the bill and the revenue provisions that are in 
the Senate version passed the Senate Finance Committee 17 to 
four, totally bipartisan, totally noncontroversial, but we have 
heard White House objection. We are working in the Finance 
Committee now on a new package that the Finance Committee has 
identified as provisions that have passed previously, not gone 
through the whole process, but passed one body or the other 
with White House support, with support from the House of 
Representatives, but have never been implemented, so that we 
can come forward with a new package of revenue that should be 
totally noncontroversial.
    I am not going to ask you, and I don't think it is 
appropriate at this point for you to have this put to you, 
because this is going to have to deal with the White House, but 
I think it is very important that you know there is a very 
serious effort underway at the direction of the Chairman of the 
Committee, working with the Chairman of the Finance Committee 
and working with the Ranking Member, to identify new revenue 
sources for this bill that would be totally noncontroversial. 
But I just want you to know, I think in the judgment of this 
Committee, there is no way to write this bill and pay for it 
without some revenue source given the circumstances we 
confront.
    Again, I want to congratulate you on your nomination.
    Mr. Schafer. Thank you, Senator.
    Chairman Harkin. Thank you very much. Senator Lugar, I am 
sorry, Senator Roberts. I apologize. Senator Roberts?
    Senator Roberts. No need to apologize, Mr. Chairman. I 
always knew that Kent Conrad was squeaky clean, but I didn't 
know it was because of the bubble baths of Ed's dad.
    [Laughter.]
    Senator Roberts. Did you do that every Saturday night, or--
--
    Senator Conrad. Pretty much.
    Senator Roberts. Pretty much, whether you needed it or not.
    [Laughter.]
    Senator Roberts. Governor Schafer, you have my vote and 
best wishes. Return with me now to the not-so-thrilling days of 
yesteryear, when just last year we faced the budget challenge 
that Senator Conrad has talked about. Much of that challenge, 
as he has indicated, was over funding and finding offsets, 
which is the new game in town, for new programs or to increase 
any program. It was embarrassing. As a matter of fact, it was a 
little ugly to see Kent and myself crawling around on our hands 
and knees, looking under every chair, every cushion for any 
change that we could find. But that is what we had to do and we 
did come up with a bipartisan approach in the Finance Committee 
and I hope we can do that again.
    But after all that was decided, despite this challenge, 
there was an effort to keep the direct payment rates at their 
current levels. I truly appreciated your list of priorities. I 
would only add one in and that is to preserve farm income, 
which I think is the biggest rural development program of all.
    In their own proposal released almost a year ago, the 
Department actually offered a slight increase in the direct 
payment, roughly $5.5 billion worth, if I recall, and this is 
the most trade-friendly program in the commodity title. As 
Frank Sinatra and Kermit the Frog can tell you, it isn't easy 
being green. If you use the Direct Payment Program and you 
believe in Doha and the trade rounds, it is the greenest 
program.
    It is also the only program, along with crop insurance, 
that actually assists farmers and their lenders during times of 
loss. When prices are high, the countercyclical program does 
not help producers when they have lost the crop. And you have 
just gone through, or as Kent has pointed out, eight times you 
went through that when you were Governor--eight times. We have 
gone through it four of the last five years in Kansas, four. 
You had eight charts. I only had four. But we just went through 
a terrible time in Kansas. We had a blizzard and we had 
tornadoes sweeping entire towns away, and then we had all of 
Southeast Kansas underwater. Then we got into an ice storm. I 
don't know what is next, maybe a plague of locusts. I certainly 
hope not.
    But at any rate, we figured it up, and under the 
countercyclical program, despite the best efforts of this 
Committee and others and the administration and everybody 
concerned and the farm organizations, all the commodity groups, 
if you lose a crop, you are really in trouble because all you 
have is that direct payment and crop insurance, which, by the 
way, Bob Kerrey and I worked on for an awfully long time and 
that is what we have to rely on. And if you have a good crop 
insurance program, it makes the disaster payment less--you have 
to rely less on a disaster payment.
    I have a little bit different view. I think if you set up 
the fund, you spend it, as opposed to disaster by disaster. 
There are two views to that. We only seem to have the disaster 
especially during an even-numbered year.
    At any rate, we now have the administration, both the House 
and the Senate, on record supporting the Direct Payments 
Program at the current level. There are some that may want to 
reopen that debate, use the Direct Payment Program to offset 
increases. How do you view the Direct Payment Program? Will the 
administration continue to vigorously support the program as 
they did in their farm bill proposal?
    Mr. Schafer. Thank you, Senator. I can tell you, as 
Governor of an agriculture State, in visiting with the farmers 
and ranchers across our State, I know that direct payments are 
an important part of the program. I understand that there are 
some issues here, and today in the exciting times of 
agriculture, when prices are as high as anybody can remember--
--
    Senator Roberts. I am going to interrupt you for just a 
minute, and I apologize for this--we do this all the time, so 
don't worry about it----
    [Laughter.]
    Senator Roberts [continuing]. These prices, just ask at any 
North Dakota coffee shop or any Kansas coffee shop, do you 
think these prices will continue? This situation is similar to 
the Russian grain sale. We can all go back to the times when 
the prices have been up and down. These are astounding prices, 
due in part to renewable fuels and demand in regards to 
worldwide crops, India, China, so on and so forth. I know that. 
But I also know that it can go down the other way. And again, 
it is for the farmer who doesn't have a crop. The farm program 
should be aimed at the farmer when he needs it the most, and 
these are the two things that you can do. One is crop 
insurance. One is direct payments. I apologize for interrupting 
you.
    Mr. Schafer. I am glad you did, Senator. I appreciate the 
clarification and I agree with you. These are important safety 
net issues. As I mentioned earlier, I believe that a farm bill 
has to include those issues. I hear from farmers and ranchers 
all across North Dakota that rely on those direct payments and 
crop insurance payouts in time of disaster. As Governor, I have 
been through over and over and over again, as you mentioned, 
disaster situations, whether it was floods or that dealt with 
prevented and even late planting. Things are difficult out 
there if you don't get a crop, as you mentioned.
    So I understand the good parts of the farm bill. I have 
listened to farmers complain about the bad parts of the farm 
bill. I just look forward to, if I am confirmed, to working 
with you to understand those issues strongly and be an advocate 
for them.
    I grew up with farmers as neighbors and I want to make sure 
that those farmers and ranchers understand that the Federal 
Government, the taxpayers, and this Committee and the Senate is 
behind them. I believe that we all want to deliver programs 
that help our country's farmers manage the farm economy during 
times of problems and distress. I believe that the USDA has 
delivered programs well in the past, and if I am confirmed, I 
look forward to the opportunity of helping deliver those 
programs as best as possible.
    Senator Roberts. Thank you for your response and thank you, 
Mr. Chairman. I apologize for going over my time.
    Chairman Harkin. Thank you very much. And now, Senator 
Lugar.
    Senator Lugar. Thank you very much, Mr. Chairman.
    Governor, we have been reading, at least those of us who 
are interested in agriculture newsletters, words from Collin 
Peterson, the Chairman on the House side, with regard to the 
farm bill and these suggest that the administration has two 
large objections. There may be smaller ones. One, Senator 
Conrad has touched upon, and that is the means of financing the 
farm bill as found in the House and the Senate, and the other, 
the lack of limits on payments to farmers who receive very 
large amounts from the farm bill. There were amendments offered 
on the floor. The Senator from Minnesota offered one, as I 
recall. Others offered some capping at $1 million, $750,000, 
what have you.
    One of the intriguing facts of the hearing we had with 
Secretary Johanns was the number of committee members who 
seemed preoccupied with the thought that Secretary Johanns was 
in favor of limiting the payments to $200,000 or some such 
amount, which would lead one to believe that a good number of 
our colleagues are tremendously interested in having higher 
payments, and very clearly the amendments to limit any of these 
failed. So this is one objection the administration, as I see 
it, has to the farm bill.
    The financing parts, and I am intrigued by what our 
colleague, Senator Conrad, has said, that he has worked on 
trying to think of some other way to pay for this, and maybe 
that will turn out to be more successful. But for the moment, 
Collin Peterson says to some agriculture newsletters, we are 
going to finish the conference on this bill, it will be vetoed, 
then we will try again and somehow get to conclusion before the 
March recess with a bill that the President can sign.
    Now, you come into the picture in the middle of all of 
this, and obviously you can certainly reserve judgment as to 
what the administration is saying to anybody, but what sort of 
road map do you foresee for the conclusion of a farm bill, or 
do you foresee extension of the current bill for a period of 
time? Some of the programs at some point come to an end. At 
least some farmers are concerned about jeopardy of some 
programs if the Senate and the House are not able to act and 
the President sign it, so that we will be coming back to look 
at emergencies of that sort fairly early in your tenure. Do you 
have any comment about all of this?
    Mr. Schafer. Thank you, Senator. I share the same 
enthusiasm and excitement in the agriculture community today, 
and I want to congratulate this Committee and the work that was 
done to put the farm bill together. I applaud the tremendous 
support from both sides of the aisle to put forth a good new 
farm policy and farm bill.
    As was mentioned, I am the new kid on the block and I am 
looking forward to getting to the agency and getting fully 
briefed. I have read the elements of the farm bill; however I 
must admit that I haven't read word-for-word the full 1,000 
pages, but I do look forward to getting over to the agency. I 
want to commend Acting Secretary Chuck Conner, who has been the 
lead point person in driving the Administration's policy and 
interacting with the Senate and the Senate Agriculture 
Committee regarding the issues.
    I really look forward to, if I am confirmed, getting over 
there, standing side-by-side with Chuck Conner and the other 
great members of the employee base at USDA and working with you 
to help craft that difference. You know, there is a gap between 
the legislative and executive branches here and I hope that as 
the new kid on the block, I can come in with a fresh 
perspective, a different outlook, and be able to narrow that 
gap, because I know that the President wants to sign a new farm 
bill this year, and I think all of us working together 
hopefully can accomplish that.
    Senator Lugar. Thank you very much, and good luck.
    Mr. Schafer. Thank you.
    Senator Lugar. Good luck.
    [Laughter.]
    Chairman Harkin. This would be Senator Thune.
    Senator Thune. Thank you, Mr. Chairman.
    Governor, I have got a concern over the amount of time that 
USDA has taken to implement two recent programs. One is the Ad 
Hoc Disaster Program that we passed, the Congress passed last 
May. It took USDA 5 months before beginning sign-up and 7 
months before payments were made. The State Areas for Wildlife 
Enhancement, or the SAFE program, was announced in March of 
2007 and still no sign-up date has been announced nearly 10 
months later.
    Of course, the farm bill will be much more complex under 
the programs under the farm bill, and I guess my question is 
what steps will you take as the Secretary of Agriculture to 
ensure the timely delivery of farm bill programs based upon the 
sort of just lack of any sort of timely progress in terms of 
implementing these other programs that I just mentioned.
    Mr. Schafer. Thank you, Senator. Certainly, as Governor, I 
had the chance to interact with farm programs and the delivery 
of farm programs and heard from farmers, ranchers and land 
owners across my State when there were problems, slowdowns, or 
when things didn't get delivered.
    One of the things that I believe I was successful with as 
Governor was the delivery of programs that were put forth by 
the legislative branch. Often, I found myself finding out where 
the barriers are, getting rid of them so that the good 
employees can get their jobs done as best as they can.
    There are a wide variety of reasons why these barriers or 
delays occur. I am not aware of the current situation, but if 
confirmed, I look forward to getting to the agency and getting 
briefed on this issue. I bring a management style that is open, 
transparent, and willing to address problems. If there is a 
slowdown, a barrier, or something in the way of delivering a 
program, I believe it is my strongest mission to deliver 
programs as fast, as best, and as efficiently as possible. So I 
will hear the complaints, I will find out where the slowness 
is, and I will try to break down those barriers and move them 
faster.
    Senator Thune. And I would just say that the State Areas 
for Wildlife Enhancement Program, the SAFE program, is 
something that my State of South Dakota is uniquely positioned 
and qualified for. We have probably the best pheasant numbers 
of any State in the country and had some extraordinary success 
the last couple of years. USDA announced just recently which 
States were going to be eligible for that program and South 
Dakota wasn't one of them, and it seemed to me at least that 
would have been one of the first States that they would move to 
implement the program. Again, they have now started to make 
some announcement about it, but they still haven't had any 
sign-up, and that is going to be--like I said, that is an 
announcement that came out 10 months ago.
    And the disaster payments, the bill that was passed in May 
of last year by the Congress, took 7 months for payments to go 
out. And so I just would urge you, as you get over there, to 
really home in on this and bear down on the agency's ability to 
respond in terms of getting some of these important programs 
implemented.
    Another question I would like to ask has to do with 
conservation, but I guess, would you favor language in the farm 
bill that would grant you the authority to allow CRP contracts 
to be terminated early without penalty. Think about that 
question, and if so, under what circumstances would you 
exercise the authority to allow early termination of CRP 
contracts? There is a real concern out there that a lot of 
ground is going to be coming out of CRP and being put into 
production and there is already a lot--the contracts that are 
expiring that aren't being renewed and so we have got, at least 
in my State, about a half-a-million acres coming out of CRP in 
the next 3 years.
    So the question has to do with whether or not you would 
have the authority or would like to have the authority to allow 
those contracts to be terminated earlier.
    Mr. Schafer. Well, thank you. I have to say I am looking 
forward to, if confirmed, getting to the agency and learning 
more about this. You ask what on the outside, seems to be a 
relatively easy question. On the other hand, I also know from 
working with people that are enrolled in CRP, that this is a 
very complex issue. I know there are many people at the agency 
that are tuned up on this issue and I look forward to get in 
there myself.
    But there are complex issues as far as farmers signing the 
contract, agreeing to a time period, agreeing to a penalty if 
they remove that time period fast, or faster than the full 
length of the contract. Those things are at issue. The initial 
CRP program was for land that wasn't the best farming property 
in the history of the world. I mean, it was meant to provide 
that acreage that isn't tillable or isn't great productive land 
into the program to provide not only the idling of the land, 
but also great wildlife habitat, as we have found out through 
the life of the program.
    So the way I would answer the question is I believe that it 
is a complex issue. There are legal aspects involved. There are 
not only cropping patterns, but wildlife preservation and 
conservation issues, and I think there are lots of 
opportunities to make sure that the needs of the farmers are 
met, the needs of the wildlife community are met, but also to 
deliver the programs that were meant and put forth by this 
Committee hopefully in the new farm bill.
    Senator Thune. I appreciate your answer to that. I guess I 
just think it is really important that as we look at this, that 
we do strike the right balance between these competing 
priorities. There is a real demand for more production and for 
cropping a lot of these lands that have been in CRP, and 
certainly economic incentive to get out for a lot of farmers 
based on current market prices. But I think it is really 
important that we have a good, strong, robust CRP program and 
that there are rules that were put in place for people who 
enter into those contracts and I hope that as you get over 
there to the agency, that you will try to strike and achieve 
that balance, strike that balance and hopefully make sure that 
those contracts and programs are continued in a way that 
promotes good environmental stewardship coupled with the need 
for production, as well. So thank you.
    I can see my time is out, Mr. Chairman.
    Chairman Harkin. Thank you. Senator Coleman?
    Senator Coleman. Thank you, Mr. Chairman.
    Governor, I was traveling last week in Mankato and Windom 
and farmers there are trying to figure out what sort of safety 
net they can have in 2008. I think the bankers want to know 
that, too. There has been a lot of discussion, and in my 
opening statement I talked about my belief that you would be a 
good negotiator. You bring the right qualities to the table. 
There has been a lot of talk about prospects of the President 
vetoing a bill. I know Senator Conrad has been working on some 
alternative offsets.
    We have all tried to be very, very constructive internally 
amongst ourselves. There are many points at which this bill 
could have pulled apart, and even with there being some 
disagreements, regionally, whatever, and my concern is that as 
we work with the administration, that the attitude is--and I 
understand negotiation, which is we are going to be tough here 
and you are going to be tough here, but this is a process that 
I think demands a positive approach. I think you have got to 
send a message to the people in Windom and Mankato and other 
places in Minnesota and throughout this country that we want a 
farm bill and that we are going to try to figure a way, where 
there are concerns about offsets. So we are working on it. But 
I would just hope that I would get a little more constructive 
message as you move into this position, which I hope we do 
very, very quickly.
    Let me just raise one other issue, one that I know you know 
well. We often say that Washington is a town of a thousand 
issues and a few priorities. In the Red River Valley, sugar is 
a priority. It is a major concern. It is part of the economic 
bedrock, the foundation of the communities there. I know that 
the U.S. and Mexico recently agreed to trade terms on tomatoes, 
and then I believe some time ago there was a similar 
arrangement with regard to chicken in particular.
    U.S. and Mexican industries--sugar--have come together and 
offered some recommendations about how we can implement NAFTA 
without affecting any other single industry, again, similar to, 
I believe, what was done with tomatoes and chicken. It is not 
reopening NAFTA, and as I have noted in regard to other 
commodities, I certainly don't think it is a precedent. USDA 
and USTR are already engaged with my office. I have had some 
discussion, looking to get people together. My hope was that 
the approach to this would be one of folks listening, sitting 
down with the industries. There are going to be some changes 
with the NAFTA, again, a constructive approach.
    My question is, I want a sense from you about your 
commitment to continue the discussion to at least approach this 
with an open mind until you hear, until the administration sits 
down and hears from the industry to see if, in fact, we can do 
what I believe we--in the other areas, we had a problem and 
then we addressed it. Here you have folks saying, before you 
have a problem, is it possible to address it? So I am looking 
for a commitment to being a good listener before the Department 
articulates a position.
    Mr. Schafer. You have that, Senator. I will be a good 
listener. As you mentioned, our neighboring States deal with 
sugar issues all the time. I understand the long-term aspects. 
Years ago, we were fighting about trying to export our high-
fructose corn syrup into Mexico. Now that is displacing sugar 
down there and they want the sugar to come up this way. Those 
are trade nuances and balances that go back and forth and we 
are seeing the long-term effects of what our trade policy and 
directions do. So I really look forward to working with you and 
listening to you with the intention of figuring out what is the 
best public policy direction for these issues.
    I would note, I was very pleased to have already received 
several letters from the Mexican Consulate congratulating me 
for coming, but also looking forward to opening the door to 
working on these issues together. If I am confirmed, I will 
have the ability to get the sides together and understand the 
differences and make some progress.
    Senator Coleman. I think that would be very helpful. I for 
4 years was the Chairman of the Western Hemisphere Subcommittee 
on Foreign Relations. I am on the Foreign Relations Committee. 
I recently met with the Mexican ambassador and raised this 
issue. All too often on trade, we look at, well, if we open 
this up, it is going to open another door here and there is 
going to be a problem. This is one where, because this would be 
good for American sugar but bad for Mexican, so the Mexicans 
are going to want something else when it comes to pork, this is 
a little unique here in that you have folks on both sides 
saying, we want to work out something not impacting other 
industries, not calling for tradeoffs, and perhaps avoiding a 
problem before it begins.
    So I am pleased with, one, what I know to be your style is 
to be a listener and to be fair, and bringing the clear 
understanding and sensitivity you have to the importance of the 
industry as it impacts both my neighborhood and your 
neighborhood, in essence, and all of us. So I appreciate your 
response, Governor.
    Mr. Schafer. Thank you.
    Senator Coleman. Thank you.
    Senator Conrad. Mr. Chairman, might I ask our colleagues 
for a moment of indulgence to just introduce two mayors who are 
here with us?
    Chairman Harkin. Absolutely.
    Senator Conrad. From two of the major cities in North 
Dakota, Mayor Walaker of Fargo, if you would stand, and Mayor 
Brown of Grand Forks. And also here, Phil Harmeson representing 
the University of North Dakota, which is the Governor's alma 
mater. So we have got not only the North Dakota Congressional 
delegation, but other important figures in North Dakota who are 
here supporting the Governor's nomination.
    Chairman Harkin. Thank you very much, Senator Conrad, and 
we certainly welcome you to the Agriculture Committee here 
today. You will all notice there is one thing different about 
this room than all other committee rooms in the entire U.S. 
Senate. We don't sit on a dais and look down on people. We all 
sit around a table. It is very collegial, sort of in keeping 
with the atmosphere of this Committee going back for years. I 
have to say that this is my seventh farm bill, and in my 
experience, farm bills are by their nature never partisan. 
Regional, yes.
    [Laughter.]
    Chairman Harkin. Oh, we can get into regional disputes but 
never partisan. I think the way we sit around this table, I 
think is very indicative of that. There have been suggestions 
in the past about changing this, but I am sitting here with, 
let me see, one, two, three, at least three or four former 
Chairmen of the Committee and every one of them have all 
deigned to keep this the same and I think it makes for a good 
atmosphere here. So I just wanted you all to know that you 
won't see this in any other hearing room anywhere in the 
Senate. I think we kind of like it that way.
    Thank you very much, Senator Conrad.
    Senator Klobuchar?
    Senator Klobuchar. Thank you, Mr. Chairman. I welcome our 
visitors from North Dakota. I note that in Chairman Harkin's 
spirit of friendliness, I appreciate that you not bring up the 
embarrassing loss of my State to the North Dakota football 
team.
    [Laughter.]
    Senator Klobuchar. But I did want to talk a little bit 
about sort of following up on what Senator Conrad was talking 
about, which is the need to get this farm bill through and find 
this revenue, the fact that the last farm bill came in $17 
billion under budget, and really the revitalizing effect it had 
on so many of our rural communities.
    I was thinking about this as I thought about the stimulus 
package that we are talking about. While you were testifying, I 
was looking at some papers about that and I think that is 
important, but we really also have to look to the long-term, 
and what I saw in my State in this past month was just this 
enormous potential, of course, with wind and solar and all of 
these things, and make sure that we have policies in place also 
to keep promoting really the next generation of ethanol, the 
cellulosic ethanol, which is what I wanted to focus on here.
    The corn-based ethanol, the biodiesel, soybean-based 
biodiesel, very important to our State. I think it is going to 
get more and more efficient as we go forward. I have talked to 
President Bush about this. I know he supports it. But I also 
want you to note to him and to the administration the important 
energy policies in this farm bill with the incentives for 
cellulosic ethanol and the Biomass Crop Transition Assistance 
Program. There is a similar one on the House side.
    I just see this, if we are going to truly break the 
shackles and the dependence on foreign oil, that we are going 
to have to look to other forms of biomass, as well, and I 
wondered if you would comment about this and about looking at 
this farm bill also as jobs and stimulus for our rural economy.
    Mr. Schafer. Thank you, Senator. I really appreciate the 
question because this is an issue that I have been heavily 
involved in both as a Governor and as an individual for many, 
many years. I especially liked your comment about the ability 
to move the energy arena into a more self-sufficient--I am 
paraphrasing, but a more self-sufficient arena, because in 
1996, I was Chairman of the Interstate Oil and Gas Compact 
Commission, which are all of the oil and gas producing States 
in the country.
    As Chairman, I helped author a pamphlet that was titled, 
``America: A Dependent Nation.'' At that time, we predicted 
when oil imports were a little over 50 percent that there will 
come a time about now that oil imports will be over 65 percent. 
As we put together that forecast, we put together ways that we 
can lessen our dependence on foreign energy sources.
    I firmly believe that merging the energy and agriculture 
arenas is a way to do that. We have seen the ethanol, and I 
have supported value-added agriculture in our State, both in 
fuels and other energy sources. But importantly, as we have 
seen the bioenergy increases, we have seen pressures on other 
areas--food prices, feed prices as people have moved their 
cropping patterns from wheat to corn and those prices have gone 
up. Wheat prices have gone up. We are seeing the effects.
    I believe one of the most important things that we can do 
to move forward is to continue the effort, the research, the 
resources to make sure that we move energy efficiency into the 
next level or the next area by finding feedstocks that don't 
affect prices, that don't affect food price, et cetera. So 
switchgrass and the other feedstocks that go into bioenergy, I 
think are one of the most important issues that we can do as we 
move from--keeping the focus on renewable energy, but moving 
from feedstocks that affect food prices and other feed prices 
and things into crops that don't do that, and certainly the 
cellulosic ethanol research and effort that is in place is 
going to move us in a big direction to do that.
    Senator Klobuchar. Thank you, and I note I was listening to 
Senator Roberts talk about the green part of the bill, that 
this is also a green part of the bill as we look at putting 
carbon back into the soil and expanding on the successful 
ethanol biodiesel we have.
    Just the last thing I wanted to mention was in the USDA's 
farm bill proposals, is on our reform issue, and I spoke 
earlier about the need to keep considering some of the adjusted 
gross income issues. But in the proposal, the USDA talked about 
new rules that strengthen the now difficult-to-measure 
requirements for the active management contribution to the 
operation that enables individuals or entities to qualify for 
commodity program payments without contributing labor to the 
operation. I believe that the vast--the commodity payments are 
only 15 percent of the farm bill. The vast amount of them go to 
the people who deserve them. But, of course, we have these 
Beverly Hills 90210, almost 100 people getting farm payments.
    I am just wondering, in addition to some of the work we 
have done here with the three-entity rule and the potential 
work we can do with the income limits, if there is movement 
afoot in the USDA to do some rulemaking or move with that or if 
you would be interested in doing that to make sure that the 
money is going to the farmers that deserve it.
    Mr. Schafer. I appreciate you bringing that up, Senator, 
because I think the response is what the people are asking for. 
The people want to make sure that their tax dollars are spent 
wisely, efficiently, and that they go to the people that need 
them. And as you have worked with the Committee and on the 
floor championing some of those issues, others have, as well, 
and there has been, I think, good listening to the people 
across this country to say, we need to channel these dollars in 
where they need to go. We need to get them to the people that 
need the help and we maybe don't have to give them to the 
people that don't need the help.
    Importantly, I believe that as we--I can't tell you right 
now where I think the actual line is or what that cutoff level 
should be. I note that both the House and the Senate have made 
progress toward moving that area. They have made some reforms 
in the three-entity rule, as you mentioned, but also in 
lowering the subsidy caps, maybe not as far as some wanted to 
go, maybe farther than others wanted to go, but I look forward 
to, if I am confirmed, to getting involved in that debate 
because I think what it really is, is shepherding the people's 
money properly and performing to what they want to do. I know 
you have some strong issues on that and I would look forward to 
working with you to try to do so.
    Senator Klobuchar. Thank you.
    Chairman Harkin. Thank you, Senator.
    Senator Lincoln?
    Senator Lincoln. Thank you, Mr. Chairman.
    Well, Governor, when you are the last on the list, almost 
everything has been said or asked. You just have to kind of 
reiterate it again, so I will try to piggyback on some of what 
my colleagues have said. I would like to echo what Senator 
Coleman mentioned. I have been home in Arkansas an awful lot 
and I have been meeting with a lot of farmers who have been 
also meeting with their bankers and I think there needs to be a 
clear voice in terms of what they can expect for the 2008 crop 
year, and so I hope that as we move forward working on the farm 
bill, that at some point, there is a clear message of what they 
can expect and what they are going to be expected to adhere to 
in that 2008 crop year, because they are going to have to file 
their plans with you by April 1, I believe, and being able to 
go to their bankers and make those plans is critical.
    I also hope that you will take a look at all that we have 
done already. I know Senator Klobuchar mentions the need for 
reform, and we have done a good deal in this bill. We have got 
more reform in the bills that we have passed up here than 
really in the history of the farm bill, a 70 percent cut in 
some of those caps, or certainly the means testing that is 
being asked. It is important, because quite frankly, from the 
GAO studies that we have had, it indicates to us that before, 
at least I would hope before we would take further steps than 
that 70 percent cut, not knowing what the consequences are, 
that we would have a better idea, and their studies indicate to 
us that USDA has not been implementing a lot of the underlying 
law. So it would be hard to figure where we are really going 
and what those consequences would be.
    So I hope under your leadership you can take a look at 
that, as well, in terms of what is being implemented and what 
is not so that we don't take unintended consequences from 
making much deeper cuts than the 70 percent we have already 
gone. So I think that is going to be critical to look at.
    I think it is also important to remember what the farm bill 
does. Senator Klobuchar mentioned the commodity programs and 
the commodity title are less than 15 percent of the whole bill. 
There are so many other things that provide us unbelievable 
stimulus in our rural communities, rural development, nutrition 
programs, nutrition assistance, conservation, all of those are 
critical and we look forward to making sure that they are 
something that is implementable.
    I know you have mentioned that you are looking forward to 
getting over there when we visited, taking charge with the 
implementation of new authorities that might be included in 
this legislation and some that already exist. I would also like 
to encourage you--in the 2002 farm bill, we brought about a new 
office at USDA, which was the Assistant Secretary for Civil 
Rights. We have asked time and time again to see action out of 
that office and I hope to encourage you to seize that 
opportunity. There is much more that could be done there at a 
much more rapid pace that I think would bring about a great 
deal of justice to some farmers across our country.
    I also hope that you will take into consideration--I don't 
know what your opinions are, but when payments follow 
production, it is much like I imagine what your father faced as 
he grew his business, that oftentimes when you are faced with 
growing crops that you are suited to grow that have much 
stricter trade parameters and trade restrictions than perhaps 
sugar or other things might have, that you have to farm an 
economy of scale. If your father hadn't branched out and 
started building an economy of scale in that business, it might 
have been more difficult to be successful or to even grow his 
business.
    So I think those are certainly important things that I hope 
that you will pay attention to. The role that you have to play, 
I hope you are excited about embracing that, particularly at 
this delicate time that we find ourselves in crafting a farm 
bill. I know that the Under Secretary has been very diligent. 
He has to be. He is a former staffer from Senator Lugar's 
staff. And he does a great job in working and being in contact 
with us. But we hope that you will embrace that opportunity to 
take a role of leadership in there.
    The last thing, when you talk about implementing, one of 
the other things we hear a tremendous amount about in our farm 
States from our growers and from our farm families is the 
deadlines, the regulations, all of which they have to meet. 
They are not capable of doing it online just yet. I know that 
all of us want to move into the technological age. They do 
require a lot of assistance from FSA and we hope that you will 
work to strengthen both your field offices with the Farm 
Services, but also USDA.
    I know we have great USDA workers in our great State of 
Arkansas and we encourage that from the top down, you will 
encourage that engagement and support to those workers because 
they, in turn, are the ones--they can't file their plans--our 
farmers can't file their plans if they don't have the 
information that comes from your agency. And so that connection 
and that working relationship is absolutely critical and I hope 
that you will engage in a one-on-one opportunity to really work 
with the staff that you have in all of these States to really 
be the useful and helpful agency that USDA can and should be 
and is oftentimes when they have the resources and when they 
have the equipment.
    We look forward to working with you, as I said. I think 
many of us take a great sense of pride that we have sat around 
the table as we do here to come up with a very good, balanced, 
bipartisan bill focused on reform, but also putting added 
resources into things that are very important, whether it is 
the hunger issue we deal with and the nutrition assistance that 
is there, the conservation programs and others, they are all 
very important to us.
    So I hope that we can continue that work together. I know 
you are going to get to the agency and get into all kinds of 
things, so I just thought I would point out to you the things 
that I look to you for in terms of your leadership roles and 
the things that I hope you will embrace and engage in quickly.
    Mr. Schafer. Thank you, Senator.
    Senator Lincoln. Thank you.
    Chairman Harkin. Thank you, Senator.
    Governor, we are more than willing to expedite this 
process, and we will to the extent possible that we can, but 
now I am going to ask you to expedite something. In 2006, 
Congress reauthorized and the President signed into law the 
Livestock Mandatory Reporting Act. The program is critical to 
providing much-needed transparency in livestock markets. 
Senator Grassley was one of the big proponents of this. The 
reported prices and other information by USDA has become an 
important part of fair prices paid for livestock in the United 
States.
    Two years later, unfortunately, the USDA has still not 
published a final rule for this important program. As a result, 
it is still functioning as a voluntary program, leaving the 
door open for less than completely accurate reporting. And I 
have got to tell you, this is during a time when I know all the 
prices, wheat prices are good, bean prices are good, corn are 
all great prices out there, but all of the prices are in the 
tank and our pork producers need this vital information.
    So as Secretary, will you make implementation of the final 
rule for this program a priority and publish the final rule 
without further delay?
    Mr. Schafer. I will do my best, Mr. Chairman.
    Chairman Harkin. Well, I hope you will do your best.
    [Laughter.]
    Chairman Harkin. Two other questions. During his 
confirmation 3 years ago, Secretary Mike Johanns was asked more 
than once about what he would do with regard to reopening U.S. 
beef trade with Japan. He stated that reopening Japan was his 
priority No. 1 and that he would be taking a personal 
leadership role on that issue. Well, although we have resumed 
the beef trade somewhat, it is still on a limited basis. 
Problems continue in fully reopening trade for U.S. beef and 
our producers are frustrated.
    As Secretary, what will you do differently at the 
Department to reopen our Asian markets for U.S. beef? What do 
you think is the problem? And how soon can you address this?
    Mr. Schafer. Thank you, Mr. Chairman. I am looking forward 
to that effort and start addressing it upon confirmation. I 
understand the issues of trade. As was mentioned earlier, I 
have led a trade delegation to China from North Dakota. I also 
represented President Clinton in China on an effort when this 
body was working on the Most Favored Nation status and moving 
China into the WTO. I am anxious to get involved in these 
negotiations and the President has asked me directly to be 
involved in working with the trade negotiators and the other 
agencies to deal with this issue.
    I know--you asked, Mr. Chairman, what is the basis of it, 
what are the problems out there, and I think importantly to 
note that there are science-based standards for our agriculture 
exports and imports that are accepted by the International 
Export Society or international governments. The OIE standards 
are agreed to be met, and Japan does it and South Korea does it 
and the United States does it and others agree to those 
standards. Sometimes things get a little off whack and they 
move away from those standards, but I know for a fact that 
those OIS standards have declared the United States--the 
ability for our beef meets the standards, they meet the OIG 
direction. Other countries have agreed to follow those, and if 
I am confirmed, I am looking forward to getting over there and 
pushing as hard as I can to make sure that these countries that 
have agreed to the science-based standards will actually do so.
    Chairman Harkin. Well, I hope so, and we have to make it 
very clear. I mean, I have talked to our Korean friends, and 
they are our friends. They are good allies, a great nation. We 
want--I know the President wants a Free Trade Agreement with 
Korea. I am not opposed to that, but not as long as they 
continue to restrict access for U.S. beef. Every time they do 
something like that, the further away that Free Trade Agreement 
becomes, and I hope you take that message loud and clear to the 
President.
    I have told my Korean friends that, unless and until they 
get serious and do the right thing on our beef trade with them, 
they can forget about the Free Trade Agreement. But we have got 
a real problem with the Koreans on it, and Japan, too, I might 
add.
    Mr. Schafer. Yes.
    Chairman Harkin. One last question. Governor Schafer, the 
biographical information you submitted to the Committee said 
that you served as President of a company called Fish 'N Dakota 
from 1991 to 1997, most of the time that you were also serving 
as Governor of North Dakota. Now, I have looked at the 
information you provided, as well as some news articles, and I 
don't know that much about it but from what I gather there were 
some problems regarding taxes and sale of the business. Like I 
said, I don't intend to get into all of the details, however 
there were a lot of press reports about loans and obligations 
incurred during your tenure that maybe were not paid in a 
timely manner. There were some lawsuits and delinquencies.
    My only question is this, for the record. Can you assure 
this Committee that all obligations for this business venture 
have been paid in full, and second, that any obligations were 
not paid through government guarantees or write-offs drawing 
upon government funds?
    Mr. Schafer. Thank you for the opportunity to clarify that. 
That issue, Mr. Chairman, is one that I have talked about 
before, and as you mentioned, has been in the news and reports 
of those things. I appreciated receiving a letter from the 
Committee on that issue last Friday. I have responded in 
writing----
    Chairman Harkin. We have that.
    Mr. Schafer. And noting that, I don't know how many million 
forms I filled out during this process, but a lot of them were 
to do with financial disclosure and whether I owed any money or 
if there were any loans and outstanding balances, et cetera. I 
have filled all those forms out honestly and correctly, and as 
I did in writing, I want to assure you that any obligation for 
Fish 'N Dakota as a company while I owned that company has been 
satisfied, and any personal obligation that I have in place for 
any loans, taxes, amounts due for Fish 'N Dakota, I have paid 
in full.
    Chairman Harkin. Were any paid through government 
guarantees or write-offs drawing upon government funds, that 
you know of?
    Mr. Schafer. Not that I am aware of, sir. I believe that 
several of the loans were a Community Block Grant loan from a 
county, were from a cooperative or a county, and an electric 
cooperative that lent money to the company. Those have all been 
paid.
    Chairman Harkin. Very good. Thank you very much. I have no 
further questions. Does anybody have any follow-up questions at 
all?
    We had asked committee members for any written questions 
they had to be submitted by 6 p.m. Maybe that is not feasible 
now. But let me just say for all the staff that is here, if any 
of your Senators may not have been here or if they have a 
follow-up question, if we could have those in writing tonight 
by 8 or so tonight. Fair enough? So if you have those 
additional questions, get them in tonight. If we don't have 
any, then we don't have any, but I want to give an opportunity 
for Senators that may not have been able, to attend, if they 
had a question or two, to get that in writing which we will 
then submit to you for your response, Governor.
    Yes?
    Senator Conrad. Mr. Chairman, might I inquire if there is a 
possibility that the Committee could take early action? This is 
an unusual situation. I would not normally ask this, but it may 
be a once-in-a-lifetime opportunity for Governor Schafer to be 
able to enter the chamber for the President's State of the 
Union with the rest of the cabinet. Is there any possibility 
that we could have an early vote out of the Committee so that 
confirmation could be considered on the floor?
    Chairman Harkin. Well, I don't know. We were just 
discussing that at the beginning of the hearing here.
    Senator Chambliss. Mr. Chairman, I didn't realize you had 
indicated to folks they need to get their questions in by 6. I 
mean, this is as big a crowd as we have had for any 
confirmation hearing, I think in the last several years, and it 
looks like everybody has had a full chance to be here. If you 
have told others to have their questions in by 6, maybe we 
could move this earlier tonight. I have gotten an indication 
from all of my members who have been here that they will be 
ready to come back on a moment's notice to try to get a quorum 
together. Let us get this nomination passed out early this 
evening.
    Chairman Harkin. Well, I don't know how late we are going 
to be in, but I had, because of another committee meeting, 
Appropriations, I had to delay this until 2:30, so I thought, 
well, we can give them an extra hour. But if we don't hear 
something back from other Senators by--how about 7, give them 
another hour to do that.
    The problem is, the Senate rules wouldn't allow us to--we 
don't have a quorum, so we can't report it out, so----
    Senator Chambliss. I believe we only need 11, though, to 
have a quorum, isn't that right? We can't do it now, but if we 
could do it at 7, try to get 11 of us together----
    Chairman Harkin. We will examine what we can do. I 
understand that. I appreciate that. I have no problems with 
that. Sometimes bureaucracy is a terrible thing around here, to 
try to get things working and get it done, but we will try our 
best. That is all I can tell you. We will try our best.
    Senator Conrad. I would just say, Mr. Chairman, I would 
certainly appreciate it personally if we could find a way, and 
I think this Committee under your leadership has been already 
so gracious. I again want to just say how much I appreciate 
what you have already done.
    Chairman Harkin. Well, thank you very much, Senator Conrad, 
and we will do everything we can to expedite this. Sometimes 
these wheels turn very slowly for some things, but we will try 
our best. That is all I can tell you. I give you my word on 
that. We will try our best to get it done before Monday 
evening. That is all I can tell you.
    Senator Conrad. I appreciate that.
    Chairman Harkin. Anything else, Governor?
    Mr. Schafer. Thank you, sir. I appreciate your time.
    Chairman Harkin. Thank you very much, Governor. Thank you 
all for being here.
    The committee will stand adjourned. Now, I don't know when 
we are going to try to get this together to report this out, 
but we will try to work something out. That is all I can tell 
you. I will work with Senator Chambliss on it. Thank you.
    [Whereupon, at 5:44 p.m., the Committee was adjourned.]
      
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                            A P P E N D I X

                            January 24, 2008



      
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                   DOCUMENTS SUBMITTED FOR THE RECORD

                            January 24, 2008



      
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                         QUESTIONS AND ANSWERS

                            January 24, 2008



      
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