[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]



   HEARING TO REVIEW THE REGULATORY AND LEGISLATIVE STRATEGIES IN THE
                        CHESAPEAKE BAY WATERSHED

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

                                HEARING

                               BEFORE THE

                 SUBCOMMITTEE ON CONSERVATION, CREDIT,
                          ENERGY, AND RESEARCH

                                 OF THE

                        COMMITTEE ON AGRICULTURE
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                            DECEMBER 9, 2009

                               __________

                           Serial No. 111-40


          Printed for the use of the Committee on Agriculture
                         agriculture.house.gov






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                        COMMITTEE ON AGRICULTURE

                COLLIN C. PETERSON, Minnesota, Chairman

TIM HOLDEN, Pennsylvania,            FRANK D. LUCAS, Oklahoma, Ranking 
    Vice Chairman                    Minority Member
MIKE McINTYRE, North Carolina        BOB GOODLATTE, Virginia
LEONARD L. BOSWELL, Iowa             JERRY MORAN, Kansas
JOE BACA, California                 TIMOTHY V. JOHNSON, Illinois
DENNIS A. CARDOZA, California        SAM GRAVES, Missouri
DAVID SCOTT, Georgia                 MIKE ROGERS, Alabama
JIM MARSHALL, Georgia                STEVE KING, Iowa
STEPHANIE HERSETH SANDLIN, South     RANDY NEUGEBAUER, Texas
Dakota                               K. MICHAEL CONAWAY, Texas
HENRY CUELLAR, Texas                 JEFF FORTENBERRY, Nebraska
JIM COSTA, California                JEAN SCHMIDT, Ohio
BRAD ELLSWORTH, Indiana              ADRIAN SMITH, Nebraska
TIMOTHY J. WALZ, Minnesota           ROBERT E. LATTA, Ohio
STEVE KAGEN, Wisconsin               DAVID P. ROE, Tennessee
KURT SCHRADER, Oregon                BLAINE LUETKEMEYER, Missouri
DEBORAH L. HALVORSON, Illinois       GLENN THOMPSON, Pennsylvania
KATHLEEN A. DAHLKEMPER,              BILL CASSIDY, Louisiana
Pennsylvania                         CYNTHIA M. LUMMIS, Wyoming
ERIC J.J. MASSA, New York
BOBBY BRIGHT, Alabama
BETSY MARKEY, Colorado
FRANK KRATOVIL, Jr., Maryland
MARK H. SCHAUER, Michigan
LARRY KISSELL, North Carolina
JOHN A. BOCCIERI, Ohio
SCOTT MURPHY, New York
EARL POMEROY, North Dakota
TRAVIS W. CHILDERS, Mississippi
WALT MINNICK, Idaho

                                 ______

                           Professional Staff

Robert L. Larew, Chief of Staff      Nicole Scott, Minority Staff 
Andrew W. Baker, Chief Counsel       Director
April Slayton, Communications 
Director

                                  (ii)


       Subcommittee on Conservation, Credit, Energy, and Research

                   TIM HOLDEN, Pennsylvania, Chairman

STEPHANIE HERSETH SANDLIN, South     BOB GOODLATTE, Virginia, Ranking 
Dakota                               Minority Member
DEBORAH L. HALVORSON, Illinois       JERRY MORAN, Kansas
KATHLEEN A. DAHLKEMPER,              SAM GRAVES, Missouri
Pennsylvania                         MIKE ROGERS, Alabama
BETSY MARKEY, Colorado               STEVE KING, Iowa
MARK H. SCHAUER, Michigan            RANDY NEUGEBAUER, Texas
LARRY KISSELL, North Carolina        JEAN SCHMIDT, Ohio
JOHN A. BOCCIERI, Ohio               ADRIAN SMITH, Nebraska
MIKE McINTYRE, North Carolina        ROBERT E. LATTA, Ohio
JIM COSTA, California                BLAINE LUETKEMEYER, Missouri
BRAD ELLSWORTH, Indiana              GLENN THOMPSON, Pennsylvania
TIMOTHY J. WALZ, Minnesota           BILL CASSIDY, Louisiana
ERIC J.J. MASSA, New York
BOBBY BRIGHT, Alabama
FRANK KRATOVIL, Jr., Maryland
SCOTT MURPHY, New York
WALT MINNICK, Idaho
EARL POMEROY, North Dakota

               Nona Darrell, Subcommittee Staff Director

                                 (iii)














                             C O N T E N T S

                              ----------                              
                                                                   Page
Goodlatte, Hon. Bob, a Representative in Congress from Virginia, 
  opening statement..............................................     3
    Prepared statement...........................................     4
    Submitted letters on behalf of:
        Maryland Grain Producers Association.....................   103
        Agri-Mark, Inc., et al...................................   104
        Johnson, Donna Pugh, President, Virginia Agribusiness 
          Council................................................   106
        Schwartz, Stewart, Coalition for Smarter Growth, et al...   108
Holden, Hon. Tim, a Representative in Congress from Pennsylvania, 
  opening statement..............................................     1
    Prepared statement...........................................     3
    Supplementary material.......................................    93
Peterson, Hon. Collin C., a Representative in Congress from 
  Minnesota, prepared statement..................................     5
Thompson, Hon. Glenn, a Representative in Congress from 
  Pennsylvania; submitted letter on behalf of:
        Shaffer, Carl, President, Pennsylvania Farm Bureau.......   109

                               Witnesses

Mills, Ann, Deputy Under Secretary for National Resources and 
  Environment, U.S. Department of Agriculture, Washington, D.C...     5
    Prepared statement...........................................     7
Fox, J. Charles, Senior Advisor to Administrator Lisa P. Jackson, 
  U.S. Environmental Protection Agency, Washington, D.C..........    12
    Prepared statement...........................................    13
Redding, Russell C., Acting Secretary, Pennsylvania Department of 
  Agriculture, Harrisburg, PA....................................    20
    Prepared statement...........................................    24
Stoneman III, Wilmer N., Associate Director of Governmental 
  Relations, Virginia Farm Bureau Federation, Richmond, VA.......    46
    Prepared statement...........................................    48
Schwalb, Steve, Vice President of Environmental Sustainability, 
  Perdue Farms, Incorporated, Salisbury, MD......................    55
    Prepared statement...........................................    57
Curatolo, James A., Watershed Coordinator, Upper Susquehanna 
  Coalition, Burdett, NY.........................................    67
    Prepared statement...........................................    69

                           Submitted Material

Connolly, Hon. Gerald E. a Representative in Congress from 
  Virginia; submitted letters on behalf of:
        Baldwin, Malcolm F., Co-Owner, Weather Lea Farm..........   110
        Blake, David, Buckland Farm..............................   111
Cummings, Hon. Elijah E., a Representative in Congress from 
  Maryland, submitted statement..................................    85
Delmarva Poultry Industry, Inc., submitted statement.............   114
Phipps, W. Michael, President, Maryland Farm Bureau, Inc., 
  submitted letter...............................................   112
The Nature Conservancy, submitted letter.........................   118

 
   HEARING TO REVIEW THE REGULATORY AND LEGISLATIVE STRATEGIES IN THE 
                         CHESAPEAKE BAY WATERSHED

                              ----------                              


                      WEDNESDAY, DECEMBER 9, 2009

                  House of Representatives,
 Subcommittee on Conservation, Credit, Energy, and 
                                          Research,
                                  Committee on Agriculture,
                                                   Washington, D.C.
    The Subcommittee met, pursuant to call, at 10:05 a.m., in 
Room 1300, Longworth House Office Building, Hon. Tim Holden 
[Chairman of the Subcommittee] presiding.
    Members present: Representatives Holden, Dahlkemper, 
Schauer, Kissell, Boccieri, McIntyre, Ellsworth, Massa, Bright, 
Kratovil, Murphy, Minnick, Goodlatte, Neugebauer, Smith, and 
Thompson.
    Staff present: Christy Birdsong, Claiborn Crain, Nona 
Darrell, Tyler Jameson, John Konya, James Ryder, Anne Simmons, 
April Slayton, Debbie Smith, Rebekah Solem, Patricia Barr, Josh 
Maxwell, and Sangina Wright.

   OPENING STATEMENT OF HON. TIM HOLDEN, A REPRESENTATIVE IN 
                   CONGRESS FROM PENNSYLVANIA

    The Chairman. This hearing of the Subcommittee on 
Conservation, Credit, Energy, and Research to review the 
regulatory and legislative strategies in the Chesapeake Bay 
Watershed will come to order. I would like to thank our 
witnesses and guests for coming today.
    This hearing presents an opportunity for Members of the 
Subcommittee to review the regulatory and legislative 
strategies in the Chesapeake Bay Watershed. The Chesapeake Bay 
is the nation's largest and most diverse estuary, and has been 
recognized by Congress as a national treasure. The Bay is home 
to more than 3,600 species of plants and animals, and is 
recognized as the most significant migration and wintering 
habitat in the Atlantic flyway. It is important that we protect 
its fragile ecosystem.
    Despite some areas of progress, improving water quality in 
the Bay remains the most critical element in bringing about 
restoration. Agriculture has been an important part of the 
Chesapeake's landscape, comprising almost a quarter of the 
watershed, and it can play a significant role in the Bay 
cleanup. Farmers and ranchers have always been the original 
stewards of the land and continue to be the best advocates for 
resource conservation.
    Last week, Members of this Subcommittee heard testimony 
from Dr. Jude Capper, Assistant Professor of Dairy Science at 
Washington State University. Dr. Capper's research found that 
over the past 65 years, the carbon footprint of the entire 
dairy industry has been reduced by 41 percent through the 
voluntary adoption of technologies and modern management 
practices that improve productivity. This includes a 65 percent 
reduction in water use, a 76 percent reduction in manure 
output, and a 90 percent reduction in total land required for 
milk production. The dairy industry is not alone in finding 
ways to increase productivity while decreasing pollution.
    Efforts continue, even though the Chesapeake Bay farmers 
receive significantly less money for environmental protection 
practices, and despite being under some of the most stringent 
environmental regulations.
    The 2008 Farm Bill took significant steps to address this 
under-funding and made many improvements to USDA conservation 
programs. These programs are important tools that farmers and 
ranchers use to protect the environment and address local 
resource concerns.
    The strong conservation title in the farm bill included a 
$7.9 billion increase in conservation funding. Included in this 
was a $3.4 billion increase in the Environmental Quality 
Incentive Program, which helps producers implement practices 
that enhance soil and water quality while conserving energy.
    Perhaps most significant to today's discussion, the title 
created a new Chesapeake Bay Watershed Program of $438 million 
initiative to help reduce nutrients and sediment that can flow 
from farms and forestland into the Chesapeake Bay. This program 
applies to all tributaries, backwaters and side channels 
running into the Bay, including the Susquehanna River, which 
runs through my Congressional district, Pennsylvania's 17th.
    This new program will help to improve water quality and 
quantity, restore, enhance and preserve wildlife habitat and 
increase economic opportunity for rural communities and 
producers. Agricultural practices can be some of the most cost-
effective at improving water quality in the region, and the 
agriculture community and USDA stand ready to improve water 
quality and wildlife habitat.
    The Chesapeake Bay Watershed Program and other conservation 
efforts included in the 2008 Farm Bill have only recently been 
implemented, and we have yet to see their full impact. It is 
important that we allow these efforts to take effect to further 
elevate the environmental stewardship of farmers across the 
Chesapeake Bay Watershed before adding increased regulations.
    I remain committed to working with NRCS and FSA, as well as 
EPA, to ensure that Chesapeake Bay conservation programs are 
implemented as effectively as possible while minimizing the 
burdens on producers.
    I look forward to hearing from our witnesses today.
    [The prepared statement of Mr. Holden follows:]

  Prepared Statement of Hon. Tim Holden, a Representative in Congress 
                           from Pennsylvania
    I would like to thank our witnesses and guests for coming today. 
This hearing presents an opportunity for Members of the Subcommittee to 
review the regulatory and legislative strategies in the Chesapeake Bay 
Watershed.
    The Chesapeake Bay is the nation's largest and most diverse estuary 
and has been recognized by Congress as a national treasure. The Bay is 
home to more than 3,600 species of plants and animals, and is 
recognized as the most significant migration and wintering habitat in 
the Atlantic Flyway. It is important that we protect its fragile 
ecosystem.
    Despite some areas of progress, improving water quality in the Bay 
remains the most critical element in bringing about restoration.
    Agriculture has been an important part of the Chesapeake's 
landscape, comprising almost a quarter of the watershed, and it can 
play a significant role in the Bay cleanup. Farmers and ranchers have 
always been the original stewards of the land and continue to be the 
best advocates for resource conservation.
    Last week, Members of this Subcommittee heard testimony from Dr. 
Jude Capper, Assistant Professor of Dairy Science at Washington State 
University. Dr. Capper's research found that over the past 65 years, 
the carbon footprint of the entire dairy industry has been reduced by 
41 percent through the voluntary adoption of technologies and modern 
management practices that improved productivity. This includes a 65 
percent reduction in water use, a 76 percent reduction in manure 
output, and a 90 percent reduction in total land required for milk 
production.
    The dairy industry is not alone in finding ways to increase 
productivity while decreasing pollution. Efforts continue even though 
Chesapeake Bay farmers receive significantly less money for 
environmental protection practices, and despite being under some of the 
most stringent environmental regulations.
    The 2008 Farm Bill took significant steps to address this under-
funding and made many improvements to USDA conservation programs. These 
programs are important tools that farmers and ranchers use to protect 
the environment and address local resource concerns.
    The strong conservation title in the farm bill included a $7.9 
billion increase in conservation funding. Included in this was a $3.4 
billion increase in the Environmental Quality Incentives Program (EQIP) 
which helps producers implement practices that enhance soil and water 
quality while conserving energy.
    Perhaps most significant to today's discussion, the title created a 
new Chesapeake Bay Watershed Program, a $438 million initiative to help 
reduce nutrients and sediment which can flow from farm and forestland 
into the Chesapeake Bay. This program applies to all tributaries, 
backwaters, and side channels draining into the Bay, including the 
Susquehanna River which runs through my home district, Pennsylvania's 
17th. This new program will help to improve water quality and quantity; 
restore, enhance and preserve wildlife habitat; and increase economic 
opportunity for rural communities and producers.
    Agricultural practices can be some of the most cost-effective at 
improving water quality in the region and the agriculture community and 
USDA stand ready to improve water quality and wildlife habitat.
    The Chesapeake Bay Watershed Program and other conservation efforts 
included in the 2008 Farm Bill have only recently been implemented and 
we have yet to see their full impact. It is important that we allow 
these efforts to take effect to further elevate the environmental 
stewardship of farmers across the Chesapeake Bay Watershed before 
adding increased regulations.
    I remain committed to working with NRCS and FSA, as well as EPA, to 
ensure that Chesapeake Bay conservation programs are implemented as 
efficiently as possible, while minimizing burdens on producers. I look 
forward to hearing from our witnesses today.

    The Chairman. I now recognize the Ranking Member of the 
Subcommittee, the gentleman from Virginia, Mr. Goodlatte.

 OPENING STATEMENT OF HON. BOB GOODLATTE, A REPRESENTATIVE IN 
                     CONGRESS FROM VIRGINIA

    Mr. Goodlatte. Well, Mr. Chairman, thank you for holding 
today's hearing to review the regulatory and legislative 
strategies in the Chesapeake Bay Watershed.
    The Chesapeake Bay, the largest estuary in the United 
States, is an incredibly complex ecosystem that includes 
important habitats and is a cherished part of our American 
heritage. The Bay Watershed includes all types of land uses, 
from intensely urban areas, spread-out suburban development, 
and diverse agricultural practices. But unquestionably, the Bay 
is in need and worthy of our attention and concern, and I 
believe everyone has a role to play in restoring it.
    That is why I worked with Congressman Holden and other 
Members of this Committee during the 2008 Farm Bill to include 
critical funding to help farmers comply with increasing and 
costly environmental regulations. The approach we took in the 
farm bill was to provide unprecedented incentive-based 
mandatory money for farmers and ranchers to improve management 
practices. These incentive-based programs are the tools that 
our farmers and ranchers need to restore and protect the Bay 
and our watersheds, while continuing to provide the U.S. with 
the safest, most affordable, most abundant feed and fiber 
supply in the world.
    Unfortunately, today we are here due to a Presidential 
Executive Order and legislation that would codify this Order 
which would enforce more mandates and overzealous regulation of 
our producers. This strategy will limit economic growth and 
unfairly over-regulate agriculture in the Chesapeake Bay 
Watershed.
    The 2008 Farm Bill provides mandatory money specifically 
for the Bay in addition to numerous voluntary conservation 
programs. The Administration has barely released any of these 
conservation dollars before the announcement of this Executive 
Order. In addition, the Administration continues to call for 
budget cuts to EQIP and other conservation program funding 
which would help farmers in the Bay Watershed even more.
    The goal for all involved is the same: the continued health 
and vitality of the Bay. But the map to that health and 
vitality is being strongly debated. It is a clear choice, over-
regulation and intrusion into the lives and livelihoods of 
those who chose to make the Chesapeake Bay Watershed their 
home; or incentive-based programs that help restore and protect 
our natural resources.
    This Administration fails to realize that command and 
control over citizen's lives is no way to govern.
    Again, thank you, Chairman Holden, for holding today's 
hearing. I look forward to hearing today's testimony.
    [The prepared statement of Mr. Goodlatte follows:]

Prepared Statement of Hon. Bob Goodlatte, a Representative in Congress 
                             from Virginia
    Mr. Chairman, thank you for holding today's hearing to review the 
regulatory and legislative strategies in the Chesapeake Bay Watershed.
    The Chesapeake Bay, the largest estuary in the U.S., is an 
incredibly complex ecosystem that includes important habitats and is a 
cherished part of our American heritage. The Bay Watershed includes all 
types of land uses, from intensely urban areas, spread out suburban 
development and diverse agricultural practices. But unquestionably the 
Bay is in need and worthy of our attention and concern and I believe 
everyone has a role to play in restoring it.
    That is why I worked with Congressman Holden and other Members of 
this Committee during the 2008 Farm Bill to include critical funding to 
help farmers comply with increasing and costly environmental 
regulations. The approach we took in the farm bill was to provide 
unprecedented incentive-based mandatory money for farmers and ranchers 
to improve management practices.
    These incentive based programs are the tools that our farmers and 
ranchers need to restore and protect the Bay and other watershed's, 
while continuing to provide the U.S. with the safest, most affordable, 
most abundant feed and fiber supply in the world. Unfortunately, today 
we are here due to a Presidential Executive Order, and legislation that 
would codify this Order, which would enforce more mandates and 
overzealous regulation on our producers. This strategy will limit 
economic growth and unfairly over regulate agriculture in the 
Chesapeake Bay Watershed.
    The 2008 Farm Bill provides mandatory money specifically for the 
Bay in addition to numerous voluntary conservation programs. The 
Administration has barely released any of these conservation dollars 
before the announcement of this Executive Order. In addition, the 
Administration continues to call for budget cuts to EQIP and other 
conservation program funding which could help farmers in the Bay 
Watershed even more.
    The goal from all involved is the same, the continued health and 
vitality of the Bay, but the map to that health and vitality is being 
strongly debated. It is a clear choice, over-regulation and intrusion 
into the lives and livelihoods of those who chose to make the Bay 
Watershed their home, or incentive based programs that help restore and 
protect our natural resources. This Administration fails to realize 
that command and control of citizen's lives is no way to govern.
    Again, thank you, Chairman Holden for holding today's hearing. I 
look forward to hearing today's testimony.

    The Chairman. The chair thanks the gentleman, and would ask 
all other Members of the Subcommittee to submit any opening 
statements for the record.
    [The prepared statement of Mr. Peterson follows:]

  Prepared Statement of Hon. Collin C. Peterson, a Representative in 
                        Congress from Minnesota
    Thank you, Chairman Holden, for holding this oversight hearing to 
look at what we are doing and what needs to be done to improve the 
condition of the Chesapeake Bay Watershed.
    In the 2008 Farm Bill, we included significant resources to help 
farmers, ranchers and forest landowners improve the health of the 
Chesapeake Bay by reducing runoff and improving water quality and 
quantity.
    It is an important responsibility of this Committee to ensure that 
legislation and regulatory action is effectively addressing the 
challenges facing the Chesapeake Bay Watershed. To that end, I am 
looking forward to the testimony and discussion here today.

    The Chairman. I would like to welcome our first panel 
today: Ms. Ann Mills, Deputy Under Secretary for Natural 
Resources and Environment, United States Department of 
Agriculture; Mr. J. Charles Fox, Senior Advisor to the 
Administrator of the Environmental Protection Agency; and Mr. 
Russell C. Redding, Acting Secretary, Pennsylvania Department 
of Agriculture, but that is only until Tuesday when you get 
confirmed. Welcome.
    Ms. Mills, you are may proceed.

  STATEMENT OF ANN MILLS, DEPUTY UNDER SECRETARY FOR NATIONAL 
                RESOURCES AND ENVIRONMENT, U.S.
          DEPARTMENT OF AGRICULTURE, WASHINGTON, D.C.

    Ms. Mills. Thank you.
    Chairman Holden, Ranking Member Goodlatte and Members of 
the Subcommittee, I appreciate the opportunity to appear before 
you today.
    Conservation and restoration of the Chesapeake Bay is a 
major priority for the United States Department of Agriculture. 
At USDA, we view prosperous farms, forests and fisheries as 
integral parts of the watershed's future. The Bay is a national 
treasure, and the features that make it so special are more 
than just the waters of the estuary. They are the landscapes 
that stretch across six states. They are the rural communities 
that are so important to the fabric of this watershed.
    The Chesapeake Bay has the highest land-to-water ratio of 
any estuary in the United States. As a result, what happens on 
the land matters to the Bay and its upland tributaries.
    USDA recognizes the responsibility of agriculture to 
contribute its share to restoring the Bay Watershed. For their 
part, farmers have stepped up. Agriculture has reached 50 
percent of the goals established for nutrient and sediment 
reduction, though more needs to be done.
    In recent years, USDA has been helping these land owners 
achieve their stewardship goals by investing more than $90 
million per year directly on conservation practices and 
projects to benefit the Bay. In the 2008 Farm Bill, this 
Committee provided even further support through the Chesapeake 
Bay Watershed Program's additional $188 million. Agriculture 
cannot, nor should it, bear a disproportional burden of 
addressing the watershed's water quality goals. Nutrient and 
sediment run off from agriculture is on the downward 
trajectory, whereas it is rising in other sectors, notably 
development; 130,000 new residents move into the Bay Watershed 
every year. Every eight percent growth in population translates 
into a 41 percent increase in impervious surfaces, such as 
roads and parking lots. And every acre of parking lot generates 
the same runoff as a 16 acre meadow.
    As the Executive Order's draft strategy states, healthy 
sustainable farms and forests are essential to restoring the 
Bay and are the preferred land use. They also increase rural 
prosperity, provide food, feed and fiber, and protect the 
natural heritage that makes this watershed a natural treasure.
    The USDA is pleased to be part of the Executive Order 
effort and appreciates the opportunity to work closely with our 
sister Federal agencies. USDA believes that voluntary 
agriculture conservation practices and market-based solutions 
will play a central role in achieving Bay health, while also 
ensuring continued prosperity for producers.
    The strategy captured in the Executive Order reports 
contain six recommendations with a goal of equipping producers 
with the incentives, tools and technology and improved 
efficiency of operations to meet water quality challenges and 
protect producers' bottom line. The recommendations include 
focusing funding on high-priority watersheds, working with 
partners to apply the most effective suite of conservation 
practices, and improving accountability.
    This Executive Order calls for a new level of collaboration 
among the Federal family. This will help ensure stronger 
science and better leveraging of Federal dollars. But 
fundamental to the strategy's approach is USDA's continued 
leadership in determining how and where to allocate farm bill 
dollars, including the $188 million Chesapeake Bay Watershed 
program funding.
    Secretary Vilsack is leading USDA with an all-lands 
approach to water quality conservation. We recognize that 
upland activities are vitally important to achieving downstream 
goals. Farmers and landowners in Lancaster or Dauphin Counties 
may never boat or fish in the Chesapeake Bay, yet the 
conservation benefits achieved by our collective Bay 
restoration efforts will be seen and felt first hundreds of 
miles away from the Bay in communities that will experience 
cleaner water and air, and more productive wildlife habitat.
    Farmers across the watershed are being asked to invest real 
money at a time when agriculture is feeling significant 
economic strain. Conservation programs require the farmer to 
assume significant costs as part of implementing expensive 
practices, such as nutrient management systems. Yet producers 
continue to initiate new projects, and USDA continues to have 
backlogs. We are proud to partner with these farmers. USDA 
stands ready to provide the mix of technical help, incentives, 
tools and market opportunities to tackle the challenges ahead.
    In closing, additional details of USDA's role in the 
strategy to restore and conserve the Bay are included in my 
written testimony submitted for the record. I would be happy to 
respond to any questions that Members of the Subcommittee might 
have. Again, I appreciate the opportunity to be here with you 
today.
    Thank you very much.
    [The prepared statement of Ms. Mills follows:]

 Prepared Statement of Ann Mills, Deputy Under Secretary for National 
Resources and Environment, U.S. Department of Agriculture, Washington, 
                                  D.C.
    Chairman Holden, Ranking Member Goodlatte, and distinguished 
Members of the Subcommittee, thank you for this opportunity to appear 
before you to discuss the U.S. Department of Agriculture's (USDA) 
conservation efforts in the Chesapeake Bay Watershed. As Deputy Under 
Secretary for Natural Resources and Environment (NRE), I oversee the 
Natural Resources Conservation Service (NRCS), which plays a key role 
protecting and restoring the Chesapeake Bay Watershed. I will talk 
first about the challenges ahead of us in the Bay before describing the 
progressive steps USDA is taking to meet those challenges.
    But first let me stress this about our work to protect the 
Chesapeake Bay--USDA works with private landowners who live in the 
watershed. We work hard to reinforce the notion that the work we do 
throughout the Bay Watershed, along all of its tributaries, is designed 
to improve local natural resource conditions, which in turn will have a 
positive impact on the Bay itself.
The Challenge
    Agriculture and forest land accounts for 75 percent of the 
Chesapeake Bay Watershed, which stretches over 44 million acres in six 
states and the District of Columbia. The Chesapeake Bay has the highest 
land-to-water ratio of any estuary in the U.S. As a result, land-based 
activities heavily influence the condition of the Bay. Over 80,000 
farms, covering about 25 percent of the watershed, produce a diverse 
array of fresh vegetables, fruits, grain, dairy, beef, poultry, and 
much more. Although diminished, Chesapeake forests still account for 50 
percent of the land cover and represent one of the most expansive 
hardwood forests in the world, providing diverse habitats and valuable 
ecosystem services.
    These agricultural and forest lands also anchor rural communities 
and provide open space and other amenities important to the economic, 
cultural and social fabric of the Chesapeake Bay Watershed. Because of 
their extent, the stewardship of these lands has a tremendous influence 
on the quality of natural resources in the watershed.
    Today, agriculture and forestry in the Bay Watershed are under 
increasing pressure from development. To put this in perspective, 
visualize a strip of land 1 mile wide running from Washington, D.C. to 
San Francisco, CA. That is almost 2 million acres and the amount of 
crop, pasture, and forestland that were converted in the Bay Watershed 
to developed uses between 1982 and 2003. Currently, about 12 percent of 
the land in the Chesapeake Bay Watershed is classified as developed, up 
from eight percent in 1982.
    Approximately 130,000 new residents move to the Chesapeake Bay 
Watershed each year, accelerating the development of agricultural and 
other lands. Among the consequences of losing these agricultural and 
forested areas are diminishing access to fresh local foods; reduced 
capacity of soils and plants to capture carbon; reduction in 
groundwater recharge; and increased runoff from roads, roofs, and 
parking lots. According to the Chesapeake Bay Blue Ribbon Panel Finance 
Panel, a 1 acre parking lot produces about 16 times the volume of 
runoff that comes from a 1 acre meadow. This runoff from paved surfaces 
also carries oil, exhaust residue, lawn chemicals and other pollutants.
    While agriculture is an important component of the landscape and 
economy, it also is a source of nutrients and sediment that adversely 
affect water quality in the Bay and its tributary waters. Agriculture 
has made significant strides in reducing these impacts through a 
longstanding conservation partnership effort. According to the 
Chesapeake Bay Program, since 1985, agriculture has reached nearly 50 
percent of the goals established for nitrogen, phosphorus, and sediment 
reduction.
    Despite these gains, the challenge ahead is substantial. One thing, 
however, is clear--losing farms and forests is not in the best interest 
of the Chesapeake Bay ecosystem. Stakeholders from diverse 
backgrounds--from the Chesapeake Bay Foundation to the National Fish 
and Wildlife Foundation to state regulatory agencies--support 
agriculture as a preferred land use in the Chesapeake Bay Watershed. 
Under the Obama Administration, and with the help of additional funding 
provided through the 2008 Farm Bill, USDA has accelerated its 
conservation efforts in the Bay Watershed. USDA advocates a landscape 
scale approach that recognizes natural resource conservation issues and 
solutions do not stop and start at land ownership boundaries. A 
successful Bay conservation effort must engage local, state, and 
national partners. Integrated solutions must address intertwined issues 
of rural prosperity, strong agricultural and forest product markets, 
new revenue streams for ecosystem services, and healthy communities in 
order to deliver sustainable solutions to protect the natural heritage 
that makes the Chesapeake Bay Watershed a national treasure.
Conservation in the Bay Watershed
    Concern about Chesapeake Bay water quality and its living resources 
date back to the 1930s. Congress' longstanding commitment to protection 
of the Bay is very clear, and was recently emphasized with the 
establishment of the Chesapeake Bay Watershed Program in the Food, 
Conservation, and Energy Act of 2008 (2008 Farm Bill). The Obama 
Administration took an unprecedented step on May 12, 2009 with the 
release of an Executive Order [Chesapeake Bay Protection and 
Restoration] that commits to solutions to restore and protect the 
Chesapeake Bay.
    USDA has been a long-standing partner in the effort to protect and 
restore the Bay Watershed. Our employees across the Bay Watershed work 
daily with farmers, forestland owners, other private land managers, and 
communities to identify and address natural resource conservation 
problems. This commitment is substantial--between 2004 and 2008, USDA 
invested nearly $800 million in conservation, rural development, and 
research activities related to restoring and protecting the Chesapeake 
Bay Watershed.
    It is important to note that protection of the Chesapeake Bay, and 
conservation on agricultural lands in the Bay Watershed, is a wide-
ranging effort that includes Federal, local, and state partners and 
stakeholders. USDA, in particular, works in close partnership with 
local Conservation Districts and State Departments of Agriculture 
(often co-located with USDA) to help producers improve the condition of 
their natural resources. Local land trusts and states in the Bay 
Watershed have successful farmland preservation programs. Non-
governmental organizations such as the Chesapeake Bay Foundation and 
Environmental Defense have in recent years provided funding for on-the-
ground conservation efforts with producers. The Federal investment on 
the part of USDA is noteworthy, but the restoration of the Bay and 
widespread improvement in agricultural conservation will not be 
possible without significant investment and commitment from our diverse 
set of conservation partners.
    Through its diverse portfolio of conservation programs, USDA 
assists individuals and communities in planning and implementing 
conservation solutions to reduce the losses of nutrients and sediment, 
conserve wetlands, protect critical farm and forest acres, and improve 
related natural resource conditions across the watershed. Below are 
just a few examples of the amount of conservation applied from 2004 to 
2008:

    Top 5 Conservation Practices Applied on Agricultural Land in the
                 Chesapeake Bay Watershed, FY 2004-2008
------------------------------------------------------------------------

------------------------------------------------------------------------
Conservation Practice Name    Average Annual                  Total
                                 Application
                           ---------------------------------------------
                                               _acres_
------------------------------------------------------------------------
Conservation Crop Rotation           145,559                727,796
 Nutrient Management                 116,381                581,906
     Pest Management                  82,488                412,441
 Residue and Tillage                 106,128                530,639
           Management
Upland Wildlife Habitat               48,933                244,663
           Management
------------------------------------------------------------------------

Chesapeake Bay Watershed Program
    In 2009, USDA began implementation of the Chesapeake Bay Watershed 
Program authorized in the 2008 Farm Bill. In developing the initiative, 
USDA worked to balance the program objectives of (1) improving water 
quality and quantity, and (2) restoring, enhancing, and preserving 
soil, air, and related resources in the Chesapeake Bay Watershed. The 
farm bill language also directed USDA to give special consideration to 
four River basins (Susquehanna, Potomac, Shenandoah, and Patuxent).
    This new authority offered an unparalleled opportunity to leverage 
new information and technology to focus on accelerating conservation 
and improving the condition of the watershed. USDA collaborated with 
USGS, EPA, and others to identify watersheds expected to have the 
greatest influence on Bay water quality, based on natural resource 
condition and vulnerabilities, land use in different regions of the 
watershed, existing conservation practices, and their relationship to 
key Bay pollutants--nitrogen, phosphorus, and sediment. The partnership 
drew upon a variety of analytical tools, databases, and local 
knowledge. As a result of that effort, about 500 small watersheds (12 
digit HUC watersheds) were identified. Eighty-seven percent of these 
watersheds fall within the four special consideration river basins 
mentioned in the farm bill.
    Below is a table displaying CBWP financial assistance obligations 
for Fiscal Year 2009.

            Fiscal Year 2009 CBWP State-by-State Obligations
------------------------------------------------------------------------
                State                          CBWP Obligations
------------------------------------------------------------------------
                        Delaware                             $969,065
                        Maryland                           $4,150,068
                        New York                           $1,107,942
                    Pennsylvania                           $5,429,703
                        Virginia                           $5,642,956
                   West Virginia                           $1,148,621
                                     -----------------------------------
  Totals............................                      $18,448,353
------------------------------------------------------------------------

58.3 percent of CBWP funds were obligated in the identified priority 
watersheds using EQIP program authorities. In addition, to further 
emphasize water quality practices through the CBWP, NRCS State Offices 
in the Bay Watershed identified 24 practices that impact water quality. 
Looking at the historical implementation of these 24 practices through 
EQIP between 2004 and 2008, 45,602 practices were installed in the Bay 
Watershed. Historically in the Bay Watershed, 51 percent of those 
practices were applied in the now-identified priority watersheds. 
Through the CBWP in Fiscal Year 2009, we were able to increase the 
application rate of the 24 practices in priority watersheds to 75 
percent. This translates into practices with the greatest impact on 
water quality being implemented in locations that contribute the 
largest amounts of nutrients and sediment to the Bay. Next year we hope 
to further increase this rate.

    We will soon announce the availability of CBWP funding for Fiscal 
Year 2010. The 2008 Farm Bill authorizes $43 million for CBWP in 2010. 
We will be re-evaluating the priority watersheds and practice list 
based on what we learned through the first year of implementation. We 
are also hoping to use innovative approaches to improve producer 
outreach efforts.
Conservation Innovation Grants in the Bay Watershed
    Conservation Innovation Grants was authorized in the 2002 Farm Bill 
under EQIP. Through this program, funding is used to stimulate the 
development and adoption of innovative conservation approaches and 
technologies. Since 2005, a portion of CIG funding has been dedicated 
to projects in the Chesapeake Bay Watershed. In Fiscal Year 2009, over 
$2 million was provided to six projects through the Chesapeake Bay 
component.
    Two recent awards focusing on developing water quality credit 
trading markets are examples of the type of innovative approaches 
funding through CIG. The Development and Implementation of a Water 
Quality Bank and Trade Program for the Potomac River Watershed is a 
three-phase project to develop and implement a water quality credit 
trading program in the WV area of the Potomac River Watershed. This 
project is being developed by the West Virginia University Research 
Corporation. In Maryland, the Maryland Department of Agriculture is 
piloting a Point source to Non-Point Source Nutrient Trading in the 
Upper Chesapeake Bay Maryland. Deliverables from these projects will 
hopefully enhance opportunities for intrastate and interstate water 
quality trading in the Chesapeake Bay Watershed.
Conservation Effects Assessment Project
    In addition to delivering a wide array of conservation programs in 
the Chesapeake Bay Watershed, USDA is also leading the Conservation 
Effects Assessment Project (CEAP) that will be an important tool for 
strengthening the science base in the Bay Watershed. CEAP began in 2003 
as a multi-agency effort to quantify the environmental benefits of 
conservation practices and systems.
    The first CEAP cropland report (Upper Mississippi River Basin 
(UMRB)) is being completed currently, while the CEAP Chesapeake Bay 
Watershed assessment is underway. Analysts have identified some UMRB 
results that are expected to apply equally in the Chesapeake Bay, 
namely the importance of: (1) focusing conservation on the most 
vulnerable acres to provide the quickest response; (2) conservation 
systems that address runoff, edge-of-field mitigation, and carefully 
manage inputs; and (3) managing the intensity of land use for some of 
the most vulnerable acres.
    We expect other important elements to emerge in the forthcoming 
Chesapeake Bay Watershed assessment. For example, additional 
conservation practices not included in the UMRB simulations will be 
examined, such as drainage water management to promote de-nitrification 
or construction of wetlands near interfaces with streams and cultivated 
cropland. Given the concentration of animal agriculture in certain 
parts of the Bay Watershed, there will be special emphasis on 
conservation needs related to manure management. Last, the influence of 
proximity to streams will be an important factor in assessing potential 
vulnerabilities in the Chesapeake Bay Watershed.
    Expected to be completed in 2010, the CEAP Chesapeake Bay report 
will be able to provide estimates of the progress in reducing the 
delivery of agricultural contaminants, identify remaining under-treated 
cropland acres, and estimate the environmental results from treating 
those acres. There also will be an opportunity to coordinate between 
the Bay Model and the CEAP Model to improve the identification of 
priority landscapes as well as the estimates of environmental effects 
of conservation applied.
Chesapeake Bay Executive Order
    The May 12th Executive Order (EO) 13508 called on the Federal 
Government to take significant action to restore and protect the 
Chesapeake Bay Watershed. Agencies were directed to develop 
recommendations for accomplishing important steps to protect and 
restore the Bay. USDA, in collaboration with other Federal and 
agencies, outlined an aggressive and focused voluntary conservation 
strategy under Section 203 of the EO, titled ``Chesapeake Farms and 
Forests for the 21st Century.'' This draft strategy contains six major 
elements for focusing resources and developing new approaches to 
protect and restore the Chesapeake Bay and its tributary waters.
1. Focusing on the Highest Priorities First
    This strategy will focus first on the watersheds and acres that 
have the greatest conservation need--where our shared work will address 
the most pressing challenges and deliver the biggest impact for 
improving local water quality. Conservation applied on any acre 
delivers an environmental benefit, but to date conservation applied in 
the Chesapeake Bay Watershed has not reached dimensions needed to 
achieve the broader goals for improving the aquatic health of the Bay 
and its tributary waters. Applying lessons learned, we are using 
science-based tools and input from local experts to determine where to 
invest program and human resources in order to deliver the greatest 
environmental benefit.
2. Integrate Federal, State, and Local Programs
    A substantial number of Federal and state programs are delivered in 
the Chesapeake Bay Watershed with objectives related to restoring and 
protecting the Bay. With so many entities involved, it is critical to 
coordinate and integrate programs on the ground to ensure that they are 
working toward common objectives, maximizing synergistic opportunities, 
and preventing potential duplication of efforts. Among the many 
benefits of increasing integration of programs on the ground is the 
potential to simplify program delivery for potential participants--
developing the virtual ``one-stop-shop'' for individuals and 
communities that will need to participate in conservation efforts in 
order to accomplish Chesapeake Bay Watershed restoration and protection 
objectives. Coordinating programs across all of with the Bay Partners, 
including the authorities under the farm bill, State and Private 
Forestry, the Clean Water Act, as well as Department of the Interior 
programs such as Partners for Wildlife, offers the best opportunity for 
success.
3. Accelerate Conservation Adoption
    Nearly 75 percent of the Chesapeake Bay Watershed is in the hands 
of agricultural and forest landowners and managers. Economic and non-
economic incentives play an important role in encouraging these 
landowners to make the day-to-day stewardship decisions that shape 
conservation in the Chesapeake Bay. Between 2004 and 2008, through USDA 
conservation programs alone, nutrient management was applied on 600 
thousand acres; while an important achievement, we must accelerate 
conservation adoption if we are to achieve objectives for restoring the 
health of the Bay. Existing incentive approaches will be improved on to 
increase their effectiveness by better coordinating programs and 
streamlining processes to simplify program participation.
4. Accelerate Development of New Conservation Technologies
    USDA's research mission through the Agricultural Research Service 
(ARS) and the National Institute for Food and Agriculture (NIFA) is 
engaged in a substantial partnership effort with public and private 
sector interests to identify needed research and focus Federal 
researchers and grant programs on developing solutions. We will be 
focusing funding and increasing public-private research partnerships to 
spur innovation in research and accelerate development of new 
conservation technologies. New technologies that increase revenue 
opportunities for farmers and their communities will also increase 
rural wealth and sustain the restoration of the Bay.
5. Foster and Support Ecosystem Markets
    Chesapeake Bay protection and restoration could also involve 
private markets in order to reach the level and scope of progress 
needed. Markets for carbon sequestration, water quality, wetlands, 
wildlife habitat, and species protection have great potential to 
complement existing federally supported conservation efforts and drive 
private investment to improve the health of the Chesapeake Bay. These 
markets could connect the critical ecosystem services provided by 
farms, forests, and ranches to beneficiaries who are willing, or 
required, to pay for their stewardship--such as urban water utilities, 
industry, and land developers who need to mitigate unavoidable negative 
impacts to the watershed. While farmers and foresters use conservation 
methods to improve the quality of the watershed's natural resources, 
they could also be building new revenue streams for themselves and 
their rural communities. Potential income from ecosystem markets could 
provide new incentives for landowners to engage in restoration and 
conservation activities on their land.
6. Implement a Sound System of Accountability
    A sound system of accountability is critical to monitoring progress 
toward the goals for the Bay. That system of accountability has many 
parts starting with ensuring that objectives are clearly defined and 
achievable, and that adequate resources are dedicated to make restoring 
and protecting the Bay possible. An adaptive management approach is 
fundamental to an effective accountability system, including monitoring 
how well programs are working, evaluating and refining priorities, and 
incorporating new science and strategies to improve results. Adaptive 
management for the Chesapeake Bay Watershed will be data intensive, and 
will depend on effective collaboration across the broad Bay 
partnership.
    USDA also will work to implement the Healthy Waters, Thriving 
Agriculture Initiative included under the response to the EO. We will 
be consulting with both Federal and non-Federal partners to align 
financial and technical resources to accelerate our on-farm 
conservation work in the Bay Watershed. For example, we will be 
identifying watersheds and Centerpiece projects where the greatest 
opportunity for demonstrating conservation benefits exist and working 
with EPA and other partners to leverage their voluntary conservation 
funding to accelerate action in these areas.
Conclusion
    The shores of the Chesapeake Bay could likely be covered with past 
proclamations and restoration goals that have gone unfulfilled and 
deadlines that have been missed. At USDA, we know that, despite our 
progress in agricultural conservation over the past few decades, we 
have more work to do. Additional resources in the 2008 Farm Bill will 
help us reach more customers. The Administration's Executive Order 
provides USDA with new tools and strategies to accelerate our efforts 
in the Chesapeake Bay Watershed. We look forward to this challenge and 
the opportunities ahead. Thank you again for the opportunity to testify 
before you today and I am happy to answer any questions you may have.

    The Chairman. Thank you very much.
    Mr. Fox.

         STATEMENT OF J. CHARLES FOX, SENIOR ADVISOR TO
 ADMINISTRATOR LISA P. JACKSON, U.S. ENVIRONMENTAL PROTECTION 
                    AGENCY, WASHINGTON, D.C.

    Mr. Fox. Mr. Chairman, Ranking Member Goodlatte, Members of 
the Subcommittee, thank you very much for the invitation to 
appear here this morning.
    We appreciate greatly the interest of this Subcommittee in 
the restoration and protection of Chesapeake Bay. We would like 
to extend a special thanks to Mr. Holden and Mr. Goodlatte for 
their leadership in securing the new Chesapeake Bay Watershed 
Initiative in the most recent farm bill. This program is 
already producing impressive results, and we are immensely 
appreciative of your actions.
    At the outset, it is important to emphasize that EPA 
believes that maintaining the viability of agriculture is 
essential to sustaining healthy ecosystems in the watershed. 
Put simply, environmentally sound farming is a preferred land 
use. EPA remains committed to working together with USDA to 
help farmers produce abundant and affordable foods while 
managing nutrients and soils in a manner that helps to restore 
the Bay's water quality.
    It is also important to emphasize that while today's 
testimony will focus on the challenges and opportunities for 
the agricultural sector, EPA remains intensely focused on 
reducing runoff pollution from urban and suburban lands. Since 
1950, the number of residents in the Chesapeake Bay Watershed 
has doubled. Sprawling development patterns have exacerbated 
pollution, consumed farms and forest lands, and degraded 
habitats throughout the watershed. We expect to implement 
several new actions to reduce pollution from these landscapes, 
and we would be happy to discuss these further in response to 
questions from the Subcommittee.
    Over the past 2 decades, agricultural sources have 
significantly reduced pollution to the Chesapeake Bay and its 
tributaries. This is a result both of substantial investments 
and significant commitments of time and energy by the 
agricultural community.
    Some of the more effective actions include widespread 
adoption of no-till systems, improved nutrient management, 
increased use of cover crops, expanded installation of riparian 
buffers, and improved fencing practices along streams.
    At the same time, agriculture remains the single largest 
source of nitrogen, phosphorus and sediment pollution to the 
Chesapeake Bay, with about half of that pollution load directly 
related to excess livestock waste.
    On May 12, President Obama signed an Executive Order which 
defined a new era of shared Federal leadership to restore the 
Bay. The Executive Order created a Federal leadership committee 
and directed the preparation of seven topical reports to 
support a joint Federal strategy. A draft of that strategy was 
released last month, and we are in the process of soliciting 
comments from the public and key interest groups throughout the 
watershed.
    The draft strategy seeks to achieve three principal 
objectives: One, restoring water quality; two, conserving 
treasured places and restoring habitats; and three, adapting to 
the impacts of climate change. Our written statement describes 
these elements in some detail.
    In my remaining comments, I will focus on actions to 
improve water quality, which I know is of special interest to 
the Chairman and the Committee.
    The draft strategy defines several key steps to improve 
water quality. The first is a new accountability program which 
builds on the requirements of sections 117(g) and 303(d) of the 
Federal Clean Water Act to reduce nitrogen, phosphorus and 
sediment pollution. Specifically, over the next 2 years, EPA 
will work closely with the states to develop watershed 
implementation plans that are consistent with the emerging 
TMDL, which is required to meet water quality standards.
    The second step includes a proposal for EPA to initiate new 
Federal rulemakings designed to reduce run-off pollution from 
urban, suburban and agricultural lands. Specifically, these 
proposed rulemakings will focus on concentrated animal feeding 
operations, urban storm water, and new or expanding discharges 
of nutrients and sediments. Importantly, the draft strategy 
emphasizes EPA's desire for state-level action in lieu of 
Federal action whenever possible and appropriate.
    Finally, the strategy defines an enhanced partnership with 
the USDA to promote Healthy Waters, Thriving Agriculture. This 
initiative is designed to improve several voluntary 
conservation programs of each agency, relying upon our distinct 
statutory authorities.
    Mr. Chairman, thank you once again for this opportunity. 
The Chesapeake Bay ecosystem remains severely degraded despite 
the concerted efforts of many people for more than 25 years. We 
look forward to working with you and your colleagues to chart a 
new future for the Chesapeake Bay and its communities.
    [The prepared statement of Mr. Fox follows:]

 Prepared Statement of J. Charles Fox, Senior Advisor to Administrator 
Lisa P. Jackson, U.S. Environmental Protection Agency, Washington, D.C.
    Chairman Holden, Congressman Goodlatte, and Members of the 
Subcommittee, I am J. Charles Fox, Senior Advisor to Administrator Lisa 
P. Jackson, at the U.S. Environmental Protection Agency (EPA). Thank 
you for the invitation to speak today on the Chesapeake Bay Executive 
Order and the Federal Agency Strategy for implementing it. We 
appreciate greatly the interest of this Subcommittee in cleaning up the 
Chesapeake and in the valuable role that the agriculture community can 
play in doing so.
    President Obama's Executive Order on the Chesapeake Bay defines a 
new era of shared Federal leadership, one that is characterized by new 
levels of accountability, performance, partnership and innovation. In 
this regard, we intend to build on the progress made by the 
agricultural community and other sectors in the Chesapeake Bay 
Watershed in implementing the important objectives of the Executive 
Order. The twenty-six year history of the modern Chesapeake Bay cleanup 
program suggests that we will need a new commitment and new tools to be 
successful in achieving our ambitious goals for the Bay and the 
watershed.
The Importance of the Watershed and the Bay
    The Chesapeake Bay Watershed encompasses 64,000 square miles, parts 
of six states and the District of Columbia. Nearly 17 million people 
live in the watershed. The land mass of the Bay Watershed is sixteen 
times the size of the Bay, a ratio higher than any other estuary in the 
world. This means that our actions on the land have a profound impact 
on our local streams, rivers and, ultimately the Bay.
    The Chesapeake Bay is the largest estuary in North America and is 
ecologically, economically and culturally critical to the region and 
the country. It is home to more than 3,600 species of fish, plants and 
animals. For more than 300 years, the Bay and its tributaries have 
sustained the region's economy and defined its traditions and culture. 
The economic value of the Bay is estimated at more than $1 trillion \1\ 
and two of the five largest Atlantic ports (Baltimore and Norfolk) are 
located in the Bay.
---------------------------------------------------------------------------
    \1\ Saving a National Treasure: Financing the Cleanup of the 
Chesapeake Bay, A Report to the Chesapeake Bay Executive Council, 
Chesapeake Bay Blue Ribbon Finance Panel, October 27, 2004.
---------------------------------------------------------------------------
    The approximately 84,000 farms in the Chesapeake Bay Watershed form 
a vital part of the watershed's economy and way of life. EPA believes 
that maintaining the viability of agriculture is essential to 
sustaining ecosystems in the Bay. Environmentally sound farming is a 
preferred land use in the Region and EPA is committed to working 
together with USDA to help farmers produce abundant and affordable 
foods while managing nutrients and soils in a manner that helps to 
restore the Bay's water quality and the values and benefits that derive 
from clean water and a healthy, vibrant ecosystem.
The Health of the Bay
    The main sources of nutrient and sediment pollution to the 
Chesapeake Bay and its tributaries are agriculture, urban and suburban 
discharges and runoff, wastewater, and atmospheric deposition (see 
Figure 1). While both nitrogen and phosphorus loadings have declined 
since 1985, significant additional loading reductions are needed to 
meet water quality standards (see Figures 2 and 3). Based on EPA's 
current estimates, to meet water quality standards by 2025 in the Bay, 
as specified in the President's Executive Order, nitrogen must be 
reduced by 84 million pounds per year from current loadings and 
phosphorus by 1.3 million pounds per year from current loadings.
    It is clear that to achieve the loading reduction targets EPA, in 
collaboration with the Bay states and stakeholders, estimate are needed 
to achieve state water quality standards in the Bay and its 
tributaries, significant nutrient and sediment loading reductions are 
needed from each of these main pollution sources. Put differently, 
water quality standards cannot be met without a significant reduction 
of nutrients and sediments from each of these sectors.
Figure 1. Relative Responsibility for Pollution Loads to the Bay

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] 


Figure 2. Total Nitrogen Delivered to the Chesapeake Bay from the 
        Watershed


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] 

        Source: Chesapeake Bay Program Watershed Model Phase 5.2 
        (2009).
Figure 3. Total Phosphorus Delivered to the Chesapeake Bay from the 
        Watershed

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] 

        
        Source: Chesapeake Bay Program Watershed Model Phase 5.2 
        (2009).

    Much of the reductions in agricultural pollution since 1985 been 
achieved through implementation of nutrient management and conservation 
practices, and changes in land use. In addition to this historical 
progress, there are many current examples in the Bay Watershed of the 
agricultural community's leadership in conservation. They include:

   Manure injection technology on no-till systems.

    The Commonwealth of PA and other Bay states have made tremendous 
        progress in sediment reductions by switching to no-till 
        systems. EPA, through our Innovative Nutrient and Sediment 
        Reduction Program, is funding a project to test manure 
        injection technologies on farms throughout the watershed to not 
        only get the sediment reductions from no-till systems, but to 
        increase the nutrient crop uptake and lower the manure nutrient 
        runoff from these systems. This technology will be tested soon 
        on farms in Pennsylvania, Maryland and New York.

   Advanced nutrient management.

    NRCS through the Conservation Innovation Grants program is funding 
        a project that will showcase how enhanced nutrient management 
        can be good for the farmers' bottom line and for the Bay. 
        Demonstrating how farmers can lower nitrogen application rates 
        on some fields by guaranteeing participating producers no loss 
        in net income, is a great way to test out new approaches 
        without negative impacts on the farmers' bottom line. This 
        approach will be demonstrated soon in Pennsylvania.

   Cover crops and ethanol production.

    EPA, through our Innovative Nutrient and Sediment Reduction Program 
        is funding a project in Maryland that will target 7,000 acres 
        per year in the Chester River Watershed to plant commodity 
        cover crops. The project will quantify nutrient uptake by 
        winter small grain commodity cover crops and promote cover crop 
        ethanol production. This work is good for the Bay and offers an 
        additional revenue stream for the farmer.

   Accelerated Agricultural Conservation.

    In the Commonwealth of Virginia, under Congressman Goodlatte's 
        leadership the Virginia Waste Solutions Forum was formed to 
        address the most pressing challenges of livestock waste in the 
        Shenandoah Valley. EPA is pleased to be aligning our resources 
        with the USDA farm bill funding to harness the collaborative 
        efforts of the Virginia Waste Solutions Forum to accelerate 
        nutrient reduction efforts in areas of high-density animal 
        production in the Shenandoah Valley.

    Still, agriculture remains the single largest source of nutrient 
and sediment pollution to the Bay, with about half of that load 
directly related to excess livestock waste. Agriculture covers about 25 
percent of the Chesapeake Bay Watershed, representing the largest 
intensively managed land use. USDA's 2007 Census of Agriculture 
estimates there are84,000 farms in the Bay Watershed covering about 
12.8 million acres. Excess livestock waste and improperly applied 
fertilizers still flow into creeks, streams and rivers, carrying excess 
nitrogen and phosphorus into the Bay. Aggravating this problem are 
certain cropland tillage practices that increase sediment and nutrient 
discharges to the Bay and its tributaries by contributing to erosion.
    Pollution from urban and suburban stormwater is also significant 
and like agricultural sources, must be significantly reduced if the 
Bay's water quality standards are to be met. Since 1950, the number of 
residents in the Bay Watershed has doubled. Experts predict that 
population will continue to rise, topping 19 million in the watershed 
by 2030. Low density, disconnected development--commonly referred to as 
sprawl--has been the predominant form of development in the Bay 
Watershed for the past several decades and its impacts are very 
significant. New development that is spread-out, far from existing 
communities, schools, wastewater treatment facilities, shopping, and 
jobs brings increased impervious surfaces that do not allow water to 
filter into the ground. Instead, rainfall runs off, picking up 
pollution and quickly carrying it into waterways, increasing the volume 
and speed of storm water carried in nearby streams and rivers, eroding 
stream banks, and increasing rates of nutrient and sediment discharges 
downstream and into the Bay.
    Clearly the manner in which we manage the impacts from such growth 
must be improved and new and successful practices like low impact 
development, and storm water retention and infiltration are necessary 
if this growth is to be accommodated on the landscape and the Bay's 
water quality standards achieved. Devising and delivering low impact 
development practices on the ground is every bit as important to 
reducing the impacts of urban and suburban development as conservation 
practices like livestock waste management, conservation tillage and 
buffers are to reducing impacts from agriculture.
Executive Order 13508
    On May 12, 2009, President Obama presented all citizens who cherish 
the Chesapeake with an historic opportunity when he signed an Executive 
Order on Chesapeake Bay Protection and Restoration, directing a new era 
of shared Federal leadership to restore the Bay. The Executive Order 
acknowledged that the efforts of the past 25 years to reduce pollution 
and clean up the Bay and its tributaries have yielded some progress. 
However, it concluded that the poor health of the Chesapeake remains 
one of our nation's most significant environmental challenges. Indeed, 
Administrator Jackson has emphasized repeatedly that communities in the 
Chesapeake Bay Watershed expect and deserve rivers and streams that are 
healthy and thriving.
    The Executive Order created a Federal Leadership Committee, chaired 
by EPA, to strengthen the role of the Federal Government in the Bay 
restoration and align the capabilities of EPA, and the Departments of 
the Interior, Commerce, Agriculture, Defense, Homeland Security, and 
Transportation. The Order directed Federal agencies to prepare seven 
draft reports to support a joint Federal strategy. These topical 
reports, on issues ranging from water quality to public access, were 
released in draft on September 10, 2009 and in revised form on November 
24, 2009. At the same time these reports were being prepared, EPA 
conducted extensive outreach in public meetings and invitational 
sessions with agriculture leaders in the Bay Watershed. We held public 
meetings with agricultural stakeholders in Frederick, Maryland and 
Harrisburg, met with key Chesapeake Bay leadership of the National 
Association of Conservation Districts, twice met with producers in 
meetings facilitated by NRCS and the American Farmland Trust, and held 
numerous meetings with state agricultural agencies and producer groups. 
And we will continue to seek public review and comment on the Executive 
Order Strategy.
    The Executive Order directed the Federal Leadership Committee to 
prepare and release a Draft Strategy for Protecting and Restoring the 
Chesapeake Bay. That Draft Strategy was released on November 9, 2009. 
It contains a comprehensive suite of Federal initiatives that 
collectively support three objectives:

    1. Restoring clean water,

    2. Conserving treasured places and restoring habitats, fish and 
        wildlife, and

    3. Adapting for Climate Change.

    To achieve these objectives, there are three mechanisms that 
pervade our approach:

    1. Empowering local efforts by governments, citizens, and 
        conservation districts;

    2. Promoting science-based decision making, and

    3. Establishing a new era of shared Federal leadership.

    The Draft Strategy is available online at: http://
executiveorder.chesapeakebay.net. The formal public comment period 
opened November 9, 2009 and extends through January 8, 2010. The 
strategy will evolve significantly through public comments, state 
consultations and agency revisions before the final version is 
published in May 2010.
Actions to Restore Water Quality
    The Executive Order challenged EPA to identify potential changes to 
programs, policies and regulations that would be sufficient to achieve 
water quality standards. The Strategy states the goal of implementing, 
by 2025, all pollution control measures needed to restore water quality 
and attain water quality standards. As explained in the draft Strategy, 
EPA is proposing three key steps to accomplish these pollution 
reductions:

    1. Create a new accountability program to guide Federal and state 
        water quality efforts;

    2. Initiate new Federal rulemakings as needed and other actions 
        under the Clean Water Act (CWA) and other authorities; and

    3. An enhanced partnership between USDA and EPA to implement a 
        ``Healthy Waters--Thriving Agriculture'' Initiative.
New Accountability Program
    The proposed new accountability framework builds on the 
requirements of Sections 117(g) and 303(d) of the Clean Water Act to 
establish new expectations to guide state and Federal efforts for 
reducing nutrient and sediment pollution.
    On November 4, 2009, EPA sent a letter to the six watershed states 
and the District of Columbia providing the Agency's expectations for 
the development of Watershed Implementation Plans (WIPs). These plans 
are a key element of this new era of ecosystem restoration, greater 
transparency and accountability, and improved performance.
    Watershed Implementation Plans will express the specific intentions 
and commitments of the states, and through the states, the local 
partners, for achieving the Bay TMDL nitrogen, phosphorus and sediment 
load reductions necessary to meet Bay water quality standards. EPA 
expects Phase One plans to be submitted by November 2010 and include a 
description of the authorities, actions and control measures that will 
be implemented to achieve point and nonpoint source target loads and 
TMDL allocations. Phase Two plans, due November 1, 2011, will further 
divide loads at a finer scale and among smaller geographic areas.
    EPA expects the states and the District to have controls in place 
for 60% of the necessary load reductions by 2017 as an interim 
milestone to meeting the 2025 goal. These plans will be further 
measured through a series of 2 year milestones detailing near term 
actions to evaluate progress.
    EPA's new accountability program, modeled on the Clean Air Act, 
also includes actions we may take in the event that jurisdictions do 
not commit to establish and implement effective restoration programs or 
do not achieve interim milestones. EPA plans to articulate these so 
called ``consequences'' in greater detail in a letter to the states 
later this month, and they include:

   Revising the draft or final pollutant reduction allocations 
        in the Bay TMDL that EPA will establish in December 2010 to 
        assign more stringent pollutant reduction responsibilities to 
        pollution sources where achievement of pollution reductions is 
        more reliable;

   Objecting to state CWA National Pollutant Discharge 
        Elimination System (NPDES) permits that fail to incorporate 
        limitations consistent with the pollutant allocations in the 
        TMDL;

   Acting to limit or prohibit new or expanded discharges of 
        nutrients and sediments unless appropriate offsets are made;

   Withholding, conditioning, or reallocating Federal grant 
        funds; and

   Taking other actions as appropriate.
New Federal Rulemakings and Actions
    The draft Strategy calls for new clean water rulemakings to reduce 
pollution from concentrated animal feeding operations (CAFOs), 
stormwater, and new or expanding discharges of nutrients and sediment. 
With these rulemakings, EPA would significantly strengthen or clarify 
Federal requirements that would further limit nutrient and sediment 
discharges to the Bay. EPA is also in the process of developing and 
implementing a number of regulations and programs that will continue to 
reduce nitrogen from a variety of stationary and mobile sources of air 
deposition. EPA expects the full slate of planned air program 
activities will result in at least an estimated additional 7 million 
pounds of reduction in nitrogen loading to the Bay between 2010 and 
2020.
    It is important to note that with respect to the CAFO, stormwater 
and new or expanding discharge rules, EPA has expressed its willingness 
and desire to encourage state-level regulatory action in lieu of 
Federal action whenever possible and appropriate. Nonetheless, EPA 
believes initiating Federal rulemaking in the areas outlined here 
provides important Federal leadership in support of state regulatory 
action. As described in the Water Quality Report under Section 202(a) 
of the Executive Order, EPA plans to initiate rulemakings under the CWA 
to reduce nitrogen, phosphorus and sediment pollution to the Bay 
Watershed from concentrated animal feeding operations (CAFOs), 
stormwater \2\ and new or expanded dischargers. In the interim, EPA 
will continue to collaborate closely with the Bay states in 
establishing appropriate new programs that are consistent with the load 
reductions necessary to achieve water quality standards.
---------------------------------------------------------------------------
    \2\ More information: http://www.epa.gov/npdes/stormwater/
rulemaking.
---------------------------------------------------------------------------
    EPA will also implement a compliance and enforcement strategy that 
focuses on four key sectors: concentrated animal feeding operations, 
stormwater discharges, municipal and industrial wastewater treatment 
facilities and stationary air sources of nitrogen deposition. In 
addition, EPA will identify appropriate opportunities for compliance 
and enforcement activities related to the CWA section 404 program 
regulating dredge and fill operations, Federal facilities, and 
Superfund sites, including remedial action and removal sites and 
Resource Conservation and Recovery Act (RCRA) corrective action 
facilities.
Enhanced Partnership between USDA and EPA
    Let me emphasize again that EPA believes maintaining the viability 
of agriculture is essential to sustaining ecosystems in the Bay. 
Environmentally sound farming is a preferred land use in the region, 
and the Agency is committed to strong partnerships and collaboration 
with states and local governments, urban, suburban and rural 
communities, the private sector, and USDA to achieve the water quality 
and environmental objectives for the Bay. We want to work with USDA to 
align our resources to complement USDA efforts. Recognizing that well-
managed forest and farm lands are the preferred land uses for water 
quality in the Bay, EPA and USDA have committed to developing and 
implementing a ``Healthy Waters--Thriving Agriculture Initiative.'' 
Meeting the challenges in the Bay will require Federal agencies to 
commit and coordinate resources on a scale that matches the scope of 
the environmental and agricultural issues in the region. EPA has a 
unique opportunity to undertake with USDA several new and ambitious 
efforts that build and expand on the strong working relationships that 
have been reinforced in developing the Chesapeake Bay Watershed 
Initiative. Our hope and commitment is to work with USDA to achieve 
significant improvements for the Bay itself and the farming communities 
in its watershed in several key areas, including:

   Strategically expanding intensive use of key conservation 
        practices in the high priority agricultural watersheds by 
        aligning EPA resources with those of USDA and other public and 
        private partners to engage farmers in nutrient and sediment 
        reduction efforts;

   Collaborating in development of next generation conservation 
        planning tools with other Federal, state, agricultural, and 
        research partners;

   Aligning Federal, state, and private resources and 
        partnerships to establish high profile projects to tackle some 
        of the most challenging agricultural issues facing the Bay; and

   Aligning EPA programs and resources with USDA efforts to 
        achieve water quality improvements by developing critically 
        needed tools and technologies to help farmers meet their 
        conservation and farm operation objectives.

By aligning the resources and continued work of Federal, state and 
local partners, EPA and USDA's collaboration can accelerate the wider 
adoption of conservation practices and support innovative efforts to 
address some of the most pressing challenges to meeting water quality 
and agricultural goals in the Bay. For example, EPA will target its 
resources as a catalyst for strong partnerships on local initiatives to 
address challenging agricultural issues such as keeping livestock out 
of streams and engaging small dairy operations in conservation.

    EPA is also interested in working to expand market-based 
conservation opportunities. We believe markets for ecosystem services 
are an essential part of the solution to Bay impairment. EPA's 2003 
National Water Quality Trading Policy and 2007 Water Quality Trading 
Toolkit for Permit Writers recognize and promote trading markets. We 
anticipate the 2010 Bay TMDL and state implementation plans will 
provide a basis for trading whereby landowners who reduce their 
nutrient discharges can generate nutrient credits in the process, and 
sell a portion of those credits on the open market. EPA is also 
supportive of wetland mitigation banking which creates a revenue stream 
for participating landowners and we are interested in promoting other 
types of markets such as carbon sequestration and endangered species 
habitat protection, which could also benefit landowners.
Closing
    As I noted earlier, a fundamental challenge for the Bay's water 
quality is reducing pollutant discharges and run-off from both urban 
and suburban development and agricultural lands. Pollutant discharges 
and run-off to the Chesapeake from urban and suburban development are 
increasing, while nutrient and sediment loadings from agriculture have 
not declined enough to restore the Bay. Presently, we have a range of 
tools that we are implementing to tackle these problems and we have 
also laid the groundwork to achieve similar necessary pollution 
reductions from municipal wastewater and air sources of nutrients. We 
stand ready to work with the Subcommittee and other Members of Congress 
to explore these issues in the months ahead.
    Across the Chesapeake Bay Watershed, there have been important 
actions over the past 25 years--by farmers to implement nutrient 
management practices, such as installing buffer strips and fences; by 
homeowners to reduce energy consumption and storm water pollution; by 
localities to upgrade wastewater treatment plants and to reduce 
stormwater pollution; by developers to implement sediment and erosion 
control plans and implement smart growth practices; by states to expand 
land conservation and strengthen their water quality protection 
programs. These good efforts have helped to hold the line against 
further degradation of the magnificent Chesapeake Bay, they have not, 
however, been sufficient to restore the Bay to its once healthy 
condition.
    The Chesapeake Bay Program's March 2009 annual Health and 
Restoration Assessment of the Chesapeake Bay and Watershed, known as 
the ``Bay Barometer,'' documents what so many residents of the Bay 
Watershed already know: the Chesapeake Bay ecosystem remains severely 
degraded, despite the concerted efforts of many people for more than 25 
years. The data are sobering. Virtually all of the 13 measures which 
comprise Bay health show conditions that fall short of restoration 
goals.
    Although we face daunting challenges, in all my conversations with 
government officials and citizens around the Bay, I have heard a strong 
sense of optimism for the future. Scientists have learned much about 
the Bay and that knowledge is being used by managers to help plan and 
evaluate new policies and practices. Our region's elected officials are 
engaged as never before. At EPA and partner Federal agencies, we have 
clear direction from the President to provide the leadership necessary 
to protect and restore the Bay. We have a wonderful opportunity to 
build on the work of farmers in the Chesapeake Bay Watershed to make a 
clean and healthy Chesapeake Bay a reality.
    I greatly appreciate your support in simultaneously addressing the 
agricultural sustainability and water quality restoration imperatives 
in the Chesapeake Bay Watershed. Thank you again Chairman Holden, 
Congressman Goodlatte, and Members of the Subcommittee, for the 
opportunity to appear before you today.

    The Chairman. Thank you.
    Mr. Redding.

STATEMENT OF RUSSELL C. REDDING, ACTING SECRETARY, PENNSYLVANIA 
                   DEPARTMENT OF AGRICULTURE,
                         HARRISBURG, PA

    Mr. Redding. Mr. Chairman, thank you, first of all, for the 
opportunity to be here.
    I want to say thanks to Ranking Member Goodlatte and 
Congressman Thompson and Congresswoman Dahlkemper.
    We are pleased to have three leaders on this Committee. 
Thank you for your interest and your leadership here in 
Washington and on behalf of Pennsylvania agriculture.
    On behalf of the Governor, thank you again for the 
invitation to be here. It is certainly symbolic on this panel 
to have the USDA, the EPA and the Commonwealth as partners, and 
I will talk about that in a moment, the importance of the 
partnership as we go forward.
    Clearly, there are a multitude of legislative, regulatory 
and administrative strategies that are being considered to 
improve water quality in the Chesapeake Bay.
    Having an opportunity today to talk about that is an 
important part of the conversation. In fact, the Obama 
Administration, as Chuck has mentioned, has recognized the 
Chesapeake Bay as a national treasure and worthy of national 
attention. We agree with that.
    The strategies being considered today are in part the 
result of the Presidential attention. It is part Congressional 
attention, and it is also a judicial process where the courts 
have mandated that the Bay Watershed jurisdiction develop a 
plan for clean water. Surely these programs must address the 
broad spectrum of the very important natural resources and the 
cultural issues which are multifaceted, complex and interwoven.
    Your interest and willingness to examine these strategies 
and how they will impact Pennsylvania farmers, citizens and the 
communities of Pennsylvania is greatly appreciated. But let me 
be clear at the outset. I believe we need to have two clear and 
co-equal goals in any effort to restore the Chesapeake Bay and 
its Watershed. First, it is imperative to meet the goals 
established for clean water for Pennsylvania and the other Bay 
Watershed states. Second, it is imperative that we have 
economically viable and thriving farms and strong communities 
in Pennsylvania and other Bay Watershed states. These goals 
will need the strong support of Congress, and Federal support 
in general.
    And we certainly appreciate the work, Mr. Chairman, of this 
Committee through the farm bill that you mentioned in your 
opening statement.
    We also have a chance in the reauthorization of the Clean 
Water Act to further complement the work of the farm bill and 
leverage the work that has been done and will have been done by 
that time through the efforts of the farm bill funding.
    It is clear to me that the problems we face in the Bay in 
terms of nutrient and sediment reduction goals is not 
exclusively an agricultural problem, nor is it exclusively an 
urban problem. Regardless, it is a Pennsylvania problem. More 
than three million Pennsylvania citizens call a portion of the 
Chesapeake Bay Watershed their home. Each and every person who 
lives in a portion of the Chesapeake Bay Watershed contributes 
to the nutrient and sediment loads that are impacting the Bay.
    Whether you milk cows in Bradford County, the northern 
reaches of the state, fertilize your lawn in State College, 
flush the toilet in Lancaster County, or park your car in 
Gettysburg, you are contributing to the problem of the 
Chesapeake Bay. And, therefore, you must contribute to the 
solution as well.
    In terms of farmers, they fully understand that clean water 
for the Chesapeake Bay means clean water for their families, 
communities and their livestock. Pennsylvania farmers are 
trying to better understand how the changes called for in the 
Executive Order proposed report, strategies, and legislative 
bills will impact their day-to-day farming decisions. What 
changes will they need to make? And what will the cost be? All 
are legitimate questions.
    It is imperative that, as legislative leaders and appointed 
political leaders, we fully understand the impact of these 
proposals, their solutions, and what a balanced and effective 
solution looks like for addressing the issues of the Bay.
    I would be remiss if I didn't mention the economic issues 
of agriculture right now; just to make sure that we achieve 
this goal and to achieve one of the two goals I stated at the 
outset, we will have to deal with the economic issues of 
agriculture. We are asking farmers to come up with money to 
match, to leverage Federal and state investment. But we have to 
be sensitive to the economic times we are in. And for that 
reason, and it is the reason I state in the testimony, we need 
to have a long-term view of this. As long as we are smart about 
the approach and sensitive to the progress made, we are 
sensitive to the times we live in, I believe we can achieve 
those two co-equal goals.
    We also have to understand, as you do, the issues of local 
government, state government and the resources. They are the 
partners. They are the folks who are being asked to come up 
with money to implement the strategies to help advance the 
plans. They are in a tough spot. Again, just being smart about 
that is an important statement at the outset of us being able 
to achieve our goals.
    I mentioned the complexity, and I just put this on the 
table, this is a complex issue. There are four different 
components that we are talking about when we say strategies for 
the Chesapeake Bay. Certainly the Presidential Chesapeake Bay 
Watershed Executive Order that Chuck has mentioned, the ongoing 
Chesapeake Bay TMDL process is what I referenced earlier in 
terms of the court-mandated action, the proposed 
reauthorization of the Chesapeake Bay Program and the Clean 
Water Act, and in our case, Region 3's Agricultural Assessment 
Initiative in Lancaster County. All four of these are of a part 
of the conversation in Pennsylvania at the moment about the 
Chesapeake Bay. They are all interrelated, and all will have 
significant impact on the progress we make and the action plan 
that we lay forth to achieve the goal.
    The bottom line in Pennsylvania, especially for 
Pennsylvania farmers, they have much at stake, and we have to 
be sensitive to the economic times. But also, I would ask 
recognition of the progress made by farmers. Ms. Mills 
mentioned this, and I think farmers have done a phenomenal job.
    It is also important to note that we have been at this for 
over 25 years, and that is only in terms of the legal mandates 
we have had, but, obviously, part of agriculture is good 
conservation. So, in many terms, we have made the investments 
needed. We have shown reductions, as noted here earlier.
    Pennsylvania is the first state to have a mandatory Farm 
Nutrient Management Plan, the first Nutrient Management Plan to 
regulate both nitrogen and phosphorus, and the first EPA 
approved regulatory program for confined animal feeding 
operations. It is also important to note that we have 
permanently preserved 20 percent, nearly 3 million acres, in 
this watershed. All of that is important in achieving the goal.
    You have the testimony, and I won't read that verbatim, 
just a couple of highlights. I mentioned the partnership and 
each of the four points here that are on the table for the 
Chesapeake Bay. Partnerships have brought us here, and 
partnership is really how we have achieved what we have 
achieved, whether it is at the state level with our partners, 
both in county government and the conservation districts, 
whether it be the Federal level with USDA and EPA and many 
others, or the nonprofit community.
    But the largest partner and the partner that is being asked 
to put the most on the table is agriculture, and the farmers 
who have signed on the dotted line to repay the loans that they 
have taken out to stay in this business called agriculture. 
They are a partner. Respecting that partnership as we go forth 
I think is absolutely critical. And it is an important 
statement of Congress and this government about what we believe 
is achievable with those partners.
    Finding some balance between our approach, and we know on 
the one hand that we need greater compliance, and we know that 
we need greater investment. We know that we need farmers and 
communities to step up to achieve more. It is clearly known. We 
have to do more than we have done to achieve the goals. We can 
do that if we are smart about it, if there is balance, and 
continued investment in it.
    A few specifics in terms of the framework, regulatory 
framework, going forward, that I would ask the Committee to 
consider.
    I think we have to recognize that simply requiring more 
operations to be confined animal feeding operations to get that 
permit is not the right approach. What is important is not what 
you term them, it is what they do on the ground. It is what 
practices they put in place to give us the results we are 
looking for in clean water.
    Second, our farmers deserve clear, predictable legal 
obligations. We need to know what it is we are obligated to do. 
And that conversation has begun, and it is ongoing. To the 
credit of Chuck Fox of the EPA and the USDA, we have had these 
conversations. Knowing where the boundaries are is important. 
But for the farmers at the outset, given the four pieces that 
are at play here, we need to understand where the boundaries 
are.
    We also ask in this regard, and we suggest, that the 
proposed legislation to reauthorize the Bay includes some 
provision that dispels the notion that the EPA will be the 
regulatory authority on farms under the bill. Make the 
expectations clear. If a farmer has developed and is 
implementing a plan, let's acknowledge that. That is an 
important part of building their trust and getting the trust we 
want.
    There is much I could talk about on the compliance side. 
There is nothing more important than getting good technical 
assistance on the ground, and having resources available both 
for the technical assistance, but also to help farmers and 
landowners who will need the money to implement the plans. We 
need to make that available.
    We need a good tracking system. One of the revelations that 
I think has come out of this discussion in the last several 
months is that we are very good at tracking what we pay for as 
a government. We are not good at tracking what farmers and 
landowners have done on a voluntary basis. All of that, when 
you start counting practices and counting acres that in the 
models equate to certain changes in water quality. We need to 
make sure that we are capturing that and doing a good job of 
it, and that is a Bay-wide piece. We have taken some actions in 
the state, and we have talked to USDA and the EPA about that.
    But I think that is one of the items that helps build the 
confidence of the folks who are asked to do more, to at least 
give them credit for what they have already done. So we put 
that on the table, a good tracking system that needs to be 
available.
    And we believe that new technologies will also help us get 
there. It is part of the way you will address the problem. 
Science is part of the solution here. We need technologies and 
investments in those technologies.
    With that, let me just stop where I began, and that is 
there are co-equal goals: clean water and viable agriculture.
    [The prepared statement of Mr. Redding follows:]

      Prepared Statement of Russell C. Redding, Acting Secretary, 
         Pennsylvania Department of Agriculture, Harrisburg, PA
Introductory Comments
    Chairman Holden, Members of the Subcommittee on Conservation, 
Credit, Energy and Research and guests, thank you for inviting the 
Commonwealth of Pennsylvania to be a part of this important hearing 
concerning the multitude of legislative, regulatory and administrative 
strategies that are being considered to help improve the water quality 
of the Chesapeake Bay, its tributaries, and its watershed. On behalf of 
Governor Edward G. Rendell, it is my honor to testify before you today.
    There is no doubt that the Chesapeake Bay and its tributary waters 
are natural resources of outstanding ecological, economic and cultural 
importance to the citizens of the United States, and especially to the 
citizens and farmers of Pennsylvania. In fact, the Obama Administration 
has recognized the Chesapeake Bay as a national treasure worthy of 
national attention.
    The strategies being discussed here today are in part the result of 
that Presidential attention, in part the result of Congressional 
attention, and in part the result of the judicial process as the courts 
have mandated that the Bay Watershed jurisdictions develop a plan for 
clean water. Surely these programs must address the broad spectrum of 
very important natural resource and cultural issues which are 
multifaceted, complex and intricately intertwined. Your interest and 
willingness to examine these strategies and how they will impact 
Pennsylvania farmers, citizens and communities is greatly appreciated.
    Let me be clear at the outset, I believe we need to have two key, 
clear, and co-equal goals in any effort to restore the Chesapeake Bay 
and its watershed.

        First, it is imperative to meet the goals established for clean 
        water for Pennsylvania and other Bay Watershed states.

        Second, it is imperative that we have economically viable and 
        thriving farms and strong communities in Pennsylvania and other 
        Bay Watershed states.

    To accomplish these goals, we need strong Federal support. This 
Committee, and the Congress, must be commended for your work on the 
farm bill to deliver to the watershed those tools and resources needed 
to keep farmers in business protecting clean water. Now, we have a 
second shot at the apple with the reauthorization of the Bay Program in 
the Clean Water Act. If done right, this legislation can compliment the 
farm bill and again ensure that farming will be sustainable while farms 
are managed to deliver clean water.
    It is clear to me that the problems we face in meeting the Bay 
nutrient and sediment reduction goals is not exclusively an 
agricultural problem, nor is it exclusively an urban problem; 
regardless, it is a Pennsylvania problem. More than three million 
Pennsylvania citizens call a portion of the Chesapeake Bay Watershed 
their home. Each and every person that lives in a portion of the 
Chesapeake Bay Watershed contributes to the nutrient and sediment loads 
that are impacting the Bay. Whether you milk cows in Bradford County, 
fertilize your lawn in the suburbs of State College, flush a toilet in 
Lancaster City, or park your car at the mall in Gettysburg, we all 
contribute to the nutrient and sediment loads that are impacting the 
Bay. Likewise, we all need to contribute to the solutions that will 
help restore the Bay.
    Approximately 40,000 Pennsylvania farmers rely on the soil, water, 
air and other natural resources of the Chesapeake Bay Watershed to 
raise and market their crops and livestock, support their families and 
communities; and to help feed the citizens of Pennsylvania, the United 
States, and people around the globe. These Pennsylvania farms are 
extremely diverse, from 50 cow Amish dairy farms to 2,500 cow dairies; 
small organic truck farms to cash-grain operations farming thousands of 
acres; backyard cow-calf operations to large-scale poultry or swine 
growers. The diversity of Pennsylvania agriculture is one of its most 
important strengths.
    It is often said that farmers are our first conservationists, and I 
sincerely believe that. Pure and simple, they make their living off the 
land. The quality, health and sustainability of the natural resources 
they manage from day-to-day, year-to-year, and decade-to-decade on 
their farms determines to a large degree their economic success, 
viability and longevity. Farm families are often tied to their land for 
generations.
    Pennsylvania farmers have worked diligently over the generations to 
help protect and restore the natural resources that they and their 
fellow citizens depend on. I believe our farmers take seriously the 
challenges we collectively face in achieving water quality goals that 
have been established for the Chesapeake Bay and its tributaries. They 
fully understand that clean water for the Chesapeake Bay means clean 
water for their families, their communities and their livestock.
    Pennsylvania farmers are trying to better understand how the 
changes called for in these Executive Order proposed reports, 
strategies and legislative bills will impact their day-to-day farming 
decisions, what changes will they need to make, and what the costs will 
be. It is imperative that as legislative leaders and appointed 
political leaders, we fully understand the impact of these proposals, 
ensure the solutions are practical, balanced and effective, and work to 
provide the financial and technical resources that will be necessary to 
implement these changes.
Current Economic Challenges
    I would do an injustice if I did not note that farmers are also 
dealing with the some of the most difficult and challenging economic 
conditions that they have faced in more than 30 years, at the same time 
they are being asked to do more for the Bay. Requiring farmers to 
expend significant amount of funds for conservation practices during 
this economic recession could force many operators to make difficult 
decisions about leaving the industry.
    In addition, state and local governments in Pennsylvania also face 
very real economic challenges. Pennsylvania's 2009-2010 state revenue 
short falls resulted in the need to make difficult and painful 
reductions in state agencies' budget and staff complements. County and 
local governments are currently adopting 2010 annual budgets that are 
extremely tight due to revenue short falls. County conservation 
districts, which depend on a combination of state and county based 
funding sources, are being impacted especially hard during this annual 
budget cycle. Conservation districts are a key component of 
Pennsylvania's outreach and technical assistance programs for nonpoint 
source pollution programs.
    Any Chesapeake Bay Watershed restoration strategy, initiative or 
legislative solution must provide adequate Federal funds necessary to 
accomplish new regulatory requirements and initiatives. As a state, we 
truly appreciate and value the funds provided through farm bill 
programs such as EQIP, and especially the Chesapeake Bay Watershed 
Initiative. These funds and the technical assistance they bring to 
Pennsylvania are critical to our success, but unfortunately 
significantly more financial and technical resources are needed to 
achieve the nutrient and sediment reductions that are called for in the 
TMDL and draft strategy.
    For these reasons, our approach to the Bay restoration must be 
viewed over many years to address the economic and fiscal cycles that 
we will have to manage through.
Complexity of Challenges Faced
    As I mentioned earlier, these strategies address a broad spectrum 
of very important natural resource and cultural issues that are 
multifaceted, complex and intricately intertwined. This is a very 
complicated equation with a common denominator--the Chesapeake Bay. 
Parts of the equation include:

   The Presidential Chesapeake Bay Watershed Executive Order 
        with its seven draft reports and a draft strategy.

   The ongoing Chesapeake Bay Total Maximum Daily Load (TMDL) 
        process to establish enforceable waste load allocations and 
        caps throughout the watershed that is currently being 
        implemented under existing authorities of the Federal Clean 
        Water Act.

   The proposed reauthorization of the Chesapeake Bay Program 
        provided for under Section 117 of the Federal Clean Water Act, 
        including S. 1816 and H.R. 3852 which propose to reauthorize 
        section 117, including broad codification of the TMDL process.

   EPA Region 3's new ``Agricultural Assessment Initiative'' 
        currently taking place on 26 farms (25 Amish, 1 English) in 
        Watson Run, Lancaster County.

    The complex and inter-related nature of each of these proposals and 
actions is challenging to those whose full-time job it is to review 
rules, regulations and legislation. Imagine how overwhelming they are 
when you're hustling everyday to make a living from farming.
    The bottom line is Pennsylvania, and especially Pennsylvania 
farmers, have much at stake in the intricate details of the evolving 
national strategies and plans regarding the restoration of water 
quality in the Chesapeake Bay and its watershed lands and communities.
Recognizing Accomplishments to Date
    Pennsylvania has worked diligently over many decades to help reach 
the water quality goals for the Chesapeake Bay and its tributaries. We 
were a signatory to the original 1983 Chesapeake Bay Watershed 
Restoration Agreement. From the beginning, Pennsylvania's approach has 
focused on each of the challenges we have faced, with a strong emphasis 
on agricultural nonpoint source pollution.
    Pennsylvania leads the Chesapeake Bay states in measures critical 
to the restoration of the nation's largest estuary. The U.S. 
Environmental Protection Agency's most recent calculations show 
Pennsylvania farmers can proudly lay claim to 55 percent of all the 
nitrogen reductions made by agriculture anywhere in the multi-state 
watershed. This leadership derives from the Commonwealth's set of 
agricultural stewardship firsts:

   The first mandatory farm nutrient management plans.

   The first nutrient management program to regulate nitrogen 
        and phosphorus.

   The first EPA-approved regulatory program for concentrated 
        animal feeding operations.

   The first Bay state permanently to preserve 20 percent (now 
        more than 3 million acres) of land in the watershed. More than 
        425,000 of those acres represent some 3,900 preserved farms 
        (required to follow a conservation plan), representing an 
        investment of more than $1 billion in state, county and Federal 
        funds.

    The Commonwealth also met its goal to plant 600 miles of riparian 
forest buffers well ahead of the 2010 goal. Pennsylvania is home to the 
largest Conservation Resource Enhancement Program in the entire nation. 
Our CREP program delivers more than $50 million in state and Federal 
assistance for best management practices and, unlike other Federal farm 
bill programs, targets key edge-of-stream BMPs to maximize water 
quality. Pennsylvania leads the Bay states in this category after 
restoring 3,212 miles of 35 feet-wide buffers in the watershed.
    From 2007 to 2009, Pennsylvania has invested more than $750 million 
in a variety of programs to improve water quality in the Bay. This 
includes $264 million in Commonwealth funds for financing municipal and 
industrial wastewater systems. The largest funding sources have been 
the Growing Greener bond initiatives, the state Resource Enhancement 
And Protection Program (REAP), the Pennsylvania Farmland Preservation 
Program, and land conservation acquisitions and easements funded by the 
Department of Conservation and Natural Resources, through Growing 
Greener and the `Key 93' real estate transfer tax fund.
    Together, these measures and others have helped Pennsylvania 
achieve 46% reductions in Nitrogen, 64% in Phosphorus and 88% in 
sediment (as of 2008). Since 1985, the U.S. Geological Survey trend 
analysis of water quality data shows that Pennsylvania has been sending 
cleaner water to the Chesapeake Bay. While we have made important 
gains, there is more to do. The Commonwealth continues to need funding 
to improve water quality in the Susquehanna River and its tributaries, 
and funding for conservation.
Local, State and Federal Partnerships
    To date, achieving water quality goals for the Chesapeake Bay has 
been dependent on strong and balanced partnerships at the local, state 
and Federal level. As new strategies, initiatives, regulations and/or 
laws are developed, it is critical that these partnerships are enhanced 
and that a proper balance of non-regulatory and regulatory approaches 
are maintained. This is especially true as efforts are ramped up to 
address nonpoint source pollution concerns.
    Pennsylvania conservation districts and the USDA NRCS have worked 
for decades to assist landowners in voluntarily managing their natural 
resources in a manner to minimize nonpoint sources of pollution 
(nutrients and sediment). They have developed relationships and trust 
with landowners that are critical to solving nonpoint source pollution 
problems. Our conservation districts also have experience in managing 
regulatory nonpoint source programs such as nutrient management and 
erosion and sediment control programs. When these efforts are combined 
with the regulatory tools of the Pennsylvania Department of 
Environmental Protection and other state agency partners, Pennsylvania 
has access to a suite of tools that we believe are best equipped to 
accomplish the nutrient and sediment reduction goals for the Chesapeake 
Bay and its tributaries.
    The key to success in addressing nonpoint source pollution problems 
is using the right tool for the job at the correct time. Some 
situations call for technical and or financial assistance; some call 
for a regulatory approach; and some call for a mix of both. The key is 
balance. By utilizing the appropriate mix of tools, positive tension 
can be created that causes farmers and landowners to change behaviors 
and adopt best management practices that are necessary to reduce 
nutrients and sediments being delivered to the Bay.
    Adopting a heavy handed or unbalanced approach will only drive 
farmers away from compliance and or out of business. On the other hand, 
if we work smartly, with a balanced approach, and allow the agency(s) 
with the appropriate skills and necessary tools to work with farmers 
and landowners, we will have a greater chance of accomplishing our goal 
of clean water and thriving farms.
    Based on the success of this existing regulatory frame work, we 
recommend EPA and other Federal agencies work cooperatively with 
Pennsylvania agencies to develop and implement a strategy for achieving 
widespread compliance of agricultural producers using existing 
Pennsylvania legal requirements. The strategy should address the 
following:
    Regulatory Authority:

   Recognize that simply requiring more operations to obtain a 
        Concentrated Animal Feeding Operation (CAFO) permit is not the 
        answer to improving water quality, but rather we believe 
        implementing Pennsylvania's current regulatory authority that 
        calls for an active on-site collaboration between producers and 
        conservation professionals to identify and implement required 
        practices for all farms, is the best approach.

   Farmers require and deserve clear and predictable legal 
        obligations. We must do a better job of communicating those 
        expectations to farmers, and provide them with tools that 
        facilitate their ability to comply. Any changes to regulatory 
        and enforcement strategies must be made in a transparent manner 
        with cooperation between Federal, state, and local partners. In 
        this regard, we suggest that the proposed legislation to 
        reauthorize the Bay Program includes some provisions that 
        dispel the notion that EPA will be the regulatory authority on 
        farms under this bill and make the expectations clear. If a 
        farmer has developed and is implementing a plan (in accordance 
        with any existing state and/or Federal requirements and in 
        accordance with the criteria established), then the producer 
        should be deemed to be in compliance with the TMDL and its 
        Watershed Improvement Plan (WIP). Simply stated, if the Federal 
        Government develops a set of approved conservation practices 
        for the Bay water quality, and those practices being 
        implemented are part of an approved conservation and 
        comprehensive nutrient management plan, then the producer is 
        assured they have met the requirements.

   The TMDL and the proposed language to reauthorize section 
        117 both recognize that one size does not fit all and identify 
        the states as the entity that will develop and carry out 
        Watershed Implementation Plans (WIPS). EPA has a legitimate 
        interest in overseeing a state's implementation, but as long as 
        a state continues to meet its commitments under the 
        Implementation Plan, the state must remain the primary entity 
        for regulation and enforcement. However, for a state to be 
        successful, we do need a strong Federal partner in the area of 
        compliance assistance.

    Compliance assistance:

   The proposed legislative language to reauthorize section 117 
        recognizes the crucial role that technical assistance plays in 
        agricultural compliance. We cannot underestimate the benefits 
        of having knowledgeable conservation professionals who can meet 
        one-on-one with farmers. The time and money spent on these 
        relationships are extremely cost-effective in the long run 
        because they help to ensure that practices are implemented 
        correctly both for the environment and for the farmer. This in 
        turn will help to keep plans implemented and practices on the 
        ground.

   There is a critical shortage of technical assistance and 
        compliance oversight staff in Pennsylvania. Providing 
        additional technical assistance capacity (planning/engineering) 
        through conservation districts, an enhanced technical service 
        provider (TSP) program and increased compliance oversight staff 
        is critical. USDA must take action to expand their capacity 
        under the TSP program, and EPA must allocate funding to address 
        the staffing shortfall for compliance oversight staff at the 
        state agencies and conservation districts.

   Technical and financial assistance programs must be 
        coordinated within the state to ensure that all farms develop 
        and implement the necessary conservation and manure management 
        plans. Program delivery and conservation practice 
        implementation at the state level should be integrated with 
        EPA's expectations for water quality improvement. They should 
        also be linked to individual states' implementation plans and 
        milestones.

   A tracking system, to be effective, must include the ability 
        to capture all conservation practices, including those 
        implemented with or without Federal or state funding. Current 
        modeling has no effective method for including practices (i.e., 
        cover crops, reduced tillage) established independently of 
        public assistance.

   Technical and financial assistance programs should be used 
        holistically to address the overall water quality challenges on 
        a particular farm, instead of the current piecemeal approach 
        that leaves some water quality problems unaddressed. Good 
        overall farm management throughout the watershed is needed to 
        reach the goals we need to reach, not just individual priority 
        practices on certain farms or regions.

   The practices needed on each farm must be site-specific and 
        address water quality cost-effectively. While we recognize that 
        best management practices must meet certain standards that 
        demonstrate water quality improvement, a rigid set of standards 
        may actually be a hindrance to compliance instead of an asset. 
        Instead, we need flexible standards that, while still being 
        based on water quality outcomes, recognize the differences 
        between types of farms and their configuration on the 
        landscape.

   New and alternate technologies (i.e., phytase, manure 
        digestion) can play a key role in helping some farms improve 
        water quality. Strategically targeted technologies in areas 
        where it can make the most difference can be very cost-
        effective. For example, focusing the placement of enhanced 
        regional digesters in areas of Franklin and Lancaster County 
        could help achieve 20 percent of Pennsylvania's manure-related 
        reductions. Investments in new research or technological 
        developments can provide significant opportunities.

   Effective and simple planning tools are needed in order to 
        assist farmers in their efforts to comply with water quality 
        obligations. As we move to deal with a greater number of 
        smaller farms, we need to have planning tools that can be 
        easily understood and completed by farmers or their 
        consultants. The current array of extensive planning tools has 
        relevance to the larger farms; however, a very simple approach 
        is appropriate and needed in order to ensure compliance with 
        the vast number of smaller farms. Pennsylvania is in the 
        process of developing these tools (i.e., OneStop Online 
        Conservation Plans) and needs additional resources to finalize 
        them for public use.

    Mr. Chairman and Committee, I'll end where I began by saying there 
are two co-equal goals--

        First, it is imperative to meet the goals established for clean 
        water for Pennsylvania and other Bay Watershed states.

        Second, it is imperative that we have economically viable and 
        thriving farms and strong communities in Pennsylvania and other 
        Bay Watershed states.

    If we are going to be successful, we must find balance between 
these goals and be flexible as we develop the strategy. This year and 
next, as the Reauthorization of the Bay Program is considered by 
Congress, we hope that you will continue to champion these inextricably 
linked goals. In doing so, you will be greatly assisting the 
Commonwealth of Pennsylvania, the Chesapeake Bay and farmers throughout 
the watershed.
    Furthermore, we hope that you will continue to be our champion as 
the farm bill is reconsidered, each time assuring that farm 
sustainability and clean water are considered in tandem. The Bay-wide 
TMDL must be implemented by 2025. Between that end goal and now stands 
16 years and at least two, possibly three farm bills. We must count on 
you then, as we count on you now, to be the voice for farms and clean 
water.
    Thank you.

    The Chairman. Thank you, Mr. Redding.
    Ms. Mills, Mr. Goodlatte and I and many other Members of 
this Subcommittee and the Committee worked very hard to come up 
with a good Chesapeake Bay Program in the farm bill and devoted 
mandatory money for this effort. We have heard, and you have 
said, that it has been very popular, and we are committed to 
making sure this program works.
    The Executive Order outlines several new initiatives for 
USDA, and I want to make sure that we are all on the same page 
with regard to the role of ag in the Chesapeake Bay region. Can 
you assure us that the Bay program in the farm bill will be run 
and operated by USDA only?
    Also, can you assure us today that all farm bill money is 
allocated and based on decisions made by USDA?
    Finally, can you assure us that agriculture decisions are 
made by the Department of Agriculture?
    Ms. Mills. Yes, sir. I would answer in the affirmative on 
all of those. As it has for decades now, USDA has decided where 
and how we invest farm bill dollars. This does not change with 
the Chesapeake Bay at all.
    We have been leaders in this. Certainly, as Mr. Redding has 
indicated, there is a strong partnership and consultation with 
our local, state and Federal partners, whether it is local 
working groups, conservation districts, state technical 
committees, Federal partners including the U.S. Fish and 
Wildlife Service, USGS and EPA. But at the end of the day, it 
comes down to the science and the judgment of the NRCS staff as 
to where these dollars are invested, both base farm bill 
funding dollars and the $188 million Chesapeake Bay program 
dollars.
    The Chairman. Well, we are with you. We look forward to 
working with you.
    Mr. Fox, there are several regions of the country that have 
similar problems that we currently are experiencing with the 
Chesapeake Bay. Can you explain what distinguishes the need to 
emphasize the new regulatory and enforcement approach in the 
Bay but not in other regions, such as the Gulf Coast?
    Mr. Fox. Yes, Mr. Chairman. The fundamental nature of the 
Clean Water Act is a mandate for EPA, working with the states, 
to tailor solutions to meeting the unique water quality 
challenges of a specific water body.
    We all remember when Lake Erie was declared dead in the 
1970s. The response by states and the Federal Government was a 
series of pollution control actions to improve water quality in 
Lake Erie. These were not pollution control actions that were 
then implemented throughout the nation. It is the way the Clean 
Water Act is designed and how it is being implemented. All of 
our actions are dictated towards improving and achieving the 
water quality goals that are established by the states.
    As a practical matter right now in the Chesapeake Bay 
Watershed, EPA is implementing the CAFO regulations uniformly 
in the Bay Watershed and throughout the country. There is no 
difference whatsoever with how we treat a CAFO in Virginia, 
Maryland, Pennsylvania, or how we treat one in Iowa with 
respect to Federal law.
    There are sharp distinctions in state laws in how they 
regulate different sources throughout the country. 
Fundamentally, our challenge here is, as Russ said, Mr. Redding 
said, is to ensure viable agriculture and at the same time 
achieve our goals for the Chesapeake Bay and the communities 
throughout the watershed.
    The Chairman. Mr. Fox, last week we heard from Jude Capper, 
a dairy economist that I mentioned in my opening statement, and 
I would like to enter her testimony into the record for this 
hearing, along with some points that the dairy sector has been 
doing to increase productivity while reducing the carbon 
footprint.
    [The information referred to is located on p. 93.]
    The Chairman. Also, we will hear from some on the second 
panel who will talk about voluntary programs underway to reduce 
pollution in the Bay. My question is, given the voluntary 
actions currently underway by agriculture, coupled with new 
measures in the farm bill, why aren't we giving these 
initiatives time to be implemented and to work? Why are we 
increasing regulations before we give some of the programs a 
chance to show their progress?
    Mr. Fox. That is an excellent question, and one that we 
struggle with every day. I look forward to learning more about 
the dairy examples that you used. In the Chesapeake, we have 
similar examples that I think cause us a great deal of 
satisfaction.
    The poultry industry, which you will hear from soon, has 
voluntarily introduced some feed additives which have greatly 
reduced the phosphorus concentration in the manure. There have 
been tremendous success with voluntary programs since the Bay 
program was started in 1983.
    As you heard my counterparts on either side of me testify, 
since the Bay program began, we have achieved roughly a 50 
percent reduction in ag pollution, 50 percent of the goal we 
need to achieve, and that is a remarkable testament to 
voluntary programs.
    The challenge we face today, though, is to achieve our 
ultimate goals for the Chesapeake Bay, we need to do far better 
than we have done in the past. This is where we are trying to 
find the appropriate mix of enhancing our voluntary programs, 
and in some cases strengthening the regulatory programs. At the 
end of the day, the goals which have been established by the 
Governors and the Administrator of EPA is that we have a 
Chesapeake Bay to restore for the people in the communities and 
the watershed.
    The Chairman. Mr. Redding, if you want to comment on that, 
and do you think anything in the Executive Order, or any of the 
legislative initiatives that are being proposed, will put 
Pennsylvania farmers at a competitive disadvantage?
    Mr. Redding. Mr. Chairman, first on the voluntary efforts, 
I would say a couple of things. Clearly we have made great 
progress with our voluntary actions. I think at the moment we 
are in, and I refer to this time as sort of a teachable moment. 
We clearly, for the resource issues I mentioned earlier and in 
agriculture, it is a moment that we have to be clear what the 
expectations are. We can, both as a Congress and state, outline 
where we want these producers to go, and particularly where we 
want our citizens to go so all of us are clear. So the 
voluntary actions have brought us so far. We will continue 
that, and that will be parallel with some other actions.
    But, the moment we have right now is to change the game, 
and that is to be clear right now about what we want 
agriculture to do and where we want them to be. In 16 years, 
the TMDL is to be implemented. And when this Executive Order, 
different pieces are done and with the Clean Water Act, I think 
you have a moment here, Mr. Chairman, to use to reframe the 
discussion. Acknowledge first of all that there has been some 
progress. We are halfway there. And then be clear about how we 
are going to reach the second half of that goal.
    It also presents an opportunity for us, with the efforts at 
hand, to spawn some innovation. How do you close the gap? If we 
haven't done it in 25 years, what is going to get us there? 
There is going to be technology, and there are folks who 
haven't complied to this point, and we haven't needed them to 
because of recommendations or law. We ought to use them. So you 
have this moment to really spawn some innovation.
    I think, in terms of the Committee and for the Federal 
Government, you have spoken very clearly in the farm bill about 
what your expectations are. I think in this initiative, we now 
have an obligation to tell you what we have done. And one way 
to do that is to be clear in the framing, so everyone in the 
Chesapeake Bay Watershed knows where the end goal is and how we 
will get there. We will do it with volunteers, but we will also 
do it with continued investments and collaboration with 
partners.
    The Chairman. The gentleman from Virginia.
    Mr. Goodlatte. Thank you, Mr. Chairman.
    Let me ask both Ms. Mills and Mr. Fox, has the 
Administration issued a statement of policy or SAP on the 
legislation introduced by Senator Cardin, and there is a House 
companion bill as well?
    Ms. Mills. Congressman Goodlatte, we have not. We are 
looking forward to commenting on the bill and will do so as 
soon as we get a request to comment on it.
    Mr. Goodlatte. Do you need a request to comment on it?
    Ms. Mills. Yes. My understanding is that we need a formal 
request. Actually, we did meet with Senator Cardin's staff last 
week, I believe, and made the request. And we have eagerly 
started looking at the bill, and will comment on it the 
earliest we can.
    Mr. Goodlatte. Have you consulted with Senator Cardin on 
the drafting of this legislation?
    Ms. Mills. No, sir, we did not.
    Mr. Goodlatte. You have stated that farms are essential to 
the fabric of the Bay Watershed while also alleging that they 
are a major source of pollution in need of greater regulatory 
mandates. Farmland continues to diminish, while population 
growth skyrockets, along with more impervious surfaces. Farms 
operate on thin margins in the best of times. This legislation 
and the Administration's plan promises more costly regulatory 
mandates for farmers. How do you expect to improve the Bay with 
policies that will accelerate the loss of farmland and the 
proliferation of land uses that deliver a greater nutrient load 
to the Bay?
    Ms. Mills?
    Ms. Mills. USDA cannot comment on the role of regulation, 
and we have not done so. So, again, with regard to the 
legislation, we do look forward to commenting on the bill and 
giving our full analysis of each of the provisions in the bill.
    I will note that one question we are asking ourselves as we 
have looked at the legislation is reconciling what the farm 
bill asked USDA to do, and that is to establish uniform 
standards for ecosystem service markets. And we have within the 
Natural Resources and Environment mission area stood up an 
Office of Ecosystem Service Markets to do that. And we are 
pleased that in the Executive Order draft summary, that USDA is 
identified as the leader in working with Federal partners to 
develop this framework and these standards.
    There appears to be a conflict between what the Executive 
Order summary and the farm bill say and what is in the 
legislation. This is something that we are looking at, and 
again, one of the provisions we are interested in giving 
comments on.
    Mr. Goodlatte. Did you reach out to the agricultural 
community prior to the Executive Order? And if so, specifically 
who in the ag community did you reach out to?
    Ms. Mills. Yes, Congressman Goodlatte, there were a series 
of listening sessions throughout the summer during the course 
of crafting our, USDA's, specific 202(b) report, and USDA staff 
was involved in that in addition, just after the publication of 
both the----
    Mr. Goodlatte. But Ms. Mills, the Executive Order was 
issued on May 12.
    Ms. Mills. Yes.
    Mr. Goodlatte. Who did you reach out to in the agricultural 
community prior to the issuance of the Executive Order?
    Ms. Mills. The consultation all took place afterwards.
    Mr. Goodlatte. Why was that? Before you issue an Executive 
Order that has dramatic implications on the agriculture 
community, on farms all across the Chesapeake Bay region, why 
wouldn't you reach out to members of that community, at least 
to members of the Farm Bureau or other organizations like that, 
before you issued an Executive Order?
    Ms. Mills. The Department of Agriculture was not involved 
in drafting the Executive Order.
    Mr. Goodlatte. Mr. Fox?
    Mr. Fox. Yes, Mr. Goodlatte, if I can respond to a few of 
the issues.
    Mr. Goodlatte. Well, let me ask you to respond to that 
question. Did you reach out to members of the ag community 
prior to the issuance of the Executive Order on May 12?
    Mr. Fox. The roots of the Executive Order go back to an 
initiative that began with Governor Kaine, Governor O'Malley 
and Governor Rendell, on behalf of the Chesapeake Executive 
Council, they presented----
    Mr. Goodlatte. I didn't ask for a history of it. I asked 
you whether the Environmental Protection Agency reached out to 
the agriculture community in the Chesapeake Bay region prior to 
issuing an Executive Order that has, potentially, a dramatic 
impact upon the viability of agriculture, of farms, in my 
district and Mr. Holden's district and dozens of other 
Congressional districts in the Chesapeake Bay region?
    Mr. Fox. The Administration was responding to a request 
from the Chesapeake Bay Executive Council to issue the 
Executive Order. We did not have extensive consultations with 
any interest group, whether they were agricultural interest 
groups, municipal interest groups, or stormwater interest 
groups.
    Mr. Goodlatte. Thank you.
    Earlier this week, the Waterkeeper Alliance filed a 58 page 
petition with the EPA that would require the EPA to be the 
enforcer for the Clean Water Act to better protect the 
Chesapeake Bay. Their petition, if approved, would set 
increased NPDES fees and increased EPA oversight of state 
government agencies, and, essentially, having the EPA run the 
Clean Water Act in the Bay Watershed. While I assume you have 
not taken a position on this petition, can you share with the 
Committee your vision of the role you think EPA should play in 
enforcing and overseeing the Clean Water Act in the Chesapeake 
Bay Watershed and throughout the country?
    Mr. Fox. Yes, Mr. Goodlatte. Just a few very brief 
comments. First, your comment about expanded regulations 
pursuant to the Executive Order, I just want to make it very 
clear that we have only proposed one specific change in 
regulatory authorities, those governing CAFO regulations, and 
specifically it relates to the provisions of the land 
application of manure with respect to CAFO regulations.
    Second, I agree completely with your characterization about 
sprawl and development patterns and how difficult it will be to 
achieve our goals given the patterns of the past.
    Third, with respect to legislation, the Administration did 
receive a request from Senator Cardin to testify on the 
legislation. We do have Administration-approved testimony that 
I would be happy to provide to the Committee. It doesn't 
specifically support or oppose the legislation in terms of a 
bottom line, but I would be happy to get that to you.
    Finally, with respect to the petition, we received numerous 
petitions for withdrawal of NPDES programs. We have received 
over a dozen of them. We received one when I was Assistant 
Administrator for the State of Virginia. We consider these 
pursuant to the legal requirements of the Federal Clean Water 
Act. Every single state in the country that has a delegated 
program is delegated pursuant to the law by EPA, and we have an 
obligation to ensure that the states are implementing these 
programs efficiently and effectively, and this petition will be 
considered like all of the others.
    Mr. Goodlatte. And what factors will you employ in doing so 
in terms of what role you believe the EPA should play in 
implementing Clean Water Act provisions within the Chesapeake 
Bay Watershed relative to the role of the states?
    Mr. Fox. I haven't specifically read the petition, let me 
be clear about that. The allegations that I have heard about in 
summaries include that the State of Maryland is not reissuing 
permits in a timely fashion, is not taking aggressive 
enforcement action, and is not appropriately implementing the 
TMDL programs. These are three allegations that the petitioners 
have made. Again, we are going to have to go through a process 
to review these evaluations and have conversations with the 
State of Maryland and, ultimately, make some determination. We 
have never in the history of the agency withdrawn a state 
program.
    Mr. Goodlatte. Mr. Chairman, I have plenty more questions, 
but my time has expired.
    The Chairman. The chair thanks the gentleman.
    The gentleman from North Carolina.
    Mr. Kissell. Thank you, Mr. Chairman.
    And I would like to thank the panel for being here today.
    The Chesapeake Bay area is unique, vital and a very 
important community in all regards. I have learned from reading 
Michener's book a few years ago, Chesapeake, to understand the 
history and culture and the environment. Also, in having a wife 
whose family is multigenerational in farming in Lancaster 
County, I am very familiar with that part of the world also.
    Mr. Fox, I have concerns that we are making decisions, and 
I would like for you to respond to this concern, that we are 
making decisions based upon a model that predates a lot of the 
changes that have taken place in agricultural practices. It is 
based on numbers and agriculture Census numbers that would not 
be current to some of the improvements we have already heard 
about in the poultry and dairy industry, and agriculture in 
general. You even responded a second ago, I think that you said 
you are interested in learning more about these programs and 
the positive effects.
    Are we making decisions, and how would you respond to 
somebody who says that you are making decisions based upon 
outdated information, a model that has changed, and you are 
going to require a lot of changes in the agricultural community 
based upon outdated information? How would you comment on that?
    Mr. Fox. Thank you, and I welcome the connections you have 
to the Chesapeake Bay. It is a wonderful place.
    The short answer is, we can be very proud of the science 
that we have on the Chesapeake Bay Watershed. I will tell you, 
as the former national manager of the Federal Water Program, I 
don't know of any other place in the country where we have as 
good information about the specific cause and effects of 
pollution like we have in the Chesapeake Bay.
    The model that you referred to specifically has been peer-
reviewed numerous times. It has been in development for over 25 
years. Literally tens of millions of dollars have been invested 
into it. And at the same time, it is but one tool that we use, 
ultimately, to make decisions. I have a lot of confidence in 
the model. But it is, at the end, just a model, and it is 
something you should know that is constantly updated with new 
information.
    In the last year, for example, we have revised all of the 
calculations for the efficiencies of various agricultural best-
management practices based on some of the best science that we 
have. Some of these efficiencies showed that these practices 
were more efficient than we thought, and others showed that 
they were less efficient. And this is the kind of commitment we 
have to science. It is an interagency commitment and a multi-
jurisdictional commitment to science that I think has been the 
hallmark of the Chesapeake Bay program.
    Mr. Kissell. So people in the agriculture community then 
could accept and feel good that you all will have taken into 
consideration all of these improvements that have been made and 
will be made. So, as we have talked about and witnesses have 
said, it is a very fragile economic time for agriculture 
everywhere, and this area included, and regulations that are 
put on top of things that are already being done that don't 
serve to a positive end against what is being done, that you 
all take that into effect.
    Mr. Fox. I won't for a minute begin to represent the 
agricultural community, but I will tell you there is one 
significant issue, at least one that I am aware of. Mr. Redding 
mentioned it in his testimony. We do need to improve the 
procedures by which we incorporate the most recent data about 
practices that are going on the ground, particularly those that 
are not part of any Federal or state cost-share program, and we 
are working closely with our counterparts at the state. NRCS, I 
am aware, is very actively working on this. It is something 
that we hope to improve, going forward. But again, it is 
important to keep in mind that the model is just one tool that 
we use, ultimately, to guide our decisions.
    Mr. Kissell. As my time is running out, I would like to 
caution, as we move forward, as the Ranking Member just talked 
about, for us to make proclamations on regulations before we 
seek input is not a good way to go. It needs to be, if we talk 
about a joint exercise, it needs to be a fully informed joint 
exercise.
    Mr. Fox. Mr. Chairman, I need to dispel something very 
clearly here. Any regulatory actions by this agency will go 
through the normal regulatory procedures. At this point, we 
have a draft strategy. As I suggested, it proposes one change 
in agricultural regulations dealing with CAFOs. If this 
regulation is proposed, that proposal process will probably 
take about a year and a half to propose. Finalization of that 
will probably be another year and a half. So you are looking at 
between now and probably 3 years of a whole lot of process 
before any regulations would ultimately be changed for CAFOs.
    The Chairman. The chair thanks the gentleman.
    The Chair recognizes the gentleman from Texas.
    Mr. Neugebauer. Thank you, Mr. Chairman, for having this 
hearing. This issue has implications, not just for the 
Chesapeake Bay Watershed but I believe for agriculture as a 
whole. I have been very concerned about this process.
    With that, I would like to yield the balance of my time to 
the gentleman from Virginia, Mr. Goodlatte, to continue this 
very important questioning he has started.
    Mr. Goodlatte. I thank the gentleman from Texas, who is the 
Ranking Member on our Livestock Subcommittee.
    I want to follow-up on the comments and question of the 
gentleman from North Carolina, which I thought was a very good 
one, regarding the concern about not taking note of the 
dramatic progress that agriculture has made in terms of 
reduction in various types of sediments and so on that get into 
our waterways. It also was pointed out by the Chairman in his 
comments on how efficient dairy production has become in the 
country. And it is true in other sectors of agriculture as 
well.
    But the gentleman from North Carolina expressed concern 
about piling on more regulation. So I would like to ask Mr. Fox 
to comment, even though I know the Administration has not yet 
issued an SAP on the reauthorization legislation that Mr. 
Cardin introduced in the Senate.
    The legislation to reauthorize the Bay is far more 
expansive than simply the reauthorization of the Bay program. 
Included in this reauthorization legislation is the 
codification of President Obama's Executive Order to 
incorporate into the reauthorization legislation new law on how 
agriculture will operate in the watershed.
    President Obama's Executive Order and the subsequent EPA 
section 202(b) reports focus on a centralized Federal oversight 
approach to Bay restoration activities that emphasize 
regulatory mandates and enforcement rather than cooperative 
approaches.
    This reauthorization bill could result in Federal 
regulation and enforcement of the Chesapeake Bay, yet 
legislation introduced earlier this year to reauthorize the 
Gulf States Program simply reauthorizes the program.
    What distinguishes the need to add all of these additional 
provisions into the Chesapeake Bay reauthorization where no 
similar need was found in the reauthorization for the Gulf 
States?
    Mr. Fox. I think you are asking me to speculate on the 
motivation of the Senator for introducing the legislation.
    Mr. Goodlatte. No, I am asking you to speculate on why an 
Executive Order was issued with regard to the Chesapeake Bay, 
and why that Chesapeake Bay reauthorization should be put into 
this legislation? If your position is that it should not be, 
then we certainly would welcome hearing that. If your position 
is that the additional mandates that go beyond the Executive 
Order that are in Senator Cardin's legislation should not be in 
the legislation, we would welcome hearing that as well.
    Mr. Fox. Just to be very clear, the Administration has no 
formal position on the Cardin legislation. And again, I would 
be happy to share our formal Administration-cleared testimony, 
which does discuss some of the nuances that I think you are 
getting at.
    With respect to why the Executive Order was issued, again, 
first and foremost, it was in response to a request that we 
received from the Chesapeake Bay Executive Council, made up of 
the Governors of the Chesapeake Bay States, the Mayor of the 
District of Columbia and the head of the Chesapeake Bay 
Commission. And, second, it was in response to the 
Administrator and the President's interest in delivering on 
some real results for the people of this watershed. The 
Chesapeake Bay, as you well know, we have not fulfilled our 
goals for the better part of almost 30 years, and we believe it 
is time to change that.
    Mr. Goodlatte. Have they achieved those goals in the Gulf 
States?
    Mr. Fox. To the best of my knowledge, the Gulf States do 
not have the specific goals that we have here for the 
Chesapeake Bay.
    Mr. Goodlatte. But do they not have the same type of 
problems with sedimentation and water quality standards that we 
have issues here of in the Chesapeake Bay area?
    Mr. Fox. I couldn't testify to that, sir.
    Mr. Goodlatte. You don't know? The Chesapeake Bay is the 
only watershed in the country that faces water quality issues?
    Mr. Fox. Of course not, and I did not say that. What I am 
suggesting is that I don't know about the water quality 
standards and the criteria for the Mississippi River and the 
Gulf of Mexico. I am quite familiar with those of the 
Chesapeake, and I know of no other part of the country where we 
have dissolved oxygen, chlorophyll and clarity standards with 
the specificity that we have in the Chesapeake Bay Watershed.
    Mr. Goodlatte. So that means, because the Chesapeake Bay 
region, without by the way consulting with the farmers in that 
region, as you have acknowledged, because we have more 
information about the nature of the problem, the farmers in 
that region should face greater environmental burdens and 
economic burdens than farmers in other parts of the country?
    Or are you simply saying because we have reached this 
information with the Chesapeake Bay sooner than we have in 
other areas, what is coming down the pipeline for the 
Chesapeake Bay and the farmers in that region, it is only a 
matter of time before those same burdens would fall upon the 
Gulf States or other parts of the country that have similar 
programs or similar needs and concerns that have to be 
addressed. What we are looking at here in terms of government 
regulation is coming to those areas in the not-to-distant 
future, but you have more information for the Chesapeake Bay so 
you are going there first?
    Mr. Fox. Responding first to your question of consultation, 
it is true that there was not extensive consultation with 
anybody in advance of the Executive Order. I am not aware of 
typical consultation periods that happen with Executive Orders 
anyway. I can tell you there has been extensive consultation 
after the Executive Order at many different points, and I will 
continue that. I have spent many days in your state and the 
Chairman's state and many times with Mr. Redding talking about 
these precise matters. And I am committed to continuing to do 
that.
    With respect to your characterizations about what is 
happening next in other parts of the country, I am trying to be 
respectful, but I just don't feel comfortable talking about it 
because it is not my job, and I am not aware of it. It is 
certainly fair to say that the challenges we face here in the 
Chesapeake are very similar to challenges that other 
communities and waters are facing throughout the rest of the 
country. That is true.
    Mr. Goodlatte. Thank you, Mr. Chairman.
    The Chairman. I thank the gentleman, and recognize the 
gentleman from Maryland.
    Mr. Kratovil. Thank you, Mr. Chairman.
    Let me begin by thanking you for holding the hearing, and 
thanking all of the panelists here today, coming to testify.
    It is, obviously, a very important opportunity for all of 
us to hear from all sides on this issue and do our best. Mr. 
Redding, you have certainly suggested, and all of you have 
suggested, trying to find a reasonable, pragmatic, and fair 
approach to doing something that at times clearly appears to be 
to be at opposite ends--improving water quality in the Bay and 
the watershed and at the same time obviously recognizing and 
doing everything we can to promote and protect the agriculture 
industry.
    My district and the First District both are critically 
important, not only economically but culturally, and as we go 
forward, as we move forward, all of us need to recognize that 
this cannot be a zero-sum game. There has to be a reasonable, 
fair, pragmatic approach. I think everyone has to have an open 
mind about it in moving us forward.
    There is no question we have been trying to clean up the 
Bay for 25 years. We have a long way to go. The flip side of 
that, as Mr. Fox, you and I have talked about on a number of 
occasions, I do feel that there has been substantial focus on 
agriculture as opposed to other areas. You have all mentioned 
the fact that ag has made substantial progress reducing by 50 
percent, and I don't think we have had the same kind of focus 
in other areas. So let me begin with that.
    Mr. Fox, you mentioned in your statement that there have 
been substantial declines in nitrogen and phosphorus loading 
since 1985. Specifically, what has that decline been in 
agriculture, and how does that compare to the other areas of 
municipal-industrial wastewater, atmospheric deposition, and 
urban and suburban stormwater runoff.
    Mr. Fox. With the Chairman's permission, I would like to 
get you the specific quantitative pound reductions for the 
record. I can characterize them fairly precisely though for 
you, Mr. Kratovil.
    The most significant percentage reduction since 1985 has 
clearly been in the wastewater publicly owned treatment works 
sector. There has been literally billions of dollars invested 
in improving pollution control at wastewater treatment plants. 
That is, I think everyone would agree, a very big success 
story.
    Agriculture, as Mr. Redding testified, has contributed 
significant total poundage reductions that have also been very 
impressive. But as I suggested there is still--because it is 
the largest source of pollution, we still have a long ways to 
go.
    There have been also significant reductions in air 
pollution. The one area that we have actually seen going the 
wrong direction, as you implied in your question, has been the 
urban-suburban runoff. This is a huge challenge and it is the 
focus of considerable attention of the Executive Order and some 
of the regulatory responses that we are considering.
    By and large, we have to turn around the pollution loads 
from the urban and suburban sector and not only just get them 
to come down again, but they ultimately have to get reduced. 
And this will require new pollution requirements most likely on 
new development projects, on redevelopment projects, and we are 
going to have to explore ways of retrofitting some of the most 
impactful large development projects that have occurred over 
the last 40-50 years.
    Mr. Kratovil. Mr. Fox and Ms. Mills, one of the things I 
noticed when we were having discussions about the energy bill 
was, looking at Maryland specifically and how Maryland farmers 
in my view have in some ways been ahead of the curve, depending 
on where you are on the issue for good or for bad and the 
consequence of not taking that into consideration in terms of 
moving forward. Similarly, in this situation, I am concerned 
that Maryland farmers have already been leaders in implementing 
best management practices to help clean up the Bay.
    Will the fact that many are already taking responsible 
steps put them at a disadvantage to other states when the 
responsibility to reduce pollution is allocated under TMDL?
    Ms. Mills. Congressman Kratovil, in fact, I was just in 
your district last week in Queen Anne and Kent County, seeing 
some of the steps that producers there are taking to put 
conservation on the ground.
    I think the potential to help agriculture, to help farmers, 
through these new markets, ecosystem service markets, is 
tremendous. USDA is, as I noted earlier, is taking the 
leadership role with the Federal partners to set up standards 
in a framework that will create certainty and expand the market 
opportunities to give producers income, new streams of income.
    We are in conversations with EPA. We feel strongly that it 
is important to create room for producers to take advantage of 
these markets. As Mr. Redding said, we have to take the long 
view here, and we have to allow producers to position 
themselves to not only do what is right and what they want to 
do in terms of stewardship of the land, but also to experience 
the benefits of conservation on the ground through these new 
market center developments.
    So that is certainly our commitment, and we will continue 
to talk to EPA about this.
    Mr. Kratovil. Mr. Chairman, my time has expired. I yield 
back.
    The Chairman. The chair thanks the gentleman, and 
recognizes the gentleman from Pennsylvania.
    Mr. Thompson. Thank you, Mr. Chairman, and I thank the 
panel for being here for your testimony today.
    I will start out by saying I am very disappointed, 
actually, in the shortsightedness of the President's Executive 
Order. While it certainly recognizes the Chesapeake Bay as a 
national treasure, it fails to recognize all components of 
national treasures--and that is our agriculture, our tradition, 
our heritage, the importance of our independence over having 
our own healthy agriculture--there is a failure to recognize 
our farms as a natural treasure.
    As Secretary Redding noted in his testimony, I think he 
captured what the President missed. Our goals are to establish 
clean water, and also to have economically viable and thriving 
farms. That, to me, is extremely critical, both components.
    Secretary Redding, in your opinion, what do you see as some 
of the practical impacts and effects on Pennsylvania farms 
should the Cummings bill become law?
    Mr. Redding. Congressman, I haven't looked at the other 
bill in detail. I will say this: Generally, our concern, as I 
stated, has been sort of respecting that balance between the 
state and Federal Government. I think that is crucial. At least 
early indications are that that balance may not be there, or at 
least recognized fully as it should be. So we think that is an 
important piece that needs to be taken into account.
    So, making sure that that partnership that I spoke of 
earlier, and we recognized here that has been so valuable to 
bringing us to that point, is respected in whatever legislation 
goes forward.
    I, too, think the issues of trading and how they are 
addressed in the legislation are key. I will say in 
Pennsylvania we have the only viable trading program, the only 
workable trading program at the moment. We have eight trades as 
of today. Not big numbers, but you have to start somewhere.
    To the Congressman's earlier comments about how do you find 
this equity between the producers who have really stood up and 
have done everything we asked them to do, what is the incentive 
to keep going? And you have this issue across fence lines. 
Well, part of it is that we can offer those folks, who have 
gone to baseline, who have done a good job, a trading 
opportunity. To deal with some of the issues of the community, 
whether it be the stormwater runoff or municipal authorities, 
the answer is in part linking production of agriculture with 
the other entities. So how trading is handled there is 
important.
    The final point, whatever you do in the legislation has to 
acknowledge the technical assistance and the funding needed to 
do it. The legitimate question we get all the time, if everyone 
knows what the problem is, why isn't it fixed now? Well, part 
of it is money. It is about resources. It is about having 
enough money to do what you want to do, either on the farms or 
at the municipal level.
    So making sure there is some technical assistance to deal 
with getting people--landowners, farmers, others--into the 
proper stage of planning, implementing the plans, and then the 
resources to help them do that.
    But most important in that is making sure we acknowledge 
that this has been a partnership between the Federal Government 
and the state. States should have the primacy in making sure 
that they are meeting the goals set forth so you have the 
accountability, and the EPA then can oversee that to make sure 
it is done.
    But we are continuing the review of the legislation.
    Mr. Thompson. Thank you.
    Mr. Fox, actually just one comment first, and then a 
question for you. One of my colleagues was talking about the 
concern over the regulations, where that would go. You assured 
us it would go through normal regulatory process. Well, myself, 
and I know some of my colleagues are probably skeptical of 
that, given the most recent EPA announcement that 
CO2 is a dangerous gas. That really, from the best I 
can see, circumvented all normal regulatory processing.
    But my question for you is that I really am concerned about 
the attitude toward our farmers that has been shown by some 
organizations pushing this bill. As you mentioned, stormwater 
runoff and agriculture pollution are, in EPA's opinion, the 
largest source of pollution in the Bay. When family farms that 
are struggling currently go out of business, those farms are 
rarely returned to forestland. Instead, those farms are 
developed into shopping malls, houses, and expansions of 
services.
    Can you assure this Committee that as you move forward with 
the Executive Order in whatever Bay program bill that we move, 
that you will do everything you can to assist farmers in 
meeting your goals? That you will do your best not to make the 
precarious financial situation that they find themselves in 
today, for many different reasons, even worse?
    Mr. Fox. Absolutely. We are not going to save this Bay 
unless we can find a way to do it with the cooperation and 
engagement of not just members of the agriculture community, 
but the building community, members of the public, the hunting-
sportsmen community. We all have to be in this together.
    I am acutely aware, I spent enough time with Mr. Redding 
and his counterparts in the other states, I am acutely aware of 
the economic situation facing the farmers in the region and the 
nation, for that matter. We have to be mindful of that and 
tailor our solutions so that they work for everybody.
    The goal we are working on right now is to have practices 
on the ground by the year 2025. That seems like a long way 
away, but there is a lot that has to happen in the next 17 
years, and this is the challenge we face. We have to do that in 
a way that respects the economic realities that not just the 
farmers are facing, but in Russ' case, the economic realities 
that state governments are facing as well.
    Mr. Thompson. You are talking about 17 years. We have had 
25 years and we have remediated--I don't know what the proper 
word is, I guess that is the best word as any--50 percent of 
the problem. You are talking about 17 years and approaching it, 
and you are changing course in how we are going to address it. 
So what is the problem? If you are looking at 17 years out and 
we have mediated the first 50 percent in 25 years, and it takes 
some time I am sure to get that started, what is the problem 
with staying the course?
    Mr. Fox. You have done the math quite well. Just to 
elaborate a little bit on this, the leadership of Mr. Goodlatte 
and Mr. Holden with the new farm bill provisions are huge, and 
this is going to significantly improve things. But, at the same 
time, it is also fair to say that we have done a lot of the 
low-hanging fruit, the easy things first, and Mr. Redding and 
his counterparts will all agree that the challenge gets much, 
much more difficult with time.
    For example, no-till agriculture is now pretty much 
universal throughout the watershed. There are huge benefits 
that we get from that. It has been a tremendous success story. 
We are not going to be able to go to that well again.
    So, this is where we are trying to look at the appropriate 
mix of an expansion of our voluntary programs, expansion, 
hopefully, of using the new farm bill monies as efficiently as 
we can, and then considering some tailored expansion of some of 
our regulatory and accountability programs.
    Mr. Thompson. I am well over my time. Thank you, Mr. 
Chairman.
    The Chairman. I recognize the gentlewoman from 
Pennsylvania.
    Mrs. Dahlkemper. Thank you, Mr. Chairman. Thank you to the 
panel.
    I have a number of questions, but I want to first state 
that I am not from the Chesapeake Bay Watershed. I am from 
Pennsylvania, but I am from the far western side. I am on the 
Lake Erie side, which is where I reside.
    So, Mr. Fox, you brought up Lake Erie. As a school girl, I 
remember when the Cuyahoga River caught on fire. I also know 
the economic benefits that have come to my region from the 
cleaning up of that lake. And we have a beautiful bay on Erie. 
Anyone looking for a vacation spot in the summer, or in the 
winter if you want to ice fish, come up there. But it certainly 
has improved our economy greatly by improving the quality of 
that lake.
    So, I only have 5 minutes. Mr. Fox, if you just could give 
us a 30 second history on that and maybe how that would tie 
into what we are doing today?
    Mr. Fox. Thank you very much. It is a wonderful story. Lake 
Erie was impaired by phosphorous, one of the two nutrients that 
is identical to what we are facing in the Chesapeake Bay. 
Unlike the Chesapeake, it is a very small watershed. It is 
literally a little ribbon, and it was heavily dominated by 
point sources, sewage treatment plans. The fix, the solution, 
was a series of permanent limitations that restricted the 
amount of phosphorous discharges. That in turn led to very 
remarkable improvements in Lake Erie.
    We have had phosphorus limitations in the Chesapeake Bay 
Watershed since the early 1980s from municipal sewage treatment 
plants. Since then the Bay Program has grown and expanded and 
we now have very aggressive programs to control phosphorus and 
nitrogen. But this is exactly what we are trying to do in the 
Chesapeake. It is just a lot harder here, because the watershed 
is so large.
    Mrs. Dahlkemper. Okay. So the 30 years you have been 
working on this is just not enough time because of the expanse 
of the watershed basically?
    Mr. Fox. Right.
    Mrs. Dahlkemper. Thank you for that quick history lesson. I 
do have a couple of questions.
    Mr. Redding, you mentioned in your testimony that the 
economic hardships facing our farmers are dire, and, of course, 
you and I have dealt with this on my side of the state and 
different issues than we are currently talking about today. But 
I just wanted you to elaborate on that a little bit and how 
much you think it would cost for farmers, on average, to 
implement the Executive Order?
    Mr. Redding. Thank you first of all for hosting some 
discussions in your district on dairy and the perils we have at 
the moment on that. Certainly that is what I was referring to 
in the testimony.
    Two points: One is just on dairy, and then for Pennsylvania 
specifically. That is 42 percent of our cash receipts in the 
state; big numbers. It is the key part of agriculture. So what 
happens there at the moment speaks volumes for what happens to 
the rest of agriculture and what you could expect from it.
    It has cost about a $1,000 loss in the last year per cow; 
550,000 cows, that is $550 million of lost income to 
Pennsylvania. So when we talk about resources being available 
to take the next step to implement plans, that is what I was 
referring to.
    In the terms of cost per plan, I think it is going to 
develop. I think for someone to develop a plan, it is going to 
cost a couple thousand dollars to put the plan at least on 
paper. Then it depends on the scope of that plan for 
implementation, but it will be tens of thousands of dollars to 
do it and do it well.
    Mrs. Dahlkemper. And the help that might be there for those 
farmers?
    Mr. Redding. Well, that is a good question. That is why I 
keep emphasizing the technical assistance. It begins there. 
Because the first question for any farmer is what do I have to 
do to get me to the baseline compliance, and that is where 
NRCS, the conservation districts, and the technical assistance 
money that has been available to date, both through EPA and the 
farm bill and the state, has been so critical. But it begins 
there, and then builds from that in terms of the dollars.
    Everything beyond the baseline planning though is a match. 
You have to put a dollar on the table, or some amount, to 
leverage that money. So it is going to take some additional 
resources to get it done. But everything that we are working 
with is anywhere from a 25 percent match to a 75 percent match, 
depending on what the practice would be.
    Mrs. Dahlkemper. Do you see these increased regulations 
really forcing many farmers out of business? I know that it is 
hard to look in the crystal ball, but what do you see, going 
forward?
    Mr. Redding. Well, I don't know if it is going to force 
them out. That is the reason I use the word smart in the 
testimony, because we have to be smart about this. I think we 
know what the end goal is, right? We know where we want to get 
to. But we have to understand the world in which we are living. 
Financially it is upside down right now, right? Financially.
    So having some great expectation we are going to find some 
new money in the next 12-24 months to do what we want to do is 
not the answer. That has to be conveyed though to the 
landowner, the producers, and to many others, is that we are 
taking a long view of this. We will work with you, we will get 
there, and there will be opportunities for you; in our case, if 
you meet the baseline, that there will be some trading 
opportunities.
    We haven't spent a lot of time on that today, but it has 
great potential because it says for the folks that have 
invested for 25 years, you are there. Now you can add value to 
your income stream by trading that across the state, the 
watershed, and potentially the legislation is considered 
federally, across state lines.
    So I don't know if we force them out. But we have to be 
clear up front about what we want them to do, reassure them we 
will work with them, and reassure them we are going to support 
them through the state and conservation districts and have an 
open conversation, but to do that in a positive and 
constructive way.
    Mrs. Dahlkemper. My time has expired. But I just want to 
finish by saying, as I look at my own experience and my own 
district with Lake Erie, there are a lot of economic issues 
that have to do with making sure we have that clean water; 
economic issues for those who work in the aqua-industries, 
whatever they might be, as well as certainly for the health of 
the people, including the agriculture around there. I think our 
farmers are with us on that. We have to find a way to do that.
    The Chairman. I thank the gentlewoman.
    Now I recognize the Ranking Member for a unanimous consent 
request.
    Mr. Goodlatte. Thank you, Mr. Chairman.
    I would ask unanimous consent that three letters be 
submitted for the record. One of those is signed by the 
Virginia Agribusiness Council; one by the Maryland, New York 
and Virginia Grain and Corn Growers as well as the National 
Corn and Wheat Growers; and the third signed by 63 state and 
national agriculture producer organizations, including producer 
groups from each of the six states in the Chesapeake Bay 
Watershed.
    Each of these letters expresses concerns about H.R. 3852, 
the House version of the Chesapeake Clean Water and Ecosystem 
Restoration Act of 2009 and the potentially severe economic 
effects it will have on the agriculture sector in the 
Chesapeake Bay Watershed.
    This bill goes beyond reauthorizing the Chesapeake Bay 
program under the Clean Water Act and codifies the Presidential 
Executive Order that we are discussing today, and the 
legislation does not have the support of our farmers and 
ranchers.
    Just to give you an example, I won't read all 63 of these 
organizations, but just to show you how widespread this is, in 
Virginia it includes the Virginia Agribusiness Council, the 
Virginia Cattlemen's Association, the Christmas Tree Growers 
Association, the Cotton Growers Association, the Crop 
Production Association, the Virginia Farm Bureau Federation, 
the Forage and Grasslands Council, the Forest Products 
Association, the Golf Course Superintendents Association, the 
Grain Producers Association, the Green Industry Council, the 
Virginia Horse Council, the Nursery and Landscape Association, 
the Peanut Growers Association, the Pork Industry Association, 
the Virginia Poultry Federation, the Sheep Producers 
Association, the Soybean Association, the Virginia State 
Dairymen's Association, the Virginia State Horticulture 
Society, the Virginia Turf Grass Council, and the Virginia 
Wineries Association.
    So this is widespread. And I will tell you, this is the 
product of legislation being drafted without consulting with 
the agriculture community. In fact, I was not consulted, as has 
been noted. And I thank Mr. Fox for his comments about the 
efforts of Mr. Holden and myself. We strongly want to help the 
Chesapeake Bay. We think the approach taken in this legislation 
is misguided. I wasn't contacted by anybody with the Chesapeake 
Bay Foundation, the Chesapeake Bay Commission, anybody, about 
the introduction of this legislation or about the Executive 
Order before either were put forward.
    I think this is the wrong approach to take to help the 
Chesapeake Bay to create this kind of confrontation and 
controversy, and it is spreading nationwide. The American Farm 
Bureau Federation and many national organizations related to 
those Virginia ones, and Pennsylvania, Maryland, Delaware, West 
Virginia, and New York organizations, have all expressed very, 
very strong concerns about the legislation. I think it is the 
wrong foot to be starting out on.
    I thank the Chairman for allowing me to ask unanimous 
consent that those three letters be made part of the record.
    The Chairman. Without objection, the three letters will be 
made part of the record.
    [The information referred to is located on p. 103.]
    The Chairman. The gentleman from New York.
    Mr. Massa. Thank you, Mr. Chairman.
    Just a quick question, if I could, for Mr. Fox. I represent 
the northernmost and westernmost headwaters of the Chesapeake 
Bay. From the confluence of the Tioga-Chemung-Cohocton Rivers, 
one can kayak to the Susquehanna and all the way south, as 
millenniums worth of humankind have done. With that 
understanding and with the focus today that we are talking 
about agriculture, I would like to place a marker, if I could, 
in those headwaters.
    For the first time ever, New York State is now considering 
a natural gas extraction process called chemical hydrofracking, 
which accesses the second largest natural gas field in the 
world, the North American Marcellus Shale, cutting from 
southern New York through most of central and Western 
Pennsylvania and southward. Depending on where you drill, 
natural gas is available from a depth of 5,000 to 14,000 feet 
under the actual shale rock.
    Through a simple quirk of legislative legerdemain, the 
chemical hydrofracking process was exempt in the last energy 
bill passed in the previous legislation from all controls of 
the Clean Water Act. We now know that the chemicals that are 
used to dissolve and dislocate the shale rock include some of 
the most carcinogenic chemicals known to man, aromatic 
benzoates, et cetera. I am not a chemical scientist, but I am a 
cancer survivor, so this is something in which I have some 
interest.
    The Finger Lakes in western New York State represent one of 
the largest depositories of fresh water in the world. In fact, 
Lake Seneca is 900 feet deep. There are those who have tried to 
tell me that drilling to a depth of 8,000 feet, injecting 1 
million gallons of chemical-laced water, including, at least in 
a million-gallon load, some 15 tons of known carcinogenic 
chemicals, will in no way affect groundwater, because there is 
no commingling. To which I say, Bunk. Over the millennium in 
time, there is no doubt in my mind that the aquifer commingles 
across natural fissures occurring in shale.
    So as a marker in this hearing, I would like to lay before 
you, Mr. Fox, and this Administration, the fact that all that 
you are talking about doing now with agriculture, everything 
and every effort that has been yet undertaken to protect the 
Chesapeake Bay, is about to be for naught. And unless we 
understand very clearly what it is we are about to do in the 
name of extracting cheap natural gas, which I am all in favor 
of--everybody would want to use natural gas from an American 
source rather than imported crude from our enemies, and make no 
doubt they are our enemies--unless the provisions of the Clean 
Water Act are assigned to chemical hydrofracking, this hearing 
is useless. And in 20 years, it makes no difference how much 
cow urine we keep out of the Cohocton River if we are pumping 
in tens of millions of gallons of a hydrofracking solution to 
the northern Marcellus Shale.
    I would welcome the opportunity to speak with you and the 
other Representatives concerned with this, one on one. I don't 
think that anyone yet has connected the dots. But if I throw a 
rubber ducky in the Cohocton River three blocks from my house, 
it will end up in the Chesapeake Bay. And if I pump 1 million 
gallons of chemically laced carcinogenic waters into the 
aquifer of western New York State, you are going to be drinking 
it in 20 to 30 years.
    Mr. Chairman, I yield back the balance of my time.
    The Chairman. The gentleman yields back the balance of his 
time. Anyone want to comment? Mr. Fox?
    Mr. Fox. I would just say thank you for that. That was a 
very articulate statement, and I would be happy to follow up 
with you and make sure we get you in touch with the appropriate 
folks at EPA.
    Mr. Massa. I don't think I am out of bounds here, sir. I 
really don't. My personality and my public persona and my 
politics are not one of being an off-the-chart tree-hugging 
environmentalist. I am a very pragmatic and practical person. 
But long after these drilling companies leave my hometown and 
long after they have extracted the mineral wealth that lies 
underneath western New York State and shipped it overseas--
because many of these companies are foreign-owned--I would like 
to be able to drink the water, and I don't know for sure that I 
am going to be able to do that.
    Mr. Fox. Thank you.
    The Chairman. The chair thanks the gentleman, and also 
thanks our witnesses for their testimony today.
    We will now call on our second panel. We would like to 
welcome Mr. Wilmer Stoneman, Associate Director of Governmental 
Relations, Virginia Farm Bureau; Mr. Steve Schwalb, Vice 
President of Environmental Sustainability of Perdue, Salisbury, 
Maryland; and Mr. Jim Curatolo, Watershed Coordinator of the 
Upper Susquehanna Coalition.
    Mr. Stoneman, whenever you are ready, you may begin.

         STATEMENT OF WILMER N. STONEMAN III, ASSOCIATE
   DIRECTOR OF GOVERNMENTAL RELATIONS, VIRGINIA FARM BUREAU 
                    FEDERATION, RICHMOND, VA

    Mr. Stoneman. Chairman Holden, Ranking Member Goodlatte, I 
want to express to you the thanks of farmers throughout the 
watershed for having this hearing. Without question, the Bay 
relies upon USDA for our technical assistance. It relies on the 
farm bill for funding to help us make it through. And 
certainly, without question, you have heard today that farmers 
throughout the watershed are certainly trending in the right 
direction. We have made 50 percent of our goal. But as you have 
heard, there is 50 percent more to do.
    So we thank you for, certainly, your leadership in having 
this hearing today. We certainly thank you for your interest in 
this subject, and we think it is something that affects farmers 
nationwide.
    The EPA Administrator has very plainly said that the 
Chesapeake Bay Program, this legislation, the Executive Order 
and perhaps the TMDL, will be the blueprint for the Gulf of 
Mexico, the Great Lakes, Puget Sound, and perhaps even 
Albemarle Sound. So this is big. This is something that farmers 
everywhere have on their mind.
    I greatly appreciate Mr. Goodlatte listing off the 63, or 
at least the Virginia portion of the 63 organizations that are 
certainly concerned about this legislation. I will say up front 
and I will say very clearly, and I have done this many times 
over the last few weeks, the Virginia Farm Bureau and farmers 
throughout the watershed support reauthorization of the 
Chesapeake Bay Program. But we don't support the extra things 
that go along with it that are included in this bill, like 
codification of the TMDL, like upping the ante, including 
enforceable and otherwise binding programs for farmers, like 
including citizen suits in this particular legislation.
    Now, the bill does have redeeming qualities. It includes 
further technical assistance for farmers. It includes an idea 
certainly that is of concern to us, and you have heard about it 
today: voluntary measures that have not been accounted for in 
the Bay model up until this point. And certainly in that 
discussion we are heartened, because in Virginia we found out 
that certainly the Federal dollars that you have sent us 
through the USDA for the last 4 years have not been included in 
the Bay model. We think there is a lot more to be said about 
the good things that farmers have done for the Chesapeake Bay.
    So the bill has its redeeming qualities. It takes into 
account these volunteer measures. It takes into account the 
fact that we need technical assistance, and it reauthorizes the 
Bay Program.
    Mr. Chairman, you have heard today about the 25 year 
history of the Chesapeake Bay cleanup effort. I contend that 
the Chesapeake Bay's current state is 400 years old. From the 
time John Smith made that right-hand turn with three ships full 
of paper, we have had an effect on the Chesapeake Bay. We are 
not going to clean it up right away.
    My family and I own a farm in the Chesapeake Bay Watershed. 
Actually it goes back 400 years. We are the proud current 
owners of the farm that Pocahontas and John Rolfe owned, where 
the tobacco industry as we know it was started. So we have a 
keen sense of what has gone on certainly in the Chesapeake Bay, 
and what is needed for farmers.
    We talk about 50 percent improvement. Well, over the last 
20 to 30 years, since 1987, we have lost 41 percent of our 
farms. No amount of efficiency, no amount of technical 
advancements, no amount of money is going to bring those 
farmers back. You hear a lot about Farm Bureau crying wolf 
about farmers being lost or farmers going out of business. That 
is an ag statistics fact; 41 percent fewer are there today. 
That may not be all because of regulation, but there are 41 
percent fewer.
    Very much our concern about this particular bill is about 
the TMDL. It caps our growth. It caps our farms. A no-net 
increase of nitrogen and phosphorus to the Chesapeake Bay 
basically says a young farmer will have to buy the farm and 
then buy offsets for the right to use it. Farmers are generally 
considered as being the beneficiaries of offsets. But I contend 
with the TMDL in place, there will be no room for a trade, 
because the compliance level will be so high.
    Mr. Chairman, I have used all of my time and certainly will 
answer any question that you ask of me. But I want to remind 
you that we have had 400 years of effect on the Chesapeake Bay. 
We are not going to fix it in 30. We are not going to fix it in 
25, and we certainly are not going to fix it in 2 year 
increments.
    Thank you, sir.
    [The prepared statement of Mr. Stoneman follows:]

  Prepared Statement of Wilmer N. Stoneman III, Associate Director of 
 Governmental Relations, Virginia Farm Bureau Federation, Richmond, VA
    Chairman Holden, Ranking Member Goodlatte, and Members of the 
Subcommittee, thank you for the invitation to testify today on the 
regulatory and legislative strategies in the Chesapeake Bay Watershed. 
My testimony will specifically address S. 1816 and H.R. 3852 and the 
efforts to expand and reauthorize the Chesapeake Bay Program. I ask 
that these comments be entered into Congressional record as part of the 
December 9, 2009 hearing on Regulatory and Legislative Strategies in 
the Chesapeake Bay Watershed before the Subcommittee on Conservation, 
Credit, Energy and Research of the House Committee on Agriculture. As a 
supplement to my comments, I have received permission to attach the 
testimony of Susan Parker Bodine, Partner, Barnes and Thornburg, before 
the Subcommittee on Water and Wildlife of the Senate Committee on 
Environment and Public Works on the ``Chesapeake Clean Water and 
Ecosystem Restoration Act of 2009.''
    Across the Chesapeake Bay watershed and nation, agricultural 
producers are very concerned about the implications of these 
legislative proposals that seek to significantly expand Federal 
enforcement and spur citizen litigation of Chesapeake Bay programs. In 
addition to heavy-handed enforcement we understand that the legislation 
also places a cap on economic growth in the watershed--impacting jobs, 
development, and food production. These bills will impose severe 
economic hardship to our industry and further increase pressure to the 
Chesapeake Bay's most effective and efficient land use, production 
agriculture, to move out of the watershed.
    First, before exploring the specifics of the regulatory and 
legislative proposals I would like to give you a brief update on the 
plight of agriculture in the Chesapeake Bay Watershed. According to 
USDA's National Agriculture Statistic Service, farms across the Bay 
watershed are under significant financial pressure. Over the period of 
1987 to 2007, NASS's numbers indicate that almost 14 percent of the 
tillable farmland has been converted to another use. Over that same 
period, 20 percent of all agricultural land--tillable land and pasture, 
has been converted to another use. However, the most significant loss 
in the watershed has been in the loss of farms. Over that same 20 year 
time period, the Chesapeake Bay watershed has lost 41 percent of its 
farms. In this area, no amount of scientific advance, gain in 
efficiency or technology will replace the people and families we have 
lost.
    Second, I would like to discuss the regulations and requirements 
that are already in place and mandated on farms by state regulation in 
the Chesapeake Bay watershed. I am talking about mandatory nutrient 
management, setbacks and buffer zones that take land out of production, 
and tillage practices and farm plans that require farms and ranches to 
operate in a manner that seeks to increase environmental outcomes. 
Almost all require significant management and labor but most of these 
practices achieve two important and complementary things. They reduce 
environmental externalities, improve efficiencies and if managed 
properly can help the farmer's bottom line. The management practices 
that will be required to achieve the load reductions called for in the 
Bay Total Maximum Daily Loads (TMDLs) will have a high cost and will 
only take away from the farms' already thin bottom line. Mandating 
environmental practices will push more and more of Bay watershed 
farmers and ranchers from the land. This will be a sad consequence of 
this legislation and a significant issue for the nations' food 
security.
    Last, TMDLs and ``hard'' nitrogen, phosphorus and sediment caps 
will have profound negative implications for agriculture and the 
overall economy in the Chesapeake Bay watershed. In current EPA 
regulations, there are ``prohibitions'' on any new or expanding permits 
in ``impaired'' watersheds. In other words, if a new activity needs a 
permit--EPA can object or any person can sue in order to stop the 
issuance of the permit. That means no new jobs if the owner of the 
business needs a construction stormwater permit to build a factory or 
parking lot. That means no new homes for an increasing population 
because the developer would need a construction stormwater permit. That 
means farmers can be stopped from building a barn or poultry facility 
because the activity would need a construction stormwater permit. The 
process will likely force a very harsh economic reality. It could mean 
that new jobs could not be brought into the watershed unless other jobs 
are pushed out of the watershed. It could mean no new homes could be 
built unless others are torn down. It means that any development or 
redevelopment activity in the watershed must be ``offset'' which brings 
mandates to restore the land to a ``pre-development'' hydrology 
standard. This applies to the construction of schools, hospitals and 
roads as well as homes and businesses. If the restoration can not be 
accomplished on site, offsets must be installed elsewhere in the 
watershed.
    Proponents of the offset or trading concept have proposed that the 
offsets can be supplied by farmers. But there is a significant problem 
with that reasoning because the approach mandated in the leading 
proposals only allows offsets to be traded after the farm reaches its 
individual nutrient reduction obligations. Individuals who understand 
the Bay model know that every farm will have to install every BMP 
available on every acre just to reach the goal. That means, and experts 
in this area agree, there will be no offsets left to sell on working 
farms. So we believe the offset provisions will leave local governments 
and developers with no other option than to purchase whole farms and 
take them out of production in order to achieve the offset. The 
alternative is a halt to all economic development in the watershed.
    We understand that improving the Bay will require a lot of time, 
money and individual effort. Improving the Bay is an important task, 
but the Chesapeake Clean Water and Ecosystem Restoration Act is too 
heavy on Federal enforcement and will force states to:

    1. Adopt and submit to EPA for approval watershed implementation 
        plans that must have reduction targets, key actions, and 
        schedules to attain water quality standards by reducing loads 
        of nitrogen, phosphorus, and sediment from all sources, 
        including agricultural runoff, point sources including 
        stormwater point sources, nonpoint source stormwater runoff, 
        and septic systems;

    2. Codify the nitrogen, phosphorus, and sediment caps identified in 
        a December 2003 EPA document, unless more stringent limits are 
        established by a state or EPA;

    3. Adopt control measures that identify, and include enforcement 
        mechanisms;

    4. Phase implementation into 2 year periods with modeling to show 
        reductions associated with each period--the plan must also 
        identify contingency measures if reductions are not achieved; 
        and

    5. Adopt plans that address offsets for new or expanded sources.

    The legislation also mandates EPA to approve or disapprove a 
state's implementation plan, based on minimum criteria established by 
EPA. If a state fails to submit an implementation plan or meet its 2 
year milestones, EPA must:

    1. In the Senate bill, withhold all Clean Water Act funds from the 
        state; this includes state revolving fund (SRF) capitalization 
        grants under section 601, and section 106 and section 319 
        funds. In the House bill, all funds except SRF capitalization 
        grants are completely withheld. For the SRF grants, 75 percent 
        of the grant is withheld and given to EPA to select projects 
        and activities from among those eligible for SRF funding in 
        that state.

    2. Develop and administer an implementation plan in that state.

    3. Require 2-1 offsets for all new or expanded sources of nitrogen, 
        phosphorus, and sediments.

    4. Promulgate any regulations or issue any permits as EPA 
        determines are needed to control pollution to meet water 
        quality goals, notwithstanding any other provision of the Clean 
        Water Act and notwithstanding any existing exclusion or 
        exemption. For farmers in the watershed, this provision repeals 
        the agricultural stormwater exemption and provides EPA with 
        blanket authority to do anything to meet water quality 
        standards, not limited to issuing 402 permits.

    5. Enforce any permits issued under a watershed implementation plan 
        as if they were section 402 permits.

    The Chesapeake Clean Water Ecosystem Restoration Act contains broad 
and far reaching language that ``authorizes states to issue permits 
under section 402 of the Clean Water Act to any pollution source the 
state determines to be necessary to achieve the nitrogen, phosphorus, 
and sediment reductions in the implementation plan.'' These permits are 
authorized for any source of pollution, whether or not that source is 
currently excluded from regulation under current law (the agricultural 
stormwater exemption). The permits are then fully enforceable by EPA 
and citizen suits.
    In addition, to implement the TMDL, the legislation grants EPA 
sweeping new authority to promulgate any regulations or issue any 
permits as EPA determines is necessary to control pollution sufficient 
to meet the water quality goals defined in the implementation plan. 
This is an extraordinary expansion of Federal authority. As was pointed 
out in the Senate testimony on S. 1816, ``EPA could supersede the local 
development plan of every community, as well as state and metropolitan 
transportation plans. EPA could prohibit or prescribe sidewalks, 
parking lots, buildings, roads, even lawns. EPA could dictate the 
length of gutters or require rain barrels and green roofs. EPA could 
prohibit the use of fertilizer. EPA could shut down factories or force 
land out of agriculture production.''
Nutrient Trading
    Nutrient trading should be a safety valve to facilitate 
implementation of sound conservation practices, but as anyone that 
understands the load reduction required to achieve the TMDL knows, 
trading opportunities are likely to be limited or non-existent. First, 
it appears that trading will be limited to regulated entities and few 
sources in agriculture will be able to reduce nitrogen, phosphorus, or 
sediment loadings above the reductions assigned to them under the TMDL 
implementation plan. In other words, within agriculture, there will be 
very few excess reductions to trade as credits. The unfortunate fact is 
that the only cost-effective source of credits will be the retirement 
of agricultural land, driving agriculture from the watershed. The May 
2009 plans put forth by states to meet their 2011 milestones for 
reducing nitrogen and phosphorus already assume the retirement of 
81,676 acres of land.
Citizen Suites
    The legislation authorizes citizen suits against EPA for failure to 
carry out any provision of the Act. While EPA does retain the 
discretion to choose where and how to utilize most of its new 
authorities, if a citizen believes that EPA's actions are not 
sufficient to meet the goals of the TMDL, then that person can file 
suit in Federal court to compel action. Implementation of the load 
allocations from nonpoint sources in the TMDL will likely be the 
outcome of litigation, no matter what the impact is on communities, 
individuals or farmers and ranchers.
Codification of the TMDL
    Through codifying executive and regulatory authorities, the 
Chesapeake Clean Water and Ecosystem Restoration Act will hamper 
innovative solutions in areas such as nutrient trading, economic 
growth, farm adaptive management and overall water quality restoration. 
Without adequate time and science to effectively work through processes 
such as the drafting of the Chesapeake Bay Total Maximum Daily Load 
(TMDL), the Chesapeake Clean Water and Ecosystem Restoration Act will 
impose burdensome regulations and penalties before defining procedures 
and practices that are proven to efficiently achieve desired water 
quality goals. This accelerated course of action will be expensive and 
damaging to the watershed's economy, viability of our agriculture 
sector, and overall water quality objectives.
    Farmers in the Chesapeake Bay watershed have a strong history of 
being responsible and proactive environmental stewards, both through 
compliance with existing regulations and through implementation of 
voluntary conservation practices. However, a significant amount of 
conservation practices implemented by agricultural producers have not 
been given accurate credit in decision making models. The Chesapeake 
Clean Water and Ecosystem Restoration Act will create a system of 
burdensome regulations without understanding the full impact of water 
quality improvements from implementing additional requirements on 
agriculture. Reauthorization of the Bay Program should enhance the 
current Chesapeake Bay Model to ensure it is based on comprehensive and 
accurate data.
    We support reauthorization of the existing Chesapeake Bay Program 
without dramatically expanding Federal authorities. We believe adequate 
time should be given to develop creative ways for economic recovery and 
growth to partner with water quality goals, as well as to refine the 
science and modeling in the watershed. We are committed to developing 
strategies to protect all resources within the Chesapeake Bay 
watershed, including family farmers and other agribusinesses. Our 
organizations look forward to continuing discussions with you regarding 
this critical issue and thank you for the opportunity to comment.
                               Attachment
prepared statement of susan parker bodine, partner, barnes & thornburg, 
   before the subcommittee on water and wildlife, senate committee on
environment and public works, hearing on great water body legislation: 
              s. 1816 and s. 1311, dated november 9, 2009
    Chairman Cardin, Ranking Member Crapo, and Members of the 
Subcommittee, thank you for the invitation to testify today on S. 1816, 
the Chesapeake Clean Water and Ecosystem Restoration Act of 2009 and S. 
1311, the Gulf of Mexico Restoration and Protection Act.
    My goal today is to provide a legal analysis of these two 
legislative proposals, based on my understanding of the Clean Water Act 
and water quality implementation programs. I am currently a partner in 
the law firm of Barnes & Thornburg. I have previously held positions at 
both the U.S. Environmental Protection Agency (EPA), as Assistant 
Administrator for the Office of Solid Waste and Emergency Response, and 
in the House of Representatives, as the staff director for the Water 
Resources and Environment Subcommittee of the Committee on 
Transportation and Infrastructure. During my tenure on the Water 
Resources and Environment Subcommittee, I worked on the last 
reauthorization of the Chesapeake Bay Program, as Title II of Public 
Law 106-457 (2000). I also participated in extensive oversight of EPA's 
Total Maximum Daily Load (TMDL) program.
S. 1816, the Chesapeake Clean Water and Ecosystem Restoration Act of 
        2009
Establishment of a Chesapeake Bay TMDL
    Consistent with EPA's announced plans, S. 1816, the Chesapeake 
Clean Water and Ecosystem Restoration Act of 2009, requires EPA to 
establish, by December 31, 2010, a basin-wide Chesapeake Bay TMDL for 
the 92 Bay and tidal tributary segments that are impaired by nitrogen, 
phosphorus, and sediment. This TMDL will cover 64,000 square miles in 
six states and the District of Columbia. Under the bill, the TMDL must 
include wasteload allocations for point sources for nitrogen, 
phosphorus, and sediment, necessary to implement applicable water 
quality standards. The bill also requires the TMDL to include 
enforceable or otherwise binding load allocations on nonpoint sources, 
including atmospheric deposition, agricultural runoff, and any 
stormwater runoff that is not currently regulated. Finally, under the 
bill, the TMDL must prohibit any net increase in nitrogen, phosphorus, 
and sediment from any new or expanding source, including increases from 
new or increased impervious surfaces, concentrated animal feeding 
operations, transportation systems, and septic systems, even if a 
discharge meets water quality criteria so the source is not causing or 
contributing to the violation of a water quality standard.
    S. 1816 provides states with greatly expanded state authorities to 
implement the TMDL. If a state fails to implement the TMDL, EPA must 
implement it, with the greatly expanded Federal authorities provided by 
the bill. Finally, if persons are not satisfied with the implementation 
by a state or by EPA, the bill provides for citizen suits to use the 
courts to implement the TMDL. These provisions all raise significant 
issues. A few of those issues are highlighted below.
Load Allocations and Water Quality Standards
    Under new section 117(j), S. 1816 requires each state to develop an 
implementation plan for each impaired segment in its jurisdiction. The 
implementation plans must incorporate the caps on nitrogen, phosphorus, 
and sediment that were agreed to among EPA and the states in 2003, or 
the caps identified in the TMDL developed by EPA. The 2003 agreement 
caps nitrogen loads at 175 million pounds, phosphorus loads at 12.8 
million pounds, and sediment loads at 4.15 million pounds.\1\ These 
maximum loads were based on modeling in 2003 that assumed that states 
would be modifying their water quality standards based on ambient water 
quality criteria for the Bay for dissolved oxygen, water clarity, and 
chlorophyll published by EPA in April 2003.\2\ The 2003 agreement notes 
that:
---------------------------------------------------------------------------
    \1\ Memorandum dated April 28, 2003, from W. Tayloe Murphy, Jr., 
Chair, Chesapeake Bay Program Principals' Staff Committee to Principal 
Staff Committee Members and Representatives of the Chesapeake Bay 
``Headwater'' states, titled ``Summary of Decision Regarding Nutrient 
and Sediment Load Allocations and New Submerged Aquatic Vegetation 
(SAV) Restoration Goals,'' reprinted as Appendix A of ``Setting and 
Allocating the Chesapeake Bay Basin Nutrient and Sediment Loads,'' EPA 
903-R-03-007, December 2003.
    \2\ Ambient Water Quality Criteria for Dissolved Oxygen, Water 
Clarity and Chlorophyll a for the Chesapeake Bay and Its Tidal 
Tributaries, EPA 903-R-03-002 (April 2003).

        ``Over the next two years, Maryland, Virginia, Delaware, and 
        the District of Columbia will promulgate new water quality 
        standards based on the guidance published by EPA. Although the 
        public process for adopting water quality standards varies 
        among the states, each state's process will provide 
        opportunities for considering and acquiring new information at 
        the local level. States may choose to explore a number of 
        issues during their adoption process, such as the economic 
        impact of water quality standards and specific designated 
        uses.'' \3\
---------------------------------------------------------------------------
    \3\ ``Setting and Allocating the Chesapeake Bay Basin Nutrient and 
Sediment Loads,'' December 2003, at A6. For example, in setting its 
water quality standards for dissolved oxygen, Maryland has included 
variance that allows dissolved oxygen criteria to exceed the water 
quality standard in some of the deepest parts of the Bay because: 
``Even after spending billions of dollars to reduce nitrogen, 
phosphorus, and sediment pollution to clean up the rest of the Bay, 
essentially doing everything we know how to do at this time, the deep 
areas still could not attain the dissolved oxygen standard.'' http://
www.mde.state.md.us/Programs/WaterPrograms/TMDL/wqstandards/faqs.asp.

    Scientific analysis did not stop in December 2003, and EPA and the 
Chesapeake Bay States have continued to refine the models on which 
these load allocations are based. In fact, based on the most recent 
modeling, EPA and the Chesapeake Bay Program's Principals' Staff 
Committee have agreed to preliminary target loads of 200 million tons 
per year of nitrogen and 15 million tons per year of phosphorus. These 
targets are likely to continue to change. In fact, the most recent 
model (phase 5.3) is not expected to be ready until December 2009. 
However, S. 1816 codifies the nitrogen, phosphorus and sediment load 
allocations as no more than the December 2003 allocations, or whatever 
allocations EPA establishes in the TMDL. Thus, the load allocations are 
capped by Federal law even if, after the TMDL is established in 
December 2010, new data or further changes to the model show that 
increased loads would achieve water quality standards.
    By codifying specific pollutant caps in law, S. 1813 may be 
freezing both science and policy. As noted above, the models used to 
establish pollutant loads are very complex and are continually 
evolving. Codifying the pollutant caps could preclude EPA and states 
from using their evolving understanding of the Bay and improved 
modeling to achieve water quality goals. Also, the models seek to 
answer the question of whether or not water quality standards are met. 
States must review and, as appropriate, revise, their water quality 
standards every 3 years. 40 CFR 131.20. Under current law, water 
quality standards can be made less stringent if meeting those standards 
``would result in substantial and widespread economic and social 
impact.'' 40 CFR 131.10(g)(6). It appears that, by codifying specific 
load allocations, S. 1813 would eliminate the ability of states to 
later make changes to the loads based on changed water quality 
standards that may be needed to account for substantial and widespread 
economic and social impacts. Finally, codifying load allocations is 
contrary to the principles of adaptive management. The Chesapeake Bay 
watershed is a complex, dynamic system. It is unclear how the watershed 
will respond to the various measures being proposed. In its report, 
Assessing the TMDL Approach to Water Quality Management, the National 
Academy of Sciences (NAS) recommended using the scientific method to 
apply adaptive implementation to TMDLs. NAS describes this as ``a 
process of taking actions of limited scope commensurate with available 
data and information to continuously improve our understanding of a 
problem and its solutions, while at the same time making progress 
toward attaining a water quality standard.'' \4\ The NAS's recommended 
framework for water quality management includes reviewing the 
attainability of designated uses and water quality standards both 
before the development of a TMDL and as part of adaptive 
implementation.\5\ S. 1813 would prevent EPA and states from 
implementing that recommendation.
---------------------------------------------------------------------------
    \4\ Assessing the TMDL Approach to Water Quality Management, 
National Research Council, National Academy of Sciences (2001), at 90.
    \5\ See id, Figure 5-1, at p. 91.
---------------------------------------------------------------------------
State Implementation
    S. 1816 requires state implementation plans to include enforceable 
or otherwise binding measures to reduce loads of nitrogen, phosphorus, 
and sediments, to meet the targets discussed above. Although programs 
to achieve voluntary reductions through funding commitments may be 
included in the implementation plan, S. 1816 makes it clear that the 
state must have enforcement mechanisms to employ if an entity does not 
achieve its assigned pollutant reductions. S. 1816 provides Federal 
authority for binding measures and enforcement mechanisms in new 
section 117(j)(2), which authorizes states to issue permits under 
section 402 of the Clean Water Act to any pollution source the state 
determines to be necessary to achieve the nitrogen, phosphorus, and 
sediment reductions in the implementation plan. These permits are 
authorized for any source of pollution, whether or not that source is 
currently excluded from regulation under current law. The permits are 
then fully enforceable by EPA and by citizen suits.
    This provision greatly expands the scope of Federal water pollution 
control law. Under current law, the Clean Water Act controls point 
source discharges of pollutants. ``Point sources'' are defined in 
section 502 of the Clean Water Act as any discernible, confined and 
discrete conveyance, such as pipes, ditches, channels, etc. Diffuse 
runoff of water is not a point source. The Clean Water Act also 
specifically excludes agricultural stormwater discharges and return 
flows from irrigated agriculture from the definition of point source, 
so they are not regulated under Federal law. In addition, EPA, by 
regulation (in 40 CFR 122.27) has defined what is and is not a 
silviculture point source, excluding a variety of activities such as 
natural runoff from forest road construction and maintenance. These 
sources all could be subject to permits under S. 1816.
    ``Pollutants'' are defined in section 502 of the Act as specific, 
measurable, materials that are discharged into water, such as solid 
waste, sewage, chemical wastes, biological materials, radioactive 
materials, heat, and industrial, municipal, and agricultural waste. In 
contrast, ``pollution'' is defined as the man-made or man-induced 
alteration of the chemical, physical, biological, and radiological 
integrity of water. Pollution includes increased water flows and 
habitat alternation. Under S. 1816, any activity that causes increases 
flow or habitat alteration, no matter how distant from a body of water, 
could be required to obtain a permit.
    In fact, under S. 1816, permits issued under section 402 of the 
Clean Water Act could be required for any activity that affects water, 
whether or not there is any addition of a pollutant to the water, and 
whether or not there is even a discharge that can be measured and 
controlled. The bill specifically requires reductions in pollution from 
agricultural runoff, point sources including point source stormwater 
discharges, nonpoint source stormwater discharges, and septic systems. 
Although not specifically required, the bill also would authorize a 
state to issue a section 402 permit to a source of air deposition, 
because the states' new authority applies to ``any pollution source,'' 
and air deposition is a source of pollution to the Bay. Finally, the 
bill does not restrict the states' new authority to sources located 
within the geographic boundaries of that state.
    The section 402 permitting program is designed for point source 
discharges of measurable pollutants into bodies of water. It is unclear 
how section 402 permits could be used to address all the diverse 
sources of pollution affecting the Chesapeake Bay. For example, S. 1816 
does not address what types of technology-based and water-quality based 
effluent limitations could be established to address diffuse sources of 
pollution that do not directly discharge into a water body. Absent 
specific statutory language clarifying how these sources are intended 
to be controlled, it is unclear where and how compliance is to be 
measured, whether numeric limitations could be imposed, and who would 
be legally responsible for meeting any requirements. Because these new 
permits can be enforced by citizen suits, these questions may be 
answered by courts.
    S. 1816 also imposes specific requirements for development. Under 
new section 117(j)(3), EPA must issue regulations identifying, based on 
the area of impervious surface,\6\ what development projects states 
must regulate to maintain or restore predevelopment hydrology, to the 
maximum extent feasible. EPA must define ``predevelopment hydrology'' 
by regulation. This may mean that the owner of property must return the 
volume of water leaving the property to its predevelopment levels, 
whether or not the water flows into a water body and whether or not 
there is any impact on water quality. These requirements will apply to 
existing projects seeking to expand, as well as new projects. When the 
term ``maximum extent feasible'' is used, that is usually understood to 
mean technically feasible without regard to cost.\7\ If an impact to 
predevelopment hydrology is not avoidable, then a permit (presumably a 
section 402 permit, although the bill does not specify) must require 
mitigation using a ratio to be established by EPA by regulation. States 
are required to provide assurance to EPA that they will implement these 
regulations.
---------------------------------------------------------------------------
    \6\ The area of impervious surface may include roofs as well as 
parking lots.
    \7\ In contrast, the term ``practicable'' is usually understood to 
include consideration of cost.
---------------------------------------------------------------------------
Federal Implementation
    If a state fails to submit an implementation plan or submits a plan 
that does not meet criteria established by EPA, new section 117(k)(5) 
requires EPA to withhold all Clean Water Act funds from the state. This 
includes the capitalization grants for State Revolving Loan Funds. EPA 
also must develop a Federal implementation plan to implement the TMDL 
in that state.
    To implement the TMDL, S. 1816 gives EPA the authority to 
promulgate any regulations or issue any permits as EPA determines is 
necessary to control pollution sufficient to meet the water quality 
goals defined in the implementation plan. This is an extraordinary 
expansion of Federal authority. It literally means that EPA could 
regulate any activity that has any impact at all on water quality. 
Under this provision EPA could supersede the local development plan of 
every community, as well as state and metropolitan transportation 
plans. EPA could prohibit or prescribe sidewalks, parking lots, 
buildings, roads, even lawns. EPA could dictate the length of gutters 
or require rain barrels and green roofs. EPA could prohibit the use of 
fertilizer. EPA could shut down factories or require farm land to 
become idle. EPA could force communities to spend billions of dollars 
beyond the limits of affordability to meet nutrient standards at sewage 
treatment plants. EPA could require all municipal separate storm sewer 
systems to carry out retrofits, at an estimated cost of $7.9 
billion.\8\
---------------------------------------------------------------------------
    \8\ See ``The Next Generation of Tools and Actions to Restore Water 
Quality in the Chesapeake Bay, A Draft Report Fulfilling Section 202a 
of Executive Order 13508'' (Sept. 9, 2009), at 23-24.
---------------------------------------------------------------------------
    S. 1816 also requires EPA to impose requirements for 2 to 1 offsets 
in permits under section 402 for any new or expanding discharges of 
nitrogen, phosphorus, or sediments in a state where EPA is implementing 
the TMDL. All permits would be enforceable as permits issued under 
section 402 of the Clean Water Act, including citizen suit enforcement.
    EPA's new authority is to be implemented to advance a single goal: 
meeting the load allocations of a TMDL. S. 1816 does not provide for 
consideration of other values that a state or local government may want 
to take into account, such as safe transportation, locally grown 
produce, the economic health of a community, and even the ability of 
individuals to afford the cost of shelter. In fact, as discussed above, 
even if a state chooses to change its water quality standards to 
address any substantial and widespread social and economic impacts of 
implementing the TMDL, those new standards may not be implemented. It 
appears that S. 1816 would still mandate achievement of the goals 
established in 2003 or in the TMDL to be issued in December 2010.
Nutrient Trading
    New section 117(k)6) directs EPA to establish, by May 2012, an 
interstate nitrogen and phosphorus trading program to facilitate 
implementation of the TMDL. However, trading opportunities may be 
limited. First, it appears that trading must occur between ``points-of-
regulation'' which must be entities regulated under the Clean Water 
Act. It is unclear if a regulated entity can rely on credits generated 
from unregulated activities, such as wetlands restoration, nutria 
eradication, or increasing the number of filter feeders such as 
oysters. It also is unclear if trading can occur with sources of air 
deposition. Second, few sources will be able to reduce nitrogen, 
phosphorus, or sediment loadings above the reductions assigned to them 
under the TMDL implementation plan. Given that credits must arise in 
the watershed and all sources of pollution in the watershed would 
become regulated under the bill, there may be very few excess 
reductions to trade as credits. In fact, the only cost-effective source 
of credits may be the retirement of agricultural land, driving 
agriculture from the watershed. The May 2009 plans put forth by states 
to meet their 2011 milestones for reducing nitrogen and phosphorus 
already assume the retirement of 81,676 acres of land.\9\
---------------------------------------------------------------------------
    \9\ See http://archive.chesapeakebay.net/pressrelease/
EC_2009_allmilestones.pdf.
---------------------------------------------------------------------------
Federal Assistance
    S. 1816 requires EPA to develop guidance, model ordinances, and 
guidelines, to help states and local governments ensure that land 
maintains predevelopment hydrology and to encourage low impact 
development. The bill authorizes $1.5 billion in grants to help local 
governments that adopt the guidance, ordinances, and guidelines to 
implement projects designed to reduce stormwater discharges. However, 
as noted above, EPA estimates the cost of retrofitting municipal 
separate storm sewer systems to reduce stormwater discharges of 
nitrogen, phosphorus, and sediment to be $7.9 billion.
Enforcement
    New section 117(o) includes provisions to authorize Federal and 
citizen suit enforcement against states for failure to implement the 
TMDL, and citizen suit enforcement against EPA for failure to carry out 
any requirement of section 117.
    The section authorizing Federal and citizen suit enforcement 
against states for failure to act would likely be found to be 
unconstitutional under the 10th Amendment to the Constitution, even if 
the bill successfully waives state sovereign immunity under the 11th 
Amendment.\10\ Specifically, the Supreme Court has held that Congress 
may not ``commandeer the legislative process of the states by directly 
compelling them to enact a Federal regulatory program.'' New York v. 
United States, 505 U.S. 144, 161 (1992) (relating to solid waste 
disposal). See also Printz v. United States, 521 U.S. 98 (1997) (the 
Federal Government may not compel the states to enact or administer a 
Federal program, relating to regulation of guns). Thus, Congress cannot 
compel a state to implement the Bay TMDL.
---------------------------------------------------------------------------
    \10\ The Supreme Court has gone back and forth in recent years 
regarding whether Congress can waive state sovereign immunity through 
the exercise of Article I authority. Compare Seminole Tribe of Florida 
v. Florida, 517 U.S. 44 (1996) (Congress cannot abrogate state 
sovereign immunity under Article I), with Central Virginia Community 
College v. Katz, 546 U.S. 356 (2006) (the Bankruptcy Clause of Article 
I abrogates state sovereign immunity).
---------------------------------------------------------------------------
    Congress can authorize citizen suits against EPA for failure to 
carry out any provision of the Act. While EPA does retain the 
discretion to choose where and how to utilize most of its new 
authorities, if a citizen believes that EPA's actions are not 
sufficient to meet the goals of the TMDL, then that person can file 
suit in Federal court to compel action. In deciding the case, the 
Federal court will not be able to balance competing interests. 
Implementation of the load allocations in the TMDL could be ordered, no 
matter what the impact is on communities or individuals.
S. 1311, the Gulf of Mexico Restoration and Protection Act
    S. 1311, the Gulf of Mexico Restoration and Protection Act would 
amend the Clean Water Act to add section 123 to formally establish a 
Gulf of Mexico Program office, to be located in a Gulf Coast State.\11\ 
The Program Office is to coordinate and carry out activities to improve 
the water quality and living resources in the Gulf of Mexico. These 
activities may include research, monitoring, modeling, education and 
outreach, and providing information. The Program Office also is to be a 
liaison with counterparts in Mexico.
---------------------------------------------------------------------------
    \11\ The existing Gulf of Mexico Program Office is located at the 
Stennis Space Center in Mississippi.
---------------------------------------------------------------------------
    S. 1311 authorizes grants to nonprofits, state and local 
governments, colleges and universities, interstate agencies, and 
individuals for monitoring, research, addressing water quality and 
living resource needs, habitat restoration, and reducing point source 
discharges of pollutants. The grants have a 25 percent local cost share 
and a 15 percent cap on administrative costs. The bill also requires 
periodic reports and, in coordination with the Gulf of Mexico Executive 
Council, periodic assessments of the state of the Gulf of Mexico 
ecosystem and implementation of the Program. The bill authorizes $10 
million in 2010, $15 million in 2011, and $25 million in each of 2012 
through 2014 to carry out the Program.
    The bill defines the Gulf of Mexico Executive Council as ``the 
formal collaborative Federal, state, local and private participants in 
the Program'' but does not establish the Council or specify how people 
become members of the Council. If the Council includes private 
citizens, it can be advisory only. The only function provided for the 
Council in the bill is to coordinate with EPA on the assessment of the 
ecosystem and the Program that must take place every 5 years. It is 
unclear what other functions, if any, the Council is intended to 
perform. Currently, there is a Gulf of Mexico Alliance that is a 
partnership of the States of Alabama, Florida, Louisiana, Mississippi, 
and Texas. There also is a Citizens Advisory Committee, a Policy Review 
Board that includes public and private entities, and a Management 
Committee that includes public and private entities. It is unclear how 
the efforts of these existing organizations are intended to be 
integrated. It also is unclear how existing efforts, such as the 
Governors' Action Plans developed by the Gulf of Mexico Alliance, will 
be supported.
    In new section 123(b)(1)(C)(iii), the bill authorizes the Program 
Office to implement state-led and community-led restoration plans and 
projects, and facilitate science, research, modeling, monitoring, data 
collection and other activities to support the program. As drafted, it 
appears that this provision would be carried out using contract 
authority. If it is intended to be carried out using grants, it should 
cross-reference subsection (d), authorizing grants.
    Among the purposes of the grants authorized under subsection (d) is 
to eliminate or reduce point sources of pollutants, including 
eliminating leaking septic systems. Septic systems are nonpoint 
sources, not point sources.

    The Chairman. Thank you.
    Mr. Schwalb.

         STATEMENT OF STEVE SCHWALB, VICE PRESIDENT OF
          ENVIRONMENTAL SUSTAINABILITY, PERDUE FARMS,
                  INCORPORATED, SALISBURY, MD

    Mr. Schwalb. Chairman Holden and Ranking Member Goodlatte, 
other Subcommittee Members, thank you for the opportunity to 
appear today. I am Steve Schwalb, Vice President of 
Environmental Sustainability of Perdue, Incorporated.
    Perdue, a family owned business, is the largest 
agribusiness company in the eastern U.S., and the third largest 
poultry company in the nation. Perdue employs 22,000 associates 
in 15 states, with operations throughout the mid-Atlantic, 
South and Indiana. With our headquarters located in the heart 
of the Chesapeake Bay's Eastern Shore, we know the ecological 
sensitivity of the Bay and its watershed.
    Our Chairman, Jim Perdue, is committed to preserving the 
Bay and the highest level of environmental stewardship. We are 
proud of the leadership we have provided on environmental 
challenges. We have invested millions of dollars in research 
and technology. Let me mention a few examples.
    In 1999, we created Perdue AgraRecycle, the first and only 
full-scale litter processing facility in the world that 
converts poultry litter into organic fertilizer. Since then, 
Perdue AgraRecycle has handled 639,000 tons of poultry litter. 
That is 26 million pounds of nitrogen, 13 million pounds of 
phosphorus, and 20 million pounds of potassium. At least half 
of those nutrients have been relocated out of the Chesapeake 
Bay Watershed.
    Since 2006, Perdue has had a unique partnership with the 
EPA, now called the Perdue Clean Waters Initiative. This 
initiative fosters and produces on-farm environmental 
leadership. Implementation of the Clean Waters Initiative is on 
schedule, with almost 700 Delmarva poultry farmers coming on 
line first. By the end of the 4 year implementation, 1,650 
family farms in the eastern U.S. will be included.
    In 2007, we established the Perdue Environmental 
Sustainability Initiative under three platforms: Reduce, Reuse, 
Recycle; Research and Innovation; and Community Outreach.
    Now, Perdue is not alone in our efforts to care for the 
Bay. Agriculture on Delmarva is a three-legged stool with the 
poultry companies, poultry growers and grain farmers working 
together. According to Maryland's Department of Agriculture, 
poultry growers and grain farmer conservation accomplishments 
have been numerous.
    Our position on the Chesapeake Bay Program is that Perdue 
also wholeheartedly supports its reauthorization. However, we 
have concerns that the legislation creates new law on how 
agriculture will operate in the watershed. The President's 
Executive Order and EPA's section 202 reports envision a 
centralized Federal oversight approach to Bay restoration.
    Perdue's Clean Waters Initiative is producing measurable 
results. Before Congress codifies Federal oversight and 
enforcement of the Bay restoration, we should first let these 
efforts take hold. Codification is unwarranted.
    The bill creates an uneven playing field for poultry in 
Delmarva. It establishes a higher level of EPA Clean Water Act 
regulation for farmers in the Bay Watershed than elsewhere. 
This bill puts our operations and growers at significant 
competitive disadvantage, and that threatens the very existence 
of the Delmarva poultry industry.
    Second, the bill gives EPA unprecedented authority to take 
any actions the Agency deems necessary to reach Bay restoration 
goals. This includes requiring all poultry and livestock 
operations, and potentially any farmer that fertilizes a field, 
to operate under a Clean Water Act permit. This would be cost-
prohibitive.
    Third, the bill mandates caps, specific caps, for the TMDL 
for the Chesapeake Bay, sets deadlines and gives EPA ultimate 
authority to run the program. Unfortunately, the agricultural 
community still has very little information on the Bay-wide 
TMDL. USDA's NRCS is still gathering information to determine 
what agricultural BMPs are included in the Bay model. Many of 
the volunteer practices outlined in my written testimony are 
not included in the Bay model. It is not an accurate 
representation of agriculture's environmental impact on the 
Bay. We need to better understand the baseline and outcomes 
before mandating a Bay-wide TMDL.
    Fourth, codifying the citizen suits will generate 
unnecessary legal actions directed at family farmers.
    Fifth, this reauthorization would require farmers to get a 
Clean Water Act permit, yet not place the same oversight and 
enforcement mechanisms on the other nutrient contributors in 
the watershed. The bill envisions that all nutrient 
contributors should protect the Chesapeake Bay. Why then is 
agriculture the only one facing penalties if this fails?
    Sixth, while the Bay envisions Federal funds for technical 
support to help farmers, the bill does not ensure such funding. 
Thus, farmers are left with the stick of enforcement and merely 
the promise of a carrot, without a guarantee of funds, placing 
the financial burden on the back of the farmer.
    Finally, this legislation mandates an environmental credit 
program that would be generated by agricultural efforts to 
enable farmers to pay for the costs associated with additional 
regulation, and to utilize those credits to provide necessary 
offsets for any form of additional development. Experts agree 
that there will be no farm credit offsets to sell, leaving 
local governments to purchase whole farms and take them out of 
production to achieve the offsets necessary for additional 
development, such as schools and hospitals.
    Perdue's actions are in place and effective. Congress must 
ensure the actions of the agricultural community are included 
in an updated Bay model and that the Executive Order not be 
codified. Otherwise, agriculture and the Chesapeake Bay 
Watershed will be at a competitive and economic disadvantage.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Schwalb follows:]

 Prepared Statement of Steve Schwalb, Vice President of Environmental 
       Sustainability, Perdue Farms, Incorporated, Salisbury, MD
    Chairman Holden and Ranking Member Goodlatte, thank you for the 
opportunity to appear today before the Subcommittee as you review 
regulations and legislation impacting the Chesapeake Bay Program.
    My name is Steve Schwalb. I am Vice President of Environmental 
Sustainability at Perdue Incorporated, headquartered in Salisbury, 
Maryland, on the Eastern Shore of the Chesapeake Bay. Perdue 
Incorporated's (Perdue) operating entities consists of Perdue Farms and 
Perdue Agribusiness. Perdue Farms is the number-one brand of premium 
chicken in the Eastern U.S. and is synonymous with quality products 
around the globe. With annual sales in excess of $4.6 billion, Perdue 
is ranked as the third largest poultry company in the U.S. and the 
largest agribusiness company in the eastern U.S. Combined, we provide 
food and agricultural products and services to customers in more than 
50 countries and to our servicemen and women serving in war. Perdue 
employs 22,000 associates in 15 states, with operations in Alabama, 
Delaware, Florida, Georgia, Indiana, Kentucky, Maryland, New Jersey, 
New York, North Carolina, Pennsylvania, South Carolina, Tennessee, 
Virginia, and West Virginia.
    With our headquarters located in the heart of the Chesapeake Bay's 
Eastern Shore, we know all too well the importance and ecological 
sensitivity of the Bay and its watershed. Our Chairman, Jim Perdue is 
fully committed to restoring, protecting and preserving the Bay, like 
the other watermen and farmers of the Shore. With a family history on 
the Shore dating back to the 1600s and a PhD in fisheries, Jim 
continues to support the highest level of commitment to environmental 
stewardship. As a firm believer that the restoration of the oyster 
population in the Bay is critical to a successful Bay restoration, he 
serves as a board member of the Oyster Recovery Partnership.
    Perdue is committed to environmental stewardship and shares that 
commitment with our farm-family partners. Together, we can continue to 
provide a safe, abundant and affordable food supply while protecting 
our natural resources.
    Perdue is proud of the leadership role we're providing in 
addressing the full range of environmental challenges related to animal 
agriculture and food production. We have invested, and continue to 
invest, millions of dollars in research, new technology, equipment 
upgrades and awareness and education as part of our ongoing commitment 
to protecting the environment. Some examples:

   Perdue has been conducting environmental research for more 
        than 2 decades.

   Perdue was among the first poultry companies with a 
        dedicated Environmental Services department. A group of 
        corporate environmental specialists and environmental managers 
        are responsible for ensuring that every Perdue facility 
        operates within 100 percent compliance of all environmental 
        regulations and permits.

   Our processing plants have some of the newest and most-
        advanced wastewater treatment facilities, helping us to protect 
        the waterways in our communities.

   We've invested thousands of man-hours in producer education 
        to assist our farm-family partners manage their independent 
        poultry operations in the most environmentally responsible 
        manner.

   Our Technical Services department is conducting ongoing 
        research into feed technology as a means of reducing nutrients 
        in poultry manure. We've already achieved phosphorus reductions 
        that far exceed the rest of the industry.

   Perdue was one of four poultry companies operating in 
        Delaware to sign a historic agreement with Delaware officials 
        outlining our companies' voluntary commitment to help 
        independent producers solve on-farm environmental challenges.

   Perdue signed MOUs with Delaware, Maryland and Virginia 
        pledging cooperative efforts to address current and potential 
        environmental challenges created from poultry production on the 
        Eastern Shore.

    Our demonstrated commitment to protecting the Chesapeake Bay is not 
something recent. In 1999, as ``physteria hysteria'' was settling in 
over the watershed, Perdue took immediate action. We entered into a 
joint venture and created Perdue AgriRecycle. Because many Delmarva 
poultry producers did not have sufficient land to be able to utilize 
poultry litter as fertilizer, especially those with smaller farms, an 
alternative to traditional land application of poultry litter was 
needed. Perdue AgriRecycle provides that alternative. Our manufacturing 
facility, the first-ever, large-scale litter-pelletizing operation and 
the result of an initial investment of $13 million, is located in 
Sussex County, Delaware, the center of one of the country's most-
concentrated areas of poultry production. While the close proximity to 
hundreds of poultry farms helps the supply of raw material, the plant's 
location also demonstrates Perdue's environmental commitment to the 
independent poultry grower and the grain farmer. Perdue's willingness 
to continue to invest an additional $17+ million to-date to keep Perdue 
AgriRecycle operating further demonstrates our commitment to the 
environment.
    Perdue AgriRecycle can process the equivalent of 400 poultry houses 
worth of litter each year. Perdue AgriRecycle also participates in 
litter relocation programs, further reducing excess nutrients on the 
Delmarva Peninsula.
    The Perdue AgriRecycle process begins at the farm, where surplus 
poultry litter is loaded into specially designed, sealed trucks for 
transport to our 65,000 square-foot manufacturing facility. The trucks 
are unloaded inside the plant, where a negative-air system prevents 
dust and odor from escaping to the environment (the same negative-air 
system is used in the finished product storage area). Special filters 
and scrubbers ensure that the air leaving the plant is cleaner than the 
outside air. Raw material is heated to a temperature that kills 
Salmonella and E. coli as well as destroys bacteria and weed seed. The 
dried material is then reduced to a powder before it is transferred to 
the pellet mill. Moisture captured in the drying step is re-used in the 
pelletizing process. The finished product is then stored in an enclosed 
warehouse room. Product can be shipped by truck or rail to our 
customers.
    While poultry litter remains a valuable resource for many producers 
as a natural alternative to chemical fertilizers, Perdue AgriRecycle 
provides an environmentally friendly alternative for those producers 
who do not have the acreage for traditional land application or whose 
fields do not need the nutrients in poultry litter. Our organic 
fertilizer, approved by the USDA's National Organic Program (NOP) and 
classified as approved for use without restriction by the Organic 
Materials Review Institute (OMRI) is used in horticulture, landscaping, 
organic crop production, on golf courses and as a key ingredient in 
popular organic lawn and garden products. Perdue AgriRecycle also 
participates in litter transport programs, relocating raw litter to 
farmers who can appropriately utilize the nutrients. Since its 
inception, Perdue AgriRecycle has handled 639,000 tons of poultry 
litter, the equivalent of 1535 poultry houses and over 51 million 
pounds of nitrogen, 25 million pounds of phosphorus and 38 million 
pounds of potassium. Also since its inception, Perdue AgriRecycle has 
sold almost 329,000 tons of finished product. This represents 26.3 
million pounds of nitrogen, 13.1 million pounds of phosphorous, and 
19.7 million pounds of potassium. At least half of those nutrients have 
been relocated to states out of the Chesapeake Bay Watershed.
    In 2001, Perdue approached the Delaware Center for Inland Bays (a 
private, nonprofit National Estuary Program) and proposed a ``model 
watershed'' concept for the Little Assawoman Bay that would include 
cooperative efforts to accelerate compliance with Delaware's Nutrient 
Management regulations. The proposal developed into the Poultry 
Integrators Nutrient Effort (P.I.N.E.). Partnership, which includes the 
poultry industry, the Center for Inland Bays, the Delaware Nutrient 
Management Program, the Sussex Conservation District, the Delaware Non-
point Source Program and the University of Delaware. The P.I.N.E. 
Partnership includes environmental surveys of poultry farms within the 
watershed and the development of nutrient management planning and best 
management practices for the Little Assawoman Bay Watershed. Most 
recently, as part of the P.I.N.E. partnership, Perdue helped create a 
model farm that incorporates technology and best practices to reduce 
the environmental impact and is more ``neighbor-friendly.''
    Another example of our commitment to environmental sustainability 
centered on the independent farm families that grow poultry for Perdue. 
On September 18, 2006, Perdue and the U.S. Environmental Protection 
Agency (EPA) Region 3 signed a Memorandum of Agreement for the Perdue-
EPA Clean Bays Environmental Management Initiative (Clean Bays), a 
corporate stewardship program aimed at reducing environmental impacts 
of poultry farms on the Chesapeake Bay and Coastal Bays throughout the 
Delmarva Peninsula.
    The first-of-its-kind Pilot Program for the poultry industry, Clean 
Bays was also designed to improve the independent poultry producers' 
compliance with environmental regulations by utilizing the unique 
relationship between the Perdue flock supervision and those producers 
within the comprehensive structure and organization of Perdue Farms. 
Although EPA was a participating partner, the strong reliance upon 
corporate leadership throughout many levels within Perdue Farms 
constituted the majority of the effort under the Clean Bays Memorandum 
of Agreement.
    The pilot program included trained area flock supervisors visiting 
the 19 largest poultry farms that were growing birds for Perdue to 
evaluate how the producer was managing important aspects of poultry 
litter as well as how best management practices (BMPs) were being 
implemented to help reduce nutrient runoff.
    After training was provided to area flock supervisors and producers 
by Perdue and EPA, poultry farms in the pilot program throughout the 
Delmarva Peninsula were visited several times throughout 2007 and early 
2008 by the area flock supervisors. Utilizing an environmental 
assessment checklist jointly developed by Perdue and EPA, the area 
flock supervisor recorded how farms were implementing environmental 
practices in accordance with Clean Bays, identified areas needing 
improvements, and assisted producers with ensuring that corrective 
measures were taken.
    The pilot program also included recognition awards to producers 
that demonstrate excellence in environmental stewardship.
    This pilot program was a new model for how industry, agriculture 
and regulators can cooperate to promote environmental compliance and 
protect our natural resources.
    Based upon the very positive results of the pilot program, Perdue 
and the EPA agreed to expand the Clean Bays initiative company-wide. On 
November 21, 2008, Perdue and EPA Regions 3 and 4 signed an MOA to 
continue to work together to develop and implement the Perdue Clean 
Waters Environmental Initiative (Clean Waters). The purpose of this 
Initiative was to continue to foster Perdue's environmental leadership 
in the poultry industry by providing training, assistance, and 
environmental assessments to all the producers to enhance their 
compliance with Federal, state, and local environmental regulations and 
specific BMPs and by the use of Environmental Management Systems (EMSs) 
at Perdue processing facilities.
    As outlined in the ``Clean Waters Initiative'' MOA:

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

-------------------------------------------------------------------------
    The goal of this Initiative is to restore and protect our nation's
 waters. To accomplish this goal, the Initiative is designed to minimize
 environmental impacts to our nation's waters, to support continued
 corporate environmental excellence, to encourage sustainable
 agriculture, and to improve Producers' compliance with environmental
 requirements. The Parties have identified the following critical
 components of the Initiative and plan to work together to refine these:

               Perdue Corporate Environmental Stewardship

    1. Sustainable Agriculture: It is in the interest of Perdue and the
     Producers to employ agricultural practices to ensure environmental
     protection and a prosperous and sustainable agricultural industry.
     Toward that end, Perdue agrees to utilize feed management
     techniques to minimize phosphorous content of poultry litter and
     endeavor to minimize the use of substances that are determined
     jointly by the Parties to adversely affect surface and groundwater
     quality. Perdue currently utilizes phytase in its feed formulation
     and has adjusted the composition of its feed to minimize the
     phosphorous content of poultry manure. Perdue agrees to continue
     this practice and to continue to investigate and utilize other
     means to minimize the phosphorus levels of litter if found not to
     detrimentally affect bird health or growth. Perdue agrees to make
     every effort not to use arsenic compounds in its feed, but may use
     it where the health of the flock is a concern and other non-arsenic
     techniques fail to restore the flock to health in a timely manner.
     EPA and Perdue intend to engage in regular technical discussions on
     advances in feed management practices to identify and employ new
     advances in sustainable agriculture.

    2. Environmental Management Systems: To enhance Perdue's
     environmental excellence, Perdue plans to implement an
     Environmental Management System at all of its processing plants
     using as a model the ISO 14001 based program that has been
     developed for Perdue's Salisbury processing plant.
------------------------------------------------------------------------


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

-------------------------------------------------------------------------
                            Producer Program    1. Training and Assistance: Proper training and assistance are
     critical to ensure that both Perdue associates and the Producers
     have sufficient tools and knowledge to comply with environmental
     regulations and to take the necessary actions to minimize nutrient
     loads to our nation's waters. Under the September 2006 Perdue-EPA
     Clean Bays Environmental Management Initiative, Perdue and Region 3
     have developed a training program in consultation with other
     Federal and state agricultural agencies. Under this Initiative, the
     Parties plan to modify the training program to incorporate lessons
     learned from the Perdue-EPA Clean Bays Environmental Management
     Initiative. The Parties will also review modifications proposed by
     Region 4 and agricultural agencies and environmental departments in
     Region 4 states that were not part of the September 2006 Perdue-EPA
     Clean Bays Environmental Management Initiative's pilot program.      Once updated, the training program, to be jointly presented by
     Perdue and EPA, will:        a. provide Perdue flock supervisors training necessary to
         perform thorough environmental and compliance assessments;        b. provide Producers information on Best Management Practices
         and how they are to comply with Federal, state and local
         environmental requirements governing poultry operations; and        c. provide Producers with technical guidance and information
         about publicly available financial assistance to support
         implementation of nutrient management plans.    2. Producer Environmental Assessments: Regular and thorough Producer
     Environmental Assessments (``Assessments'') are critical if the
     goals of this Initiative are to be achieved. Perdue, in previous
     consultation with EPA, developed an Assessment program that Perdue
     implemented as a part of the Perdue-EPA Clean Bays Environmental
     Management Initiative's pilot program. With this Initiative, the
     previous pilot program is being expanded to include the Assessment
     of all dry litter chicken facilities owned or operated by the
     Producers located in Region 3 and 4 states only. In addition, an
     updated assessment checklist has been developed by Perdue. This
     expanded Assessment program is to be implemented in phases
     according to the following schedule:
------------------------------------------------------------------------


------------------------------------------------------------------------
  April     October     April     October     April    October    April
  2009       2009       2010       2010       2011       2011      2012
------------------------------------------------------------------------
Retrain   Region 3    Train     Region 3    Train     Region 3
 Region    assessmen   Region    assessmen   remaini   assessme
 3 Flock   ts on       3         ts on       ng        nts on
 Supervi   farms       Produce   farms       Region    remainin
 sors,     with        rs with   with        3         g farms
 Produce   >100,000    60,000-   60,000-10   Produce
 rs with   capacity    100,000   0,000       rs
 >100,00               capacit   capacity
 0                     y
 capacit
 y
          Train       Region 4  Train       Region 4  Train      Region
           Region 4    assessm   Region 4    assessm   remainin   4
           Flock       ents on   Producers   ents on   g Region   assess
           Superviso   farms     with        farms     4          ments
           rs,         with      80,000-12   80,000-   Producer   on
           Producers   >125,00   5,000       125,000   s          remain
           with        0         capacity    capacit              ing
           >125,000    capacit               y                    farms
           capacity    y
------------------------------------------------------------------------


-------------------------------------------------------------------------------------------------------------------------------------------------
      In order to maintain a more comprehensive Assessment checklist,
     EPA, in consultation with participating Region 3 and 4 states
     agrees to provide available guidance that reflects state and
     Federal environmental requirements. These criteria will be
     incorporated by Perdue into the Assessment checklist.
      The Assessment checklist is intended to promote compliance by the
     Producers with applicable state and Federal environmental
     requirements, and evaluate:         whether Producers have obtained a Nutrient Management
         Plan,------------------------------------------------------------------------


-------------------------------------------------------------------------------------------------------------------------------------------------
         whether critical elements of the Nutrient Management
         Plan, as it relates to chicken operations within the production
         area, are being followed, and         whether required Best Management Practices are fully
         implemented within the production area.      The Assessment should also record that the Producer has a means of
     disposing of and handling litter that is consistent with good
     environmental practices and all applicable Federal and state
     regulations. Perdue is not expected to verify the accuracy of the
     Producer's plan and does not intend to perform assessments of
     operations outside the production area.
      The Assessments are to occur at a frequency of two (2) times per
     year at each Producer's facility. One assessment should be
     conducted within a reasonable time after birds have been removed
     from the farm but prior to the next placement of birds and another
     assessment should be conducted during the Producer's grow-out
     cycle. Perdue agrees to make the Assessments available to EPA in
     redacted form upon request.    3. Deviation Notification Process: During Perdue's Assessments, it
     is possible that deviations may be identified regarding some
     Producers' operations. It is important from an environmental
     compliance standpoint that these deviations be corrected in a
     timely and appropriate manner. During the Perdue-EPA Clean Bays
     Environmental Management Initiative, Perdue developed and
     implemented a program to enable the Producers to address deviations
     identified during the Assessments. The same response to deviations
     will operate under this Initiative. Specifically, in the event that
     Perdue's Assessment identifies a deviation, Perdue should implement
     the Deviation Notification Process, which alerts the Producer to
     correct the deficiency by a certain date. If a deviation is not
     addressed by a Producer in the time specified in the Assessment and
     the issue is elevated to Perdue's Environmental. Services group, it
     will be logged and tracked to closure. Perdue agrees to make the
     deviation log available to EPA for review upon request with
     Producer names redacted and agrees to notify EPA annually of
     Producers that are no longer in the program.    4. Environmental Results: Our shared goal in the development and
     implementation of this Program is the restoration and protection of
     our nation's waters. Toward that end, it is central that the
     program be designed and implemented to achieve environmental
     results. Perdue, in consultation with EPA, intends to develop and
     implement an information system and set of program measures
     designed to track progress in achieving environmental improvement
     and compliance. Perdue agrees to make available information
     regarding Assessments and deviations available for EPA review
     except that the database will not contain Producer names and
     locations but will substitute a confidential identification number
     specific to an individual farm.    5. Program Evaluation: In order to ensure that the program is
     accomplishing the intended results, Perdue and EPA plan to conduct
     an annual evaluation, involving joint site visits, joint record
     reviews, including reviews of Assessments and Deviation Response
     Plans, and environmental results analysis. Perdue and EPA intend to
     use the information obtained from these evaluations to assess the
     effectiveness of program implementation and make any necessary
     program modifications.    6. Recognition: EPA appreciates the efforts of its partners to
     improve water quality and compliance. Perdue, in consultation with
     EPA, intends to work with other agencies and organizations to
     develop a program designed to recognize those program participants
     who demonstrate environmental and compliance excellence,
     particularly those that are judged to be outstanding in their
     efforts to minimize nutrient loads to our waters.
------------------------------------------------------------------------


-------------------------------------------------------------------------------------------------------------------------------------------------
    7. Outreach: In order to further our shared goals of environmental
     protection and compliance, materials and tools developed under this
     program with EPA assistance may be shared with the public and other
     members of the poultry industry.    8. EPA Compliance Assurance Activities: While nothing in this
     agreement waives or limits the authority of EPA to conduct
     compliance monitoring (including inspections or other information
     gathering activities) or to take enforcement action pursuant to
     Federal law, the Agency intends to consider the good faith and full
     participation by Perdue and the participating Producers in this MOA
     as a factor in determining whether and how such activities will be
     undertaken.    9. Record Retention: Perdue agrees to maintain copies of all
     Assessments and Deviation Response Plans for a period of 4 years (1
     year after full implementation) of the Producer Program.    10. Record Review: Perdue agrees to provide EPA with copies of any
     documents generated by Perdue as part of this initiative upon
     request by EPA. These documents may be redacted to shield the
     identity of the Producers. However, if EPA needs to review
     documents in their entirety for program evaluation purposes, EPA
     can have access to these documents on-site at Perdue's regional
     complexes located in Salisbury, Maryland and Perry, Georgia. This
     MOA in no way limits EPA's legal authority to obtain documents from
     Perdue or any of the Producers.
------------------------------------------------------------------------


    Progress-to-date on the implementation of the Clean Bays initiative 
has been on-schedule, with the largest of the almost 700 Delmarva 
producers the first to come on-line. By the end of the 4 year 
implementation, approximately 1,650 producers in Alabama, Delaware, 
Florida, Georgia, Kentucky, Maryland, North Carolina, South Carolina 
and Virginia, as well as all Perdue processing operations, will be 
included in the initiative.
    Since the on-farm environmental assessment component of the Clean 
Bays initiative is especially applicable to the purpose of this 
hearing, I would like to highlight the specifics of the assessment 
process and how the process is executed:

   Two on-farm environmental assessments are to be performed on 
        each farm annually. These assessments are performed by the 
        Perdue area flock supervisor. One is performed when the house 
        is in production (birds in) and one is performed when the house 
        is out of production (birds out).

   It's important to note that although ``official'' 
        assessments are conducted two times per year, the Perdue flock 
        supervisors visit the poultry farms each week, and will be 
        observing and noting assessment items during those times. Any 
        issues of concern noted during these visits will be addressed 
        with the producer.

   Assessment information includes:

     General Farm Information.

     Nutrient Management Plan review.

     Manure Management practices review and evaluation.

     Mortality Management practices review and evaluation.

     Chemical Management practices review and evaluation.

     Environmentally Beneficial Practices (EBS)/Best 
            Management Practices (BMP) review and evaluation.

     Direct Contact with Waters evaluation.

     Records Management review.

     Status & Summary

   A graduated ``deviation notification process'' is part of 
        the initiative, and operates as follows:

     Step One: Issue identified, brought to the producers 
            attention by the Perdue flock supervisor to address with a 
            follow-up time scheduled to verify completion.

     Step Two: Should the producer not address the issue, 
            it is elevated to Perdue Corporate Environmental Services 
            and Perdue Live Production management, who meet with the 
            producer to address/correct the issue.

     Step Three: Should the issue remain unresolved, Perdue 
            will not place birds at the farm until the producer 
            rectifies the situation.

     Final Step: If all previous steps do not result in 
            satisfactory resolution, the contract with the producer 
            will be terminated. Perdue's contract with the producer 
            clearly states that the producer agrees to comply with 
            applicable Federal, state and local laws, regulations and 
            codes.

    It's also important to note that the Clean Waters initiative 
includes a commitment by Perdue to implement an Environmental 
Management System (EMS) in each processing facility. This is a major 
undertaking to ensure that all environmental aspects related to the 
processing of our poultry at our processing plants are considered. 
Based on the ISO 14001 standard, Perdue's EMS is a Plan-Do-Check-
Improve process for controlling and improving environmental 
performance. By requiring the setting of clear environmental goals, 
roles and responsibilities, an EMS provides the mechanism for ensuring 
involvement of every facility associate in environmental issues. The 
EMS also serves as a comprehensive training tool for facility and 
environmental management.
    I hope it is apparent that the Clean Bays and subsequent Clean 
Waters initiatives are a different model for supporting environmental 
compliance. Since September 2006, Perdue has demonstrated our on-going 
commitment through thousands of man-hours and substantial funds to 
support this initiative, and will continue to do so in the future.
    Perdue has established a long record for exceeding compliance and 
leading the industry in addressing the environmental challenges 
associated with animal agriculture and food production. Continuing that 
record, we formally established the Perdue Environmental Sustainability 
Initiative in November 2007. This initiative, operating parallel and in 
harmony with the Corporate Environmental Services function mentioned 
earlier, is a comprehensive approach. It's driven by the Environmental 
Steering Committee, a cross- business unit and cross-functional team 
that set the strategic direction for the overall Environmental 
Sustainability Initiative and ensures there are measurable results to 
support Perdue's environmental story. Today, we're organizing our 
Environmental Sustainability Initiative efforts under three platforms: 
Reduce, Reuse, Recycle; Research and Innovation; and Community 
Outreach:

   The Reduce, Reuse, Recycle platform at Perdue is defined as 
        conserving resources and reducing waste streams by managing 
        material usage more efficiently. Some examples are:

     Phytase, an enzyme added to our feed formulations 
            since 2000, reduces phosphorus in manure by over 25%.

     Water Conservation initiatives for our facilities on 
            Delmarva resulted in an average reduction in water use of 2 
            million gallons of water per week per plant.

     Energy saving pilot projects at our Delaware 
            processing plants will save 3.98 million kWh annually and 
            pave the way for even greater energy savings throughout the 
            company.

     A pilot recycling project at our Dillon, S.C., 
            processing plant recycled 2 million pounds of solid waste 
            in 1 year, and is now a model being implemented in all of 
            our plants.

     Perdue uses recyclable, eco-friendly corrugated boxes.

     Improvements at our Accomac, Va., protein conversion 
            plant reduced nitrogen oxide emissions by 29,000 pounds per 
            year and sulfur dioxide by 121,000 pounds.

     Perdue Transportation Inc. is an EPA SmartWay 
            Transport Partner with an ``exceptional rating'' for our 
            fuel savings and environmental improvements.

     Revised routing for flock supervisors reduced 
            distances traveled by 2,000 miles per week. This process is 
            being applied to other live production transportation.

   The Research and Innovation platform at Perdue is leveraging 
        technology discovered through research or developed through 
        innovation to drive environmental sustainability throughout 
        Perdue's supply chain for the benefit of associates, consumers, 
        customers and our businesses. Some examples are:

     Perdue BioEnergy, LLC, is pursuing opportunities in 
            alternative fuels, including wood chips, poultry fat and 
            by-products from our waste treatment plants to replace fuel 
            oil at our processing plants.

     Perdue is working to reduce packaging and make our 
            packaging more recyclable.

     The company has modified formulas in our products to 
            be less impactful on our waste treatment facilities.

     We've modified our packaging case sizes to reduce the 
            environmental impact of the transportation of our finished 
            products. In one example, a case-size change enabled the 
            same product to be shipped in 240,000 less corrugated boxes 
            on 1,666 less wood pallets needing 75 less trucks to 
            deliver.

   The Community Outreach platform at Perdue is bringing us 
        together with various stakeholders to communicate, educate and 
        collaborate on environmental sustainability efforts. Some 
        examples are:

     The Perdue EPA Clean Waters Environmental Initiative 
            that is currently being implemented.

     As part of the P.I.N.E. Project from 2004, activity at 
            the Model Farm continues, the latest being the installation 
            and testing of diverters for the exhaust fans to minimize 
            airborne dust. This project is managed within an ongoing 
            partnership with the Delaware Center for Inland Bays.

     For 2008 & 2009, Perdue supported Maryland Public 
            Television's Chesapeake Bay Week volunteer-a-thon by 
            pledging 500 and 700 volunteer hours respectively to Bay-
            based environmental projects.

     Also for 2008 & 2009, Perdue participated in Project 
            Clean Stream, an effort coordinated by the Alliance for the 
            Chesapeake Bay. Perdue associates volunteered 498 hours 
            over the two yearly efforts. Additionally, a Perdue 
            executive serves on the Board of the Alliance.

     In 2009, Perdue initiated a pilot partnership with the 
            National Fish and Wildlife Foundation. By committing funds 
            to NFWF, Perdue supported two important Chesapeake Bay-
            oriented projects: an Oyster Recovery Partnership project 
            that attached 200+ oyster gardens to docks along the 
            Nanticoke River; and a Nanticoke Watershed Alliance project 
            that will develop a Green Infrastructure conservation plan 
            for ecologically sensitive areas in the Nanticoke River 
            Watershed.

    When this Environmental Sustainability Initiative is combined with 
our Environmental Services efforts to ensure compliance at our Perdue 
facilities and locations, I hope it is very apparent that Perdue is 
committed to a comprehensive approach to addressing our corporate 
environmental impact.
    Perdue is not alone in our efforts to care for the Bay. Agriculture 
on Delmarva is best characterized as a three-legged stool, with the 
poultry companies, poultry growers and grain farmers working to equally 
support a viable poultry industry. According to the Maryland Department 
of Agriculture, poultry grower and grain farmer conservation 
accomplishments include:

   Since 1984, farmers have spent over $12.25 million of their 
        own money to match $98 million in state and Federal funds to 
        install over 20,000 water quality best management practices 
        (BMP) or about 2.5 BMPs per day, every day, for 24 years. 
        Installation of agricultural BMPs on farmland will account for 
        67 percent of 2.5 million pounds of nitrogen of Maryland's 
        recent 2011 Chesapeake Bay milestones.

   In 2007 and 2008 alone, farmers matched $24.4 million in 
        MACS state grants with $3 million of their own money to install 
        over 4,000 capital and special projects on their farms. These 
        practices are preventing 5.1 million pounds of nitrogen, and 
        287,000 pounds of phosphorus from impacting waterways.

   Cover crops are widely recognized as one of the most cost-
        effective and environmentally promising ways to reduce 
        agricultural runoff into the Chesapeake Bay and its 
        tributaries. In 2004, the Chesapeake Bay Restoration Fund was 
        established to create a dedicated and stable funding source for 
        Maryland's cover crop cost-share program. In 2008, Governor 
        O'Malley's 2010 Chesapeake Bay Fund provided millions more. In 
        2009, farmers have signed up to plant 330,500 acres of cover 
        crops to take up excess nutrients and prevent soil erosion over 
        the winter.

   Since 1999, through Maryland's Manure Transport Program, 
        approximately 456,983 tons of excess poultry litter and manure 
        have been transported from areas with excess manure or high 
        soil phosphorus levels to other farms or alternative use 
        facilities that can use the product in an environmentally-sound 
        manner. In 2008, approximately $520,357 in state cost-share 
        funding to transport manure was matched by Delmarva poultry 
        companies, for a total of $891,342 provided to participating 
        poultry growers.

   99 percent of the state's 1.3 million acres of crop land and 
        99 percent of the state's 6,200 eligible farmers have nutrient 
        management plans and are complying with the state's nutrient 
        management law.

   Over the last 10 years, Maryland farmers have converted 
        approximately 74,000 acres of environmentally sensitive 
        farmland into streamside buffers, wetlands other wildlife 
        habitat areas through the Conservation Reserve Enhancement 
        Program (CREP). The program helps protect water quality in 
        local streams and rivers by reducing soil erosion, controlling 
        nutrient runoff and increasing wildlife habitat.

   Approximately 22 percent of all Maryland farmland is managed 
        as woodland, which promotes sustainable forestry to provide 
        clean water, improve stream health, stabilize soil reduce 
        nutrients and sequester of carbon through actively growing 
        forests and tree biomass.

   More than 50 percent of Maryland farmers in targeted 
        watersheds achieved the highest assistance rate available from 
        the Conservation Security Program--a Federal program that 
        provides funds for the farmers that go the extra mile for 
        conservation. More farms in Maryland qualified in their first 
        year of eligibility than any other state in the Northeast.

   The Maryland Agricultural Land Preservation Foundation has 
        permanently preserved 277,475 acres of priority farmland for 
        farming, with a public investment of over $550 million since 
        its founding in 1977. The Foundation has preserved farmland in 
        all of Maryland's 23 counties.

    Today you, the Members of this Committee, are exploring legislation 
and regulation as it relates to the Chesapeake Bay Program. On behalf 
of the 8,000 Perdue associates that live and work in the Chesapeake Bay 
Watershed, the 700 independent farm families on Delmarva that grow 
poultry for Perdue, and the more than 7,000 independent farm families 
in the Chesapeake Bay Watershed that grow grain, we appreciative of 
your efforts.
    Our position on the Chesapeake Bay Program is clear. Perdue 
wholeheartedly supports the reauthorization of the program, Section 117 
of the Clean Water Act. We do, however, have concerns with the efforts 
to incorporate into the reauthorization legislation new law on how 
agriculture will operate in the watershed. President Obama's Executive 
Order (EO 13508) and the subsequent Section 202 reports recently issued 
by EPA focus on a centralized, Federal oversight approach to Bay 
restoration activities that emphasize regulatory mandates rather than 
cooperative approaches. Through the efforts taken by Perdue and our 
family farm partners, in cooperation with both Federal and state 
officials, and the actions taken by the agriculture community, we have 
implemented an initiative that is producing measurable results for the 
Bay and the watershed. Before Congress codifies the Federal oversight 
and enforcement of the Bay restoration, we should first let the efforts 
that Perdue and the farmers in the watershed have started take hold. 
Many of the concepts and regulations included in this legislation to 
reauthorize the Chesapeake Bay Program are codification of proposals 
recently set forth in EO 13508. This EO is not yet promulgated into 
regulation, but now without the opportunity to see if the regulation 
has value or testing its impact, it would be set in stone as law. Such 
action is premature.
    As for specific areas of concern, first, H.R. 3852 will create an 
uneven playing field for the ever tenuous continued operation of 
poultry processing in the Delmarva by establishing a higher level of 
EPA Clean Water Act regulation for the states in the Bay Watershed than 
is required by farmers throughout the rest of the country. Today, 
Delmarva is one of the least cost effective locations for the 
agriculture community and, in particular, for the poultry industry. 
This reauthorization would put our operations and our growers at a 
significant competitive disadvantage and would threaten the very 
existence of the poultry industry.
    Second, the bill gives EPA unprecedented authority to take any and 
all action the agency deems necessary to reach Bay restoration goals. 
This includes requiring all poultry and livestock operations, and 
potentially any farmer that fertilizes a field, to operate under a 
Clean Water Act permit. This will be cost prohibitive for small and 
medium size farm operations.
    Third, the bill puts into law specific caps for the Total Maximum 
Daily Load (TMDL) for the Chesapeake Bay, sets deadlines to achieve 
these TMDLs and gives EPA ultimate authority to implement the program. 
Unfortunately, the agricultural community still has very little 
information on the TMDL, what it means at the farm level and how they 
are expected to measure the nonpoint sources attributed to their farms. 
Based on information from the USDA, the NRCS is still gathering 
information to determine what agricultural BMPs are included in the Bay 
Model, the basis for the TMDL program. We know that many of the 
voluntary practices outlined in this testimony are not included in the 
Bay Model, and therefore, the baseline on which the initial TMDLs have 
been developed is not an accurate representation of agriculture's 
environmental impact on the Bay. This baseline effort needs to be 
completed, and the outcomes better understood, before the TMDL program 
is mandated through codification by this legislation.
    Fourth, citizen right of action or citizen suits must not be 
codified as they will generate unnecessary legal actions that are 
intended to stop a project or prolong the issuance of permits. This 
will provide a legal tool to be used by any group against farmers and 
other permitted projects from getting established, and will become a 
huge financial burden to farm families targeted by special interest 
groups.
    Fifth, this new reauthorization would designate agriculture as 
permittees, yet would not place the same oversight and enforcement 
mechanisms on the other nutrient contributors in the watershed. Why if 
the legislation envisions that all nutrient contributors should be 
engaged in the process of protecting the Bay is agriculture the only 
one facing penalty if they fail to meet the goals established by EPA?
    Sixth, while we appreciate the provisions in the bill to set aside 
Federal funds for technical support in NRCS and Soil Conservation 
District offices to help farmers develop conservation plans and install 
BMPs, this authorization of legislation does not ensure that such 
funding will be made available through an appropriation. Thus farmers 
are left with ``the stick'' of enforcement and merely the promise of a 
``carrot'' without a guarantee of the funds. We are concerned that if 
Congress fails to make the annual appropriation, farmers will bear the 
brunt of nutrient reduction when local governments cannot afford the 
investment.
    Finally, it is our understanding that the legislation mandates an 
``environmental credit'' program that would be generated by 
agricultural efforts for farmers to ``pay'' for the costs associated 
with additional regulation, and utilize those credits to provide 
necessary ``offsets'' for any form of additional development. However, 
it is our understanding that farmers will be required to meet all 
individual farm nutrient obligations under the TMDL program, and 
therefore have to implement all available BMPs, before being eligible 
to generate any credits. According to the Maryland Farm Bureau, experts 
in this area agree that there will be no offsets on farms to sell, 
leading to local governments utilizing very onerous alternatives, such 
as purchasing whole farm and taking them out of production, to achieve 
the mandated offsets necessary for additional required development, 
such as schools and hospitals.
    Earlier in my testimony, I outlined the actions Perdue is taking to 
address our environmental impact and help sustain the environment. 
These actions are in place and effective. I also outlined a few actions 
that the agricultural community currently has in place that's proving 
to be effective. I respectfully request that Congress ensure the 
current actions of Perdue and others in the agriculture community are 
included in an updated Bay Model, and that President Obama's Executive 
Order not be codified through legislation at this time to allow the 
agricultural community to work cooperatively with the Federal 
Leadership Committee charged to develop the strategy to address EO 
13508. To do otherwise would be placing all agriculture in the 
Chesapeake Bay Watershed at a competitive and economic disadvantage.
    To that end, we urge you to share with your colleagues at the 
Transportation Committee that this legislation, as introduced, could 
dramatically and adversely impact the future of agriculture in the 
watershed.
    In closing, Mr. Chairman and Members of the Subcommittee, I thank 
you for your time and I will be happy to answer any of your questions.

    The Chairman. Thank you, Mr. Schwalb.
    Mr. Curatolo.

           STATEMENT OF JAMES A. CURATOLO, WATERSHED
     COORDINATOR, UPPER SUSQUEHANNA COALITION, BURDETT, NY

    Mr. Curatolo. I would like to thank you, Mr. Chairman, for 
allowing me to testify, and I would like----
    The Chairman. Sir, if you would move the microphone closer 
to you. Thank you.
    Mr. Curatolo. And I would like to thank Congressman Massa 
for having me come from New York and provide you with some 
information. My testimony will be a little different. I want to 
give you a local perspective from water quality professionals 
on how we see the Chesapeake Bay.
    I am the Watershed Coordinator for the Upper Susquehanna 
Coalition. The Coalition consists of 19 county soil and water 
districts, 16 in New York and three in Pennsylvania, that 
completely cover the headwaters of the Susquehanna River and 
Chesapeake Bay. I think in your package you all have a map, and 
that map actually delineates the USC boundaries, and I will 
talk about that map a little later.
    I am employed by the Tioga Soil and Water Conservation 
District. I am a conservation employee. The USC has three major 
focus areas. Where the folks work on ag sustainability, we do 
stream rehabilitation and wetland restoration. Agriculture 
sustainability I define as farmers having a good bottom line 
and also being environmentally healthy.
    I suggest that for a delivery system that you folks look at 
soil and water districts, organization of soil and water 
districts as a delivery system that can complement the state 
and Federal folks in working on Chesapeake Bay issues, 
especially ag.
    We are the folks who provide the technical support to the 
farmer, and I always like to say we don't have a regulatory 
bone in our body. We are the ones that go out and help farmers 
get things done. And when you go out on a farm with the 
district person, the farmers are real comfortable working with 
us. And, if you read my written testimony, we can do things 
outside that box that the NRCS and the state folks need to work 
under for what they do. So we add value and expanded work on 
farms that other folks just can't do because they have too much 
bureaucracy.
    There is a discussion on data collection. I think it is 
very important to have true, important, baseline data so that 
the agricultural models that are out there that define what we 
need to do have a source in truth.
    The way the Coalition works, we actually have a dot on the 
map and a data stream that defines all the good practices that 
every farm has done. I always say the truth will set you free. 
If we have really good information on the nutrient loads from 
farms, from real good assessment work, we will see that our 
farm loads are not quite as high as thought. And there is your 
information needs, if you want to get into nutrient trading, 
you can really document things.
    We have developed a fantastic data management system that 
we use to give the information to the Chesapeake Bay, and I 
suggest that this is a good way to, over time, work on Bay 
issues. Which gets me to a real important point, is how we 
deliver programs effectively, which is one of the major 
Executive Order discussions.
    The way that EPA and NRCS look at delivering programs, if 
you look at that map, they target by geographical region. A few 
points I should suggest, that by targeting geographically and 
putting all your money in those certain watersheds, you 
disenfranchise a lot of the farmers. Those farmers are not able 
to access that funding. They are still under the same 
regulations, and we have found that those farms outside the 
targeted areas--there are plenty of farms where we could get 
just as much bang for our bucks--deliver just as much in 
nutrient load reduction. By disbursing your work, you don't 
overload the technicians in those watersheds, you keep 
everybody sustainable, and you have a true watershed approach.
    You can even it out over the long term, if you are only 
working a portion of your watershed, you are going to reduce 
the infrastructure that farming needs. We are a dairy area. If 
we only work on dairy over here, the milk trucks over at this 
end of the watershed will be gone and it is hard to bring them 
back.
    The devil is in the details, but it is so important that we 
address a scientific approach to farms. And the answer is that 
you pick a farm that has a willing farmer, has that nutrient 
reduction need, and has the technical work to do it. And with 
the models, which are pretty good, we can pick the right farm, 
get the job done, and do it faster.
    The other thing is we need to get things done. If you put 
all your money in one watershed, it will slow things down. I am 
the proposal writer. I am the one--the spin doctor gets money. 
I guarantee you, if you keep all the money in certain 
watersheds, you will be paying for diapers on dairies sooner or 
later, and it will sound very good because I will write it the 
right way.
    So you are going to get to that third tier of practices 
that won't be as efficient, but because you are forced to spend 
money there, that is what will happen. I think NRCS has said 
they will select the areas. The model they use, all it really 
shows if you look at that map, what their model shows basically 
is this is where there are a lot of farms. The model isn't good 
enough to say these are leaky farms that need help. These are 
just farms.
    So I would hope that the farm bill could do two things: 
allow work to be done where it should, and also to put a plug 
in for districts, allow districts to get access to that 
funding, not through NRCS, but directly. That way the practices 
that we can do don't have to follow NRCS specs, because we do 
things that NRCS can't do. We can pound posts with Amish 
farmers and show them how to build things, where if it is not 
an NRCS BMP, it doesn't fit.
    They do good work, but we can expand on that and do that 
cost-effective stuff, especially management plans where we can 
go back and visit with the farmer, make sure he is doing it 
right. We can visit with him, do the planning it needs, and you 
will support the local implementation of folks who really are 
there to help.
    I think I am over time.
    [The prepared statement of Mr. Curatolo follows:]

 Prepared Statement of James A. Curatolo, Watershed Coordinator, Upper 
                   Susquehanna Coalition, Burdett, NY
    I am the Watershed Coordinator for the Upper Susquehanna Coalition. 
I write proposals and develop programs to promote the ability of 
Conservation Districts to work on a watershed scale. The Coalition is 
composed of the 16 County Soil and Water Conservation Districts in NY 
and three County Conservation Districts in PA that cover the Headwaters 
of the Susquehanna River and the Chesapeake Bay. Its mission is to 
protect and improve water quality and natural resources in the Upper 
Susquehanna River Basin with the involvement of citizens and agencies 
through education, partnerships, planning, implementation and 
advocating for our water resources. The Coalition formed in 1992 and I 
was hired as Coordinator in 1996. We implement agricultural practices, 
rehabilitate streams and restore wetlands. The following testimony 
contains my own opinions and views.
    I bring a county-based watershed perspective on how to best develop 
strategies that support Agricultural sustainability and maximize 
nutrient and sediment reductions to the Chesapeake Bay. I would like to 
address several major themes that run through the Chesapeake Bay 
Program, President Obama's Chesapeake Bay Protection and Restoration 
Executive Order, The farm bill, and the proposed Chesapeake Clean Water 
and Ecosystem Restoration Act of 2009 (S. 1816, H.R. 3852). This 
legislation gives us 16 more years to get the mechanisms in place to 
restore water quality throughout our region. If this bill and 
subsequent farm bills can get us more resources to build our capacity 
to provide technical assistance, we should be able to get the job done.
    Let me begin with ``Deliver programs most effectively'' from the 
Executive Order:

        ``Technical assistance is an essential ingredient in delivering 
        conservation programs effectively. We will develop a 
        coordinated plan to assess technical assistance capacity across 
        the partnership and identify and create strategies to fill 
        technical gaps to ensure success of this effort. . . . We will 
        also explore new ways to develop local capacity, taking into 
        account innovative approaches for delivering assistance, 
        opportunities to build third-party capacity, and the need to 
        reach out to landowners who may not have traditionally 
        participated in conservation programs. As we broaden and 
        strengthen the traditional conservation partnership, these 
        local advocates will help to leverage the interest and 
        participation needed to accelerate the application of 
        conservation on the ground'';

and S. 1816/H.R 3852: ``give preference to cooperative projects that 
involve local governments''.

    I suggest the paradigm for such an approach is the Upper 
Susquehanna Coalition (USC). The USC works under a simple Memorandum of 
Understanding where the Districts agreed to work on watershed issues in 
the Chesapeake Bay Headwaters, and to the degree possible, without 
regard to county boundaries. And to answer the question now: funds from 
NY stay in NY, funds from PA stay in PA, but Federal funds for the Bay 
go to wherever the best project is located.
    The USC, being a coalition of Conservation Districts, houses the 
local agricultural professionals that implement Best Management 
Practices on farms. By taking a watershed approach we have developed an 
integrated network where a state or Federal agency can sit down and 
talk with people from an entire Basin on an issue. Our integrated, 
networking abilities were championed by the NY State Department of 
Environmental Conservation when it gave the USC the task of writing the 
agricultural portion (as well as the other nonpoint chapters) of its 
original Tributary Strategy for the Bay and as well as future 
implementation plans. We are a one-stop shop for getting nonpoint 
messages out to watershed residents.
    A Conservation District person is frequently the liaison between 
the state and Federal agencies and the farmer: she or he is the one 
that helps them through the increasingly complex maze of farming 
bureaucracy. District staff don't have ``a regulatory bone in their 
body'' and maybe that is why they can, like no other entity, reach out 
and be trusted by farmers. We have had great success helping the 
``nontraditional'' farmers by teaching how to install practices rather 
than paying for them. For example, we bought a post pounder for our 
Grazing Specialist, Troy Bishop, and he held a fence building workshops 
on Amish farms. They ended up buying their own pounder and the cows are 
now out of the streams and grazing where they should be. Troy is always 
welcome on their farms. Helpful Hint: If you have the opportunity to go 
on a farm tour be sure to go stand next to the person wearing the 
District cap when everyone piles out of their vehicles.
    When you organize Districts by watershed you have an efficient 
delivery system to complement Federal and state approaches. The USC 
covers 12% of the Bay Watershed. Seven more similar sized coalitions 
would cover the entire Basin. Even a few more strategically located in 
high agricultural areas would be tremendously helpful. We have spent 
the last 18 years perfecting the approach and will gladly provide all 
of our lessons learned to help other coalitions form.
    And since there is a great need to help build capacity and 
capability at the local level I suggest that a direct funding mechanism 
for Districts be included in a future farm bill similar to what is 
described in the Chesapeake Bay Restoration Act. I believe Conservation 
Districts are the local partner you want; it will be the most cost 
effective use of money you can find. Comparison Shop: In the NY 
Chesapeake Bay headwaters you can get almost all District Technical 
support for $34 per hour.
    Second I would like to discuss ``Targeting funds to Priority 
Watersheds'', a tremendously important approach that will drive the 
entire Bay cleanup.
    Everyone agrees that the best use of the limited funding that is 
available is to reduce the maximum amount of nutrients and sediment for 
the least amount of dollars. That is the End Game. The strategy of 
choice is targeting watersheds for funding. There is a great desire to 
``focus in'' on small areas where many good projects can be done, its 
the ``Targeting Priority Watersheds'' approach. Computer models 
estimate where the nutrient loads originate and high loading watersheds 
are selected. The EPA Bay Program and the USDA have almost completely 
gone to this approach. You can see a myriad of maps with ``Priority 
Watersheds'' delineated based on computer models. These computer models 
are actually fairly good; however, they do not designate watersheds 
with ``leaky farms'' as high priority and watersheds having ``clean 
farms'' as low. To the computer all the farms are basically the same. 
The model is highlighting watersheds with more farms per square mile 
that cumulatively deliver the most nutrients. However we do not 
implement at the watershed level. To implement we drive up to a single 
farm and begin identifying Best Management Practices. At that level 
there are many farms in the lower priority watersheds that have exactly 
the same potential for nutrient reduction as the high priority 
watershed farms. Exactly the same or even better. Just not as many. But 
the need to target has disenfranchised those farms from participation. 
So the next time you see a priority map look at the white areas. Those 
are the areas where farms are not allowed to participate for funding. 
But they are still going to be under the same TMDL regulations.
    There a simple solution that I believe is most efficient. Let us 
``target'' instead two things:

   the farm that has a willing landowner and nutrient imbalance 
        that we can address, and

   the computer model agrees that the practices we select on 
        this farm will be most cost effective.

    The results after we place all our red dots on a map for farms 
where efficient nutrient reduction measures were implemented will look 
quite similar to a priority watershed map (it should, as the computer 
was telling us where most of the farms are) but with two important 
differences.

   There will be a scattering of red dots where we were able to 
        work on all of the High Priority Farms, and everyone was ``in 
        the game''.

   We had a truly watershed-based approach where every Member 
        of Congress can go home to his or her District and say ``you 
        all are eligible to get implementation money but we are 
        starting with the highest priority farms and practices that we 
        can scientifically show will give us the most reductions to the 
        Bay.'' Every farmer will agree this is a truly democratic and 
        cost effective approach. There is no disenfranchisement. I 
        reviewed the S. 1816/H.R 3852 and this bill allows for all 
        stakeholders to participate.

    And as a grant proposal writer and seeker of funds for the past 37 
years I can guarantee you when funds are dedicated only to a small 
portion of the watershed the good projects will be done first and the 
second tier of lower-value projects will get funded out of necessity 
spend the funding. You will not maximize your implementation dollars. 
Part of a watershed approach is to keep farming sustainable and 
environmentally friendly and to ensure that we have a functioning area-
wide infrastructure. If only certain farming areas (the geographical 
targeting approach) are subsidized it could lead to loss of farms in 
other areas ultimately causing infrastructure to disappear; getting 
that system back up and running is very difficult.
    A third strategic topic is supporting ``innovative practices''. I 
suggest that it is indeed critical that we continue to add to our 
toolbox. However the objective of developing ``innovative'' practices 
is to shake out those that will become ``Tried and True'' and have a 
lasting and important benefit. Much of the competitive funding 
proposals solicited from EPA and USDA now needs to be ``innovative''. I 
suggest the agencies provide funding for high quality practices that a 
farmer needs while adding to the innovativeness.
    Innovativeness is good. The USC, Cornell University and Cornell 
Cooperative Extension have developed some tools to help a farmer reduce 
costs. Cornell developed a simple mass balance calculator that farmers 
can use to calculate nutrient inputs and outputs. Interestingly we have 
found that over several years of use on a farm the mass balances get 
more ``balanced'' and we believe the farmers are reviewing data in a 
different way and they see places for savings. And we have taken that 
concept one step further by developing a series of benchmarks for dairy 
farmers, who can quietly, at their own kitchen table, measure 
themselves against a ``standard'' to see if they can do better and 
reduce their costs (one benchmark example is home grown feed as a 
percent of diet--it should be at least 60% to ensure cost 
effectiveness).
    Last, I want to support the need for good, high quality data so we 
can track all the good practices that we have installed. High quality 
data is needed for computer modeling to support watershed planning; it 
will ensure that we target the right practices. The Chesapeake Clean 
Water and Ecosystem Restoration Act of 2009 does an excellent job of 
walking that fine line between confidentiality and data needs. To 
further assess farm operations I suggest that one look at NY State's 
Agricultural Environmental Management Program (http://www.nys-
soilandwater.org/). This entire voluntary Program uses a simple yet 
sophisticated farm assessment approach that aids the farmer and his 
planner in determining how to reduce both his costs and his nutrient 
loading by helping identify where a problems may exist on the farm.
                               Attachment

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    The Chairman. Thank you very much.
    We have talked a lot today about the farm bill provisions 
for the Chesapeake Bay. I am just curious; have your members or 
your associates utilized the program and how do you think it is 
being administered?
    Mr. Stoneman. Yes. Our members, we rely on a couple of 
sources for funding for BMPs. Certainly the Commonwealth of 
Virginia in recent years has put forward $20 million for these 
practices. We certainly rely upon EQIP dollars and that type of 
thing.
    But, without question, $3 fuel has pushed no-till farming 
far beyond any technical assistance or far beyond any cost-
share dollars. So most of our farmers are looking for 
efficiencies and are looking for better ways to farm, and it 
just so happens they have environmental benefits.
    The Chairman. But the specific programs are Chesapeake 
Bay--in the new farm bill, I know USDA is still in the process 
of getting the program up and running. But have you been able 
to utilize those provisions, and how do you think it is being 
administered by the Department?
    Mr. Stoneman. I think without question the intent was good. 
I think, certainly, in the priority areas that were selected, 
those dollars were being put out as quickly as possible. The 
unfortunate thing is a lot of dollars are flowing through too 
little technical assistance, and that is a positive of the 
bill.
    I will say that there is a good--USDA has made a change in 
the last 6 months to expand the priority areas, and it was 
something of concern to my members that folks that could see 
the Bay, touch the Bay, and are near the Bay every day, weren't 
in a priority area. It was in some of our livestock regions. So 
there have been tweaks that have made the program better.
    The Chairman. Anyone else care to comment?
    Mr. Stoneman and Mr. Schwalb, you have made clear your 
opposition to the proposed legislation. Do you care to 
elaborate why you think the voluntary program has made such 
good progress, and why people have had the incentives to 
participate in your voluntary programs, that we don't have the 
need for any advanced regulatory legislation?
    Mr. Stoneman. I think without question, farmers want to do 
the right thing. They need water quality as badly as anyone 
else. So they are there. They want to do these practices.
    I think the detail that it shows--even the Presidential 
Executive Order says we are trending in the right direction 
with voluntary measures. I think once we get the voluntary 
measures that are done outside of any state or voluntary 
program in the Bay model, then you will see an even further 
impressive record for agriculture with respect to the 
Chesapeake Bay. That has been a concern of ours for a long 
time, and I think that is another positive for the bill.
    But our concern about the codification of this TMDL and the 
acceleration of its process could bring all of that to a halt.
    The Chairman. Mr. Schwalb?
    Mr. Schwalb. Yes, I would echo for our poultry growers, our 
Clean Water environmental issue is a great example. There is a 
thirst to understand what the regulations are. They want to do 
what is right. And really one of the emphases behind our Clean 
Waters Initiative was for us, with our expertise, to help 
explain to the farmer what is required to be a poultry farmer 
today from an environmental standpoint. It is increasingly 
complex.
    So really what this process does, and it is voluntary on 
our part, and it is mandatory for anyone that grows with us, it 
is something that utilizes really a very established 
relationship between the grower and our flock supervisor. That 
is the person who they deal with on a weekly basis. And 
utilizing that relationship, that flock supervisor goes through 
training and an education and an environmental assessment 
process with that grower. It is a four-step--there is a 
deviation process. If there are problems, there are four steps 
to work with the grower to ensure they are corrected.
    But the grower needs that information to know what to do, 
and the role that we have is to help them understand that 
information. And it is a much more comfortable role dealing 
with us than dealing with the EPA.
    Now we do partner with the EPA on this, and they have 
helped us develop this training program. But it is really 
something that the grower is looking to understand--what do we 
do, just help us understand that, and help us understand where 
to get resources to get that done--and they like to do that.
    The Chairman. Thank you.
    The chair recognizes the gentleman from Virginia.
    Mr. Goodlatte. Thank you, Mr. Chairman.
    Mr. Chairman, before I question these witnesses, I would 
like to commend Mr. Fox. He stayed and listened to their 
testimony. You know, as a courtesy, we have always recognized 
government representatives to speak on our first panels, and 
usually it happens that they give their testimony and then get 
up and leave, and don't listen to what their constituents have 
to say. So, Mr. Fox, thank you for staying. It is not unheard 
of, but it is definitely out of order. I thank you for that.
    Mr. Stoneman, you have testified about some of the positive 
things that farmers and agribusinesses have done to protect 
water quality. You have also stated that the proposed 
reauthorization bill would be economically harmful to farmers 
and agribusinesses. What impacts will this legislation have on 
agriculture in the Chesapeake Bay Watershed in being able to 
compete nationally and internationally?
    Mr. Stoneman. Well, without question if we put this TMDL in 
place, if we codify it in such a way and it actually does cap 
the growth of our industries, a young farmer will not be able 
to expand his business. And certainly that could push him to 
another place, if he wants a bigger farm or a more economical 
farm.
    I think without question, if we have the--if he is capped 
in such a way that he has to buy the right to farm his 
property, that is an economic cost that other folks don't have 
in the rest of the nation and the world. I think without 
question, if we codify the citizen suit provisions of this 
particular bill, then that particular farmer may not ever get a 
permit, because of being held up in litigation, and actually 
never receive his permit.
    So there is a high cost associated with the provisions of 
this bill.
    Mr. Goodlatte. Mr. Schwalb, you have briefly outlined in 
your statement the actions that Perdue has taken with its Clean 
Bay and Clean Water Initiatives with EPA. How does this program 
actually work, and how do family farmers who work with Perdue 
feel about this program?
    Mr. Schwalb. The program works. As I said, it utilizes that 
relationship between the grower and the flock supervisor. And 
we have found during the pilot piece of it, which started in 
2006, through the implementation of the full roll-out of it, 
that the growers have been very receptive. Again, it is a 
thirst for knowledge and it is a thirst to understand what the 
regulations are about.
    There is a genuine fear of doing something wrong and not 
really understanding what that is. So each grower is educated. 
They go through a training process that we have developed with 
the EPA. That is on a CD, or it is written for those growers 
that don't have access to a computer. That is a training, 
educational, and environmental assessment process that we 
review with them, all the resources they would need to know how 
to operate a poultry farm.
    Included in that, the environmental assessment piece, is 
two times a year, the area flock supervisor, who is someone who 
is a step up from the flock supervisor, who knows a larger 
area. They assess each farm with an assessment that has been 
developed jointly by the EPA and Perdue. And that is an 
environmental assessment, looking at key things like nutrient 
management plans, bird disposal, renewal management, best 
management practices on the farm, like vegetative buffers, 
stormwater management. And based on that plan, if there are 
processes that are needed to improve, those are identified. 
Those supervisors come up with an action plan to fix and the 
growers are in a responsible position to get that done.
    If it happens that the grower decides they do not want to 
get on board, then Perdue has made the decision that we will no 
longer place birds on that farm.
    So there is a tremendous set of teeth involved in this. 
There is a tremendous impetus for the grower to participate. 
And during our pilot program, we really have not had anybody 
that has not been interested, and during the roll-out we are 
finding the same thing so far.
    Mr. Goodlatte. Thank you, Mr. Chairman.
    The Chairman. The chair recognizes the gentleman from North 
Carolina, Mr. Kissell.
    Mr. Kissell. Thank you, Mr. Chairman, and thank you, 
gentlemen, for being on the panel today.
    Mr. Stoneman, we talked about the voluntary aspect of best 
practices and that so much has been accomplished. From your 
perspective, how widespread are the voluntary practices across 
the board in all the different aspects of agriculture?
    Mr. Stoneman. I think without question, certainly with the 
high price of fuel, the economy overall, and the economic 
condition of all farmers, they are looking for better ways to 
do everything. We have had technical advances in biotechnology. 
We have had technical advances in equipment. So farmers are 
doing more and more and more of the right things.
    I think in my brief history associated with this program 
and in farming, I have seen--we have talked about the explosion 
of no-till farming. Farmers are doing that everywhere. I think, 
certainly, the important take-home point of this is that 
farmers are doing--stepping up to the plate. In fact, I get the 
response from my members all the time, You mean they want us to 
do more? What we have done hasn't been good enough? That has 
been quite disappointing to all of them.
    I think the Clean Water Act in the past has taken aim on 
farmers of large scale. Certainly this bill and the activities 
of the Presidential Executive Order are going to make the EPA's 
reach or the Federal reach all the way down to the smallest of 
the small, and that is of concern to all farmers.
    Mr. Kissell. I would like to join in expressing my 
appreciation to Mr. Fox for staying on and listening.
    It is kind of a question to combine the testimony earlier 
and the question I had earlier. Mr. Stoneman, Mr. Fox said that 
the best practices that the farmers are practicing now, that 
they are included in current models and how they will be 
viewing this relationship as we move forward.
    You mentioned a few minutes ago, I kind of thought maybe 
you thought they weren't being accounted for in these models. I 
am just wondering, did I interpret what you said right? Are you 
comfortable that the best practices are being accounted for in 
the model?
    Mr. Stoneman. Up until this discussion, it has been my 
experience that when we talk about BMPs or practices that have 
been installed by a farmer on his own, free from any connection 
to a local soil, water and conservation district, NRCS, or any 
government program, they have not been counted in that model.
    However, just this summer when we have had this discussion, 
we have brought to light that those practices do count, they do 
have a meaning, and they should be included in the model. But 
they are not currently included in the model.
    We have also discovered that because of a lack of manpower 
and lack of funding, that even the best management practices 
that you have funded through the farm bill in Virginia for the 
last 4 years have not been counted in the model.
    So we think that is a significant difference in where the 
water quality regarding agriculture is and where folks think it 
could be.
    Mr. Kissell. And Mr. Chairman, it would seem that this may 
be, this gap of understanding may be some opportunity we have 
to improve the models or improve the communication as we move 
forward.
    One last question. Mr. Schwalb, I don't know the percentage 
and I am not asking you the percentage of Perdue's share of the 
poultry production on the Eastern Shore, but assuming there are 
other competitors out there, do they follow the same practices 
that Perdue has put forth?
    Mr. Schwalb. At this point, the answer is no. They do 
follow some practices. I am not really sure as to what all of 
their practices with their growers are. They do not have a 
Clean Waters Environmental Initiative with the EPA yet. They do 
practice good environmental stewardship. They have 
environmental management. I do know that they work with growers 
on similar issues the way we do. I don't know of a formal 
program, but I am sure that they do work with their growers on 
similar nutrient management issues and best management 
practices.
    Mr. Kissell. Thank you, sir. Mr. Chairman, I yield my time.
    The Chairman. I recognize the gentleman from Pennsylvania.
    Mr. Thompson. First of all, I would like to submit a letter 
from the Farm Bureau on this particular issue.
    [The document referred to is located on p. 109.]
    The Chairman. Without objection.
    Mr. Thompson. Second, I would like to follow up on my 
colleague from New York, who brought up the issue of natural 
gas, and my perspective. My home State of Pennsylvania is 
sitting on what is the largest natural gas plane in the world, 
the Marcellus, and the shale is virtually on tap, close to the 
Northeast. The infrastructure is there. I believe if developed 
correctly, it will bring significant wealth and jobs throughout 
Pennsylvania and our surrounding states.
    Finally, I speak with farmers in Pennsylvania regularly who 
are anxious to supplement their farms, especially in this 
current economy, with revenues from natural gas leases.
    Most recently I met with the Pennsylvania Department of 
Environmental Protection, Secretary John Hanger, and 
Pennsylvania DP has a long record, and a successful record of 
overseeing natural gas drilling, ensuring that this industry's 
accessing of domestic energy is safe and meets quality 
standards. Frankly, under the Pennsylvania Department of 
Environmental Protection standards, I don't believe anyone in 
Pennsylvania would consider the Pennsylvania DP as warm and 
fuzzy in providing oversight on environmental standards. They 
are fair, they do their job, and there are consequences if they 
don't follow those. But under the Pennsylvania DP standards 
compliance, no history of water quality compromises have 
occurred with natural gas drilling.
    Mr. Stoneman, you talked about the potential and 
unnecessary litigation H.R. 3852 could impose on many farms in 
the watershed. In my district, we are seeing firsthand the 
problems that are created when unnecessary suits are brought on 
the Federal Government. The Allegheny National Forest is in my 
district, and the Forest Service has shut down the leasing of 
oil and natural gas, which is putting many businesses, frankly, 
many families and people out of jobs, even though the Federal 
Government doesn't even own the mineral rights and subsurface 
rights. And some of the environmental groups are using the 
courts to systematically put these mom-and-pop producers out of 
business. This Executive Order, I believe, actually provides--I 
mean the bill provides for the establishment of a citizen right 
of action for civil suits.
    In your opinion, what impact could these suits regarding 
total maximum daily loads have on the ability of farmers to 
operate in the watershed?
    Mr. Stoneman. Without question the TMDL is going to require 
practices of farmers. The Presidential Executive Order you 
heard a good bit about today contemplates requiring further 
work on behalf of confined animal feeding operations. Certainly 
the bill in and of itself requires states to implement certain 
programs. If they don't, then the state can be sued, and 
generally the way to get a permit is through our Commonwealth 
or through the state. If you are tangled up with litigation, 
ultimately you will end up with no permit and ultimately 
spending a lot of dollars for nothing.
    Mr. Thompson. In the previous panel, Mr. Fox mentioned that 
EPA wants to continue to foster the relationship with states 
and local governments. I want to check with all three gentlemen 
on the panel, do you have any suggestions or ideas on how the 
EPA could foster that partnership?
    Mr. Curatolo. We work closely with the Department of 
Environmental Conservation. I think the state's view is they 
really want to have control of how to finalize all our TMDL 
work and our BMP practices. I think between the state and the 
counties, they have the information and the local understanding 
of how to maximize our reductions, minimize money, and 
definitely minimize the cost to our farmers and our 
communities. I think it is important that EPA provide enough 
opportunity for the state to develop its strategy, and each 
state strategy should be different, because each state is a 
little different in its philosophy and its watershed, and that 
is an important way to go.
    Mr. Stoneman. I would like to add, the bill in and of 
itself asks states to do certain things and asks local 
governments to do certain things. It seems, though, in this 
particular scenario, the way the bill is drafted EPA holds all 
of the cards. You either do it or they withhold funds. You 
either do it or we regulate somebody else, therefore creating a 
civil war among economic sectors.
    So my suggestion is we take, we go back to where we are, a 
cooperative nature, a voluntary program, and keep moving the 
ball forward. Holding all of the cards, or both the carrot and 
the stick, one in one hand and one in the other, is just going 
to stifle where we are.
    Mr. Schwalb. If I could add, EPA working with state and 
local agencies, to truly understand what BMPs have been 
accomplished on farms, be they ones that were cost-shared or be 
they ones that were voluntary, is critical to gaining 
credibility. AgriRecycle is a great example. The Bay model, 
based on agriculture Census, assumes a certain number of birds 
generate a certain amount of litter. But all of the litter that 
goes to AgriRecycle does not get put on the ground as 
fertilizer. As I mentioned in my testimony, over half of that 
is moved out of the watershed; yet the Bay model assumes, based 
on the number of chickens, this is the amount of litter and 
here is where it goes. So there is a lot of local knowledge 
that I think is just not tapped yet, and so I would encourage 
that.
    Mr. Thompson. I thank you.
    The Chairman. The Chair would like to add to Mr. Thompson's 
statement that also the Susquehanna River Basin Commission is 
heavily involved in regulating a new natural gas field that has 
been recently discovered. I would just like to add that for the 
record.
    I recognize the gentleman from Maryland.
    Mr. Kratovil. Thank you, Mr. Chairman.
    Mr. Stoneman, going back to something that you said that I 
think is very important. You were talking about the decline in 
farms. And first of all, congratulations on the ability to 
maintain the family farm and the historic value of it and so 
forth.
    One of the things that strikes me about this debate that we 
have, again, is looking at these sources of pollution and, in a 
sense, putting them on equal footing. And the bottom line is 
they should not be, because looking at the critical value that 
farming has to our country, not just economically and 
culturally, but clearly in terms of national security issues, 
there is a big difference between farming and, in my view, the 
issues of sprawl and development.
    I would say, Mr. Fox, thank you for sticking around, but I 
think that is something important to consider as we look at how 
we deal with these different sources of pollution. There is a 
big difference in terms of promoting and protecting 
agriculture, as opposed to allowing for sprawl and development.
    Mr. Schwalb, you have obviously talked at length about your 
initiative, Clean Bays and Clean Water Initiative. What has the 
relationship with EPA been on that and how did that 
relationship come about?
    Mr. Schwalb. The relationship has been excellent. Really it 
was a discussion early on in 2006 about how to help ensure--a 
group discussion that we had with EPA about how to help ensure 
that our growers had a good understanding of all of the 
regulations. Perdue, as part of our environmental commitment, 
said it is tough for the growers to understand that. It is hard 
for us to understand them sometimes.
    Really what evolved was how best can we work together to 
come up with a process that would help the growers understand 
it, and, from Perdue's standpoint, if you can't grow chickens, 
we can't sell them. So that is a very important part of our 
supply chain. We felt that the relationship we had with our 
growers is much more comfortable in working with the grower 
than the EPA's relationship with the grower.
    Mr. Kratovil. Going back to the point that the Ranking 
Member was making about lack of communication prior to the 
Executive Order, did you have any idea, heads-up--anybody that 
you guys were dealing with in terms of EPA know, despite the 
efforts you were making, sort of what was going to happen and 
where this was going?
    Mr. Schwalb. I can't say that would be something that we 
would have discussed with the EPA folks during this time. So I 
can't say that we had that discussion; but I don't know if I 
would have expected to.
    Mr. Kratovil. One of the innovations that you haven't 
talked about is the use of the feed additive by the growers to 
reduce the phosphorus generated in poultry litter. Tell me 
about that, and how has that been working, and how do we know?
    Mr. Schwalb. Phytase, which is an enzyme, we have been 
giving it to our poultry since 2000. What it does, it helps the 
chicken better utilize the phosphorus in the feed. The chicken 
needs phosphorus in the feed to support its bone structure. So 
if the chicken can utilize the phosphorus in the feed better, 
then we have to add less phosphorus generating products in the 
feed itself. If the chicken utilizes that phosphorus better, 
then there is less in the manure. Studies have shown that the 
reduced phosphorus level in the manure has been by 25 to 30 
percent, and we do that by analysis of the manure.
    Mr. Kratovil. Are other growers, other companies doing 
that?
    Mr. Schwalb. Yes, other companies are doing that.
    Mr. Kratovil. All of you have expressed concerns about the 
Bay model. Given your concerns, what are your specific 
suggestions in terms of how we deal with that?
    Mr. Stoneman. I think without question, you include or 
figure out a way to include the voluntary measures that farmers 
are doing on their own.
    Now I am going to mention a thorny little subject, but one 
of the reasons why we haven't been able to get that information 
in there is a little nuance in the farm bill that even my 
organization supported at the time because it seemed like a 
wonderful thing, and that was the privacy clause. Certainly we 
need to figure out how to get aggregate data into the model. 
Individual data is problematic and certainly fits into the 
privacy clause that was put in the farm bill, I think 1619 is 
the number. But we have to get Federal agencies--and I am not 
going to be the one that says the Presidential Executive Order 
is all bad, because if it has gotten Federal agencies talking 
together and communicating and sharing data, then that will 
certainly help that Bay model be a better model.
    But harkening back to my computer 101 course, garbage in is 
garbage out, and no information is no information. So that's 
what we have to do with that Bay model.
    Mr. Kratovil. Thank you, Mr. Chairman.
    The Chairman. I recognize the gentleman from Indiana.
    Mr. Ellsworth. Thank you, Mr. Chairman.
    Mr. Stoneman, I was intrigued by the 41 percent loss of 
Virginia farmers, and I certainly don't want to see them 
becoming an extinct entity by any means, especially the 
Virginia peanuts. We survive on those on the Agriculture 
Committee, along with North Carolina and Georgia.
    Talking about what Mr. Kratovil said about sprawl, I know 
you don't have it broken down, but as the Farm Bureau 
President, in discussions, how much of that is the family 
decides that a subdivider or developer, whether office 
buildings, subdivisions, that come in and offer the family 
farmer thousands per acre and they make that decision based on 
finances, and once they do that, it never goes back to 
farmland. Virginia is a pretty good example. They make that 
conscious decision to do what they want with their land.
    Can you break down a little bit in your discussions, how 
much is regulation; how much is a farmer, the family decides 
let's profit, the kids decide I am not going to get into the 
business that mom and dad were in?
    Mr. Stoneman. The 41 percent is for Bay-wide. So Bay-wide, 
we have lost 41 percent of our farmers.
    The interesting statistic in Virginia is we have gained 
farmers, but they have gotten smaller. In some discussion, a 10 
acre farmette that is raising pumpkins, strawberries, or 
watermelons is what Virginia is sustaining itself with as far 
as farming.
    The second part of your question, I have some very strong 
experience with that. I have talked about the farm that my 
family and I own. I farmed it myself for 12 long years. My 
child wanted to eat better, and I wanted a better standard of 
life for her. We have several family members involved, so we 
figured the best thing to do was to rent it out. But my father 
was one of the largest dairymen in the state. When the Clean 
Water Act was passed, he made a conscious decision, because he 
didn't feel like he could justify the rules associated with his 
size of dairy. They went out of the dairy business. They became 
a grain farmer, which made it a little simpler but not a whole 
lot more.
    But I contend--and we have just gotten through with our 
state annual meeting. We had a farmer from Amelia very 
passionately say to the press that she is a small dairyman. 
This particular regulation puts a target in Virginia on the 
back of small dairies because most poultry farms, as has been 
discussed, are regulated. Most pork farms because of their size 
are regulated by the state. In fact, our state regulations are 
three times more stringent than anything EPA has put forward so 
far.
    So when EPA says it wants more, it is the 200 cow dairies 
and less that they are after. At least in Virginia. They are 
the only ones left. Eighty-four percent of our dairies in 
Virginia, a significant number in Mr. Goodlatte's district, are 
200 cow dairies. They feel like they are the target, the ones 
left.
    So I cannot stand here and tell you that for any one 
specific farmer, a regulation put them out of business. But I 
will tell you that along with the cumulative effect of the 
economy and the situation of the ag enterprises, it will.
    Mr. Ellsworth. Thank you very much.
    Mr. Schwalb, what will Perdue do? What is the tipping point 
with these regulations that Perdue decides either your growers 
decide it is not worth it anymore, kind of like we are talking 
about with dairy, and what will Perdue do? We don't mind you 
coming to Indiana, but I know you already have producers there. 
I am sure there would be people glad to see you go out of the 
area.
    Mr. Kratovil. We mind you going to Indiana.
    Mr. Schwalb. We are in both places, so we will keep you 
both happy.
    Mr. Ellsworth. So what is the game plan when you start 
pulling producers and pulling jobs and affecting the economy 
when these regulations start? Or do you suspect they will go to 
Indiana? What does the crystal ball say?
    Mr. Schwalb. Again, it a three-legged stool. Perdue is in 
15 states. If you think about agriculture on the Shore, 
agriculture on the Shore is a combination of the grain farmers 
that grow the grain, the poultry farmers that grow the 
chickens, and the integrators that keep all those together. 
Those are the three legs.
    Mr. Stoneman was talking about additional regs. While 
poultry producers are regulated now in nutrient management 
plans, under the new proposed regulation, most poultry farms 
will become CAFOs, and the regulations required for CAFOs are 
substantially higher and substantially more expensive for those 
farmers.
    So it is really going to depend on which leg of the stool 
sort of bends the first and breaks. This will be a tremendous 
burden--as written, this bill would be a tremendous burden, we 
feel, to poultry growers. If poultry growers can't make a 
living, there isn't any reason to grow grain. And if grain 
farmers aren't around, we have 14 other states or 13 other 
states. Not that we want to move out of the Bay, but it is an 
economic decision. It is pure economics.
    So again, the voluntary things that we are doing, we need 
to make sure that they are counted, so then we truly know what 
is the effect of poultry. I don't think you can treat a poultry 
farm the same way you can treat a point source, and that really 
is a little bit about what is coming down the road.
    Mr. Ellsworth. Does Perdue have any facilities outside the 
United States?
    Mr. Schwalb. We do have a China venture, a very small one 
in China. But that is the only operation that we have outside 
of the United States, and it is limited to producing product 
for the Chinese market.
    Mr. Ellsworth. Could you foresee it getting to the point 
where you opened something, where you import the product to the 
United States because it is cheaper to operate in another 
country?
    Mr. Schwalb. We have a definite concern that is coming down 
the road. We have a genuine concern that production of our food 
will be outsourced overseas because it is more economical.
    Mr. Ellsworth. Thank you, and I yield back.
    The Chairman. The chair thanks the gentleman. The chair 
also thanks the witnesses for their testimony.
    Under the rules of the Committee, the record of today's 
hearing will remain open for 10 calendar days to receive 
additional material and supplemental written response from the 
witnesses to any question posed by a Member.
    This hearing of the Subcommittee on Conservation, Credit, 
Energy, and Research is adjourned. Thank you.
    [Whereupon, at 12:20 p.m., the Subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]
      
  Submitted Statement of Hon. Elijah E. Cummings, a Representative in 
                         Congress from Maryland
    Mr. Chairman:

    I thank Chairman Holden for the opportunity to submit a statement 
for the record compiled for the hearing entitled ``Regulatory and 
Legislative Strategies in the Chesapeake Bay Watershed.''
    The Chesapeake Bay is America's largest estuary and its biological 
productivity was once unparalleled in the world--making its current 
degradation all the more stunning. As the Representative of Maryland's 
7th Congressional District, I know first-hand what an incomparable 
resource the Chesapeake Bay is to the State of Maryland and indeed to 
this entire nation.
    In the Administration of President Barack Obama, we finally have a 
President who has made the restoration of this national treasure among 
his top environmental preservation goals.
    Earlier this year, the President issued an Executive Order that 
created a Federal Leadership Committee on the Bay. A few months ago, 
that Federal Leadership Committee released a series of reports on the 
Bay--known as the Section 202 Draft Reports.
    These reports reaffirm that the Chesapeake Bay is one of the most 
studied water bodies in the world. They also reaffirm that there is no 
scientific doubt that the flow into the Bay of nitrogen, phosphorus, 
and sediment from a variety of sources is the cause of the Bay's 
decline. Together, they foster the rapid growth of algae and they lower 
dissolved oxygen levels in the water; as oxygen levels fall, so-called 
``dead zones'' develop where aquatic life cannot survive.
    Controlling the flow of nitrogen, phosphorus, and sediments into 
the Bay is essential to restoring the Bay's ecosystem and enabling the 
Bay to thrive again.
    The 202 reports also find that thirty years of voluntary agreements 
enforced only by good intentions have left the Chesapeake Bay with 
water quality that is still rated ``very poor.''
    Particularly as the population in the Bay's Watershed increases, it 
is evident that we must begin implementing more formal structures to 
control pollutant loadings. It is also evident that current law does 
not provide all of the authorities necessary to implement and assess 
the results of such new control measures.
    Responding to these challenges, on October 20, 2009, I introduced 
the Chesapeake Clean Water and Ecosystem Restoration Act of 2009, H.R. 
3852. This legislation is similar to legislation introduced in the 
Senate by Maryland Senator Ben Cardin.
    H.R. 3852 will require the Environmental Protection Agency to 
complete its determination of judicially ordered and scientifically 
derived maximum tolerable levels of nitrogen, phosphorus, and sediment 
in the Bay. The legislation would then require the Bay's Watershed 
states and the District of Columbia to each contribute to the 
achievement of reductions in nutrient flows into the Bay until these 
levels are reached.
    Each jurisdiction would have the flexibility and discretion to 
develop its own detailed plan outlining how it would reduce its 
pollutant load; however, states that do not develop or implement their 
plans will face significant penalties.
    I emphasize that to achieve overall nutrient flow reductions, H.R. 
3852 would require equitable reductions in pollution from all sources, 
including wastewater treatment plants, stormwater run-off, and run-off 
generated from agricultural activities.
    Importantly, the benefits of H.R. 3852 will accrue to the entire 
Chesapeake Bay Watershed--and not just to the Bay itself. New 
approaches to nutrient control adopted by the states in the Bay's 
Watershed and by the Federal Government itself will improve water 
quality in the tributaries that flow into the Bay, including the 
Susquehanna River in Pennsylvania, the Rappahannock River in Virginia, 
and rivers providing drinking water throughout the Bay's Watershed.
    H.R. 3852 also supports what must be a renewed and reinvigorated 
partnership among Federal, state, and local governments, and between 
public and private interests. For our part, the bill would authorize 
more than $5 billion to support efforts to clean up the Bay, including 
providing $1.5 billion to support initiatives that will control 
stormwater run-off and $500 million for each of Fiscal Years 2010 
through 2015 to support the Section 319 programs that help farmers 
implement nonpoint source management initiatives.
    To provide additional assistance to farmers in the Bay's 
Watershed--who I know are struggling in the midst of this prolonged 
economic crisis--and to support the adoption of the most cost-effective 
nutrient reduction measures, H.R. 3852 would also establish an 
innovative interstate nitrogen and phosphorus credit trading program.
    Such a program will encourage Bay-wide partnerships between 
municipal and agricultural interests for the implementation of cost-
effective, upstream nutrient management controls.
    A study issued by the World Resources Institute analyzing the 
nutrient trading programs that would be created by H.R. 3852 found 
that, ``[p]reliminary analysis indicates that the potential annual 
revenue to farmers from selling credits in a Bay-wide nitrogen trading 
program could be of a similar scale or greater than current annual 
government agriculture conservation funding in the Chesapeake Bay.''
    The study estimates that a nitrogen trading program could generate 
as much as $300 million in annual revenue to farmers. A copy of the 
World Resources Institute study entitled ``How Nutrient Trading Can 
Help Restore the Chesapeake Bay'' is attached here as a reference.
    I note that the nutrient trading program proposed by H.R. 3852 
builds on successful programs already implemented in states such as 
Pennsylvania and Virginia.
    As Peter Hughes, President of Red Barn Consulting, Inc., testified 
during a hearing held by the House Transportation and Infrastructure 
Committee's Subcommittee on Water Resources in September of this year, 
``Pennsylvania has become a national model for a nutrient cap-and-trade 
free market system that the agricultural community has embraced. Due to 
low commodity prices, especially milk prices, farmers are more than 
ever seeking ecosystem services to bring new revenue streams onto the 
farm through the acres they own.''
    Under the Administration of President Obama, we have a once-in-a-
lifetime chance to enact legislation that can finally set us on the 
path to restoring the Bay--an achievement whose true benefits will 
accrue to our children and grandchildren.
    I am honored to be working with Senator Cardin as well as 15 
bipartisan House cosponsors to develop the legislation that will 
finally achieve the Bay restoration we have so long pursued.
    I also look forward to working closely with Chairman Holden, 
Ranking Member Goodlatte, and the Members of the Committee on 
Agriculture--and the Subcommittee on Conservation, Credit, Energy and 
Research--to ensure that this legislation is responsive to the concerns 
and needs of the farm community, which will continue to play a central 
role in our restoration efforts.
                               Attachment

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 Supplementary Material Submitted by Hon. Tim Holden, a Representative 
                     in Congress from Pennsylvania
    prepared statement of judith ``jude'' l. capper, b.s.c., ph.d., 
                               assistant
 professor of dairy science, department of animal sciences, washington 
                     state university, pullman, wa
Before the Subcommittee on Conservation, Credit, Energy, and Research, 
        Committee on Agriculture hearing, entitled, Hearing To Review 
        the Potential Economic Impacts of Climate Change on the Farm 
        Sector, dated Wednesday, December 02, 2009
Summary
    The purpose of U.S. animal agriculture is to produce high quality 
meat, milk and eggs for human consumption. The environmental impact of 
livestock production must therefore be assessed on a whole-system basis 
and expressed per unit of food produced. Improving productivity (output 
per unit of resource input) is a key factor in reducing the 
environmental impact of livestock production. Systems that allow for 
increased milk yield per cow, improved growth rate per beef steer or 
greater quantities of food product to be moved using a single vehicle 
allow for considerable reductions in resource use, greenhouse gas 
emissions and economic cost per unit of food produced. Management 
practices and systems that intuitively appear to be environmentally and 
economically beneficial should therefore be subjected to scientific 
assessment in order to correctly assess their potential for mitigating 
the environmental impact of livestock production.
Introduction
    All food production systems have an impact upon the environment, 
regardless of how and where the food is produced. The environmental 
impacts of agricultural practices are increasingly well-known, not only 
to food producers but also to policy-makers, retailers and consumers. 
Increased public awareness of these issues underlines the critical need 
to adopt livestock production systems that reduce the environmental 
impact of agricultural production. This can be achieved through the use 
of management practices and technologies that encourage environmental 
stewardship at the farm-level, as well as improving transportation 
operations to reduce the eventual environmental and economic cost to 
the consumer. In the following testimony I will discuss the potential 
for improved productivity to mitigate the environmental impact of 
animal agriculture.
Low-Input Production Systems Are, By Definition, Low-Output Production 
        Systems
    The dichotomous challenge of producing more food from a dwindling 
resource base often leads to the suggestion that adopting low-input 
production systems is the key to sustainable agriculture. However, this 
defies a fundamental principle of physics, the First Law of 
Thermodynamics which states that `energy can neither be created nor 
destroyed, it can only change form'. Carbon is the key unit of currency 
of energy use of living organisms. Just as we balance our checkbook 
every month, energy (carbon) inputs and outputs must be balanced 
against each other. By definition, a low-input production system is a 
low-output system. Within livestock production systems, low-output 
systems are characterized by reduced productivity over a fixed time 
period. The following examples will discuss the effects of improved 
productivity manifested as increases in milk yield per day (dairy 
production), growth rate (beef production) and transportation carrying 
capacity (egg production).
Environmental Assessment Must Be Assessed Per Unit of Food Produced
    The purpose of any livestock production system is to provide 
sufficient safe, nutritious, affordable meat, milk or eggs to fulfill 
market demand. In contrast to more uniform manufacturing industries, 
livestock production occurs within myriad different systems that range 
from extensive to intensive; small-scale to large-scale and 
independently owned and managed to contracted production. Environmental 
impact has previously been assessed per acre, per animal or per 
facility. Although this may provide an indication of the impact of 
animal production on a specific geographic region, this fails to 
consider the true aim of the system--to produce food.
    When assessing environmental impact, it is therefore essential to 
express impact per functional unit of food, e.g., resource use and 
waste output per lb, kg or gallon of product (Schau and Fet, 2008). 
Thus, greenhouse gas (GHG) emissions should not be simply assessed as 
per animal or per facility but based on system productivity using a 
lifecycle assessment (LCA) approach. Prescribed by the EPA, LCA 
incorporates all inputs and outputs within food production and allows 
valid comparisons to be made between systems. For example, it is 
intuitively obvious that a 50 cow dairy will have lower annual methane 
emissions compared to a 500 cow dairy. However, the 500 cow dairy will 
produce more milk both per facility (as a consequence of the increased 
number of animals) but also, according to a recent USDA-NAHMS report 
(USDA, 2007) an extra 1,152 kg milk per cow annually. Greater 
productivity is associated with both physical and financial economies 
of scale, but also with a reduction in environmental impact through the 
`dilution of maintenance' effect (Bauman et al., 1985).
The `Dilution of Maintenance' Effect
    All animals require a daily amount of maintenance nutrients to 
maintain weight, bodily functions and health. This `fixed cost' must be 
met before production (growth, pregnancy or lactation) can occur and is 
fulfilled by primary (feed, water) and secondary (cropland, fertilizer, 
fossil fuels) resource inputs. It is also associated with a proportion 
of the animal's daily waste and GHG output. To use dairy cows as an 
example, `dilution of maintenance' occurs when output (milk yield per 
cow) is increased, thus diluting the maintenance cost over more units 
of production and improving efficiency. This effect is not simply 
confined to lactating cows: the national herd also contains a 
considerable number of non-productive animals (non-lactating cows, 
replacement heifers and bulls) that serve to maintain the dairy herd 
infrastructure and require maintenance nutrients. Improving 
productivity thus improves efficiency and reduces the total population 
size required to produce a set amount of milk. Consequently it reduces 
both resource use and GHG emissions per unit of milk produced.
Improving Productivity (Milk Yield) Reduces the Dairy Industry's 
        Environmental Impact
    The effect of improved productivity on the environmental impact of 
producing a set quantity of milk is perhaps best illustrated by 
comparing U.S. dairy production in 1944 compared to 2007 (Capper et 
al., 2009b). The agrarian vision of U.S. dairy farming involves cows 
grazing on pasture with a gable-roofed red barn in the background--a 
traditional low-input system. By contrast, the image of modern dairy 
production propounded by anti-animal agriculture activists is 
synonymous with ``filthy and disease-ridden conditions'' and 
``industrialized warehouse-like facilities that significantly increase 
GHG emissions per animal'' (Koneswaran and Nierenberg, 2008). It is 
indeed true that modern dairy cows produce more GHG emissions than 
their historical counterparts. Figure 1 shows that daily GHG emissions 
per cow (expressed in CO2-equivalents, the standard measure 
for expressing carbon emissions) have increased considerably over the 
past 65 years. The average dairy cow now produces 27.8 kg of 
CO2-equivalents per day compared to 13.5 kg CO2-
equivalents per day in 1944 (Capper et al., 2009b). However, expressing 
results on a `per cow' basis fails to consider system productivity. 
When analyzed using LCA on a whole-system basis, GHG emissions per kg 
of milk produced have declined from 3.7 kg in 1944 to 1.4 kg in 2007, a 
63% reduction. This has been achieved through considerable improvements 
in productivity conferred by advances in animal nutrition, genetics, 
welfare and management. Annual milk yield per cow more than quadrupled 
between 1944 (2,074 kg) and 2007 (9,193 kg), allowing 59% more milk 
(84.2 billion kg vs. 53.0 billion kg) to be produced using 64% fewer 
lactating cows (9.2 million versus 25.6 million).
    The resource use and waste output per unit of milk for 1944 and 
2007 production systems are shown in Figure 2. The 4.4-fold increase in 
productivity (milk yield per cow) drove a 79% decrease in total animals 
(lactating and dry cows, heifers, mature and adolescent bulls) required 
to produce 1 billion kg of milk. Feed and water use were reduced by 77% 
and 65% respectively. The total land required for milk production in 
2007 was reduced by 90% compared to 1944, due to both improved crop 
yields and the shift from feeding pasture to nutritionally-balanced 
diets based on silage, hay and concentrate feeds. Manure output from 
the modern system was 76% lower than from the 1944 system, contributing 
to the aforementioned 63% decrease in the carbon footprint per unit of 
milk. In consequence, the carbon footprint of the entire dairy industry 
was reduced by 41% by the adoption of technologies and modern 
management practices that improved productivity between 1944 and 2007.

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        Figure 1. Carbon Footprint per Cow and per Kilogram of Milk for 
        1944 and 2007 U.S. Dairy Production Systems (Capper et al., 
        2009).

    The U.S. dairy industry has led the major global dairy regions in 
terms of productivity since 1960 (FAO, 2009). The average U.S. dairy 
cow produced 9,219 kg milk per year in 2007. By contrast, the average 
annual yield for the top six milk-producing counties in Europe was 
6,362 kg milk per year, while annual production in New Zealand and 
Canada averaged 3,801 kg milk/cow and 8,188 kg milk/cow respectively 
(FAO, 2009). On a comparative basis, this meant that for every one 
dairy animal in the USA in 2007, Canada required 1.1 animals, Europe 
required 1.4 animals and New Zealand required 2.4 animals to maintain a 
similar milk supply (Figure 3, Capper et al., 2009a). This clearly 
demonstrates the important of improving productivity in reducing the 
number of dairy animals required to produce a set amount of milk, 
therefore reducing total resources and GHG emissions associated with 
milk production.
    Within any milk production system, a relatively minor increase in 
productivity will have a major environmental mitigation effect. Simply 
increasing the average U.S. dairy cow's daily milk yield from 29.5 kg 
to 34 kg would reduce the dairy population required to fulfill the 
market demand for milk by 12% (Capper et al., 2008). This would reduce 
the GHG emissions per billion kg of cheese by 1,173,000 metric tonnes--
equivalent to taking 246,900 cars off the road or planting 184 million 
trees. This improvement in productivity would also equate to a 
significant improvement in economic sustainability for the producer. 
Fetrow (1999) discusses a similar improvement in productivity conferred 
by the use of the technology recombinant bovine somatotropin (rbST) and 
concludes that a 50% return on investment can be gained. Furthermore, 
as noted by Alvarez et al. (2008), improvements in productivity are 
intrinsically linked to economic and labor efficiencies. 

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        Figure 2. 2007 U.S. Milk Production, Resource Use and Emissions 
        Expressed as a Percentage of the 1944 Production System 
        (Adapted from Capper et al., 2009).
Improving Productivity (Growth Rate) Reduces the Environmental Impact 
        of Beef Production
    Mirroring improvements in dairy productivity over time, the average 
beef-carcass yield per animal has increased over the past 30 years from 
266 kg in 1975 compared to 351 kg in 2007 (USDA, 1976; USDA/NASS, 
2008). It appears that slaughter weight has reached a plateau beyond 
which the processor is unwilling to venture. However, improving 
productivity by increasing growth rate confers considerable potential 
as a mechanism to reduce the environmental impact of beef production. 
As previously described, all animals have a basic requirement for daily 
maintenance nutrients to maintain health and body tissues. As growth 
rate increases, fewer days are required to grow the animal to slaughter 
weight, thus saving maintenance nutrients and associated resource 
inputs. 

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        Figure 3. Dairy Animals (Cows, Heifers and Bulls) Required to 
        Produce One Billion kg of Milk in 2007 (Capper et al., 2009a).

    According to Capper et al. (2009a) finishing beef steers on pasture 
takes 438 days, compared to 237 days to finish identical animals on 
corn-based diets. This is due to the lower growth rate conferred by 
pasture-based diets. In combination with increased daily GHG emissions 
and energy use by animals fed pasture-based diets, the extra 201 days 
of maintenance nutrients results in a threefold increase in total 
energy use and methane emissions to finish the pasture-fed steer. To 
supply the extra maintenance nutrients required, 13 more land is 
required to finish a pasture-fed beef steer than a corn-fed steer. 
These results are in agreement with modeling simulations of beef 
production systems published by researchers at Iowa State University 
(Lawrence and Ibarburu, 2007), and with the suggestion by Avery and 
Avery (2007) that pharmaceutical technologies used to improve growth 
rate in beef animals have positive environmental and economic effects. 
Furthermore, Acevedo et al. (2006) analyzed the economic implications 
of differing productivity in conventional (grain-fed), grass-fed and 
organic beef production systems and concluded that the conventional 
system, with its high growth rate, was the most economically-beneficial 
to the producer.
Productivity Plays a Key Role in Reducing the Environmental Impact of 
        Food Transportation
    Transportation represents a relatively minor component of the total 
environmental impact of food animal production with the major component 
occurring during the on-farm production phase (Berlin, 2002; Steinfeld 
et al., 2006). Nonetheless, the productivity (in this situation defined 
as the quantity of food product moved over a specific distance) of the 
transport system has a major effect upon the total environmental impact 
attributed to transportation. In response to the current tendency to 
use `food miles' as an indicator of environmental impact, three 
scenarios were developed by Capper et al. (2009a) to model the 
transport of a dozen eggs from the point of production to the 
consumers' home. The three scenarios were as follows: (1) the local 
chain grocery store supplied by a production facility with eggs 
traveling a total distance of 805 mi; (2) a farmer's market supplied by 
a source much closer than the grocery store's source; (total distance 
traveled 186 mi) or (3) directly from a local poultry farm (total 
distance traveled 54 mi). Intuitively it would seem that buying eggs 
directly from a local poultry farm would be the situation with the 
lowest environmental impact. However, the grocery store eggs, which 
traveled the furthest distance, were shown to have lowest fuel 
consumption per dozen eggs (0.56 liters), buying eggs from the local 
farm had the highest fuel use (9.12 liters per dozen eggs) and the 
farmer's market eggs were intermediate between the other two scenarios. 
The high energy efficiency of the grocery store system can be 
attributed to its reliance on tractor-trailers that have a capacity of 
23,400 dozen eggs--a huge increase in productivity compared to the 
other two scenarios. Again, it is clear that productivity has a 
significant impact, not simply upon resource use and consequent 
environmental impact; but, given the current financial situation, on 
the economic sustainability of the food transport system.
Conclusion
    The global population is predicted to increase to 9.5 billion 
people in the year 2050 (U.S. Census Bureau, 2008). Total food 
requirements will increase by 100% (Tilman et al., 2002) as a function 
of both the 50% increase in population and the additional global demand 
for animal protein as people in developing countries become more 
affluent (Keyzer et al., 2005). The resources available for 
agricultural production are likely to decrease concurrently with 
population growth due to competition for land and water and depletion 
of fossil fuel reserves. To continue to produce sufficient milk, meat 
and eggs for future domestic and export markets in an environmentally 
and economically sustainable manner it is essential to examine the 
entire food production system and to make judgments based on 
productivity, expressed per unit of food. There can be no doubt that 
improving productivity, whether as part of on-farm production or 
further down the transportation chain has a considerable effect upon 
total environmental and economic impact.
References Cited
    Acevedo, N., J.D. Lawrence, and M. Smith. 2006. Organic, Natural 
and Grass-Fed Beef: Profitability and constraints to Production in the 
Midwestern U.S., Iowa Beef Center, Iowa State University, Ames, IA.
    Alvarez, A., J. del Corral, D. Solis, and J.A. Perez. 2008. Does 
intensification improve the economic efficiency of dairy farms? Journal 
of Dairy Science 91: 3693-3698.
    Avery, A., and D. Avery. 2007. The Environmental Safety and 
Benefits of Pharmaceutical Technologies in Beef Production, Hudson 
Institute, Center for Global Food Issues, Washington, D.C.
    Bauman, D.E., S.N. McCutcheon, W.D. Steinhour, P.J. Eppard, and 
S.J. Sechen. 1985. Sources of variation and prospects for improvement 
of productive efficiency in the dairy cow: a review. Journal of Animal 
Science 60: 583-592.
    Berlin, J. 2002. Environmental life cycle assessment (LCA) of 
Swedish hard cheese. International Dairy Journal 12: 939-953.
    Capper, J.L., R.A. Cady, and D.E. Bauman. 2009a. Demystifying the 
environmental sustainability of food production. In: Proceedings of the 
Cornell Nutrition Conference, Syracuse, NY.
    Capper, J.L., R.A. Cady, and D.E. Bauman. 2009b. The environmental 
impact of dairy production: 1944 compared with 2007. Journal of Animal 
Science 87: 2160-2167.
    Capper, J.L., E. Castaneda-Gutierrez, R.A. Cady, and D.E. Bauman. 
2008. The environmental impact of recombinant bovine somatotropin 
(rbST) use in dairy production. Proceedings of the National Academy of 
Sciences 105: 9668-9673.
    FAO. 2009. FAOSTAT. http://faostat.fao.org/. Accessed: 09/04/2009.
    Fetrow, J. 1999. Economics of recombinant bovine somatoptropin use 
on U.S. dairy farms. AgBioForum 2: 103-110.
    Keyzer, M.A., M.D. Merbis, I.F.P.W. Pavel, and C.F.A. van 
Wesenbeeck. 2005. Diet shifts towards meat and the effects on cereal 
use: can we feed the animals in 2030? Ecological Economics 55: 187-202.
    Koneswaran, G., and D. Nierenberg. 2008. Global farm animal 
production and global warming: impacting and mitigating climate change. 
Environmental Health Perspectives 116: 578-582.
    Lawrence, J.D., and M. Ibarburu. 2007. Economic Analysis of 
Pharmaceutical Technologies in Modern Beef Production in a Bioeconomy 
Era, Iowa State University.
    Schau, E.M., and A.M. Fet. 2008. LCA studies of food products as 
background for environmental product declarations. International 
Journal of Life Cycle Assessment 13: 255-264.
    Steinfeld, H. et al. 2006. Livestock's Long Shadow--Environmental 
Issues and Options, Food and Agriculture Organization of the United 
Nations, Rome.
    Tilman, D., K.G. Cassman, P.A. Matson, R. Naylor, and S. Polasky. 
2002. Agricultural sustainability and intensive production practices. 
Nature 418: 671-677.
    U.S. Census Bureau. 2008. Total Midyear Population for the World: 
1950-2050. http://www.census.gov/ipc/www/idb/worldpop.html. Accessed: 
July 2009.
    USDA. 1976. Livestock Slaughter Annual Summary 1975, USDA, 
Washington, D.C.
    USDA. 2007. Dairy 2007, Part I: Reference of Dairy Cattle Health 
and Management Practices in the United States, 2007, USDA-APHIS-VS, 
Fort Collins, CO.
    USDA/NASS. 2008. Livestock Slaughter 2007 Summary, USDA, 
Washington, D.C.
                               Attachment

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  Submitted Letter by Hon. Bob Goodlatte; on Behalf of Maryland Grain 
                     Producers Association, et al.
December 7, 2009

Hon. Tim Holden,
Chairman,
Subcommittee on Conservation, Credit, Energy, and Research,
Committee on Agriculture,
Washington, D.C.;

Hon. Bob Goodlatte,
Ranking Minority Member,
Subcommittee on Conservation, Credit, Energy, and Research,
Committee on Agriculture,
Washington, D.C.

    Dear Chairman Holden and Ranking Member Goodlatte,

    We write today in regards to H.R. 3852 and as part of the December 
9, 2009 Subcommittee on Conservation, Credit, Energy, and Research 
hearing, ``To review the regulatory and legislative strategies in the 
Chesapeake Bay Watershed.'' We thank you for your leadership in 
convening this hearing. We also thank you in advance for carefully 
considering the broad implications of this legislation for production 
agriculture and the important role our industry plays in water quality.
    This legislation subjugates state and local actions to the approval 
of Federal authority through the Environmental Protection Agency (EPA). 
Our producers and members are concerned about the requirements 
established by this legislation with' little or no consideration to 
economic impact or future growth. By codifying the May 2009 Executive 
Order, H.R. 3852 would establish broad and undefined new authorities 
for the U.S. Environmental Protection Agency (EPA) and other Federal 
agencies. Many of the reports required by the Executive Order are still 
being drafted and not yet publicly released. Language in this bill 
significantly expands EPA authority to include withholding state funds, 
withholding current and new permits, superseding state and local 
programs and other measures. We believe codifying the Executive Order 
cedes the legislative process to the Executive Branch and establishes 
questionable authority, particularly since the Administration's 
proposals are still being developed.
    This proposed legislation also codifies already court-ordered Total 
Maximum Daily Loads (TMDLs) while shortening the process for TMDL 
completion. The TMDL process, which includes 92 TMDL's throughout the 
watershed, is the most complicated TMDL process ever undertaken by EPA 
and is only given 8 months to complete according to H.R. 3852. In 
addition, the current nutrient trading or offset program would be 
rendered worthless. Because of the strenuous baseline cap established 
by EPA through the TMDLs, less than 10% of the agricultural acres in 
the watershed would be eligible to participate in offsets. 
Additionally, certain agriculture sectors will mostly likely need to 
buy offsets to update or expand their operations. Without adequate time 
and science to effectively evaluate the TMDL process, H.R. 3852 will 
impose burdensome regulations and penalties before procedures and 
practices for efficiently achieving desired water quality goals are 
defined.
    Along with the Executive Order, the Chesapeake Bay Program 
announced 2 year milestones with which to track TMDL progress through 
2025--the estimated duration of full Chesapeake Bay restoration. 
Currently, milestones have only been drafted through December 31, 2011 
which leaves approximately 14 years of unknown regulations that would 
be codified by H.R. 3852. In addition, this legislation carries strong 
penalties such as a 90 day period to correct any missed 2 year 
milestones. In the case of production agriculture, this penalty leaves 
no room for weather problems or delayed harvest which is a common 
challenge. This lack of flexibility demonstrates the absence of 
economic impact evaluation for the agricultural sector.
    In addition, this language also exposes family farmers to potential 
citizen action lawsuits both through the permit process and by 
establishing mandatory regulations. In respect to water quality, 
agriculture is the Chesapeake Bay Watershed's most effective and 
efficient land use; however, farmers would bear such significant 
economic hardship from S. 1816 that many farms would be sold into less 
desirable, detrimental land uses. We believe this type of approach will 
not achieve desired water quality benefits because it seeks to penalize 
production agriculture--the very industry that stands to provide the 
most benefit to the Bay. Agriculture is the watershed's top economic 
industry and the only nonpoint sector that has consistently made 
progress toward water quality goals over the past decade.
    While efforts to improve the Chesapeake Bay are critically 
important, achieving water quality must be a cooperative partnership 
instead of cumbersome regulations. With extremely diverse agriculture 
inside the Bay Watershed, no ``one size fits all'' approach will work. 
Flexibility and voluntary measures are key to successful water quality 
programs.
    While many changes could be made to improve this legislation, we 
believe sufficient scientific information is not in place to support 
its passage. It has been acknowledged and proven that the Chesapeake 
Bay Model operates from incomplete information, and production 
agriculture has produced numerous examples of currently implemented 
farm conservation practices that have not been counted or included in 
the Chesapeake Bay Model's current process. Without complete 
information or current science, this current proposal is unwise for Bay 
health and economic growth.
    There are some positive aspects included in H.R. 3852 such as data 
protection and technical assistance. However, these measures are pale 
in comparison to the unintended consequences and broad implications of 
this bill. We ask the Subcommittee on Conservation, Credit, Energy, and 
Research to support reauthorization of the Chesapeake Bay Program 
without substantive changes in order devote adequate time and science 
to develop creative ways for economic recovery and growth to coexist 
with water quality goals and initiatives. We welcome any opportunity to 
continue working with the Subcommittee to achieve improved water 
quality in the Chesapeake Bay and thriving farming operations 
throughout the region.
    Once again, thank you for your leadership on this issue on behalf 
of production agriculture. We look forward to continuing our work with 
you.
            Sincerely,

Maryland Grain Producers Association;
Missouri Corn Growers Association;
National Association of Wheat Growers;
National Corn Growers Association;
New York Corn Growers Association;
Virginia Grain Producers Association
                                 ______
                                 
 Submitted Letter by Hon. Bob Goodlatte; on Behalf of Agri-Mark, Inc., 
                                 et al.
December 9, 2009

Hon. Tim Holden,
Chairman,
Subcommittee on Conservation, Credit, Energy, and Research,
Committee on Agriculture,
Washington, D.C.;

Hon. Bob Goodlatte,
Ranking Minority Member,
Subcommittee on Conservation, Credit, Energy, and Research,
Committee on Agriculture,
Washington, D.C.

    Dear Chairman Holden and Ranking Member Goodlatte,

    We write today in regards to H.R. 3852 and the efforts to expand 
and reauthorize the Chesapeake Bay Program. We ask that these comments 
be entered into the Congressional record as part of the December 9, 
2009 hearing to review legislative and regulatory strategies in the 
Chesapeake Bay Watershed before the House Agriculture Committee, 
Subcommittee on Conservation, Credit, Energy, and Research.
    Across the Chesapeake Bay Watershed and nation, our agricultural 
producers and organization members are very concerned about the 
implications of H.R. 3852 and believe it does not soundly or 
efficiently achieve the goal of improved water quality in the 
Chesapeake Bay. In effect, the legislation places a cap on the 
watershed's economic growth--impacting jobs, development, and food 
production. This bill will impose severe economic hardship to our 
industry and further increase pressure to the Chesapeake Bay's most 
effective and efficient land use, production agriculture, to move out 
of the watershed.
    Through codifying executive and regulatory authorities, H.R. 3852 
will hamper innovative solutions in areas such as nutrient trading, 
economic growth, farm adaptive management and overall water quality 
restoration. Without adequate time and science to effectively work 
through processes such as the drafting of the Chesapeake Bay Total 
Maximum Daily Load (TMDL), H.R. 3852 will impose burdensome regulations 
and penalties before defining procedures and practices that are proven 
to efficiently achieve desired water quality goals. This accelerated 
course of action is expensive and damaging to the watershed's economy, 
viability of our agriculture sector, and overall water quality 
objectives.
    The agriculture sector in the Chesapeake Bay Watershed has a strong 
history of being a responsible and proactive environmental steward, 
both through compliance with existing regulations and through 
implementation of voluntary conservation practices. However, a 
significant amount of conservation practices implemented by 
agricultural producers have not been given accurate credit in decision 
making models. H.R. 3852 will create a system of burdensome regulations 
without understanding the full impact of water quality improvements 
from implementing additional requirements on agriculture. 
Reauthorization of the Bay Program should enhance the current 
Chesapeake Bay Model to ensure it is based on comprehensive and 
accurate data.
    We ask the Subcommittee on Conservation, Credit, Energy, and 
Research to support reauthorization of the existing Chesapeake Bay 
Program without dramatically expanding Federal authorities. We believe 
adequate time should be given to develop creative ways for economic 
recovery and growth to partner with water quality goals, as well as to 
refine the science and modeling in the watershed. We are committed to 
developing strategies to protect all resources within the Chesapeake 
Bay Watershed, including family farmers and other agribusinesses. Our 
organizations look forward to continuing discussions with you regarding 
this critical issue and thank you for the opportunity to comment.
            Sincerely,

Agri-Mark, Inc.;
American Farm Bureau Federation;
Association of Virginia Potato & Vegetable Growers;
Central Virginia Nursery & Landscape Association;
Cooperative Milk Producers Association;
Dairy Farmers of America, Northeast Council;
Dairylea Cooperative Inc.;
Delaware Maryland Agribusiness Association;
Delmarva Poultry Industry, Inc.;
Environmental Resources Coalition;
Maryland Association of Soil Conservation Districts;
Maryland Cattlemen's Association;
Maryland Farm Bureau;
Maryland Grain Producers Association;
Maryland Pork Producers Association;
Maryland & Virginia Milk Producers Cooperative Association, Inc.;
Missouri Corn Growers Association;
National Association of Wheat Growers;
National Cattlemen's Beef Association;
National Chicken Council;
National Corn Growers Association;
National Council of Farmer Cooperatives;
National Milk Producers Federation;
National Pork Producers Council;
National Turkey Federation;
New York Corn Growers Association;
Oklahoma Wheat Growers Association;
PennAg Industries Association;
Pennsylvania Cattlemen's Association;
Pennsylvania Center for Beef Excellence;
Pennsylvania Farm Bureau;
Pennsylvania Pork Producers Association;
Pennsylvania State Grange;
South East Dairy Farmers Association;
Southwest Virginia Agricultural Association;
St. Albans Cooperative Creamery;
The Fertilizer Institute;
United Egg Producers;
United States Poultry and Egg Association;
Upstate-Niagara Cooperative;
Virginia Agribusiness Council;
Virginia Cattlemen's Association;
Virginia Christmas Tree Growers Association;
Virginia Cotton Growers Association;
Virginia Crop Production Association;
Virginia Farm Bureau Federation;
Virginia Forage & Grasslands Council;
Virginia Forest Products Association;
Virginia Golf Course Superintendents Association;
Virginia Grain Producers Association;
Virginia Green Industry Council;
Virginia Horse Council;
Virginia Nursery & Landscape Association;
Virginia Peanut Growers Association;
Virginia Pork Industry Association;
Virginia Poultry Federation;
Virginia Sheep Producers Association;
Virginia Soybean Association;
Virginia State Dairymen's Association;
Virginia State Horticultural Society;
Virginia Turfgrass Council;
Virginia Wineries Association;
West Virginia Poultry Association.
                                 ______
                                 
    Submitted Letter by Hon. Bob Goodlatte; on Behalf of Donna Pugh 
           Johnson, President, Virginia Agribusiness Council
December 9, 2009

Hon. Tim Holden,
Chairman,
Subcommittee on Conservation, Credit, Energy, and Research,
Committee on Agriculture,
Washington, D.C.;

Hon. Bob Goodlatte,
Ranking Minority Member,
Subcommittee on Conservation, Credit, Energy, and Research,
Committee on Agriculture,
Washington, D.C.

    Dear Chairman Holden and Ranking Member Goodlatte,

    On behalf of the members of the Virginia Agribusiness Council, we 
respectfully submit the following comments in regards to H.R. 3852 and 
the efforts to expand and reauthorize the Chesapeake Bay Program. We 
ask that these comments be entered into the Congressional record as 
part of the December 9, 2009 hearing to review legislative and 
regulatory strategies in the Chesapeake Bay Watershed before the House 
Agriculture Committee, Subcommittee on Conservation, Credit, Energy, 
and Research. The Virginia Agribusiness Council represents farmers, 
foresters, processors, manufacturers, and suppliers of agricultural and 
forestal products, as well as approximately 40 commodity associations.
    Over the past month, our members have reviewed the provisions of 
H.R. 3852 and remain extremely concerned about the implications of the 
legislation. While our industry is committed to taking steps to improve 
water quality across the Commonwealth including the Chesapeake Bay, we 
are concerned that this legislation does not soundly or efficiently 
achieve goals for improving water quality. Agribusinesses across the 
Bay Watershed have implemented best management practices, complied with 
permit requirements, and made innovative and environmentally friendly 
changes in their production systems over the past 2 decades. According 
to the Chesapeake Bay Program, as of 2008 approximately 50% of the 
goals for nitrogen, phosphorus, and sediment reductions from 
agriculture have been achieved. This progress will continue in the 
future with innovations in agricultural production, increased 
participation in best-management programs, and farmer education.
    The provisions of this legislation are most troubling to us and 
threaten Virginia's number one industry of agriculture and forestry--a 
$79 billion economic engine. In effect, the legislation places a cap on 
the watershed's economic growth, impacting jobs, development, and food 
production. This bill will impose severe economic hardship to our 
industry and further increase pressure for the Chesapeake Bay's most 
effective and efficient land use, production agriculture, to move out 
of the watershed. Inclusion into law of the specific caps for Total 
Maximum Daily Loads (TMDLs) for the Bay is premature, as is the 
accelerated timetable for TMDL development set forth in the 
legislation. Court-ordered TMDL development must be in place by May 
2011, however this legislation sets a deadline of December 2010. On 
November 4, 2009, EPA communicated to each Bay state and Washington, 
D.C. expectations in setting TMDL implementation plans. This process 
has just barely gotten underway. Codification of deadlines, severe 
limits, and expanded EPA authority at this point is premature and 
troubling. Agribusinesses in Virginia will be participating in the 
development of the TMDL. However, we are unsure of the specific 
requirements for implementation and, most importantly, the true 
implications to agriculture and forestry at this time.
    By setting a hard cap on the amount of nutrients and sediments in 
the Bay through codifying the TMDL we believe any economic activity 
will also be effectively capped under this legislation. Young farmers 
or those who would like to expand their existing businesses will be 
forced to do so at significant costs for purchasing offsets, if they 
are able to do so at all. We are unsure as to the fate of already 
permitted ``point source'' discharges from agriculture. Will animal and 
livestock operations be required to comply with costly permit 
requirements or retire out of business? Will they be authorized to 
expand their business capacity beyond their current animal numbers 
without purchasing the right to do so from another agricultural 
producer? Most importantly, what will be the fate of a viable, 
sustainable, and growing farm economy in the Bay region under these cap 
limits?
    Our members are supportive of offset or trading programs as market-
based solutions to environmental issues. However, in light of the 
heavily regulated environment that agriculture could be operating 
under, the ability to generate offsets from our industry is 
questionable at best. In Virginia, compliance with the TMDL may mean as 
much as 92% implementation of practices, leaving a mere 8% for offset 
generation to go beyond TMDL requirements. Under these circumstances, 
retirement or loss of agricultural land will be the only available 
offset for use by any expanded or new economic development. The loss of 
this land in profitable agricultural production leads to loss of food 
production in the Bay Watershed. If instead, few offsets are available 
for purchase, it leads to loss of economic growth within the watershed. 
In either scenario, the outcome is concerning at best.
    Technical assistance and cost-share funds to help agriculture 
implement the best management practices that will be required for 
Chesapeake Bay clean-up remain a priority for our membership. We 
appreciate the provisions in the legislation that set aside Federal 
funds for these purposes, and continue to support efforts at the state 
and Federal levels to increase cost-share and technical assistance for 
best management practices. However, there is no assurance that cost-
share funding through the farm bill, new funds authorized in this 
legislation for technical assistance, or state cost-share funding will 
continue to exist. As more regulatory measures are placed upon 
agriculture over the next 10 to 15 years, we cannot guarantee to 
producers that cost-share funding will be appropriated to offset the 
costs of compliance.
    The legislation establishes an elevated level of Clean Water Act 
regulation on agriculture in the Bay Watershed greater than is in place 
in any other area in the nation. This unprecedented expansion of EPA 
authority to take any action deemed necessary to meet Bay goals will 
result in severe economic hardship for Bay-region producers, who must 
compete not only with their counterparts across the country but also 
worldwide. Expanding EPA's authority over any pollution that affects 
water quality effectively eliminates existing Clean Water Act 
provisions, such as agricultural stormwater exemptions placed into 
Federal law due to the specific nature of agricultural production.
    Current data utilized to make decisions on Chesapeake Bay loading 
limits, regulations, and permits must be based on accurate, scientific 
data. The basis for many of these decisions rests with the Chesapeake 
Bay Model, however, this model does not currently contain accurate data 
as to all best management practices implemented by farmers. For 
example, the Model does not account for agricultural best management 
practices voluntarily (without cost-share assistance) implemented by 
farmers or for those who continue to utilize a practice after the 
``life-span'' of the cost-share agreement has ended. While the 
legislation speaks to an accounting system for practices that have been 
implemented, this must be the first action to be undertaken.
    Our members are committed to water quality, not only in the Bay, 
but in their local streams and rivers. In light of our commitment to 
these goals, we ask you to support reauthorization of the existing 
Chesapeake Bay Program without dramatically expanding Federal 
authorities. Adequate time should be given to develop creative ways to 
economically achieve water quality goals, expand economic development, 
and refine the science and modeling in the Bay Watershed. Thank you for 
this opportunity to comment and we look forward to continuing 
discussions with you regarding this critical issue.
            Sincerely,

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] 

            
Donna Pugh Johnson,
President.
                                 ______
                                 
Submitted Letter by Hon. Bob Goodlatte; on Behalf of Stewart Schwartz, 
                  Coalition for Smarter Growth, et al.
December 8, 2009

Hon. Bob Goodlatte,
U.S. House of Representatives,
Washington, D.C.

RE: The Chesapeake Clean Water and Ecosystem Restoration Act (S. 1816/
H.R. 3852)

    Dear Representative Goodlatte:

    Many family farms throughout the Commonwealth have made significant 
progress on their land to address their impact on local streams and 
rivers. Farmers have spent a great deal of time and money, sometimes 
with Federal or state assistance, to be good stewards. A wide variety 
of conservation practices have been implemented and tailored to 
particular needs and problems--farm by farm, and there is still much 
work to be done.
    The Chesapeake Clean Water and Ecosystem Restoration Act, 
legislation recently introduced by Senator Ben Cardin and Congressman 
Elijah Cummings of Maryland, establishes for the first time a firm 
deadline for implementing Bay restoration activities. Notably there are 
significant benefits to Virginia farmers.
    Importantly, the legislation provides the funding and the guidance 
to reach the 2025 goal. The bill significantly expands the amount of 
Federal support available for restoration activities throughout the 
region, specifically targeting grants and technical assistance for both 
farmers and local governments.
    In addition to efforts by farmers, local governments and homeowners 
have made commendable progress toward cleaning up. Many local 
governments have installed state-of-the-art technology at their sewage 
treatment facilities, and these costs are borne by citizens. And many 
homeowners throughout the Commonwealth have implemented low impact 
development practices on their properties to reduce stormwater 
pollution that devastates local streams. The bill makes a strong effort 
to enable, encourage, and enforce expanded efforts to improve water 
quality from all sectors including Federal facilities, new development 
and existing pollution sources.
    All of these efforts on behalf of clean water in the Chesapeake 
region should be applauded and rewarded. Passage of the bill goes a 
step further by making good sound practices commonplace on the land and 
in our communities.
    Through the Chesapeake Clean Water and Ecosystem Restoration Act, 
we have a real opportunity to clean up degraded waters and protect 
healthy waters throughout the Commonwealth of Virginia and ultimately 
save the Chesapeake Bay.
            Sincerely,

Stewart Schwartz, Coalition for Smarter Growth;
J.R. Tolbert, Environment Virginia;
Don Sims, Float Fisherman of Virginia;
Jane Pratt, Friends of the Blue Ridge;
Bill Tanger, Friends of the Rivers of Virginia;
Karen Forget, Lynnhaven River NOW;
Sheila Sheppard, Partnership for Smarter Growth;
Chris Miller, Piedmont Environmental Council;
Chris Lyons, Restore America's Estuaries;
Kate Wofford, Shenandoah Valley Network;
Nathan Lott, Virginia Conservation Network;
Lisa Guthrie, Virginia League of Conservation Voters;
David Hannah, Wild Virginia.
                                 ______
                                 
  Submitted Letter by Hon. Glenn Thompson; on Behalf of Carl Shaffer, 
                  President, Pennsylvania Farm Bureau
SENT VIA E-MAIL

October 12, 2009

Hon. Glenn Thompson,
U.S. House of Representatives,
Washington, D.C.

    Dear Representative Thompson:

    The Pennsylvania Farm Bureau (PFB), the Commonwealth's largest farm 
organization with more than 46,000 farm and rural member families, has 
major concerns with proposed legislation regarding the Chesapeake Bay. 
As the nations' first environmentalists, farmers have committed to do 
our part in the improvement of the nation's largest estuary. However, 
agricultural producers--who make our living off the land--have much at 
stake in the intricate details of the national strategy and plan 
regarding the Chesapeake Bay.
    Senator Cardin, of Maryland, has developed a legislative proposal 
that will reauthorize the Chesapeake Bay Restoration Program and 
significantly expand Federal authority with nationwide impacts. It 
appears that Representative Cummings, of Maryland, will introduce a 
similar House version. Both bills, in their current form, codify the 
provisions of President Obama's Chesapeake Bay Executive Order, sets an 
enforceable deadline for Bay restoration, sets deadlines for Bay Total 
Maximum Daily Load development and implementation and establishes 
citizen right of action. We are asking you to reauthorize the 
Chesapeake Bay Program without codifying the Presidential Executive 
Order, setting deadlines for TMDL development and implementation, and 
establishment of citizen right of action.
    We believe that reauthorization of section 117 of the Clean Water 
Act is important to the continued progress toward the restoration of 
the Chesapeake Bay; however, we oppose expansion of Federal authority 
by codification of: President Obama's Chesapeake Bay Executive Order, 
deadlines for Chesapeake Bay Total Maximum Daily Load development and 
implementation, and authorization of citizen suits.
    As you know, on May 12, 2009, President Barrack Obama signed an 
Executive Order that recognizes the Chesapeake Bay as a national 
treasure and calls for the Federal Government to lead renewed effort to 
restore and protect the Bay and its watershed. The Order calls for a 
multi agency report to be prepared with a draft deadline of September 
2009, a draft for public comment released in November 2009, and a final 
report with recommendations and strategies completed by May 12, 2010. 
The report, in its current form, places a significant share of the 
responsibility for Bay pollution on agriculture; over 50%. It calls for 
increased and expanded regulation of agriculture, increased 
prioritization and targeting of conservation incentives, and improved 
credit for voluntary measure implemented by farmers. The Executive 
Order should not be codified because it will not become final until 
2010; and it is a precedent setting document with questionable 
authority. We also believe it blurs the line of separation of power 
between the Legislative and Executive Branch.
    Proposed bill language also codifies deadlines for development and 
implementation of a Total Maximum Daily Load for the Bay itself and its 
tributaries. It establishes the maximum load or ``cap'' of nutrients 
and sediments that can be discharged to the Bay from any source and 
sets enforceable or otherwise binding load allocations for all nonpoint 
sources, including atmospheric deposition and other sources for which a 
permit is not required. No growth will be allowed ``from construction 
of new development, increased impervious surfaces, transportation 
systems and septic systems'' that causes loadings beyond the cap. This 
will significantly limit new or beginning agricultural operations and 
place similar limits on expansion. It also effectively expands the Bay 
regulatory programs throughout the watershed without the Pennsylvania 
General Assembly action. In Pennsylvania, this watershed includes 50% 
of the land mass. While the TMDL development is court ordered, it 
should not be codified because it is under development with unknown 
outcomes and bypasses the authority of the Pennsylvania General 
Assembly. To date, a TMDL of this magnitude has never attempted. Local 
governments throughout the watershed will be saddled with implanting 
these plans with diminishing budgets.
    The proposed bill also codifies the ``Chesapeake Bay Milestones'' 
or 2 year goal or initiatives to achieve Bay restoration in 2 year 
increments. Virginia's Governor Kaine, with the other Governors from 
Chesapeake Bay states, has committed to impose these milestones. The 
immediate list of measures include continued and expanded cost share 
funding, phytase additives in feed, mandatory nutrient management 
plans, mandatory fencing of streams, and a number of other measures. 
The Milestones, as established through the Executive Order and 
Memorandum of Agreement between the Bay states and EPA, should not be 
codified because they are state specific and unknown beyond the current 
2 year cycle.
    Establishment of ``citizen right of action'' is also included in 
the proposed legislation. Whether intended to keep EPA engaged in the 
restoration of the Bay or to hold up permits, both general and 
individual permits, this is a tool that will bring economic growth to a 
halt. This will allow a legal tool to be used by any group against 
farmers and other permitted projects from getting renewed or 
established. Each farmer will have to fight the regulatory system as 
well as the legal system if they are required to get a permit for their 
operations. Citizen right of action or citizen suits cannot be codified 
because they will generate unnecessary legal actions that are simply 
intended to stop a project or prolong the issuance of permits.
    We believe that reauthorization of the program is in the long term 
best interest of the Chesapeake Bay but codification of these 
initiatives or concepts will have disastrous effects on agriculture and 
our economy. If you have any questions regarding PFB's position, please 
contact Sam Kieffer, National Governmental Relations Director, at 
[Redacted].
            Sincerely,

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] 

            
Carl Shaffer,
President.
                                 ______
                                 
   Submitted Letter by Hon. Gerald E. Connolly, a Representative in 
  Congress from Virginia; on Behalf of Malcolm F. Baldwin, Co-Owner, 
                            Weather Lea Farm
December 7, 2009

Hon. Collin C. Peterson,
Chairman,
Committee on Agriculture,
Washington, D.C.;

Hon. Frank D. Lucas,
Ranking Minority Member,
Committee on Agriculture,
Washington, D.C.;

Hon. Tim Holden,
Chairman,
Subcommittee on Conservation, Credit, Energy, and Research,
Committee on Agriculture,
Washington, D.C.;

Hon. Bob Goodlatte,
Ranking Minority Member,
Subcommittee on Conservation, Credit, Energy, and Research,
Committee on Agriculture,
Washington, D.C.;

    Dear Chairman Peterson, Ranking Member Lucas, Chairman Holden, and 
Ranking Member Goodlatte,

    I am writing in support of H.R. 3852, the Chesapeake Bay Ecosystem 
Restoration Act. My wife and I own and manage a small farm just a half 
mile above the Potomac River in Lovettsville, Virginia, where we raise 
wool sheep and have a vineyard for wine grapes we sell to a nearby 
winery. We have been heavily investing in our land, now in a 
conservation easement, as an agricultural operation, and we have no 
interest in a future greenfield development site. Contribution to the 
protection of the Potomac River and the Chesapeake Bay resource is one 
of the benefits we believe that suburban and rural and owners have an 
obligation to provide, because restoration of the Bay and its watershed 
will enhance the economic and heritage value of this entire region.
    This bipartisan legislation has been well-crafted to reduce 
pollution entering the Chesapeake Bay with fair-minded provisions that 
recognize the extent to which farmers can reduce nutrient pollutants. 
We all know that the Chesapeake Bay is in very poor health, which has 
become steadily worse over the decades since I first came to Northern 
Virginia. The crabs, fishing and oysters that I and others once 
enjoyed, and that allowed employment by thousands, have now become 
memories. Unless we act resolutely and quickly, our children and 
grandchildren will only know to regret the economic and cultural values 
that we squandered and lost.
    Taking the steps that this bill provides will have immense 
importance not simply for the Bay but for all the streams and rivers 
entering the Bay in its vast watershed. Suburban development have 
caused significant runoff and pollution problems that, to a significant 
degree, threaten to counteract progress that this bill recognizes 
farmers have made to protect the Chesapeake Watershed.
    Successful protection of the Chesapeake Bay requires firm and 
consistent regulatory measures throughout the watershed that are based 
on clearly established quantitative limits. Farmers need certainty 
around which to plan their operations and suburban developers need 
certainty to establish their new enterprises. The outstanding feature 
of the Chesapeake Bay Ecosystem Restoration Act is that it would, at 
long last, reduce pollution in the watershed by creating a Total 
Maximum Daily Load (TMDL) for watersheds within the Bay. Moreover, it 
will empower states to reduce pollution within those watersheds and 
require new greenfield development to prevent increased pollution 
loading. As I farmer I applaud this greenfield provision as an 
essential requirement to reduce pollution entering the Bay and to make 
certain that developers, who have the capacity to plan and invest ahead 
based on clear targets, contribute fairly to the Bay's restoration.
    The development here in Loudoun County that has caused our 
population to multiply 14 fold since 1960 has irrevocably destroyed 
thousands of acres of our best agricultural soils, including those 
exceptionally fertile lands lying in my area that is known as Loudoun 
Valley. Denuded forests and paved roads with no stream buffers now 
cause storm water runoff and floods unknown in our history, with Goose 
Creek being among the most notorious example. Ground water pollution 
and irrevocably altered hydrologic structures have harmed suburban and 
rural dwellers alike. All this suburban and commercial development 
directly and immeasurably contributes to rapid degradation of the 
Chesapeake, but its adverse impacts could have been, and can still be, 
economically avoided so as not cause such havoc. Protection of viable 
agriculture in the Mid-Atlantic requires that this notorious 
development problem be addressed effectively and reasonably.
    I believe that the standards set by the Chesapeake Bay Ecosystem 
Restoration Act will provide the necessary balance between constraints 
on pollution from new development and reduction of pollution from 
agriculture. Farmers regularly face difficult and often unpredictable 
economic pressures that this bill and its enforcement framework 
recognize. We also understand that we have our obligations to pursue 
long-term measures that will help return the Bay and its watershed to 
good health.
    I appreciate your work in behalf of the Chesapeake Bay and the 
agricultural community.
            Sincerely,

Malcolm F. Baldwin.
                                 ______
                                 
   Submitted Letter by Hon. Gerald E. Connolly, a Representative in 
    Congress from Virginia; on Behalf of David Blake, Buckland Farm
    Dear Chairman Peterson and Committee Members,

    I am a Virginia farmer from a family who has been farming in this 
country for fifteen generations. We also had farms in the state of 
Maryland during my youth, so I have spent much of my life hunting, 
sailing and acquainting myself intimately with the Chesapeake Bay much 
of my forty odd years.
    This bay was important to me even when in college during the 1980's 
and I testified as a farmer before the Maryland Legislature concerning 
the Chesapeake Bay Act. Several of us in my college communicated 
directly with consultants at Rutger's University who had conducted much 
study and had recommendations included within this first legislation 
designed to improve/protect conditions in the Bay. Rutgers told us then 
that there would be much more required to improve the health of the Bay 
and that the Chesapeake Bay Act which ultimately passed would not bring 
success.
    Those words have surely come true as I have watched many vast areas 
I knew well transformed by suburban development and tributaries we 
hunted/fished have died as poultry/agri-businesses changed farming 
practices. These changes brought with them devastation to the small 
farmer, the once thriving seafood industry, water-men and the small 
towns we all supported have nearly disappeared.
    Although there have been some successes with the Chesapeake Bay 
Act, including improved technology for the treatment of sewerage, much 
conservation and protection of natural resources, it is damned clear 
that we must do more now. I find it offensive to read that organized 
farm groups have written H.R. 3852 ``has the potential to put some 
farmers out of business.'' Surely you must recognize which farmers 
people who are writing such are representing and I can only imagine 
what the big developers will be writing to you as this bill moves 
forward.
    The fact is that twenty five years of laxed enforcement of 
pollution standards associated with the practices of a few have nearly 
destroyed one of the largest estuaries in the world however, citizens 
are now better informed about these matters. There are documentary 
films like ``Food Incorporated'' which show how agri-business is 
operating today (please see this is you haven't) and it is encouraging 
that people are finally beginning to understand the consequences of 
non-impervious surfaces associated with urban sprawl the people at 
Rutgers warned us about 25 years ago.
    H.R. 3852 is the first effort I've seen that takes a balanced 
approach to what has now become a shameful circumstance for this nation 
and we all have some responsibility in this. Please do not let people 
misinform you about the position of farmers on these issues. Every 
farmer I know is very much in support of this bill and would ask that 
you all please do the same. We must not let another generation, as has 
my own, watch the environmental health of this remarkable asset 
continue to decline. I hope and pray that future generations will say 
that it was you who finally stood up to do what is right.
            Truly,

David Blake,
Buckland Farm,
Warrenton, Virginia.
                                 ______
                                 
Submitted Letter by W. Michael Phipps, President, Maryland Farm Bureau, 
                                  Inc.
December 9, 2009

Hon. Tim Holden,
Chairman,
Subcommittee on Conservation, Credit, Energy, and Research,
Committee on Agriculture,
Washington, D.C.;

Hon. Bob Goodlatte,
Ranking Minority Member,
Subcommittee on Conservation, Credit, Energy, and Research,
Committee on Agriculture,
Washington, D.C.;

Re: Regulatory & Legislative Strategies in the Chesapeake Bay Watershed

    Dear Chairman Holden and Ranking Member Goodlatte:

    On behalf of 33,000 Farm Bureau families across the State of 
Maryland, I would like to thank you for considering the accomplishments 
and the concerns of the farm community during discussions of the 
Chesapeake Bay restoration effort. Please add our written comments to 
the official record for today's hearing. As you may know, Maryland 
farmers have been longstanding partners in the effort to protect the 
Bay. In fact, our farmers lead the nation in the use of conservation 
best management practices and have committed more personal funds to 
this effort than any sector in the watershed.
    Over the last several weeks we have had the opportunity to review 
H.R. 3852, The Chesapeake Clean Water and Ecosystem Restoration Act. It 
is with sincere concern that I inform you that the bill as drafted 
threatens the very existence of family farms in Maryland.
    H.R. 3852 sets an unlevel playing field for farms in the Chesapeake 
Bay region by establishing a higher level of EPA Clean Water Act 
regulation than is required of farmers in the rest of the country. 
Maryland farmers are competing against producers in other states and 
around the world, with minimal opportunity to add additional costs into 
the price we are paid for our products. The bill gives EPA 
unprecedented authority to take any and all action the agency deems 
necessary to reach Bay restoration goals. This includes requiring all 
livestock operations, regardless of size, and possibly any producer 
that fertilizes a field to operate under a Clean Water Act permit. This 
will be cost prohibitive for small and medium size farm operations, 
particularly since the bill authorizes citizen suits against all 
permittees.
    The bill also puts into law specific caps for the Total Maximum 
Daily Load for the Chesapeake Bay and gives EPA ultimate authority to 
implement the program. EPA may promulgate any regulation and issue any 
permit necessary, notwithstanding any other provision of the Clean 
Water Act--effectively repealing the stormwater exemption for farms in 
the watershed. Unfortunately, Maryland farmers still have very little 
information on the TMDL, what it means at the farm level and how they 
are expected to measure the nonpoint sources attributed to their farms. 
If the Tributary Strategy program is any indication, Maryland farms 
could be required to install every conservation practice available on 
every acre of farmland, regardless of the economic or agronomic value. 
We believe the bill is premature in this area and should not mandate a 
program and establish onerous penalties before we have a chance to 
consider the actual farm implications.
    We applaud the general goal of the bill to engage all nutrient 
contributors in all six watershed states--particularly those in the 
urban and suburban areas that are sliding backwards in the effort to 
reduce nitrogen, phosphorus and sediment pollution. However, we oppose 
penalty provisions that allow EPA to force only permitted businesses to 
make further reductions in the event that the rest of society misses 
the mark every 2 years.
    As we read it, EPA would have authority to order all permitted 
entities to reduce discharges--meaning livestock and poultry operations 
could be told to reduce herd sizes. Through the permit, EPA could 
dictate farming practices such as fertilization, harvest and cover crop 
planting dates. The agency would also have the authority to deny 
permits--meaning new or young farmers may be denied the opportunity to 
farm in Maryland.
    We appreciate the provisions in the bill to set aside Federal funds 
for technical support in NRCS and Soil Conservation District offices to 
help farmers develop conservation plans and install BMPs. We also 
support the $500 million in BMP funding in the bill. We continue to 
believe that the best way to protect the Chesapeake Bay from a farm 
perspective is to encourage farmers to use the BMPs that fit their 
specific operations and economic circumstances. Technical assistance by 
planners in local offices and cost share funding for farmers are 
critical to implementing BMPs.
    Unfortunately, there can be no assurance that new funding 
authorized in the bill will be appropriated annually, even though the 
expensive mandates will continue to exist. It appears that a good 
portion of the new funding authorized is targeted to local governments. 
While we agree that stormwater management and waste water treatment 
upgrades are necessary and will require Federal assistance, we are 
concerned that if Congress fails to make the annual appropriation, 
farmers will bear the brunt of nutrient reduction when local 
governments cannot afford the investment.
    Finally, the bill mandates an offset program that proponents 
believe will facilitate the purchase of BMPs on farms in exchange for 
development activities in other areas of the state. Under the bill, any 
development or redevelopment activity in the watershed must restore the 
land to the pre-development hydrology. This applies to the building of 
schools, hospitals and roads as well as homes and businesses. If the 
restoration cannot be accomplished on site, an offset must be purchased 
and a nutrient reducing BMP must be installed elsewhere in the state. 
Proponents believe that the offsets will be supplied by farmers.
    The problem with this concept is that there will be no offsets 
available on Maryland farms. The bill mandates that offsets may only be 
sold after a farm reaches its individual nutrient reduction obligation. 
Under the TMDL program mandated in the bill, the expectation is that 
every farm will have to install every BMP available on every acre just 
to reach the goal. Experts in this area agree that there will be no 
offsets left to sell on farms. Unfortunately, most farms will not be 
able to install the plethora of costly BMPs needed to meet the TMDL 
without financial assistance. We believe the offset provision will 
leave local governments and developers with no other option than to 
purchase whole farms and take them out of production in order to 
achieve the offset. The alternative is all economic development in the 
watershed must end.
    We know that efforts to improve the condition of the Chesapeake Bay 
must be a priority as the watershed states move towards the 2025 goals. 
This will be a substantial challenge in light of exploding population 
expectations in the region. We know that all citizens in Maryland 
treasure the Chesapeake Bay. We also know that Marylanders want family 
farms to remain economically viable in order to provide fresh, locally 
produced farm products. Unfortunately, H.R. 3852 takes the decision 
making authority on critical lifestyle issues away from state and local 
governments and the citizens they represent and gives the Federal 
Environmental Protection Agency ultimate control over our communities.
    For the sake of our family farmers and the hope for a future 
generation of producers in Maryland, we request that you not pass H.R. 
3852 in its current form.
            Sincerely,

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] 

            
W. Michael Phipps,
President.
                                 ______
                                 
         Submitted Statement by Delmarva Poultry Industry, Inc.
December 8, 2009

Hon. Tim Holden,
Chairman,
Subcommittee on Conservation, Credit, Energy, and Research,
Committee on Agriculture,
Washington, D.C.;

Hon. Bob Goodlatte,
Ranking Minority Member,
Subcommittee on Conservation, Credit, Energy, and Research,
Committee on Agriculture,
Washington, D.C.;

Hon. Frank Kratovil, Jr.,
Member,
Subcommittee on Conservation, Credit, Energy, and Research,
Committee on Agriculture,
Washington, D.C.;

H.R. 3852, Chesapeake Clean Water and Ecosystem Restoration Act of 
2009, December 8, 2009

    Gentlemen:

    We are writing to you regarding H.R. 3852 and ask that these 
comments be entered into the Congressional Record as part of the 
December 9, 2009 hearing before the House Agriculture Committee's 
Subcommittee on Conservation, Credit, Energy, and Research.
    Delmarva Poultry Industry, Inc, (DPI) is the 61 year old, 2,000 
member nonprofit trade association working for the broiler chicken 
industry on the Delmarva Peninsula that includes the State of Delaware, 
the Eastern Shore of Maryland, and the Eastern Shore of Virginia, This 
region produces about seven percent of the meat-chickens grown in the 
United States, The chicken industry is one of the largest employers in 
the region, with more than 14,000 direct poultry company jobs, nearly 
1,800 farm families growing chickens for the four chicken companies, 
thousands of local farmers supplying corn and soybeans to feed the 
chickens, and tens of thousands of other people who are employed 
because chicken industry dollars are flowing through the economy.
    In the last 10 years, most of our organization's work has been 
related to on-the-farm environmental issues. Thanks to state nutrient 
management laws enacted in 1998 and 1999, our farm families growing 
chickens have led the nation in environmental stewardship and have had 
tougher regulations than other chicken growers and other farmers in the 
Chesapeake Bay Watershed and throughout the republic. Environmental 
protection has become an expected part of growing chickens on Delmarva.
    Thanks in part to Federal Government financial support, our members 
have made tremendous strides in minimizing their contributions to water 
quality impairments. We are convinced that if other segments of society 
had been as aggressive in environmental protection, we would not face 
the Bay Watershed water quality problems that we do. The Federal farm 
bill has provided hundreds of millions of dollars to assist farmers 
through technical support and financial aid. The work by the U.S. 
Department of Agriculture's Natural Resources Conservation Service is 
invaluable and must continue.
    Our position on the Chesapeake Bay reauthorization legislation is 
clear. DPI supports the reauthorization of the program, Section 117 of 
the Clean Water Act. It should be extended as the Gulf States program 
has been extended, without imposing new laws and regulations that 
negatively will affect agriculture in the watershed. The broad 
expansion of Federal authority for the Chesapeake Bay region sets a 
dangerous precedent for similar actions in other watersheds nationwide. 
We believe adequate time should be given to develop more creative ways 
for agriculture to partner with water quality goals, as well as to 
refine the science and modeling in the watershed.
    H.R. 3852 sets an unlevel playing field for farms in the Chesapeake 
Bay region by establishing a higher level of EPA Clean Water Act 
regulation than is required of farmers in the rest of the country. 
Watershed farmers are competing against producers in other states and 
around the world, with minimal opportunity to add higher operating 
costs into the prices they are paid for their products.
    The bill gives EPA unprecedented authority to take any and all 
action the agency deems necessary to reach Bay restoration goals. This 
includes the possibility of requiring all livestock operations, 
regardless of size, and possibly any producer that fertilizes a field, 
to operate under a Clean Water Act permit. This will be cost 
prohibitive for small and medium size farm operations, particularly 
since the bill authorizes citizen suits against all permit holders.
    President Obama's Executive Order (EO 13508) and the subsequent 
Executive Order Section 202 reports focus on a centralized, Federal 
oversight approach to Bay restoration activities that emphasize 
regulatory mandates rather than cooperative approaches. Before Congress 
codifies the Federal oversight and enforcement of the Bay restoration, 
the voluntary approach in the agricultural arena should continue and be 
accelerated. EPA data show that agriculture is making progress in 
achieving Chesapeake Bay water quality goals. Other segments of society 
are getting worse. If agriculture's record of achievement was as dismal 
as urban and suburban pollution sources, then stricter requirements 
might be in order. But we've proven that the voluntary approach is 
working and it should be continued with Federal Government assistance.
    Many of the concepts and regulations included in this bill are 
codification of proposals in EO 13508. This Executive Order is not yet 
promulgated into regulation, but now without the opportunity to see if 
the regulation has value or testing its impact, it would be set in 
stone as law. Such action is premature.
    As for specific areas of concern, first, H.R. 3852 will create an 
uneven playing field for the chicken industry on the Delmarva Peninsula 
and throughout the watershed by establishing a higher level of EPA 
Clean Water Act regulation than is required for farmers throughout the 
rest of the country. Today, Delmarva is one of the least cost effective 
locations for the agricultural community and, in particular, for the 
poultry industry. This reauthorization would put our operations and our 
growers at a significant competitive disadvantage and would threaten 
the very existence of the local chicken industry.
    Second, the bill puts into law specific caps for the Total Maximum 
Daily Load (TMDL) for the Chesapeake Bay, sets deadlines to achieve 
these TMDLs and gives EPA ultimate authority to implement the program. 
Unfortunately, the agricultural community still has very little 
information on the TMDL, what it means at the farm level and how 
farmers are expected to measure the nonpoint sources attributed to 
their farms. The Natural Resources Conservation Service is still 
gathering information to determine what agricultural BMPs are included 
in the Bay Model, the basis for the TMDL program. We know that many 
voluntary, non-cost shared practices are not included in the Bay Model, 
and therefore, the baseline on which the initial TMDLs have been 
developed is not an accurate representation of agriculture's positive 
environmental impact on the Bay. This baseline effort needs to be 
completed, and the outcomes better understood, before the TMDL program 
is mandated through codification by this legislation.
    Through codifying executive and regulatory authorities, H.R. 3852 
will hamper innovative solutions in areas such as nutrient trading, 
farm adaptive management, and overall water quality restoration. 
Without adequate time and science to effectively work through processes 
such as the drafting of the TMDL, the bill will impose burdensome 
regulations and penalties before procedures and practices that are 
proven to efficiently achieve desired water quality goals are 
identified. This accelerated course of action is expensive and damaging 
to the watershed's economy, viability of our agriculture sector, and 
overall water quality objectives.
    The bill also puts into law specific caps for the Total Maximum 
Daily Load for the Chesapeake Bay and gives EPA ultimate authority to 
implement the program. EPA may promulgate any regulation and issue any 
permit necessary, notwithstanding any other provision of the Clean 
Water Act--effectively repealing the stormwater exemption for farms in 
the watershed. If the Tributary Strategy program is any indication, 
Maryland farms could be required to install every conservation practice 
available on every acre of farmland, regardless of the economic or 
agronomic value. We believe the bill is premature in this area and 
should not mandate a program and establish onerous penalties before our 
members have a chance to consider the actual farm implications.
    By codifying specific pollutant caps in law, the bill may be 
freezing both science and policy. Codifying the pollutant caps could 
preclude EPA and the states from using their evolving understanding of 
the Bay and improved modeling to achieve water quality goals. Under 
current law, water quality standards can be made less stringent if 
meeting those standards ``would result in substantial and widespread 
economic and social impact.'' 40 CFR 131.10(g)(6). It appears that, by 
codifying specific load allocations, H.R. 3852 would eliminate the 
ability of states to later make changes to the loads based on changed 
water quality standards that may be needed to account for substantial 
and widespread economic and social impacts. Codifying the load 
allocations is contrary to the principles of adaptive management, a 
tool that allows flexibility in reaching desired goals.
    Third, citizen rights of action or citizen suits must not be 
codified as they will generate unnecessary legal actions that are 
intended to stop a project or prolong the issuance of permits. This 
will provide a legal tool to be used by any group against farmers and 
other permitted projects from getting established, and will become a 
huge financial burden to farm families targeted by special interest 
groups.
    Fourth, while we appreciate the provisions in the bill to set aside 
Federal funds for technical support in NRCS and Soil Conservation 
District offices to help farmers develop conservation plans and install 
BMPs, this authorization of legislation does not ensure that such 
funding will be made available through an appropriation. Thus farmers 
are left with ``the stick'' of enforcement and merely the promise of a 
``carrot'' without a guarantee of the funds. We are concerned that if 
Congress fails to make the annual appropriation, farmers will bear the 
brunt of nutrient reduction when local governments cannot afford the 
investment.
    Fifth, the bill requires state implementation plans to include 
enforceable or otherwise binding measures to reduce pollution loads to 
meet the desired targets. Although programs to achieve voluntary 
reductions through funding commitments may be included in the 
implementation plan, H.R. 3852 makes it clear that states must have 
enforcement mechanisms to employ if an entity does not achieve its 
assigned pollutant reductions. The bill provides Federal authority for 
binding measures and enforcement mechanisms in new section 117(i)(2) 
that authorizes states to issue permits under Section 402 of the Clean 
Water Act to any pollution source the state determines to be necessary 
to achieve the nitrogen, phosphorus, and sediment reductions in the 
implementation plan. These permits are authorized for any source of 
pollution, whether or not that source currently is excluded from 
regulation under current law. The permits are then fully enforceable by 
EPA and by citizen lawsuits.
    This provision greatly expands the scope of Federal water pollution 
control law. Under current law, the Clean Water Act controls point 
sources of pollutants. ``Point sources'' are defined in Section 502 of 
the CWA as any discernible, confined and discrete conveyance, such as 
pipes, ditches, channels, etc. Diffuse runoff of water is not a point 
source. The CWA specifically excludes agricultural stormwater 
discharges and return flows from irrigated agriculture from the 
definition of point sources, so they are not regulated under Federal 
law. Agricultural stormwater runoff could be subject to permits and all 
the liabilities and lawsuits associated with permits under H.R. 3852.
    Pollutants are defined in Section 502 of the CWA as specific, 
measurable materials that are discharged into water, such as solid 
waste, sewage, chemicals, biological materials, radioactive materials, 
heat, and industrial, municipal, and agricultural waste. In contrast, 
``pollution'' is defined as the man-made or man-induced alteration of 
the chemical, physical, biological, and radiological integrity of 
water. Pollution includes increased water flows and habitat 
alternation. Under H.R. 3852, any activity that causes increased flow 
or habitat alteration, no matter how distant from a body of water, 
could be required to obtain a permit.
    Finally, the bill mandates an offset program that proponents 
believe will facilitate the purchase of BMPs on farms in exchange for 
development activities in other areas of the watershed. Under the bill, 
any development or redevelopment activity in the watershed must restore 
the land to the pre-development hydrology. If the restoration cannot be 
accomplished on site, an offset must be purchased and a nutrient 
reducing BMP must be installed elsewhere. Proponents believe that the 
offsets will be supplied by farmers.
    The problem with this concept is that there will be no offsets 
available on many watershed farms. The bill mandates that offsets may 
only be sold after a farm reaches its individual nutrient reduction 
obligation. Under the TMDL program mandated in the bill, the 
expectation is that every farm will have to install every BMP available 
on every acre just to reach the goal. Experts in this area agree that 
there will be no offsets left to sell on farms. Unfortunately, most 
farms will not be able to install the plethora of costly BMPs needed to 
meet the TMDL without financial assistance. We believe the offset 
provision will leave local governments and developers with no other 
option than to purchase whole farms and take them out of production to 
achieve the offset. Farm sales may be good for the farmers selling the 
land, but further development of farmland is contrary to the goal of 
water quality improvement. According to Chesapeake Bay Program data 
cited by a Chesapeake Bay Foundation report (A Guide to Preserving 
Agricultural Lands in the Chesapeake Bay Region: Keeping Stewards on 
the Land), ``urban/suburban development delivers the greatest amount of 
nitrogen and phosphorus pollution to local waterways and the Bay per 
acre: 30 lb/acre/year of nitrogen, compared with 17 lb/acre/year for 
agriculture . . .''
Summary
    We know that efforts to improve the condition of the Chesapeake Bay 
must be a priority as the watershed states move towards the 2025 goals. 
This will be a substantial challenge in light of exploding population 
expectations in the region. Population growth in the Bay Watershed has 
skyrocketed. In 2000, the total population stood at roughly 15.7 
million. Today's population is approximately 16.8 million and it may 
reach 20 million by 2030. Unfortunately, H.R. 3852 takes the decision-
making authority on critical lifestyle issues away from state and local 
governments and the citizens they represent and gives the Federal 
Environmental Protection Agency ultimate control over our communities.
    So we have exploding population growth with more and more 
impervious surfaces and a shrinking base of less-impacting farmland. 
This is not the time to burden farmers with more regulations. It would 
be counterproductive toward restoration of the Bay.
    Yet this is exactly what appears to be coming out of Washington. 
The President's Executive Order and related reports point to 
centralized, Federal oversight of Bay restoration activities and 
greater emphasis on regulatory mandates than the voluntary, cooperative 
approaches of the past. Some say the voluntary approaches have not 
worked. However, one would not know by just looking at the Bay Model 
because it does not account for significant numbers of farm BMPs. Only 
practices implemented with cost-share or by government regulations are 
factored in the model, yet we know that farmers have implemented 
numerous BMPs outside of any government program. Thus, a big priority 
in reauthorization of the Bay Program should be to ensure that the Bay 
Model is based on comprehensive data and valid assumptions. Before any 
more mandates are created, the best possible data must be used in the 
modeling and assignment of Bay restoration responsibilities.
    The bill would codify the President's Executive Order with its 
command and control approach; establish punitive consequences for 
states that fail to meet benchmarks, no matter how economically 
crippling; and open private enterprises, including farms, to citizen 
suits. We are opposed to this. We must not forego science and economic 
analysis in the rush to implement a new Bay restoration program.
    EPA would have authority to order all permitted entities to reduce 
discharges--meaning poultry farms could be told to reduce flock sizes. 
EPA could dictate farming practices such as fertilization, harvest, and 
cover crop planting dates. EPA would have the authority to deny 
permits--meaning new or young farmers may be denied the opportunity to 
farm.
    We support reauthorization of Section 117 of the Clean Water Act 
and recognize it as a logical step to continue the progress toward 
restoring the Chesapeake Bay and improving water quality. However, we 
strongly oppose bills that expand Federal authority by codification of 
President Obama's Chesapeake Bay Executive Order, deadlines for 
Chesapeake Bay Total Maximum Daily Load development and implementation, 
and the authorization of citizen suits. Each of these initiatives calls 
for increased and expanded regulation of agriculture.
    As Oklahoma Senator James Inhofe said during a recent public 
hearing, ``A top-down, heavy handed Federal approach will not lead to 
the kind of real-world changes that are necessary to ensure the health 
of the Bay.'' H.R. 3852 features exactly that top-down, heavy handed 
Federal approach.
    We support a reauthorization of the current Chesapeake Bay program. 
However, we cannot support a massive Federal expansion of EPA's 
authority that poses serious consequences for agriculture and local 
governments.
                                 ______
                                 
               Submitted Letter by The Nature Conservancy
December 18, 2009

Hon. Tim Holden,
Chairman,
Subcommittee on Conservation, Credit, Energy, and Research,
Committee on Agriculture,
Washington, D.C.;

Hon. Bob Goodlatte,
Ranking Minority Member,
Subcommittee on Conservation, Credit, Energy, and Research,
Committee on Agriculture,
Washington, D.C.;

    Dear Congressmen Holden and Goodlatte:

    We are writing to thank you for holding the December 9 hearing to 
review the regulatory and legislative strategies in the Chesapeake Bay 
Watershed. While many details of these strategies still need to be 
refined, The Nature Conservancy submits that this enhanced focus on the 
Chesapeake Bay, coupled with increased investments and new 
accountability measures, is essential. We also appreciate that this 
enhanced focus and the associated new requirements create both 
uncertainty and concern among a number of key stakeholders, most 
notably the agricultural sector. As such, The Nature Conservancy is 
committed to trying to advance many of these new strategies to restore 
the Chesapeake Bay, while at the same time seeking common ground with 
those interests that approach this issue from different perspectives.
    The Chesapeake Bay is a national treasure, providing us with 
outstanding ecological, economic, recreational, and cultural resources. 
For too long, however, pollution from a variety of sources has harmed 
the Bay and diminished the value of those resources. Despite years of 
public and private efforts to clean up the Bay, and despite progress in 
reducing nutrient pollution from agriculture and wastewater, the Bay's 
pollution problem persists. It is clear that current efforts are not 
enough. Many of the new approaches your Subcommittee examined would 
take the difficult but necessary steps of requiring the additional 
pollution reductions essential for a healthy and sustainable Bay.
    The Nature Conservancy believes that enforceable standards 
necessitate that the states have sufficient implementation flexibility 
to meet those standards, and we support these complementary measures, 
including those proposed in the Chesapeake Clean Water and Ecosystem 
Restoration Act of 2009 (S. 1816 and H.R. 3852). We also support the 
creation of a mechanism that allows the trading of nutrient credits and 
enables farmers and others to benefit from their successes in reducing 
harmful emissions to the Bay.
    We strongly support the proposed new authorizations for new 
implementation funding in this legislation and commend this Committee 
for the additional funding that it created in the most recent farm 
bill. The Nature Conservancy partners with the agricultural community 
on a number of fronts throughout the Bay Watershed and we recognize 
that farmers understand the role they need to play in a healthy Bay. 
Clearly, even more funding, along with outreach to ensure that it is 
put to the best use, is needed. Accordingly, The Nature Conservancy 
calls on Congress and the Obama Administration to provide the needed 
technical assistance and financial support to implement the changes and 
new practices at the local level at the scale that will be required for 
Bay-wide success.
    These are just a few elements of the various regulatory and 
legislative strategies that ultimately ask all sectors to take the 
actions necessary to restore the Chesapeake Bay. We recognize that this 
new focus on the Chesapeake Bay is ambitious, but believe an ambitious 
and innovative approach is called for it we are to restore the Bay so 
that it delivers a wide range of ecological and economic benefits. We 
are eager to continue working with you, others in Congress, the 
Administration, farmers, developers, and other key stakeholders to 
refine these efforts they move forward.
            Sincerely,

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] 

            
 Nat Williams,                        Bill Ulfelder,
Maryland/DC State Director;          New York State Director,

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] 

                                     
 Michael Lipford,                     Roger Jones,
Virginia State Director;             Delaware State Director;

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] 

                                     
 Bill Kunze,                          Rodney Bartgis,
Pennsylvania State Director;         West Virginia State Director.
                                  
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