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



 
  HEARING TO REVIEW SPECIALTY CROP AND ORGANIC AGRICULTURE PROGRAMS IN
                     ADVANCE OF THE 2012 FARM BILL

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


                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                  HORTICULTURE AND ORGANIC AGRICULTURE

                                 OF THE

                        COMMITTEE ON AGRICULTURE
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION

                               __________

                             JULY 21, 2010

                               __________

                           Serial No. 111-57


          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           DAVID P. ROE, Tennessee
STEVE KAGEN, Wisconsin               BLAINE LUETKEMEYER, Missouri
KURT SCHRADER, Oregon                GLENN THOMPSON, Pennsylvania
DEBORAH L. HALVORSON, Illinois       BILL CASSIDY, Louisiana
KATHLEEN A. DAHLKEMPER,              CYNTHIA M. LUMMIS, Wyoming
Pennsylvania                         THOMAS J. ROONEY, Florida
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
WILLIAM L. OWENS, New York
EARL POMEROY, North Dakota
TRAVIS W. CHILDERS, Mississippi
WALT MINNICK, Idaho

                                 ______

                           Professional Staff

                    Robert L. Larew, Chief of Staff

                     Andrew W. Baker, Chief Counsel

                 April Slayton, Communications Director

                 Nicole Scott, Minority Staff Director

                                 ______

          Subcommittee on Horticulture and Organic Agriculture

                DENNIS A. CARDOZA, California, Chairman

JIM COSTA, California                JEAN SCHMIDT, Ohio, Ranking 
KURT SCHRADER, Oregon                Minority Member
FRANK KRATOVIL, Jr., Maryland        JERRY MORAN, Kansas
SCOTT MURPHY, New York               TIMOTHY V. JOHNSON, Illinois
WILLIAM L. OWENS, New York           CYNTHIA M. LUMMIS, Wyoming

                Keith Jones, Subcommittee Staff Director

                                  (ii)


                             C O N T E N T S

                              ----------                              
                                                                   Page
Cardoza, Hon. Dennis A., a Representative in Congress from 
  California, opening statement..................................     1
    Prepared statement...........................................     3
Peterson, Hon. Collin C., a Representative in Congress from 
  Minnesota, opening statement...................................     7
    Prepared statement...........................................     7
Schmidt, Hon. Jean, a Representative in Congress from Ohio, 
  opening statement..............................................     4
    Prepared statement...........................................     6

                               Witnesses

Angelucci, James A., General Manager, Phillips Mushroom Farms, 
  Kennett Square, PA; on behalf of American Mushroom Institute...     9
    Prepared statement...........................................    11
Jones, Jr., Robert N., Director of Production, The Chef's Garden, 
  Huron, OH......................................................    12
    Prepared statement...........................................    14
Kohl, Jr., Bernard, President, Angelica Nurseries, Inc., 
  Kennedyville, MD; on behalf of American Nursery & Landscape 
  Association....................................................    17
    Prepared statement...........................................    19
Nicholson, Mark, Executive Vice President and Part Owner, Red 
  Jacket Orchards; Member, Board of Directors, U.S. Apple 
  Association, Geneva, NY........................................    23
    Prepared statement...........................................    25
    Supplementary material.......................................    64
Platz, Paul, corn, soybean, green pea, and sweet corn producer, 
  Lafayette, MN..................................................    27
    Prepared statement...........................................    29
Richey, Daniel R., President/CEO, Riverfront Packing Company; 
  President, Riverfront Groves, Inc.; President, Gulfstream 
  Harvesting Company, Vero Beach, FL.............................    31
    Prepared statement...........................................    33
Smith, Ph.D., Margaret A., Value Added/Sustainable Agriculture 
  Extension Educator, Value-Added Agriculture, Extension and 
  Agronomy Department, Iowa State University; Co-Manager, Ash 
  Grove Farm, Ames, IA...........................................    34
    Prepared statement...........................................    37

                           Submitted Material

Wootton, Michael, Senior Vice President, Sunkist Growers, 
  submitted statement............................................    63


  HEARING TO REVIEW SPECIALTY CROP AND ORGANIC AGRICULTURE PROGRAMS IN



                     ADVANCE OF THE 2012 FARM BILL

                              ----------                              


                        WEDNESDAY, JULY 21, 2010

                  House of Representatives,
          Subcommittee on Horticulture and Organic 
                                       Agriculture,
                                  Committee on Agriculture,
                                                   Washington, D.C.
    The Subcommittee met, pursuant to call, at 10:10 a.m., in 
Room 1300 of the Longworth House Office Building, Hon. Dennis 
A. Cardoza [Chairman of the Subcommittee] presiding.
    Members present: Representatives Cardoza, Costa, Schrader, 
Murphy, Owens, Peterson (ex officio), Schmidt, Lummis, and 
Rooney.
    Staff present: Liz Friedlander, Alejandra Gonzalez-Arias, 
Keith Jones, John Konya, Patricia Barr, John Goldberg, Pam 
Miller, Mary Nowak, Jamie Mitchell, and Sangina Wright.

 OPENING STATEMENT OF HON. DENNIS A. CARDOZA, A REPRESENTATIVE 
                  IN CONGRESS FROM CALIFORNIA

    The Chairman. Good morning. This hearing of the 
Subcommittee on Horticulture and Organic Agriculture to review 
the specialty crop and organic agriculture programs in advance 
of the 2012 Farm Bill will come to order. We will start with 
opening statements and I will start with my own opening 
statement. Then we will go to my Ranking Member's statement and 
we will recognize others.
    I want to thank everyone for being here today, taking time 
out of your busy schedules to attend this seventeenth in a 
series of the Committee on Agriculture hearings in advance of 
the 2012 Farm Bill. This morning we will focus our attention 
specifically on specialty crop and organic agriculture 
programs. My objective today is straightforward. We are here to 
assess what is working, what is not working and how we can 
improve upon the historic 2008 Farm Bill effort on behalf of 
specialty crops and organic agriculture.
    Today's hearing is a departure from the Subcommittee's 
traditional hearing format. We have foregone the Administration 
witnesses so as to maximize our time with producers. We can 
always have the Administration before us, based on what we hear 
from what the producers say today. As with our field hearings, 
we want to listen and pay close attention to those individuals 
who get up every morning to supply this country with the 
world's safest, most abundant food supply.
    As I read today's testimony, I am yet again reminded of the 
extraordinary diversity of the products and practices 
represented by these sectors. At our hearing earlier this 
summer, particularly the one that was held in Fresno, 
California, we heard from specialty crop and organic producers 
with a breathtaking diversity of size, generating an amazing 
array of different food products. We heard from producers with 
tens of acres, with hundreds of acres, and with thousands of 
acres producing almonds, apricots, bell peppers, eggplants, 
grapes, lemons, nectarines, melons, nursery plants, peaches, 
plums, oranges, spinach, sweet corn and tomatoes, and each 
producer using sound production practices. The witnesses in the 
panel before us today are no different, and you have tremendous 
geographic and product variety.
    I love to publicize the bounty of California, especially my 
own home, San Joaquin Valley. In 2008, California led the 
nation in the farm cash receipts with $36.2 billion in sales 
and accounted for 14 percent of national receipts for crops. 
However, it is clear from today's witness panel that Florida, 
Iowa, Ohio, Pennsylvania, Maryland, Minnesota, New York and 
other states have specialty crop centers in their own right. In 
working with specialty crop and organic producers over the past 
number of years, we have learned some other things as well. I 
have learned that these producers and these sectors are classic 
entrepreneurs. Specialty crop producers have never sought 
direct subsidies, even though their sector represents over 
half, more than 50 percent of the total crop farm gate value in 
the country.
    Specialty crop producers are also pragmatic problem-
solvers. When confronted with food safety issues, they formed 
their own private sector efforts, not content to merely wait 
for the Federal Government to act.
    Specialty crop producers are on the forefront of water 
conservation efforts, coexisting with urban neighbors and 
protecting the environment. Organic producers have a unique 
managerial ability to couple the best of the new, such as 
product tracing and direct marketing with wisdom of the old, 
such as composting.
    In the 2008 Farm Bill, Congress dedicated almost $3 billion 
in funding over 5 years to areas with critical importance to 
these sectors. We addressed their long-term competitiveness by 
enhancing efforts on research, pest and disease management, 
trade conservation expansion of market opportunities. We 
addressed nutritional concerns by expanding access to fruits 
and vegetables in schools and on grocery shelves, so that the 
nutritional benefits of these foods become more available and 
abundant to everyone.
    Since the passage of the 2008 Farm Bill, with the historic 
recognition of specialty crops and organic agriculture, we have 
been encouraged by the public's response. A new national 
dialogue on healthy, nutritious food has emerged and shows no 
signs of lessening. Improving the health of our country has 
become a central focus of the academic debate and of local 
media attention.
    I anticipate that the 2012 Farm Bill will be written during 
tough fiscal times. The continued intense public dialogue on 
nutrition and health, and the question of how best to wisely 
allocate America's hard-earned tax dollars will never be far 
from that debate. We must begin to address health and nutrition 
in ways like never before, increasing the accessibility of 
fruits and vegetables for public consumption in a way to begin 
to solve some seemingly intractable health problems such as 
obesity, stroke and heart disease. Based on what we have heard 
thus far, and will hear from our witnesses today, I am 
convinced that we are on the right policy track.
    [The prepared statement of Mr. Cardoza follows:]

   Prepared Statement of Hon. Dennis A. Cardoza, a Representative in 
                        Congress from California
    Thank you for taking time out of your busy schedules to attend this 
17th in a series of Committee on Agriculture hearings in advance of the 
2012 Farm Bill.
    This morning we will focus our attention specifically on specialty 
crop and organic agriculture programs.
    My objective today is straight forward. We are here to assess what 
is working, what is not, and how we can improve upon the historic 2008 
Farm Bill effort on behalf of specialty crops and organic agriculture. 
Today's hearing is a departure from the Subcommittee's traditional 
hearing format. We have forgone Administration witnesses so as to 
maximize our time with producers.
    We can always have the Administration before us based on what we 
hear from producers today.
    As with our field hearing, we want to listen and pay close 
attention to those individuals who get up every morning to supply this 
country with the world's safest and most abundant supply of food.
    As I read today's testimony, I am yet again reminded of the 
extraordinary diversity of products and practices represented by these 
sectors.
    In our hearings earlier this summer, particularly in Fresno, 
Calif., we heard from specialty crop and organic producers with a 
breathtaking diversity of size generating an amazing array of food.
    We heard from producers with tens of acres, with hundreds of acres 
and with thousands of acres producing almonds, apricots, bell peppers, 
eggplants, grapes, lemons, nectarines, melons, nursery plants, peaches, 
plums, oranges, spinach, sweet corn and tomatoes, and each producer 
using sound production practices.
    The witness panel before us today is no different with its 
geographic and product variety.
    I love to publicize the bounty of California, especially the San 
Joaquin Valley. In 2008, California led the nation in farm cash 
receipts with $36.2 billion in sales and accounted for 14% of national 
receipts for crops.
    However, it is clear from today's witness panel that Florida, Iowa, 
Ohio, Pennsylvania, Maryland, Minnesota, and New York are specialty 
crop centers in their own right.
    In working with specialty crop and organic producers over a number 
of years, I've learned some other things as well.
    I've learned that the producers in these sectors are classic 
entrepreneurs. Specialty crop producers have never sought direct 
subsidies even though the sector represents \1/2\--50 percent--of the 
total crop farm gate value in this country.
    Specialty crop producers are also pragmatic problems solvers. When 
confronted with food safety issues, they formed their own private 
sector efforts, not content to merely wait for the Federal government 
to act.
    Specialty crop producers are on the forefront of water conservation 
efforts, co-existing with urban neighbors and protecting the 
environment.
    Organic producers have a unique managerial ability to couple the 
best of the new, such as product tracing and direct marketing, with the 
wisdom of old, such as composting.
    In the 2008 Farm Bill, Congress dedicated almost $3 billion in 
funding over 5 years to areas of critical importance to these sectors.
    We addressed their long-term competitiveness by enhancing efforts 
on research, pest and disease management, trade, conservation and 
expansion of market opportunities.
    We addressed nutritional concerns by expanding access to fruits and 
vegetables in schools and on grocery shelves so that the nutritional 
benefits of these foods become more available to everyone.
    Since the passage of the 2008 Farm Bill with its historic 
recognition of specialty crops and organic agriculture, we have been 
encouraged by the public's response.
    A new national dialogue on healthy, nutritious food has emerged and 
shows no signs of lessening.
    Improving the health of our country has become a central focus of 
academic debate and media attention.
    I anticipate that the 2012 Farm Bill will be written during tough 
fiscal times. And the continued intense public dialogue on nutrition 
and health, the question of how best to wisely allocate Americans' 
hard-earned tax dollars will never be far from us.
    We must begin to address health and nutrition in ways like never 
before. Increasing the accessibility of fruits and vegetables for 
public consumption is a way to begin to solve some seemingly 
intractable health problems, such as obesity, stroke and heart disease.
    Based on what we've heard thus far and will hear from our witnesses 
today, I am convinced that we are on the right policy track.
    With that, I now yield time to Ranking Member Schmidt for her 
opening statement.

    The Chairman. With that, I now yield time to our Ranking 
Member, Mrs. Schmidt, for her opening statement.

  OPENING STATEMENT OF HON. JEAN SCHMIDT, A REPRESENTATIVE IN 
                       CONGRESS FROM OHIO

    Mrs. Schmidt. Thank you, Mr. Chairman, for holding this 
hearing to review the specialty crop and organic agriculture 
programs to help us prepare for the next farm bill. I want to 
thank our witnesses for joining us and look forward to hearing 
from all of you. I especially want to thank Mr. Jones, Bob 
Jones, from the great Buckeye State and what you may not know, 
Mr. Chairman, is that while Bob grows a variety of herbs and 
produce and edible flowers, he also supplies the White House 
with his quality Ohio produce. I am glad he was able to be here 
today to talk to us.
    As we approach--by the way, Bob, I hope you can at some 
point get invited to actually eat in the White House, but as we 
approach this next farm bill, it is imperative that we hear 
directly from you, the growers, to fully understand from your 
firsthand experience what is working and what is not. Some of 
the decisions on program authorizations and funding levels will 
be difficult, but I am confident with your input we can put 
together a farm bill that meets the goals of food safety and 
security, world prosperity, environmental health and 
nutritional well-being. As we all know, legislation affecting 
American agriculture is not only about programs that assist 
producers and consumers, it is also about our tax policies, 
international trade and regulatory programs.
    As we prepare for the next farm bill, it is critically 
important to consider the regulatory pressures our farmers are 
facing from this current Administration. For starters, it seems 
that every day the new Administration, the Obama EPA, is 
proposing a new regulation, facilitating new litigation, or 
pursuing the extreme agenda of environmental groups with a 
blatant disregard for the impact that it will have on our 
farmers. While I won't even attempt to itemize all the assaults 
on our farmers, there are a couple I want to mention.
    One recently begun is the reevaluation of a popular 
herbicide, atrazine. Now, by the EPA's own estimate, atrazine 
provides corn growers with billions of dollars of economic 
benefits each year. Less than 4 years ago the Agency completed 
a 12 year review of this product and found it to be safe for 
human health and environment. Yet, one of the first actions of 
this new EPA decided to initiate a new costly, burdensome and 
scientifically misguided reevaluation based entirely on claims 
of extremists in the environmental community that were 
published in The New York Times.
    Another recent attack by the EPA on our growers, a decision 
that deserves mention, is the proposed mandate for a zero drift 
standard for pesticide application. Interestingly enough, even 
the EPA in its own publication admits the zero drift standard 
for pesticide applications is impossible to meet, so why would 
this new Administration pursue these policies? Is our President 
so beholden to extremists in the environmental community that 
he is willing to strangle rural America with economic-killing 
regulations?
    The attacks by Federal regulators on farmers are not the 
only concern we need to address. Biotechnology is another area 
where our farmers are facing mounting threats. Here we have a 
regulatory agency in the USDA, the Animal and Plant Health 
Inspection Service that has previously conducted its 
evaluations in a fair and transparent manner, and has based its 
decisions on the best available science. Thus, by an agency 
that bases decisions on facts rather than propaganda, 
extremists in the environmental community have initiated 
numerous legal challenges. With the help of activist judges, 
these extremists have had success in slowing, stopping or in 
some cases reversing decisions by the USDA. A recent Supreme 
Court decision may offer some hope, but only time will tell. 
While these issues will be likely addressed by another of our 
Subcommittees in the coming weeks and months, I feel it is 
important that we hear from our panelists today on how these 
issues affect you.
    With regard to foreign trade, I stand solidly with the 
agriculture community in supporting the free trade agreements 
in South Korea, Columbia and Panama. It is long overdue and 
thankfully the President has finally announced his intention to 
set a November deadline for removing outstanding obstacles to 
implement the U.S.-Korea Free Trade Agreement. We await further 
action by the White House in support of this pronouncement. I 
hope the President will also aggressively pursue the agreements 
with Columbia and Panama. Our producers are losing vital 
markets and billions of dollars in export sales while the 
Administration sits on the sidelines and waits. I urge this 
Administration to move quickly on implementation of all three 
free trade agreements.
    There are other threats to our farmers including cap-and-
trade, the resurrection of the death tax at the end of the year 
which will wreak havoc on family farms, the increased 
regulation of agriculture chemicals and the expansion of the 
Clean Water Act, which would subject every wet area in the U.S. 
from irrigation canals to small ponds and even temporary 
puddles in the middle of pastures, to new and sweeping 
regulations and permitting processes. Given these regulatory 
burdens, programs in the farm bill will be even more important 
to help our producers comply with potential Federal mandates, 
remain competitive in the global marketplace, and continue to 
supply the world with the safest and most plentiful food 
supply.
    Again, I want to thank all of you and I look forward to 
hearing from you.
    [The prepared statement of Mrs. Schmidt follows:]

 Prepared Statement of Hon. Jean Schmidt, a Representative in Congress 
                               from Ohio
    I want to thank you, Mr. Chairman, for holding this hearing to 
review specialty crop and organic agriculture programs to help us 
prepare for the next farm bill. I thank our witnesses for joining us 
and look forward to hearing your insightful testimony.
    I want to especially welcome Bob Jones from Huron, Ohio, who grows 
a variety of herbs, produce, and edible flowers. Bob supplies the White 
House with his quality Ohio produce, and I am glad he was able to take 
time out of his busy schedule to be with us today.
    As we approach the next farm bill, it is imperative that we hear 
directly from you, the growers, to fully understand from your first-
hand experience what is working and what isn't. Some of the decisions 
on program authorizations and funding levels will be difficult, but I 
am confident that with your input, we can put together a farm bill that 
meets the goals of food safety and security, rural prosperity, 
environmental health, and nutritional well-being.
    As we all know, legislation affecting American agriculture is not 
only about programs that assist producers and consumers. It is also 
about our tax policies, international trade, and regulatory programs. 
As we prepare for the next farm bill, it is critically important to 
consider the regulatory pressures our farmers are facing from the Obama 
Administration.
    For starters, it seems that every day the Obama EPA is proposing a 
new regulation, facilitating new litigation, or pursuing the extreme 
agenda of environmental groups with a blatant disregard for the impact 
it will have on our farmers. While I won't even attempt to itemize all 
of the assaults our farmers are confronting, there are a couple that I 
will mention to illustrate the point.
    One is the recently begun re-re-evaluation of the popular herbicide 
atrazine. By EPA's own estimate, atrazine provides corn growers with 
billions of dollars of economic benefits each year.
    Less than 4 years ago, the agency completed a 12 year review of 
this product and found it to be safe for human health and the 
environment. Yet, in one of its first actions, the Obama EPA decided to 
initiate a new costly, burdensome, and scientifically misguided re-re-
evaluation based entirely on the claims of the extremists in the 
environmental community as published in The New York Times.
    Another recent attack by the EPA on our growers that deserves 
mention is the proposed mandate for a zero-drift standard for pesticide 
applications. Interestingly, even the EPA, in its own publications 
admits that a zero-drift standard for pesticide applications is 
impossible to meet.
    So why would the Obama Administration pursue these policies? Is our 
President so beholden to the extremists in the environmental community 
that he is willing to strangle rural America with economy killing 
regulations?
    The attacks by Federal regulators on farmers are not the only 
concern we will need to address. Agricultural biotechnology is another 
area where our farmers are facing mounting threats.
    Here we have a regulatory agency in USDA, the Animal and Plant 
Health Inspection Service, that has previously conducted its 
evaluations in a fair and transparent manner, and based its decisions 
on the best available science. Frustrated by an agency that bases its 
decisions on facts rather than propaganda, extremists in the 
environmental community have initiated numerous legal challenges.
    With the help of activist judges, these extremists have had success 
in slowing, stopping, or in some cases reversing decisions by the USDA. 
A recent Supreme Court decision may offer some hope--only time will 
tell. While these issues will likely be addressed by another of our 
Subcommittees in the coming weeks and months, I feel it important that 
we hear from our panelists today how these issues affect their 
operations.
    With regard to foreign trade, I stand solidly with the agriculture 
community in supporting the free trade agreements with South Korea, 
Columbia and Panama. It is long overdue.
    Apparently, the President has finally announced his intention to 
set a November deadline for removing outstanding obstacles to the 
implementation of the U.S.-Korea FTA. We await further action by the 
White House in support of this pronouncement.
    I hope the President will also aggressively pursue the agreements 
with Columbia and Panama. Our producers are losing vital markets and 
billions of dollars in export sales while the Obama Administration sits 
on the sidelines. I urge the Administration to move quickly on 
implementation of all three FTAs.
    There are other threats to our farmers including cap-and-tax, the 
resurrection of the death tax at the end of this year which will wreak 
havoc on family farms, the increased regulation of agriculture 
chemicals, and the expansion of the Clean Water Act, which would 
subject every wet area in the U.S. from irrigation canals to small 
ponds, and even temporary puddles in the middle of pastures to new and 
sweeping regulations and permitting.
    Given these regulatory burdens, programs in the farm bill will be 
even more important to helping our producers comply with potential 
Federal mandates, remain competitive in the global marketplace, and 
continue to supply the world with the safest and most plentiful food 
supply.
    Again, I want to thank the witnesses for joining us, and I look 
forward to your testimony and today's discussion.

    The Chairman. Thank you, Mrs. Schmidt.
    The chair is honored today to have with us, and all in 
attendance, are honored to have the Chairman of the full 
Committee on the dais today with us. Mr. Peterson, would you 
like to make an opening statement?

OPENING STATEMENT OF HON. COLLIN C. PETERSON, A REPRESENTATIVE 
                   IN CONGRESS FROM MINNESOTA

    Mr. Peterson. Briefly, Mr. Chairman, and thank you for 
calling today's hearing and I want to apologize, I have to go 
down to the White House for the bill signing here in a minute. 
I wanted to be here to recognize the outstanding work that you 
led last time in getting $3 billion in the farm bill for the 
first time horticulture and organic agriculture title, and $3 
billion that we were able to secure. You know, we want to make 
sure that in this farm bill we build on that effort we made in 
the last farm bill, and like all of the titles, we are going to 
look into what we are doing, make sure that what we are doing 
is the right thing and we are being as efficient and effective 
as we can. So we appreciate your leadership and look forward to 
working with you, and this Subcommittee, as we put the next 
farm bill together to make sure that we build on what we have 
accomplished and not go backwards.
    And I want to welcome one of my producers from Minnesota, 
Mr. Platz, who has come out here. He has a diversified 
operation, which you see more of that going on, in Minnesota, 
and we had this farm-flex deal in the last farm bill. We are 
going to have to deal with that again next time, but we were 
able to at least make sure that that industry had sufficient 
acreage and was able to expand. So I welcome all of the members 
of the panel and I am sorry I can't be with you, but I have 
other fish to fry here this morning, so thank you.
    [The prepared statement of Mr. Peterson follows:]

  Prepared Statement of Hon. Collin C. Peterson, a Representative in 
                        Congress from Minnesota
    Thank you, Chairman Cardoza, for calling today's hearing of the 
Subcommittee on Horticulture and Organic Agriculture. The purpose of 
this hearing is to review specialty crop and organic agriculture 
programs in advance of the 2012 Farm Bill. It is important that we take 
a look at what is working and what we can improve for the next farm 
bill in these areas.
    The Food, Conservation and Energy Act of 2008 was the first farm 
bill to contain a separate title dedicated to horticulture and organic 
agriculture. Overall, we added almost $3 billion in funding for organic 
agriculture, fruit and vegetable programs and local food networks. This 
includes money for programs related to specialty crop block grants, 
planting flexibility, pest and disease management, organic 
certification cost-share and conservation, specialty crop research and 
nutrition, all of which will be discussed at today's hearing.
    Specialty crops and organic agriculture are important sectors of 
the farm economy. Because every state has the capacity for some kind of 
specialty crop production, and with the growing value-added 
opportunities available to producers, these sectors show a great deal 
of promise in promoting economic prosperity in rural communities. 
According to the U.S Department of Agriculture's (USDA) Economic 
Research Service, specialty crops account for approximately 50 percent 
of all U.S. cash receipts of farm crops.
    As the Committee begins to consider the 2012 Farm Bill, we are 
looking at all of the programs under the Committee's jurisdiction to 
ensure that we are spending available money as effectively as possible. 
Because we are in the midst of a difficult fiscal environment, it is 
important that we carefully evaluate all farm bill programs before we 
move forward. Specialty crop production is an important part of the 
U.S. farm economy, and we need to be sure that the programs in place 
optimize taxpayer dollars.
    I want to thank our witnesses for testifying today and sharing 
their views and expertise. As producers from operations of various 
sizes that grow a diversity of products, they can provide the Committee 
with a comprehensive snapshot of what's going on at the ground level. 
They operate within these specialty crop and organic agriculture 
programs on a regular basis, so their perspective is an important part 
of our farm bill hearing process. This hearing and the others we are 
holding to consider farm programs will help us provide the most 
effective and efficient programs to farmers and ranchers and will lead 
to the best possible agriculture policy in the 2012 Farm Bill.
    Thank you again, Chairman Cardoza, for holding today's hearing, and 
I look forward to hearing from today's witnesses.

    The Chairman. Mr. Chairman, I think that everyone 
appreciates the work that you have done on the Financial 
Regulatory Reform Bill. Most folks don't realize that the 
Agriculture Committee had a substantial role in that bill. I 
will never forget the day that you came to the leadership 
meeting and informed us very early on in the process about the 
exposure that this country had with trillions of dollars of 
derivatives. More funds were housed in the derivatives market 
then the total amount of cash in the country. We didn't know 
how much exposure we had as a nation, and the work that you did 
will keep us from having the same kind of financial calamity I 
believe in the future. If anyone deserves watch the bill 
signing ceremony, you do. I very much appreciate your efforts.
    I would also like to say there is no possible way that we 
could have ever put together the specialty crop title of the 
farm bill, or the whole farm bill, without you. It was the 
first bill to go through regular order under PAYGO and first to 
override two Presidential vetoes. Without your shrewd steering 
of the process, and managing this Committee in a bipartisan 
basis, none of this would have happened. I appreciate serving 
on this Committee with you and thank you for your efforts. 
Thank you, Mr. Chairman.
    The chair is happy to recognize other Members to make brief 
opening remarks at this time if any Member would like to do so. 
Seeing none, I would like to welcome our witnesses to the 
witness table. I will try to not butcher your names, but if 
preceding history is any indication, I will butcher them 
anyway. I will do my best.
    First of all we have with us, Mr. James Angelucci, General 
Manager of Phillips Mushroom Farms on behalf of the American 
Mushroom Institute from Pennsylvania. Welcome, sir. We have Mr. 
Robert N. Jones, Director of Production of The Chef's Garden 
from Ohio. We have Mr. Bernie Kohl, Jr., President of Angelica 
Nurseries, Incorporated, on behalf of the American Nursery & 
Landscape Association from Maryland. Welcome. We have Mr. Mark 
Nicholson, Executive Vice President, Red Jacket Orchards, 
Geneva, New York. We have Mr. Paul Platz, corn, soybean, green 
pea and sweet corn producer from Lafayette, Minnesota. We have 
Mr. Daniel R. Richey, President and CEO of Riverfront Packing 
Company, President, Riverfront Groves, Incorporated, and 
President of Gulfstream Harvesting Company from Vero Beach, 
Florida. Welcome, sir. And we have Margaret A. Smith, Ph.D., 
Value Added/Sustainable Agriculture Extension Educator from 
Iowa State University, and Co-Manager of Ash Grove Farm in 
Hampton, Iowa.
    Wow, I think my staff knows how much trouble I have 
pronouncing these names and they have done a good job of 
picking you so I didn't mess up. Mr. Angelucci, would you 
please begin when you are ready. You have 5 minutes. Feel free 
to summarize your testimony. The entire written testimony will 
be put in the record. Summarizing will leave us more time for 
questions. You may begin.

  STATEMENT OF JAMES A. ANGELUCCI, GENERAL MANAGER, PHILLIPS 
   MUSHROOM FARMS, KENNETT SQUARE, PA; ON BEHALF OF AMERICAN 
                       MUSHROOM INSTITUTE

    Mr. Angelucci. Thank you, Mr. Chairman. Thank you for the 
opportunity to testify today.
    I am Jim Angelucci, General Manager of Phillips Mushroom 
Farms, a third-generation, family-owned operation with growing 
facilities in Kennett Square, Pennsylvania and in Warwick, 
Maryland. In addition to growing traditional white Portobello 
and Crimini mushrooms, we also are the largest producer of 
specialty mushrooms in the United States growing Shiitake, 
Oyster and four other varieties. Some of our Pennsylvania 
production is certified organic under the USDA Program. We also 
buy from other area farms, packed under other farms' labels and 
also have a processed-food division.
    I am pleased today to give you some real world examples of 
how the public policy decisions that you make result in 
programs that are tangible and have positive impacts on the 
mushroom industry and for consumers. The mushroom farm 
community is particularly proud of our Food Safety Program. 
First, mushrooms have never been associated with a foodborne 
illness outbreak. Since mushrooms are grown indoors, certain 
risks are minimized but we have our own set of unique 
challenges. Following the 2006 E. coli outbreak in spinach, the 
mushroom industry realized we had to step up our on-farm Food 
Safety Program in order to assure customers of the safety of 
our product and to satisfy the increasing demand for audits. As 
a matter of fact, the Las Vegas line had mushrooms 6:1 to be 
the next commodity to have a problem.
    In response, we came together and developed an industry-
wide food safety standard specific to growing, harvesting and 
shipping of fresh mushrooms. It is known as MGAP, the Mushroom 
Good Agricultural Program. MGAP is consistent with the FDA 
Guide to Minimize Microbial Food Safety Hazards for Fresh 
Fruits and Vegetables. It focused on risk involved in 
production based on science. It is attainable, auditable and 
verifiable. Just developing a program doesn't necessarily mean 
growers will follow it, so our next even more challenging task 
was how to get growers to implement it.
    At this point, you may be asking what these voluntary food 
safety efforts have to do with the 2008 Farm Bill and today's 
hearing. Funding from the Pennsylvania Department of 
Agriculture through the Farm Bill Specialty Crop Block Grant 
Program has supported development and implementation of the 
MGAP Program. Block grant funds were spent to develop Food 
Safety Worker Training Programs, a website where growers could 
access all of the MGAP materials including standards, 
guidelines, training tools and forms needed for audit 
documentation. These tools are important so the grower can 
spend his or her time on implementation, not designing 
checklists and schedules.
    But first, to gauge feasibility of the program, we ran a 
pilot program on a small farm testing all the materials we 
developed. We made modifications based on their experience. 
Finally, we held four training sessions with an overwhelming 
turnout. By using web-based tools and train the trainer 
workshops, we have disseminated food safety messages to 
literally thousands of our workers. By combining funds from the 
American Mushroom Institute and the Mushroom Council, we were 
able to expand our reach to all consumer mushroom farms in the 
United States. We have received technical assistance from Penn 
State University, private consultants and most importantly, 
from our industry leaders who volunteer their time and talents. 
In addition, the Pennsylvania Department of Agriculture has 
used a portion of the block grant funding to provide a cost-
share program for good agricultural practices conducted by 
USDA, not only for mushroom growers but for all Pennsylvania 
fruit and vegetable growers.
    With increasing frequency, produce buyers be they large 
packers/shippers, food service vendors or retail outlets are 
requiring GAP audits at the expense of the grower. For any farm 
but particularly a small operation, establishing a documented 
food safety program can be expensive and time consuming. Having 
all or part of the cost of the audit reimbursed through a 
Specialty Crop Block Grant Program has motivated farms to 
implement the MGAP Program.
    I understand that during consideration of the farm bill 
questions arose as to why funds should go through the state 
departments of agriculture. Sixty-five percent of all U.S. 
mushrooms are grown in Pennsylvania, therefore the Pennsylvania 
Department of Agriculture understands the needs and concerns of 
our industry and recognizes the importance to the state's 
economy. It just makes sense that the state departments of 
agriculture would have better perspective on the local needs of 
the farmers they serve. As for accountability, the Pennsylvania 
Department of Agriculture and USDA have required extensive 
progress and final reports in outlining not only what has been 
accomplished but quantitative information on the impact of the 
projects.
    So how do we measure success? Since the auditable MGAP 
Program has been in place, about 18 months, half of the 
mushroom farms in the U.S. and over 60 percent in Pennsylvania 
have successfully passed the MGAP audit. Even more importantly, 
these farms represent over 85 percent of U.S. production. In 
Pennsylvania, we have primarily small growers who struggle 
daily with the rising cost of production. They would not have 
been able to do this on their own. The work achieved through 
the Specialty Crop Block Grant Funds resulted in even safer 
food product and documented program to enhance consumer 
confidence. As we face new food safety legislation and 
regulation from FDA, the mushroom industry feels that we are 
clearly prepared and especially the Specialty Crop Block Grants 
have played a large role in our success.
    Thank you.
    [The prepared statement of Mr. Angelucci follows:]

  Prepared Statement of James A. Angelucci, General Manager, Phillips 
  Mushroom Farms, Kennett Square, PA; on Behalf of American Mushroom 
                               Institute
    Mr. Chairman, thank you for the opportunity to testify today. I am 
Jim Angelucci, the General Manager of Phillips Mushroom Farms, a third 
generation, family-owned company with mushroom growing facilities in 
Kennett Square, PA and Warwick, MD.
    I'm pleased today to give you some real world examples of how the 
public policy decisions you make result in programs with tangible and 
positive impacts for the mushroom industry and for consumers.
    The mushroom farm community is particularly proud of our food 
safety record. Fresh mushrooms have never been associated with a 
foodborne illness outbreak. Since mushrooms are grown indoors, certain 
risks are minimized, but we have our own set of unique challenges.
    Following the 2006 E. coli outbreaks in spinach, the mushroom 
industry realized we had to step up our on-farm food safety programs in 
order to assure our customers of the safety of our product and to 
satisfy the increasing demand for audits. In response, we came together 
and developed an industry-wide food safety standard specific to the 
growing, harvesting and shipping of fresh mushrooms. It is known as 
MGAP--the Mushroom Good Agricultural Practices program.
    MGAP is consistent with the FDA Guide to Minimize Microbial Food 
Safety Hazards for Fresh Fruits and Vegetables. It is focused on the 
risks involved in production and based on science; it is attainable, 
auditable and verifiable. But just developing a program doesn't 
necessarily mean growers will follow it; so our next and even more 
challenging task was how to get growers to implement it.
     At this point you may be asking what these voluntary food safety 
efforts have to do with the 2008 Farm Bill and today's hearing.
    Funding from the Pennsylvania Department of Agriculture through the 
Farm Bill's Specialty Crop Block Grant program has supported the 
development and implementation of the MGAP program. Block grants funds 
were spent to develop food safety worker training programs, a website 
where growers can access all the MGAP materials, including the 
standards, guidelines, training tools, and forms needed for audit 
documentation. These tools are important so a grower can spend his or 
her time on implementation not on designing checklists and schedules.
    But first, to gauge the feasibility of the program, we ran a pilot 
program at a small farm testing all the materials we developed. We made 
modifications based on their experiences. Finally, we held four 
training sessions with an overwhelming turnout. By using web-based 
tools and train-the-trainer workshops, we have disseminated food safety 
messages to literally thousands of our workers. And by combining funds 
from the American Mushroom Institute and the Mushroom Council, we were 
able to expand our reach to all commercial mushroom farms in the United 
States. We received technical assistance from Penn State University, 
private consultants, and most importantly, from our industry leaders 
who volunteered their time and talents.
    In addition, the Pennsylvania Department of Agriculture has used a 
portion of block grant funding to provide a cost share program for Good 
Agricultural Practice audits conducted by USDA--not only for mushroom 
growers but for all Pennsylvania fruit and vegetable growers
    With increased frequency, produce buyers--be they large packer/
shippers, foodservice vendors or retail outlets--are requiring GAP 
audits, all at the expense of the grower. For any farm, but 
particularly a small operation, establishing a documented food safety 
program can be expensive and time consuming. Having all or a part of 
the cost of an audit reimbursed through the Specialty Crop Block Grant 
program has motivated farms to implement the MGAP program.
    I understand that during consideration of the farm bill, questions 
arose as to why the funds should go through state departments of 
agriculture. Sixty-five percent of all U.S. mushrooms are grown in 
Pennsylvania. Therefore, the Pennsylvania Department of Agriculture 
understands the needs and concerns of our industry and recognizes our 
importance to the state's economy. It just makes sense that a state 
department of agriculture would have a better perspective on the local 
needs of the farmers they serve.
    As for accountability, the Pennsylvania Department of Agriculture 
and USDA have required extensive progress and final reports outlining 
not only what has been accomplished but quantitative information on the 
impact of the projects.
    So how do you measure success? Since the auditable MGAP program has 
been in place--about 18 months, half of the mushroom farms in the U.S. 
(and over 60 percent in Pennsylvania) have successfully passed a MGAP 
audit. Even more importantly, these farms represent over 85 percent of 
U.S. production.
    In Pennsylvania, we have primarily small growers who struggle daily 
with the rising costs of production. They would not have been able to 
do this on their own. The work achieved through the Specialty Crop 
Block Grant funds resulted in an even safer food product and a 
documented program to enhance consumer confidence. As we face new food 
safety legislation and regulations from FDA, the mushroom industry 
feels that we are clearly prepared, and the Specialty Crop Block grants 
have played a large role in our success.
    Thank you.

    The Chairman. Thanks you, sir.
    I will get back to my list. Next we have Mr. Robert Jones, 
Director of Production of The Chef's Garden in Huron, Ohio. Mr. 
Jones, you have 5 minutes to testify. Thank you very much.

STATEMENT OF ROBERT N. JONES, Jr., DIRECTOR OF PRODUCTION, THE 
                    CHEF'S GARDEN, HURON, OH

    Mr. Jones. Good morning. Thank you for the opportunity this 
morning and thank you for your public service.
    My name is Bob Jones. I am a vegetable grower from The 
Chef's Garden in Huron, Ohio. The Chef's Garden is a multi-
generational family farm specializing in sustainably-grown 
gourmet vegetables for four and five star restaurants in all 50 
states and 12 additional countries. I am proud to say that my 
children are the fourth generation to have worked on our family 
farm, and we hope to continue the agricultural legacy of the 
Jones Family long into the future.
    We have been fortunate and truly blessed to have developed 
relationships with chefs patient enough to teach a family of 
dirt farmers the food business. The Chef's Garden grew out of 
necessity. After many years as wholesale vegetable growers, 
suffering financial hardship, losing the family farm in 1983, 
we began rebuilding by custom growing for chefs we first met at 
Cleveland-area farmers markets.
    My personal experience with the farm bill comes by the way 
of the Specialty Crop Block Grant Program funded by USDA and in 
Ohio, administered by the Ohio Department of Agriculture. I 
have served on the Grant Review Committee in Ohio for the past 
2 years. First of all, let me say how critically important this 
source of funding is to the specialty crop industry. It is at 
this time in Ohio the sole source of funding available to this 
entire industry.
    In Ohio, we have what I consider a rather unusual problem 
that has created a tremendous opportunity. The amount of fresh 
produce consumed in our state is several times that of the 
amount of produce being grown in the state, yet the vast 
majority of Ohio's productions of fresh fruits and vegetables 
are exported out of the state. This is a losing proposition for 
both producers and consumers of fresh produce. When considering 
sustainability issues and carbon footprints, our growers must 
strive to balance the production and consumption numbers in our 
state. We must truly listen to our consumers' needs, and then 
convince growers to meet and exceed those needs. This, in my 
opinion, is where the greatest value of the Specialty Crop 
Block Grant Program comes from, helping specialty crop 
producers help themselves.
    Sixty percent of all the nation's farmers do not raise farm 
bill program crops, and, therefore, do not receive direct 
subsidies. Please let me be very clear on this point. We do not 
want them. Ohio growers like myself are much more interested in 
becoming better growers, marketers and promoters. The technical 
research on production methods, conservation issues, 
nutritional programs, Farm-to-School Program, promotional 
activities and food safety programs such as our Ohio Produce 
Marketing Agreement and producer-consumer connection activities 
are much more valuable to the sustainability of our specialty 
crop industry than direct subsidies.
    In Ohio, we have funded several such activities and are 
just beginning to see the potential benefit of these projects. 
We need to help our growers better understand the producer-
consumer imbalance and find ways to eliminate it, and then 
begin marketing outside of our state as we are within 500 miles 
of the vast majority of the entire populations of both U.S. and 
Canada.
    Ohio and other Midwest specialty crop producers could and 
should be supplying these consumers the majority of their fresh 
produce year round. Helping specialty crop producers understand 
and take advantage of the opportunities that exist for them is 
critical. We can only accomplish these lofty goals with 
continued support of the Specialty Crop Block Grant Program. 
The current program however could be even more workable if the 
funding formula were more balanced per its distribution by 
state.
    I understand that under the farm bill each state receives a 
minimum grant, and then the balances of available dollars are 
distributed according to specialty crop cash receipts data by 
state. Currently, it appears that Ohio, for example, received 
only about one percent of these additionally distributed 
dollars, compared to California which is receiving nearly 40 
percent. I understand this funding discrepancy and the need to 
flow more dollars to the states with more production. That 
said, in states like Ohio we do not have existing support 
systems or technical assistance similar to what others enjoy.
    The block grant program is one of the few tools we have to 
support our growers and better realize our specialty crop 
opportunities. To meet this need, I believe some shifts in the 
existing formula may be warranted.
    I also believe the program's success would benefit from 
having each state's specialty crop producers involved in 
determining the best use of each state's allotment funds once 
the funds are in the state departments of agriculture. It would 
also help if the funding cycle were moved to an earlier time of 
the year. Under the current funding system, some states do not 
find out the amount of funding they will receive until 
February. USDA contracts for these projects are not finalized 
until August or September which makes it difficult to conduct 
in-season research projects within the funding year.
    It is also difficult for specialty crop producers to be 
involved during the growing season. Moving the entire funding 
cycle back a month or 2 could help to keep the very people this 
program is intended to help involved in the state level 
decision-making process, and will, in my opinion, dramatically 
increase the effectiveness of the program.
    In closing, the Specialty Crop Block Grant Program is 
critically important and helpful. It is truly the only way to 
keep our industry sustainable into the future. Thank you for 
the opportunity to participate in this process and I would 
welcome any questions.
    [The prepared statement of Mr. Jones follows:]

Prepared Statement of Robert N. Jones, Jr., Director of Production, The 
                        Chef's Garden, Huron, OH
    Good morning.
    My name is Bob Jones. I am a vegetable grower from The Chef's 
Garden in Huron, Ohio. Thank you all for your public service and for 
the opportunity to speak about the specialty crop and organic 
agriculture programs at the USDA.
    The Chef's Garden is a multi-generational family farm specializing 
in sustainably-grown gourmet vegetables for four and five star 
restaurants in all fifty states and twelve countries. I am proud to say 
my children are the fourth generation to work on our farm, we hope to 
continue the Jones family farming legacy long into the future. We have 
been fortunate and blessed to develop relationships with chefs patient 
enough to teach a family of dirt farmers the food business.
    The Chef's Garden grew out of necessity. After many years as 
wholesale vegetable growers, suffering financial hardship, losing the 
family farm in 1983, we began rebuilding by custom-growing for chefs we 
met at Cleveland area farmer's markets.
    My personal experience with the farm bill comes by way of the 
Specialty Crop Block Grant Program, funded by the USDA, and 
administered in Ohio by the Ohio Department of Agriculture. This source 
of funding is critical to the specialty crop industry. It is, at this 
time, the sole source of funding available to this industry as a whole.
    In Ohio, we have an unusual problem that has created a tremendous 
opportunity. The amount of fresh produce consumed in our state is 
several times the amount grown in our state. Yet the vast majority of 
Ohio's fresh fruits and vegetables are exported out of the state. This 
is a losing proposition for both the growers and consumers of fresh 
produce. When considering sustainability and carbon footprints, we 
growers must strive to balance the production and consumption numbers 
in our state. We must truly listen to our consumers' needs, and then 
convince growers to meet and exceed those needs. This is where the 
Specialty Crop Block Grant Program is most valuable: helping specialty 
crop producers help themselves!
    Sixty percent of all the nation's farmers do not grow farm bill 
``program crops'' and therefore do not receive direct subsides. (site: 
USDA, 2007 Farm Bill Proposals, page 171) Please hear me clearly: we do 
not want them! Ohio growers like me are much more interested in 
becoming better growers, marketers and promoters. The technical 
research on production methods, conservation issues, nutritional 
programs, farm to school programming, promotional activities, Food 
Safety programs such as our ``Ohio Produce Marketing Agreement,'' and 
producer/consumer connection activities, are much more valuable to the 
sustainability of our specialty crop industry than direct subsidies. In 
Ohio we have funded several such projects and are just beginning to see 
their potential.
    In Ohio, we need to better understand the producer/consumer 
imbalance and find ways to eliminate it, and then begin marketing 
outside of our state as we are within 500 miles of the vast majority of 
the populations of both the U.S. and Canada. Ohio and other Midwest 
farms could and should supply the majority of these consumers' fresh 
produce year-round.
    Helping specialty crop producers understand and take advantage of 
the opportunities that exist for them is critical. We can only 
accomplish these lofty goals with continued support of the Specialty 
Crop Block Grant Program.
     However, the current program could be even more workable if the 
funding formula was more balanced per its distribution by state. I 
understand that under the farm bill, each state receives a minimum 
grant and then the rest of the available dollar(s) are distributed 
according to specialty crop cash receipts data by state. Currently it 
appears that Ohio, for example, receives only about one percent of 
these additionally distributed dollars compared to California receiving 
nearly 40 percent. I understand this funding discrepancy and the need 
to flow more dollars to the states with more production. That said, in 
states like Ohio, we do not have existing support programs and systems 
of technical assistance similar to what other states enjoy. The block 
grant program is one of the few tools we have to support our growers 
and better realize our specialty crop opportunities. To meet this need, 
I believe some shifts in the existing formula may be warranted. I also 
believe the program's success would benefit from having each state's 
specialty crop producers involved in determining the best use of each 
state's allotted funds once the funds are in the hands of the state 
departments of agriculture.
    It would also help if the funding cycle was moved to an earlier 
time of year. Under the current funding cycle, in some years states do 
not find out the amount of funding they will receive until February. 
USDA contracts for these projects are not finalized until August or 
September, which makes it difficult to conduct in-season research 
projects within the funding year. It is also difficult for specialty 
crop producers to be involved during the growing season. Moving the 
entire cycle back a month or 2 could help keep the very people this 
program is intended to help, involved in state-level decision-making, 
and will, in my opinion, dramatically increase the program's 
effectiveness. The Specialty Crop Block Grant Program is critically 
important and helpful. It is truly the only way to help our industry 
sustain itself in the long run.
    Thank you for the opportunity to participate in this process, and 
for your support of our industry. I welcome any questions you may have.
                               Attachment


     Thank you, Mr. Jones.Mr. Bernie Kohl, President of Angelica 
Nurseries, welcome, sir, and please proceed with your testimony.

 STATEMENT OF BERNARD KOHL, Jr., PRESIDENT, ANGELICA NURSERIES, INC., 
KENNEDYVILLE, MD; ON BEHALF OF AMERICAN NURSERY & LANDSCAPE ASSOCIATION

    Mr. Kohl. Thank you, Mr. Chairman, Subcommittee Members and guests.
    I am Bernie Kohl, a third generation nurseryman and President of 
Angelica Nurseries located on Maryland's scenic eastern shore. Angelica 
is Maryland's largest wholesale grower, producing quality landscape 
plants for customers in the eastern U.S. I am also here today on behalf 
of the American Nursery & Landscape Association.
    I thank you for the fact that the 2008 Farm Bill recognizes the 
important role of specialty crops including nursery crops and 
floriculture. Our industry provides young trees and plants to American 
farms that grow apples, oranges, peaches, grapes and strawberries. We 
grow the plants that surround the U.S. Capitol and your own homes. Our 
plants provide real benefits like urban cooling, carbon capture and 
improved air and water quality.
    While in town I intend to visit my Congressional delegation to urge 
their support for H.R. 4509, the Small Business Environmental 
Stewardship Act. I would like to thank Representative Kurt Schrader for 
introducing this important tree planting bill.
    Nursery and greenhouse crop sales are about $17 billion each year 
at farm gate. Our industry ranks among the top five agricultural 
commodities in 28 states, and among the top ten in all 50 states. We 
represent \1/3\ of the value of all specialty crop production in the 
U.S.
    The industry has survived without market distorting subsidies or 
price supports. We would like to keep it that way. Our farm bill 
priorities focus on critical infrastructure and programs to enable 
success. I will mention a few highlights. Details are in my written 
testimony.
    First, the 2008 Farm Bill helps to address a serious threat of 
invasive plant pests. Section 10201 provides funding for innovative 
programs to identify, detect and respond to plant pest threats from 
around the world. USDA's APHIS has set clear goals based on the farm 
bill language and is working with interested parties including ANLA. 
Important work under one of these goals, safeguarding nursery 
production will set the stage for a modernized certification system for 
nursery crops including interstate and international commerce.
    Section 10202 of the farm bill established a National Clean Plant 
Network or NCPN to protect U.S. specialty crops such as grapes, peaches 
and apples from catastrophic plant pests. Robert Wooley, an 
internationally respected fruit and nut treestock grower recently said 
of the program, ``The NCPN could be considered the poster child for the 
positive impact we have enjoyed from the inclusion of specialty crops 
funding in the latest farm bill.'' The NCPN has enabled nurseries to 
eliminate common virus from nursery stock and at the same time to 
monitor for exotic, invasive disease in a unique and innovative 
surveillance program. The NCPN is also providing a mechanism to update 
and harmonize state certification programs which will facilitate 
interstate commerce of clean nursery trees.
    Perhaps the most significant benefit is the maintenance and 
improvement of the clean plant programs at Washington State University, 
the University of California and Clemson University. These programs 
provide essential disease testing therapy for domestic and imported 
fruit in great varieties. Farm bill funding has been timely and 
critically important to sustaining their survival.
    On the topic of research, we appreciate establishment of the 
Specialty Crops Research Initiative, yet we remain concerned with the 
required 1:1 matching funds for these grants. This requirement puts 
some sectors at a disadvantage. SCRI grants are multi-year and many 
traditional industry funding sources cannot commit multi-year funding.
    Finally, the USDA ARS and other Federal partners are disadvantaged 
because other Federal resources cannot count toward the matching 
requirement. The Specialty Crop Block Grant Program, which provides 
grants on a formula basis to the states to fund projects important to 
the specialty crop industries, a number of state associations in our 
industry have successfully applied for these grants. I have included 
two examples in my written statement.
    Nursery growers appreciate the 2008 Farm Bill expanded eligibility 
under the Tree Assistance Program however we have encountered problems 
with the TAP implementation which are described in my written 
statement. Resolution seems close but we would appreciate your help if 
problems exist.
    While many farm bill provisions are making a positive difference, 
we want to note a serious threat from the Biomass Crop Assistance 
Program or BCAP. The potential diversion of forestry byproducts, most 
notably tree bark, from established markets to energy generation could 
devastate nursery producers across the U.S. Over 70 percent of nursery 
crops are now grown in containers, and bark is the most important 
component of the growing substance that fills these containers. BCAP 
subsidies threaten our $17 billion industry and could fuel loss of 
market share to imports from Canada and elsewhere. BCAP subsidies 
should encourage new biomass crops and opportunities, but not disrupt 
established markets at taxpayer expense.
    Let me end with an issue that is on the minds of all specialty crop 
producers, farm labor. As important as the farm bill is, growers cannot 
survive without labor. We now face a perfect storm resulting from 
aggressive worksite enforcement, Congressional inaction and regulatory 
overkill. Most producers are one I-9 audit away from disaster. A few of 
us are trying to use the legal program known as H-2A and we are 
struggling with a third set of rules in 3 years. Labor reform will 
enable a bright future. Ignoring the problem will cause American 
production on-farm and off-farm jobs to leave the country. We support 
the AgJOBS Bill, H.R. 2414 as a balanced bipartisan solution.
    Thank you again for your leadership and the opportunity to speak to 
you today. We look forward to collaborating on the next farm bill.
    [The prepared statement of Mr. Kohl follows:]

Prepared Statement of Bernard Kohl, Jr., President, Angelica Nurseries, 
   Inc., Kennedyville, MD; on Behalf of American Nursery & Landscape 
                              Association
    Thank you, Chairman Cardoza, Ranking Member Schmidt, Subcommittee 
Members, and distinguished guests, for this opportunity to present 
testimony on implementation of the 2008 Farm Bill's Specialty Crop 
title, on behalf of the U.S. nursery and greenhouse industry. I am 
Bernie Kohl, President of Angelica Nurseries, located on the beautiful 
and agriculturally important Eastern Shore of Maryland. Angelica 
Nurseries is a third-generation wholesale growing operation producing 
quality landscape plants for customers up and down the Eastern Seaboard 
and into the Midwest. Angelica is the largest nursery in the State of 
Maryland, and one of the largest agricultural employers in the state.
    My remarks today are presented on behalf of the American Nursery & 
Landscape Association (ANLA). ANLA is a leading member of the Specialty 
Crop Farm Bill Alliance, with whom we collaborated on the 2008 Farm 
Bill's specialty crop provisions. We join in thanking the Chairman and 
the Subcommittee for successfully crafting a farm bill that for the 
first time recognizes in a serious way the role of specialty crops, 
including nursery crops and floriculture. We look forward to working 
with you as the 2012 Farm Bill begins to take shape.
    Though struggling through the economic downturn, the nursery and 
greenhouse industry is a bright spot in U.S. crop agriculture. The 
combined U.S. nursery, floriculture, and landscape industry, 
collectively known as the ``green industry,'' has an estimated economic 
impact of $147.8 billion.\1\ The industry employs 1.95 million 
individuals, generates $64.3 billion in labor income, and provides $6.9 
billion in indirect business taxes. Products and services offered by 
the green industry directly contribute to production of apples, citrus, 
grapes, strawberries, and other food crops; to sustaining our 
environment; and to improving the quality of life in rural, suburban 
and urban communities. Landscape plants provide ecosystem service 
benefits that range from reducing energy needs, to fostering carbon 
sequestration, and improving water quality and storm water management.
---------------------------------------------------------------------------
    \1\ The Economic Impact of the Green Industry in the United States. 
Hall, Charles R., Alan R. Hodges, John J. Haydu. Southern Agricultural 
Economics Association, 2006.
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    U.S. nursery and floriculture crop production represents a major 
component of the nation's specialty crop agriculture. According to the 
USDA's 2007 Census of Agriculture, nursery, greenhouse and floriculture 
annual crop sales totaled roughly $17 billion at farm gate. Nursery and 
greenhouse crop production now ranks among the top five agricultural 
commodities in 28 states, and among the top ten in all 50 states. The 
sector represents roughly a third of the value of all specialty crop 
production in the U.S. In Maryland, nursery and greenhouse annual 
production totaled about $209 million according to the 2007 Census.
The Farm Bill and the Nursery Industry
    The U.S. nursery industry has developed and thrived without the 
influence of market-distorting subsidies, price supports, or similar 
programs. Most wish to keep it that way. Consistent with this history 
and philosophy, our priorities in the 2008 Farm Bill focused on 
critical infrastructure and programs to deal with plant pest and 
disease threats, and to fund needed research. Global trade and travel 
have accelerated the pace of new pest introductions. Given the 
diversity of crops that the industry produces, virtually every new 
plant pest that arrives and establishes in the U.S. becomes a 
production or market access problem for the nursery industry. Emerald 
ash borer, Asian longhorned beetle, and the pathogen responsible for 
``sudden oak death'' are just a few examples with which the industry is 
struggling.
    The 2008 Farm Bill did several positive things relating to the 
serious threat of plant pests and diseases:

   Section 10201 provided critical funding and direction for 
        innovative initiatives to identify and mitigate offshore 
        threats, and improve pest detection and rapid response in the 
        U.S. So far, USDA's Animal & Plant Health Inspection Service 
        (APHIS) has set priorities based upon six goal areas drawn 
        directly from the language of the farm bill. While this is 
        long-term work, and success at prevention is not always easy to 
        measure, we believe APHIS has so far done a good job of 
        involving stakeholders in an open and transparent process for 
        identifying and funding the best ideas to accomplish the goals.

    Specific projects funded and suggested for future funding under the 
        ``Safeguarding Nursery Production'' goal are setting the stage 
        for a modernized system for the certification of nursery crops 
        moving in interstate and international commerce.

    One critically important goal under 10201 is to more effectively 
        identify and mitigate, potential threats plant pest threats to 
        U.S. agriculture before they arrive at our airports and ports, 
        and make their way to our farms and forests. Strategic research 
        and analysis on pest threats which might reach our shores in 
        the next few years is essential to our ability to avoid 
        introduction, or to eradicate pests or diseases quickly if they 
        do arrive here. If we were to share one constructive criticism 
        for the deployment of 10201 funds so far, it would be that too 
        few projects have been designed and implemented for offshore 
        pest threat identification and mitigation.

   Section 10202 of the farm bill established the National 
        Clean Plant Network (NCPN). The NCPN was created to protect 
        U.S. specialty crops, such as grapes, nuts, apples, peaches and 
        other fruits, from the spread of economically harmful plant 
        pests and diseases. The NCPN will contribute to the global 
        competitiveness of U.S. specialty crop producers by creating 
        high standards for our clean plant programs for these vital 
        crops. The program will improve U.S. growers' access to the 
        newest and most profitable plant varieties from around the 
        world, without the devastating plant diseases that exist 
        elsewhere in the world.

    Robert Woolley, an internationally respected grower of deciduous 
        fruit and nut tree nursery stock, represents ANLA in the NCPN 
        governance structure. He recently participated in the annual 
        meeting of parties involved in NCPN, and had this to say after 
        the meeting concluded:

                ``The NCPN could be considered the poster child for 
                positive impact we have enjoyed from inclusion of 
                specialty crops funding in the latest farm bill. With 
                farm bill funding, the NCPN has enabled nurseries to 
                eliminate common virus from nursery stock and, at the 
                same time, to monitor for exotic, invasive disease in a 
                unique and innovative surveillance program. The NCPN is 
                also providing a mechanism to update and harmonize 
                state certification programs which will facilitate 
                interstate commerce of `clean' nursery trees. Perhaps 
                the most significant benefit of the establishment of 
                the NCPN, however, is the maintenance and improvement 
                of clean plant programs at Washington State University 
                and the University of California as well as Clemson 
                University in South Carolina. These programs provide 
                essential disease testing and therapy for both domestic 
                and imported fruit and grape varieties, and farm bill 
                funding via the NCPN has been timely, and critically 
                important to sustaining their survival.''

    The establishment and maintenance of the National Clean Plant 
        Network was one of our highest farm bill priorities. We are 
        truly impressed with the progress that has been made already on 
        this program.

   In Section 10203, Congress intended the Secretary of 
        Agriculture to be the final word on emergency pest funding 
        decisions. In California, we have witness time and again where 
        the experts at fighting pests are overruled by the Office of 
        Management and Budget. The result has been delayed funding and 
        more pests. We appreciate this Committee's efforts to correct 
        this bureaucratic problem. Early indications suggest that OMB 
        remains the final word and we would ask that you closely 
        monitor this situation.
Specialty Crops Research Initiative
    We appreciate the recognition, through the Specialty Crops Research 
Initiative in the 2008 Farm Bill, of the need for research funding to 
support the specialty crop industry. We remain concerned, however, with 
the required 1:1 funding match for these grants. This requirement puts 
many specialty crop growers at a disadvantage, especially in industries 
that do not have check-off programs. SCRI grants are multi-year, and 
most traditional industry funding sources (including our own research 
endowments, the Horticultural Research Institute, and the American 
Floral Endowment) cannot commit funding for multiple years. We are also 
concerned that the match requirement, as implemented, is placing USDA-
ARS and other Federal partners on a less-than-competitive playing field 
because other Federal funds and resources cannot be used to meet the 
matching requirement.
    A longer term concern with the creation of the National Institute 
for Food and Agriculture--NIFA--is that the move toward long term, 
systems competitive funded research reduces funding that could be 
applied to meet immediate or quickly emerging research needs, such as 
those resulting from the introduction of invasive pest species. We feel 
that it is critical for USDA to maintain and increase funding efforts 
for its intramural research agency, USDA-ARS, in a balanced way with 
respect to competitive funds available through NIFA. Increased funding 
is also needed for the formula-funded Smith-Lever and Hatch Act as 
these programs provide for the base research and educational delivery 
infrastructure for Cooperative Extension and State Experiment Station 
programs. If we allow our national research infrastructure to 
deteriorate for lack of funding for traditional pest and disease 
research, we will not easily be able to rebuild it.
Unintended Consequences of the Biomass Crop Assistance Program
    While many provisions of the 2008 Farm Bill are already making a 
positive difference, we must alert you to a serious potential 
unintended consequence of one particular program, the Biomass Crop 
Assistance Program, or BCAP. While the program's goals are worthy, the 
potential diversion of certain forestry byproducts--most notably 
softwood and hardwood bark--from established value-added markets could 
devastate nursery producers across the U.S. for these simple reasons: 
most nursery crops are now grown in containers, and the single most 
important component of the growing substrate that fills these 
containers is bark.
    Over 70 percent of the nursery crops and 100 percent of the 
greenhouse crops produced in the U.S. are now grown in containers. The 
major ingredient for the growing media or ``substrates'' used in 
container production is bark. Diversion of bark supplies for other 
uses, or a sharp and significant change in their market price due to 
market-distorting subsidies, threatens the domestic nursery and 
greenhouse industry and much of the $17 billion in annual nursery and 
greenhouse crop sales across the country. Market price distortions or 
diversion of bark resulting from inclusion in the BCAP will seriously 
impact domestic production and could fuel loss of market share to 
imports from Canada and elsewhere.
    It is worth noting that already, over 95% of bark byproducts have 
established value-added markets. Roughly 83% of softwood bark, and 70% 
of hardwood bark, is already used for energy generation. In this 
respect, BCAP subsidies would seem to represent a solution in search of 
a problem. Concerns about future bark availability due to market forces 
had already prompted the industry to fund a multi-year project to 
develop alternative substrates. However, the work is long-term, and the 
disruption and damage done by bark subsidies is a clear and immediate 
danger.
    ANLA recently submitted official comments to USDA's Farm Service 
Agency, in which we offered a series of recommendations on how to 
address this concern. While the issue is now in the regulatory realm, 
we are grateful for the opportunity to alert the Subcommittee to the 
potential unintended consequences that will result if bark and other 
wood waste materials with established markets are included in the BCAP.
Specialty Crop Block Grant Program
    One aspect of the Specialty Crop title of the farm bill is the 
Specialty Crop Block Grant Program. This program provides grants on a 
formula basis to the states to fund projects important to the success 
of specialty crop industries. A number of state associations in our 
industry have successfully applied for these grants. Following are two 
examples of the types of projects funded:

   Pennsylvania Landscape & Nursery Association received a 
        grant to develop a technical manual for PennDOT on proper 
        installation and maintenance plant material along road rights-
        of-way to mitigate stormwater runoff from highways. The project 
        should be completed by June 2011.

   The North Carolina Green Industry Council received a $47,000 
        specialty crop block grant last year to promote outdoor water 
        use efficiency and water conservation to the citizens of NC in 
        an effort to reinvigorate consumer purchasing of plants, trees 
        and turf. Three major droughts over the last 10 years in the 
        region have led to outdoor watering bans and water restrictions 
        which crippled nursery growers, garden centers and landscape 
        contractors. In partnership with North Carolina State 
        University, the GIC published and distributed over 200,000 
        Water Wise Works and Watering Tips brochures to consumers 
        across North Carolina using retail displays and direct 
        distribution to landscape contractors, nurseries, sod growers, 
        extension agents and municipalities. The Governor designated 
        July 2010 as Smart Irrigation Month. A statewide billboard 
        campaign is directing consumers to a new website developed with 
        the specialty block grant money, www.SavingWaterNC.com.
Risk Management, Crop Insurance, and Tree Assistance Program
    Nursery growers appreciate that the 2008 Farm Bill expanded 
eligibility under the Tree Assistance Program (TAP). However, we have 
encountered problems with TAP implementation. USDA's Farm Service 
Agency (FSA) took the position that trees were ineligible unless they 
produced a crop. This was contrary to Congressional intent which 
expanded TAP coverage by recognizing trees and ``bushes'' as crops 
themselves. We believe that a recent communication involving FSA, 
Congressional and Committee staff resolved the matter and that FSA is 
correcting its TAP handbook. We hope the Committee can help us to 
ensure that FSA has communicated this policy correction to its local 
offices.
    Another apparent glitch, in FSA's TAP computer program, resulted in 
disallowing reimbursement of rehabilitation, pruning, and site 
preparation costs for containerized trees while nevertheless allowing 
reimbursement of such costs for in-ground trees. We have been assured 
this technical error is in the process of being corrected, but no 
timetable has been given. Again, we would appreciate the Committee's 
assistance ensuring that FSA has resolved or is resolving this.
    On the broader question of risk management, the crop insurance 
system is not serving the needs of the nursery and greenhouse sector. 
Growers report that crop insurance agents in Tennessee, for example, 
have had over 70 % of their policies dropped since the nursery crop 
insurance calamity that happened as a result of the Easter freeze and 
drought of 2007. Prominent factors for the decline are a lack of 
educated adjusters and a lack of clear interpretation (adjuster to 
adjuster and even within RMA) of the specialty crop insurance policy. 
We would be happy to share previous testimony on problems with the crop 
insurance system and nursery crops.
Agricultural Labor and Immigration Policy
    As important as the farm bill has become to America's specialty 
crop industries, it is difficult to have a serious discussion about the 
future success of specialty crop producers without acknowledging the 
elephant in the room: farm labor. Hired labor is critical to most 
specialty crop producers, and we now face a ``perfect storm'' resulting 
from Congressional inaction and regulatory excess.
    The facts are stark. Most farm workers lack legal status. Many have 
been here for years, and are highly skilled and essential. The 
recession has done virtually nothing to change the reality: While we 
have seen a small uptick in Americans applying for farm jobs, few 
actually report to work, and many fewer stay.
    Aggressive worksite enforcement that began near the end of the Bush 
Administration has accelerated under the Obama Administration. 
Specialty crop and dairy producers are especially vulnerable. Farmers 
are one I-9 audit away from disaster. Meanwhile, the only legal labor 
safety net, known as H-2A, has long been difficult and unattractive. 
Producers are now struggling through the third set of rules in 3 years. 
The program has descended into regulatory chaos. I can say this with 
authority, as we have been using the program for over 10 years.
    We fully recognize that farm labor is not a traditional farm bill 
issue. Nonetheless, we raise it for this simple reason: lack of timely 
and thoughtful resolution of the farm labor crisis will hasten the 
offshoring of our specialty crop and livestock agriculture. As 
production shifts to Canada or Mexico or Chile or China, America will 
lose thousands upon thousands of U.S. jobs upstream and downstream of 
the farmer that exist here now because we are producing here. We 
respectfully urge your leadership and support for enactment of the 
bipartisan and urgently needed reforms of the AgJOBS bill, H.R.2414, 
whether as part of a comprehensive immigration reform bill, or an 
important step toward fixing our broken immigration system.
Conclusion
    Members of the Subcommittee, thank you for the opportunity to 
testify on behalf of the U.S. nursery and greenhouse industry. The 2008 
Farm Bill for the first time truly recognized the importance of 
specialty crops, including nursery and floriculture. Together, 
specialty crops now represent almost half of the value of total crop 
production in America, and the specialty crop title of the 2008 Farm 
Bill placed emphasis on practical, solutions-oriented programs. We 
recognize that the next farm bill cycle will be exceptionally difficult 
from a budgetary standpoint. We thank you for your work to date, and 
hope you will join together to protect specialty crops' place at the 
table, going forward.

    The Chairman. Thank you very much, sir.
    Mr. Mark Nicholson, Executive Vice President of Red Jacket 
Orchards from Geneva, New York. Thank you, sir, for being here 
and please proceed with your testimony.

          STATEMENT OF MARK NICHOLSON, EXECUTIVE VICE
PRESIDENT AND PART OWNER, RED JACKET ORCHARDS, MEMBER, BOARD OF 
          DIRECTORS U.S. APPLE ASSOCIATION, GENEVA, NY

    Mr. Nicholson. Thank you. Good morning, Chairman Cardoza, 
Ranking Member Schmidt, and distinguished Members of the 
Committee, but I would also like to specifically recognize New 
York Congressmen Bill Owens and Scott Murphy and express our 
appreciation for their participation on this Committee.
    Thank you for the opportunity to speak with you today 
regarding the impact of the 2008 Farm Bill. My name is Mark 
Nicholson and I serve on the board of the U.S. Apple 
Association and am a member of the third-generation that 
operates Red Jacket Orchards located in Geneva, New York. Our 
integrated farm business includes a 600 acre fruit farm, fruit 
packing facility, juice processing plant, a metro New York 
farmers market and wholesale distribution operation which my 
brother, father and I own and operate. We primarily grow fresh 
market apples and other specialty fruit crops, and also press 
apple cider and 100 percent fruit juices.
    I had the pleasure to testify during the farm bill hearings 
in Canandaigua, New York during the summer of 2006. I am proud 
that many of our industry's top priorities were incorporated in 
the 2008 Farm Bill, a truly notable milestone for our industry. 
As I stated then, and I feel is worth repeating here, apple 
growers and the produce industry have never relied upon direct 
payment programs to support grower income or market prices. 
Instead, we strongly advocate programs that help grow demand 
for, and consumption of, our products and the long-term 
competitiveness and sustainability for our industry. I believe 
the 2008 Farm Bill met these goals and would like to thank 
Chairman Cardoza for his leadership on behalf of the specialty 
crop industry during the last farm bill's lively debate.
    I believe these programs are a good investment in our 
industry especially in these tough economic times. Today, 
specialty crop producers face an interesting dichotomy. On the 
one hand we are under pressure like never before from increased 
input costs and competition from low-cost producers like China. 
On the other hand, consumers are more aware than ever of the 
health benefits inherent in our products, and their need to 
fight obesity and to make healthier choices. I much prefer that 
the healthy apple or other produce snack consumers increasingly 
reach for has a grown in the USA sticker on it rather than a 
sticker from another country like China, which produces over 
half of the world's apples.
    For the sake of time I am going to focus on just a few of 
the many specialty crop farm bill programs supported by the 
apple industry. My written testimony goes into further detail 
and I would be happy to answer any questions the Committee 
Members might have.
    The Specialty Crop Research Initiative: as growers and 
small business owners we must overcome challenges in order to 
remain in business for 50+ years as our family has been 
fortunate enough to do. As a plant science graduate from 
Cornell University, I have a special interest in, and 
understanding of, the power of science. I believe strongly that 
with adequate funding our research institutions cannot only 
help us to overcome these numerous challenges, but also give 
our next generation of family members the tools they will need 
to thrive for another 50 years.
    The U.S. apple industry has been an active participant in 
the SCRI and is pleased to champion this USDA Program. A number 
of projects selected for funding are already well under way 
covering everything from pest control to fruit quality and 
automation of orchard operations. While these projects have 
significant apple components, their activities and results also 
impact other specialty crops such as peaches, walnuts, pears, 
cherries and strawberries. Project participants span the 
country and include over a dozen institutions.
    Fruit and Vegetable Program: I believe passionately that 
the Fruit and Vegetable Program, which was expanded to all 50 
states in the last farm bill and provides a fresh fruit or 
vegetable snack to elementary-age school children, provides the 
best opportunity for a win-win program. As a parent of a 15 
month old son and 6 year old daughter, I see the power daily of 
teaching healthy eating habits and providing proper food 
choices at an early age. My daughter, Lily, continues to 
surprise me by regularly choosing a piece of fruit over candy 
or a sweet when given a choice.
    The Food and Vegetable Program has been immensely popular 
in New York and throughout the country. For example, the 
elementary school in North Rose, New York participated in the 
program and the results were phenomenal. Students there tried 
fruit like kiwi which some had never seen before and even in 
the middle of apple country, many students were not accustomed 
to eating whole, fresh apples. Unfortunately however, the State 
of New York recently made the decision that due to tight funds 
and oversubscription to the program, only schools with 98 
percent free and reduced meals would be allowed in the program. 
This shuts out the school in North Rose and many other schools 
in the rural districts as well. It all may be for naught 
unfortunately.
    While recognizing that immigration does not fall under the 
jurisdiction of this Committee, I would be remiss if I did not 
take a moment to restate my comments from the 2006 Farm Bill 
field hearing. Unfortunately and frustratingly, not much has 
changed in the 4 years since then. If in the process of 
securing our borders which our industry favors we do not 
develop a workable guest worker program for agriculture, the 
best farm bill programs will do little good. This remains, as I 
see it, the greatest immediate threat to my family's farm's 
economic viability.
    In conclusion, I thank you again, Mr. Chairman, and the 
Committee for the invitation to speak here today. I am very 
proud of the accomplishments that we have achieved in the 2008 
Farm Bill on behalf of the apple industry and other specialty 
crop producers. I believe if we can maintain the critical tools 
we have built in the 2008 Farm Bill, and if possible expand 
them, then our industry has a great opportunity to grow and 
thrive. With that, I can confidently encourage my children to 
consider joining us as the next generation and help Red Jacket 
Orchards continue for another 50 years. Thank you.
    [The prepared statement of Mr. Nicholson follows:]

Prepared Statement of Mark Nicholson, Executive Vice President and Part 
   Owner, Red Jacket Orchards; Member, Board of Directors, U.S. Apple
                        Association, Geneva, NY
Introduction
    Good morning, Chairman Cardoza, Ranking Member Schmidt, and 
distinguished Members of the Committee. I would also like to 
specifically recognize New York Congressman Bill Owens and express our 
appreciation for his participation on this Committee. Congressman Owens 
represents our state well on agricultural issues and brings a wealth of 
knowledge and experience from working with producers during his days in 
private practice. We look forward to working with you Congressman Owens 
on the many important issues that come before this Committee.
    Thank you for the opportunity to speak with you today regarding the 
impact of the 2008 Farm Bill. My name is Mark Nicholson and I serve on 
the Board of the U.S. Apple Association (USApple). I am a member of the 
third generation that operates Red Jacket Orchards located in Geneva, 
New York. Our integrated farm business includes a 600 acre fruit farm, 
fruit packing facility, fresh juice processing plant, and metro New 
York farm market and wholesale distribution operation, which my 
brother, father, and I own and operate. We primarily grow fresh market 
apples but over the past 15 years have diversified into other specialty 
fruit crops, including apricots and plums that are currently being 
harvested and sold in this region's Whole Foods or Wegmans 
supermarkets. In addition to our fresh fruit crops, we also press apple 
cider and other 100 percent fruit juices in our newly completed, 
sustainably built and powered, 22,000 square foot juice processing 
facility. The majority of our fruit and value-added products are 
marketed and sold in the Northeast, with a special emphasis in metro 
New York, but we have recently found enthusiastic customers as far away 
as Georgia, Alabama, and Texas.
    As I address this Committee today, I can't help but feel a genuine 
sense of accomplishment as I had the pleasure of testifying during your 
farm bill hearing in Canandaigua, NY, during the summer of 2006. I am 
proud that many of our industry's top priorities were incorporated into 
the 2008 Farm Bill, a truly notable milestone for our industry and a 
testament to the well organized effort put forward by both the 
Specialty Crop Farm Bill Alliance and the Congressional offices that 
supported us. As I stated then, and I feel is worth repeating here, 
apple growers and the produce industry have never relied upon direct 
payment programs to support grower income or market prices. I don't 
believe, and here I am in the majority of my peers, that would be in 
the best interest of my business or our industry. Instead, we strongly 
advocate programs that help grow demand for and consumption of our 
products, and build long-term competitiveness and sustainability for 
our industry. I believe the 2008 Farm Bill met these goals and would 
like to thank Chairman Cardoza for his leadership on behalf of the 
specialty crop industry during the last farm bill's lively debate.
    As a founding member of the Specialty Crop Farm Bill Alliance, 
apple growers and packers worked through USApple in support of programs 
included in the bill which are now enhancing the competiveness and 
efficiency of our industry. I am pleased to report today on how many of 
those programs are helping the specialty crop industry, specifically 
the apple industry, as well as the direct impact on my family's third 
generation farm, Red Jacket Orchards.
    I believe these programs are a good investment in our industry, 
especially in these tough economic times. Today, specialty crop 
producers face an interesting dichotomy. On one hand we are under 
pressure like never before from increased input costs--from electricity 
to labor and crop protection tools--and competition from low cost 
producers like China. On the other hand, consumers are more aware than 
ever of the health benefits inherent in our products and the need to 
fight obesity and to make healthier choices. I'd much prefer that the 
healthy apple or other produce snack they increasingly reach for on the 
supermarket shelf has a ``grown in the USA'' sticker on it, rather than 
a sticker from another country like China which produces over half the 
world's apples.
Specialty Crop Block Grants
    The Specialty Crop Block Grant Program focuses on regional and 
local priorities for specialty crop producers. These are being used by 
growers at the state level and are tailored to meet specific local 
needs. This approach is critical as a one-size-fits-all approach would 
not work within the apple industry--as the needs of a New York apple 
grower might be different from a grower in Washington State or in 
Ohio--let alone across the entire specialty crop industry of over 300 
crops.
    For the apple industry, these block grants are funding important 
projects ranging from research, to marketing, nutrition and food safety 
programs. In fact, in New York where the financial situation is dire at 
the moment and program funding is being cut drastically across all 
state agencies, the only reliable source of funding for industry 
projects is money from Federal funds. For Red Jacket Orchards, 
Specialty Crop Block Grants that fund New York's Pride of NY program 
have provided critical resources for demand building marketing projects 
that we could otherwise not afford. I credit the Pride of NY program 
with helping us greatly expand our business in the key metro New York 
marketplace. We are currently undertaking a grant that will allow us to 
build our brand awareness in this expensive media market.
Value-Added Grant Program
    Prior to the Specialty Crop Block Grant program Red Jacket Orchards 
participated in the Farm Bill's Value-Added Grant Program, which was 
our first major award. Funds from this program helped us make the 
critical leap from producing generic apple cider, which is more or less 
a commodity, to producing a line of value added, freshly pressed 100% 
fruit juices with a distinctive flavor and appearance. The success we 
experienced in expanding sales of this value added line, which is 
derived primarily from fruit we grow, culminated in our investment in a 
new 22,000 square foot juice production facility that came on line this 
past June and is anticipated to create 15 new jobs over the next 3 
years.
Specialty Crop Research Initiative
    As growers and small business owners we must overcome challenges in 
order to remain in business for 50+ years, as our family has been 
fortunate enough to do. As a plant science graduate from Cornell 
University I have a special interest in, and understanding of, the 
power of science. I believe strongly that with adequate funding our 
research institutions can not only help us to overcome these numerous 
challenges but also give our next generation of family members the 
tools they will need to thrive for another 50 years.
    That's why the Specialty Crops Research Initiative (SCRI) is both 
unprecedented and impressively effective. For the first time, the 
nation's producers, processors and handlers of fruits and vegetables 
have had access to a competitive funding program of sufficient 
magnitude to effectively address a range of technical barriers that 
limit their sustainability, competitiveness, and profitability. 
Researchers and extension professionals have created multi-
disciplinary, multi-institutional, and multi-state teams focused on 
stakeholder priorities.
    The U.S. apple industry has been an active participant in the SCRI 
and is pleased to champion this USDA program. A number of projects 
selected for funding are already well underway including:

   Biocontrol of key pests in western orchards.

   Application of modern genetic technologies to improve fruit 
        quality.

   Engineering approaches to stabilizing apple yield.

   Comprehensive automation of orchard operations.

   Biomarkers to diagnose fruit quality and safety.

    While these projects have significant apple components, their 
activities and results also impact other specialty crops such as peach, 
walnut, pear, cherry, strawberry. Project participants span the country 
and include such disparate institutions as Carnegie Mellon University, 
Cornell University, Michigan State University, Oregon State University, 
Penn State University, Purdue University, USDA-Agricultural Research 
Service, University of Arkansas, University of California, University 
of Minnesota, and Washington State University.
    The SCRI is a competitive funding program that supports the kind of 
research and extension activities specialty crop industries have been 
seeking for decades. Its $50 million annual allocation is effectively 
invested and has transformed the research and extension communities and 
the industries they serve.
Fruit & Vegetable Program
    I believe passionately that the Fruit and Vegetable program, which 
was expanded to all 50 states in the last farm bill and provides a 
fresh fruit or vegetable snack to elementary aged children, provides 
the best opportunity for a win-win program. As a parent of a 15 month 
old son and 6 year old daughter, I see the power daily of teaching 
healthy eating habits and providing proper food choices at an early 
age. My daughter continues to surprise me by regularly choosing a piece 
of fruit over candy or other sweet when given the choice. I guess this 
should come as no surprise as Lily has been eating fruits and 
vegetables since starting solid foods and has enjoyed an ample 
selection, many from our farm. Unfortunately, not all children are this 
fortunate and the Fruit and Vegetable program can play a critical role 
in filling this need. The other win, obviously, is the expansion of 
consumption of fruits and vegetables, something that hasn't changed 
significantly in decades, and the positive impact this will have on 
producers.
    The fruit and vegetable program has been immensely popular in New 
York and throughout the country. For example, the elementary school in 
North Rose, New York, participated in the program and the results were 
phenomenal. Students there tried fruit like kiwi, which some had never 
seen before, and even in the middle of apple country many students were 
not accustomed to eating fresh whole apples. Teachers, students and 
parents loved this program and with well over 50% of the students at 
this school qualifying for free or reduced price lunches the school 
exceeded the minimum threshold required in the farm bill. 
Unfortunately, however, the State of New York recently made the 
decision that, due to tight funds and over-subscription to the program, 
only schools with 98 percent free and reduced meals would be allowed in 
the program. This shuts out the school in North Rose and many other 
rural schools as well.
    As so much attention is now being given to the growing obesity 
rates in this country, here's a program that can really make a 
difference, and it is, at least in the schools that are lucky enough to 
have it.
Export Promotion
    Exports are extremely important for the apple industry, with about 
25 percent of our crop sold overseas. While we do not export our fruit 
at Red Jacket Orchards, a strong export market helps ensure that 
domestic prices remain stable thus helping growers like us who do not 
directly sell their fruit overseas. Apple growers use two programs--the 
Market Access Program and the Technical Assistance for Specialty Crops 
Program--to help grow exports. MAP provides critical funding, more than 
matched by industry contributions, to operate programs which promote 
American apple consumption around the world. TASC funding is also 
helping our industry reduce foreign phytosanitary barriers to apple 
exports.
It may all be for naught . . .
    While I recognize immigration issues do not fall under the 
jurisdiction of this Committee, I would be remiss if I did not take a 
moment to restate my comments from the 2006 Farm Bill field hearings. 
Unfortunately and frustratingly not much has changed in the 4 years 
since then. If in the process of securing our borders, which our 
industry favors, we do not develop a workable guest worker program for 
agriculture, the time spent here will be for naught because our 
industry will cease to be viable. Without workers to pick, prune, pack 
and process our fruit, the best farm bill programs will do little good. 
This remains, as I see it, the greatest immediate threat to my family 
farm's economic viability.
Conclusion
    I again thank the Chairman and the Committee for the invitation to 
speak here today. I am very proud of the accomplishments that have been 
achieved in the 2008 Farm Bill on behalf of the apple industry and 
other specialty crop producers. I recognize the current economic 
climate is challenging but I am optimistic the future holds better 
times not only for our industries but also the nation as well. I 
believe if we can maintain the critical tools we have built in the 2008 
Farm Bill, and when possible expand them, then our industry has a great 
opportunity to grow and thrive. With that, I can confidently encourage 
my children to consider joining as the next generation and help Red 
Jacket Orchards continue for another 50 years.

    The Chairman. Thank you, Mr. Nicholson. I can attest to the 
fact that even though my children consume vast quantities of 
sugar, they still love your apples.
    We are very fortunate to have with us today, Mr. Paul 
Platz, corn, soybean, green pea, sweet corn producer from 
Lafayette, Minnesota. Sir, welcome to the Committee and please 
proceed with your testimony.

 STATEMENT OF PAUL PLATZ, CORN, SOYBEAN, GREEN PEA, AND SWEET 
                  CORN PRODUCER, LAFAYETTE, MN

    Mr. Platz. Good morning, Chairman Cardoza, and Members of 
the Committee.
    My name is Paul Platz. I am a farmer.
    The Chairman. I did mess up your name. I apologize.
    Mr. Platz. I am a farmer, a seed sales representative and a 
licensed commercial animal waste technician which is a fancy 
name for a manure hauler. My wife, Donita, and I own and 
operate a diversified farming operation near Lafayette, 
Minnesota. Southern Minnesota's economy is predominantly 
agricultural. Corn, soybeans and livestock production of all 
types are the mainstays of our area, but a multitude of 
alternative crops are produced locally as well. On our farm, 
like most of our neighbors, we produce corn and soybeans, 
however, we also produce green peas and sweet corn for 
processing under contract with Seneca Foods.
    I am here to talk about the importance of midwestern 
farmers having the option to grow fruits and vegetables for 
processing by continuing and improving the Farm Flex Provisions 
included in the last farm bill. I decided to diversify my 
farming operation by adding sweet corn and green peas in 1993. 
I determined that adding these crops would help spread out my 
risk and improve my profitability. At that time, there were no 
farm program restrictions on fruit and vegetable production, 
and my producer history has allowed me to continue growing 
green peas and sweet corn after the limitations were put in 
place.
    We are now producing about 80 acres of green peas and 80 
acres of sweet corn for processing. Producing vegetables for 
the processing industry is important for my business because it 
is profitable. I have discovered through the years that 
planting green peas seems to reduce compaction issues in our 
soil and subsequent corn crops produce very well. Planting 
vegetables also has low input cost for us. Low input costs help 
keep my line of credit at my local bank within the targeted 
levels that lenders will provide. Also, my paychecks from 
Seneca Foods for my vegetables arrive at different times than 
those from my field corn and soybean sales, and that helps my 
cash flow needs.
    Without program restrictions, bringing a new crop 
enterprise into my farming operation was relatively simple. 
Just sign a contract and plant vegetables. Recent farm bills 
have made it more difficult to include vegetable production in 
our farming rotations. My concern about these restrictions is 
in part centered on my son's ability to start his own farming 
career and to produce vegetables under existing rules. It is my 
understanding that my producer history cannot be transferred to 
my son or my heirs. Individual farm history is preserved, but 
many of my landlords are elderly and farms may be sold to 
owners who do not produce vegetables.
    Renting new farms with history is difficult at best. The 
Planting Transferability Pilot Project does attempt to address 
some of these issues. Unfortunately, the project seems to only 
temporarily solve the immediate problems without addressing 
long-term issues. For instance, if my son were to start his 
farming career and request a pilot program, he would be allowed 
to produce vegetables in 2011, but he would not get either the 
producer history or farm history that would enable him to grow 
vegetables in subsequent years. Upon my death, not even my wife 
would be able to inherit my producer history.
    As it stands now, young farmers or any farmer who might 
decide to start growing vegetables in our area will have 
serious obstacles to doing so. As time goes on and natural 
attrition continues, either through retirements, or death of 
existing farmers, fewer and fewer farms and acres will be 
available for vegetables grown for processing. This puts the 
entire vegetable processing industry in our area in jeopardy. 
If we as farmers are not allowed the flexibility we need to 
produce vegetables for processing, eventually processors will 
be forced to close their plants. These plants employ a lot of 
people, and as I have detailed they provide an important income 
stream for midwestern farmers.
    I would also like to mention that my third son, Alex, is 
currently working his 12 hour shift as a pea combine operator 
for Seneca Foods. My decision to add vegetable production to 
our farming plan in 1993 has proven to be a good idea for both 
my farm and for my son, as he works to pay for his college 
education.
    The Farm Flex Pilot Program established in the 2008 Farm 
Bill is a good first step toward remedying these problems. 
Unfortunately, it appears underutilized. There seems to be a 
variety of reasons for the lack of participation in the pilot 
program. The downturn in the economy has played a large part. 
Seneca Foods has told me that they are contracting for less 
production because demand is down all across the industry. 
Also, the strength of the dollar relative to other currencies 
is likely making imported fruits and vegetables more 
economically attractive. The acreage limitation rules are 
simply an unnecessary complication. If the sign-up process for 
the pilot program is simplified to make the only qualification 
that participating farmers grow fruits and vegetables for 
processing, I think you will see more farmers take advantage of 
it.
    Mr. Chairman and Members, I respectfully ask that we all 
work toward a more permanent solution to these issues and 
ensure a thriving future for agriculture in the Midwest. Thank 
you.
    [The prepared statement of Mr. Platz follows:]

 Prepared Statement of Paul Platz, Corn, Soybean, Green Pea, and Sweet 
                      Corn Producer, Lafayette, MN
    Good morning, Chairman Cardoza and Members of the Committee. My 
name is Paul Platz. I am a farmer, a seed sales representative, and a 
licensed ``Commercial Animal Waste Technician,'' which is a fancy name 
for a manure hauler. My wife Donita and I own and operate a diversified 
farming operation near Lafayette, Minnesota. Southern Minnesota's 
economy is predominately agricultural. Corn, soybeans, and livestock 
production of all types are the mainstays of our area, but a multitude 
of alternative crops are produced locally as well. On our farm, like 
most of our neighbors, we produce corn and soybeans. However, we also 
produce green peas and sweet corn for processing under contract with 
Seneca Foods. I am here to talk about the importance of midwestern 
farmers having the option to grow fruits and vegetables for processing 
by continuing and improving the Farm Flex provisions included in the 
last farm bill.
    I decided to diversify my farming operation by adding sweet corn 
and green peas in 1993. I have always kept extensive records on each 
profit center in my business, and I determined that adding these crops 
would help spread out my risk and improve my profitability. At that 
time there were no farm program restrictions on fruit and vegetable 
production, and my producer history has allowed me to continue growing 
green peas and sweet corn after the limitations were put in place. 
We're now producing about 80 acres of green peas and 80 acres of sweet 
corn for processing.
    Producing vegetables for the processing industry is important for 
my business because it's profitable. My enterprise analysis over the 
last 17 years has shown that producing vegetables can be very volatile, 
but on average, mostly profitable. I have discovered through the years 
that planting green peas seems to reduce compaction issues in the soil, 
and subsequent corn crops produce very well. Planting vegetables also 
has low input costs. Low input costs help keep my line of credit at my 
local bank within the targeted levels that lenders will provide. Also, 
my paychecks from Seneca Foods for my vegetables arrive at different 
times than those for my field corn and soybean sales. This helps my 
cash flow needs.
    Planting vegetables also spreads out my workload and allows me to 
make better use of my resources. The planting and harvesting operations 
of my vegetables are generally staggered with my corn and soybeans. Our 
farm's livestock operation allows me to meet most of my own fertility 
needs with manure from my hogs. I can apply a significant amount of hog 
manure to my vegetable fields in late September before the soybean 
harvest begins. Being able to get some of my own manure applications 
completed early allows me to custom haul manure for my neighbors in 
October, which also significantly helps my cash flow.
    Without program restrictions, bringing a new crop enterprise into 
my farming operation was relatively simple. Just sign a contract and 
plant vegetables. Recent farm bills have made it more difficult to 
include vegetable production in our farming rotations. My concern about 
these restrictions is in part centered on my son's ability to start his 
own farming career and to produce vegetables under existing rules. It 
is my understanding that my producer history cannot be transferred to 
my son or my heirs. Individual farm history is preserved, but many of 
my landlords are elderly and farms may be sold to owners who do not 
produce vegetables. Renting new farms with farm history is difficult at 
best. The Planting Transferability Pilot Project does attempt to 
address some of these issues. Unfortunately, the project seems to only 
temporarily solve the immediate problems, without addressing long-term 
issues. For instance, if my son were to start his farming career and 
request the pilot program, he would be allowed to produce vegetables in 
2011, but he would not get either the producer history or the farm 
history that would enable him to grow vegetables in subsequent years. 
Upon my death, not even my wife would be able to inherit my producer 
history.
    As it stands now, young farmers or any farmer who might decide to 
start growing vegetables in our area will have serious obstacles to do 
so. As time goes on, and natural attrition continues either through 
retirements or death of existing farmers, fewer and fewer farms and 
acres will be available for vegetables grown for processing. This puts 
the entire vegetable processing industry in our area in jeopardy. If we 
as farmers are not allowed the flexibility we need to produce 
vegetables for processing, eventually processors will be forced to 
close their plants. These plants employ a lot of people and as I have 
detailed, they provide an important income stream for Midwestern 
farmers. I would also like to mention that my third son Alex is 
currently working his 12 hour shift as a pea combine operator for 
Seneca Foods. My decision to add vegetable production to our farming 
plan in 1993 has proven to be a good idea both for my farming operation 
and for my son as he works to pay for his college education.
    The Farm Flex pilot program established in the 2008 Farm Bill is a 
good first step to remedying this problem. Unfortunately, it appears 
underutilized.
    There seem to be a variety of reasons for the lack of participation 
in the pilot program. The downturn in the economy has played a large 
part. Seneca Foods has told me that they are contracting for less 
production because demand is down all across the industry. Also, the 
strength of the dollar relative to other currencies is likely making 
imported fruits and vegetables more economically attractive. The 
acreage limitation rules are simply an unnecessary complication. If the 
sign-up process for the pilot program is simplified to make the only 
qualification that participating farmers grow fruits and vegetables for 
processing, I think you will see more farmers take advantage of it.
    Mr. Chairman and Members, I respectfully ask that we all work 
toward a more permanent solution to these issues to ensure a thriving 
future for agriculture in the Midwest.
    Thank you.

    The Chairman. Thank you, Mr. Platz.
    Now, we have Mr. Daniel Richey, President and CEO of 
Riverfront Packing Company and President of Riverfront Groves, 
Inc., Vero Beach, Florida. Sir, welcome to the Committee and 
please proceed with your testimony.

         STATEMENT OF DANIEL R. RICHEY, PRESIDENT/CEO,
             RIVERFRONT PACKING COMPANY; PRESIDENT,
   RIVERFRONT GROVES, INC.; PRESIDENT, GULFSTREAM HARVESTING 
                    COMPANY, VERO BEACH, FL

    Mr. Richey. Thank you, Chairman Cardoza, Ranking Member 
Schmidt, and Members of the Committee. Also, I would like to 
thank the opportunity to thank Congressman Rooney who is a new 
Member of the Agriculture Committee and who represents a large 
portion of Florida agricultural production, including my 
groves, for his steadfast support of citrus.
    The Chairman. If I could just interrupt for a second, Mr. 
Rooney was intending to be here. He has a conflict with the 
Judiciary Committee, but he has indicated to me that he wanted 
to be in attendance for your testimony. We will make sure we 
get it to him and hopefully you all will connect throughout the 
day.
    Mr. Richey. Thank you, Mr. Chairman.
    In addition, I would like to thank Congressman Putnam, a 
great friend of Florida agriculture and a personal friend of 
mine. I want to honor him for his outstanding representation of 
our industry through all of our challenges over the past 10 
years. I would also like to recognize my Congressman, Bill 
Posey, for his service on behalf of all of us in the Indian 
River citrus growing district.
    Agriculture is a major economic engine in Florida's 
economy, ranking second only to tourism. We are reminded of the 
importance of agriculture to our economy during these 
challenging economic times when tourism is down due to the 
financial pressure families are feeling, and the recent press 
surrounding the oil crisis in the Gulf, which ultimately will 
result in a loss of 17,000 jobs and $1.2 billion impact on our 
economy.
    Our agricultural industry is very diverse. We grow a wide 
array of products, from potatoes and peanuts in the north to 
tropical fruit in the south. We are a major supplier of food to 
the U.S. during the winter months. The citrus industry 
represents the largest component of the agricultural industry 
in Florida with a $9 billion impact on the state's economy and 
it provides 76,000 jobs.
    Sticking with the theme of some of my fellow panel members, 
this is not corporate America. This is made up of fourth and 
fifth generation family farmers. I know I am preaching to the 
choir because you understand agriculture and generational 
connection that these families feel toward their chosen 
profession. Most people don't get that. I am sure you do.
    Like other fellow members, Tyler, my son, is a senior at 
Florida State University and has a desire to come into this 
business. He had a huge connection with his grandfather, who is 
since deceased, and wants to carry on that legacy for another 
generation. He questions me on this regularly if that will be 
possible.
    A major challenge to our family legacy and our entire 
industry is invasive, non-native pests and diseases. Recently, 
in Florida we have endured the introduction of citrus canker, 
which is a bacterial disease spread by wind-driven rain. You 
can imagine how the hurricanes affected us on that one.
    Huanglongbing, you can probably guess where that one came 
from, is also known as greening disease which is spread by an 
insect known as a psyllid. There is no known cure for this 
disease and it is fatal to trees.
    And third, most recently, in April we had a discovery of 
citrus black spot which is a fungal disease, in a southwest 
Florida grove. All three of these diseases are non-native to 
Florida. They have come from foreign lands. This highlights the 
importance of pest interdiction. It is a tough job, especially 
in Florida which ranks second to only California for pest and 
disease risk.
    The challenge is great due to the 21 international seaports 
and airports and the 1,200 miles of coastline in Florida. We 
have our eye to the south, as Central and South American citrus 
groves harbor three additional diseases that are not present in 
the U.S. They are known as CVC, Sudden Death--that is a great 
name--and leprosis. If allowed to enter, they would inflict 
considerable damage to our citrus industry. We have to keep 
these diseases out of the United States.
    The Section 10201 Program can be an area of focus to help 
us achieve this objective. As I understand it, the fundamental 
component of this program was to increase resources to high 
risk areas such as Florida and California. The recent 
challenges I have described probably make us the poster child 
for this program enhancement request.
    In the past 2 years, Florida effectively deployed the $3 
million received through the 10201 Program, ranging from 
enhanced interdiction at our border checkpoints to additional 
surveillance along our many rivers and canals. The funds were 
used to establish additional electronic signage and an 
additional educational video to be viewed by the cruise ship 
patrons in our state. I believe that most, if not all, tourists 
simply do not know the inherent risk they are bringing to our 
shores when transporting fruit or plant material. Education can 
go a long way in correcting this dangerous behavior.
    The proposed 2011 projects include additional detection 
dogs, which are very effective, increased inspection personnel 
and resources to detect exotic insects like the Medfly that was 
recently found in Palm Beach County, and continued funding to 
protect our vibrant avocado industry in South Florida. The 
citrus industry is engaged, partnering with each other to 
develop regional pest management districts and working very 
closely with our counterparts in California, Texas and Arizona. 
This is essential to our survival. Our collective industry 
appreciates the efforts at APHIS, Customs and Border Protection 
and the Florida Department of Agriculture to protect our 
livelihood.
    In closing, make no mistake, the challenges we face are 
just that, challenges. We will rise up to meet these challenges 
of today, and we will remain an important spoke in the wheel of 
Florida's economy. We do need your assistance with the issues 
we cannot control on our borders. If given a fighting chance, 
we will not only survive, we will thrive. Your support to keep 
us safe from the threat of invasive pests and diseases is much 
appreciated, and I appreciate the opportunity for you allowing 
me to testify here today. Thank you.
    [The prepared statement of Mr. Richey follows:]

   Prepared Statement of Daniel R. Richey, President/CEO, Riverfront 
    Packing Company; President, Riverfront Groves, Inc.; President, 
                               Gulfstream
                   Harvesting Company, Vero Beach, FL
    First I would like to thank Chairman Cardoza, Ranking Member 
Schmidt, and fellow Committee Members for the opportunity to testify in 
front of you today on behalf of the Florida citrus industry.
    I would also like to take a moment to thank Congressman Tom Rooney 
who is a Member of the Agriculture Committee and represents a large 
portion of Florida's agricultural production including some of my 
groves for his steadfast support of citrus.
    In addition, I would like to thank a former Member of this 
Committee, Congressman Adam Putnam. Adam is a great friend to Florida 
Agriculture and a personal friend of mine. I want to honor him for his 
outstanding representation of our industry through all the issues we've 
faced over the last 10 years.
    Finally, I want to recognize my Congressman Bill Posey for his 
service on behalf of my neighbors in the Indian River citrus region.
    Florida citrus represents a $9 billion economic engine that 
supports 76,000 good jobs in my home state. Many families are third, 
fourth and even fifth generation citrus farmers. Unfortunately, right 
now our great industry is locked in a fight for its long term 
viability.
    As many of you may know, Florida citrus faced the infestation of 
citrus canker disease and the hurricanes that spread it across the 
entire growing region of our state. That situation caused untold harm 
to our industry.
    But now an even more devastating disease is threatening Florida 
citrus. It is called Huanglongbing (HLB) or citrus greening disease, 
and it is one of the most serious citrus diseases in the world.
    Citrus greening is a bacterial disease that greatly reduces 
production, destroys the economic value of fruit, and kills trees. Once 
infected, there is no cure. Currently, citrus greening can be found in 
all 32 citrus producing counties in Florida.
    Furthermore, yet another pest and disease was confirmed in April of 
this year with the discovery of citrus black spot in South Florida. 
This fungal disease is marked by dark, speckled spots or blotches on 
the rinds of fruit, which is a very economically significant disease 
for a fresh citrus packer such as myself. I expect subsequent 
regulations to control the spread of black spot to affect my business.
    Here is the frustrating part. NOT ONE of these diseases is native 
to the United States. They came across the border from foreign lands. 
This clearly highlights the immense importance of pest interdiction. We 
in the Florida citrus industry are living the nightmare that is caused 
when regulators fail to keep non-native diseases out of our country.
    I acknowledge it is a tough job, especially in my home state. 
Florida is ranked #2 in the nation for pest and disease risk behind 
only California. Our state is very agriculturally diverse with a 
variety of specialty crops from tropical fruit to nursery stock to a 
variety of berry crops. This is made possible by our favorable climate. 
We are able to produce food crops during the winter when most of the 
U.S. is too cold to do so. This is an important function and one that 
needs to be protected.
    But the Florida agriculture industry has a target on its collective 
back. With 21 international seaports, airports and 1,200 miles of 
coastline, Florida is a gateway state for cargo and passengers. 
Obviously, this creates considerable risk of agricultural pest and 
disease entry.
    And believe me we are scared of the next citrus disease to reach 
our state. They are out there. Diseases such as CVC, Sudden Death and 
leprosis can be found in Brazil and Central America, two major trading 
partners with the United States. We have to do everything we can to 
keep these diseases out of the United States!
    Part of this can be achieved through the Section 10201 program. And 
we believe the USDA can improve the implementation of the program in 
high risk sentinel areas such as Florida. As you recall, a key 
foundational component of Section 10201 was to increase resources to 
high risk areas of the United States to assist with the early detection 
of new pest and disease introductions.
    There are many Florida pest detection projects that are of value, 
including citrus pest and disease mitigation and the need for better 
fruit fly early detection and mitigation tools and techniques that 
could be added. There is certainly a need to support Florida citrus 
research and suppression programs.
     The purpose of Section 10201 is clear that high risk states and 
pathways were to be the primary areas of consideration to which to 
apply Section 10201. Florida has received over $3 million in projects 
over the last 2 years designed to mitigate the impact of invasive 
species on Florida's specialty crops and agricultural in general. Key 
projects include added resources at our agricultural interdiction 
stations located at our borders. This has resulted in several key 
agricultural pest interceptions on foreign agricultural products 
including potato psyllids carrying zebra chip virus, plant feeding 
snails not established in Florida, exotic aphids and leafminer insects.
    The Florida Department of Agriculture also established a 
surveillance program for marinas, rivers and canals in Florida that 
harbor boats capable of international travel as this is a pathway that 
does not get enough attention in the agricultural safeguarding 
continuum. They have mapped all the marinas and stopping points along 
our rivers and canals, have set up survey points, and are also 
conducting outreach to help assure that parties who live and work in 
these areas are aware of the risk associated with invasive species 
introductions.
    Another project that the Florida Department of Agriculture is 
working on is an outreach project that will increase electronic signage 
and messaging at key Florida ports of entry. In addition, FDACS is 
producing a video that they plan to introduce to cruise ships and to 
international air flights that will educate incoming passengers about 
the need to declare any agricultural products they may be carrying.
    New projects they are proposing for 2011 include the use of 
agricultural detection dogs to sniff out agricultural contraband in 
incoming mail and parcels at the mail/package hubs in Florida as well 
as our interdiction stations. They have also requested funding for 
increased inspector resources to run additional pest detection traps as 
an early warning system for exotic fruit flies like the Medfly, a pest 
we are currently battling in an eradication program in Palm Beach 
County. They are also requesting continued funding to help protect our 
avocado industry from the Red Bay Ambrosia Beetle and Laurel Wilt, a 
pest disease complex with the potential to wipe out the multi-million 
dollar avocado industry in South Florida.
    Right now, the Florida citrus industry is setting up Citrus Health 
Management Areas where growers will partner together to form regional 
pest management programs to control the Asian citrus psyllid, the small 
bug that vectors citrus greening. These management areas are essential 
to the survival of the Florida citrus industry and would be a perfect 
fit for support from the Section 10201 program.
    Again, as a citrus grower I appreciate the efforts of APHIS, 
Customs and Border Protection and the Florida Department of Agriculture 
and Consumer services to protect my livelihood. We must continue to be 
vigilant to ensure our domestic sources of food are safe from the 
threat of pests and diseases.
    Thank you for allowing me to testify today.

    The Chairman. Thank you, Mr. Richey. I appreciate your 
testimony. As you can see, the gentleman from Florida, Mr. 
Rooney, has joined us. He is not a Member of the Committee but 
he has joined us today. I have consulted with the Ranking 
Member and we are pleased to welcome him for him to join in the 
questioning so long as there is no objection from the Members 
of the Committee. Seeing none, he will be allowed to join. 
Thank you for being here and welcome.
    Our next panel member to testify is Margaret Smith, Ph.D., 
Value Added/Sustainable Agriculture Extension Educator, Iowa 
State University, and Co-Manager of Ash Grove Farm, Hampton, 
Iowa. My Ranking Member, Mrs. Schmidt, indicated to me I hadn't 
seen this before the hearing, but there are over three pages of 
publications that you have produced in your career. I must say 
that that is quite impressive, and we are very pleased to have 
you here today to testify. Welcome and please proceed.

STATEMENT OF MARGARET A. SMITH, Ph.D., VALUE ADDED/SUSTAINABLE 
   AGRICULTURE EXTENSION EDUCATOR, VALUE-ADDED AGRICULTURE, 
 EXTENSION AND AGRONOMY DEPARTMENT, IOWA STATE UNIVERSITY; CO-
              MANAGER, ASH GROVE FARM, HAMPTON, IA

    Dr. Smith. Thank you so much for this opportunity to speak 
to the Subcommittee today. I am honored by your invitation and 
welcome the opportunity to share my perspective with both hats 
I wear in agriculture. My literal hats were too large to bring 
in my luggage so I come to you today with my two figurative 
hats.
    My husband, Doug Alert, and I farm 950 acres in north 
central Iowa near Hampton. We run a beef cow herd and we raise 
organic row crops, corn and soybeans, small grains, hay and 
pasture. We began transitioning to organic 16 years ago and all 
the land we now farm is certified organic.
    In my work with Iowa State University Extension, I 
coordinate a statewide Iowa Fruit and Vegetable Working Group. 
This group is comprised of a group of growers and others in the 
industry, and our mission is to help build capacity to increase 
production, handling and marketing for Iowa's fruit and 
vegetable industries.
    Let me speak first about organic farming. In the 2008 
organic Census, which was a new Census focused just on this, 
they noted $3.16 billion in sales in organic agriculture. This 
has been a growing industry for the last 20 years, and the 
market has pulled the growth and development of that industry 
again without price supports. The market has been the driver.
    In Iowa, we are listed as eighth in states by number of 
organic farms with 513. We are probably beyond that number now 
and in the upper Midwest, you look at Wisconsin, Minnesota, 
Iowa and Illinois, we have a disproportionate number of organic 
farms in the United States with about 17 percent of all those 
farms.
    The increase of organic agriculture has added to diversity 
in our agricultural landscape, both biological diversity, but 
also human diversity, and this is really a fantastic 
development for agriculture. In our state and in the nation 
where we have seen virtually a continual decline in numbers of 
farms and as we know it, ecological diversity, organic 
agriculture helps in a small way to help reverse that.
    The Organic Research and Extension Initiative is really a 
great program. We appreciate that this was added and increased 
in funding in this last farm bill. With the $78 million that 
was committed, more and more research was funded, but I would 
like to say I still believe we are under funded in this 
respect. Only 20 percent of applicants in 2009 were funded 
under that research program.
    What I think is so critical is that research for organic 
agriculture I feel doesn't just serve the organic agriculture 
industry. This research looks at basic insect, disease and weed 
biology, investigates how agroecosystems work, pursues ways to 
work with natural systems to increase productivity. These are 
all critical to agricultural sustainability. This work can also 
have application for non-organic agriculture, so that we are 
getting more bang from that research buck than we may realize, 
but we are looking far into the future. It is hard to evaluate 
exactly how much at this time. The work that is done now in 
crop rotations, cover crops, these items that are critical in 
our industry, really can have application in the future for all 
of agriculture.
    Please continue this funding to OREI. At this time, the 
funding is about 1.8 percent of the total funding for 
agriculture. The organic industry represents 3.5 percent of 
food receipts and we would like to, my husband and I, see more 
equality on that funding for the organic farming research 
program.
    I would like to speak about the Organic EQIP Program. This 
has been again a good addition. We were awarded an Organic EQIP 
Program on our farm. With those monies, we will increase and 
improve our grazing system. We received support for fencing and 
water systems, and we had great support from our local NRCS 
staff and from FSA as we worked through that process.
    There were challenges in the upper Midwest again with that 
program in understanding of our USDA NRCS staff in working with 
these different kinds of farms. Organics list different to 
them. Vegetable crops in the upper Midwest list different to 
them. Please continue the Organic EQIP Program. I think it is 
wonderful. I think we can improve it. There are a number of 
ways that might do that which are noted in my written 
testimony, but, particularly, just training for those staff 
would help. To your credit and from that program, this has 
brought a number of farmers into work with USDA Programs that 
did not otherwise have that exposure. I think that has been 
wonderful.
    Our panel here has covered very well some of the specialty 
crop programs, and in Iowa we have also used the block grant 
program. Unlike Ohio, I believe, we have a local committee of 
local experts that does determine how those funds are used. It 
has been great in that it is funding not only research, but 
also promotion so we would like to continue Specialty Crop 
Block Grant Program as well as Specialty Crops Research 
Initiative.
    Let me share this: our Fruit and Vegetable Working Group in 
Iowa has identified a number of priorities and those include 
risk management, post harvest handling and food safety. Another 
comment about the Specialty Crop Research Initiative, there is 
a requirement that those grants are multi-agency, multi-state 
and I would encourage you to think about at least a portion of 
those funds being committed that can be done just within one 
state. Some of our issues are local and we need to address 
those as well.
    I am over my time. My last area that is critical to us on 
our farm, and to specialty crop growers in Iowa, is risk 
management and insurance. We have no crop insurance for 
specialty crops in Iowa. The AGR-Lite Program which is a 
revenue insurance program could be a good program in our state. 
It is not available to Iowa. It is available in 35 other states 
but this last risk management is a double whammy for our 
farmers. Not only are they not covered by their crops in the 
event of a crop failure or market price challenges, but lenders 
are wary of working with our specialty crop growers because 
they don't have that kind of support. So, they have a hard time 
getting financing. I would encourage you to look at the AGR-
Lite Program. It can be improved a number of ways, and since it 
is not suitable for beginning farmers at this time, please look 
at AGR-Lite. Please expand that to include the United States 
and let's look at additional risk management programs and 
strategies for our specialty crop producers and organic 
growers.
    Thank you so much.
    [The prepared statement of Dr. Smith follows:]

Prepared Statement of Margaret A. Smith, Ph.D., Value Added/Sustainable 
Agriculture Extension Educator, Value-Added Agriculture, Extension and 
Agronomy Department, Iowa State University; Co-Manager, Ash Grove Farm, 
                                Ames, IA
Introduction
    Thank you for this opportunity to speak to the Subcommittee today. 
I am honored by your invitation and welcome the opportunity to share my 
experiences from our farm business and from my position with Iowa State 
University Extension, where I work in the Value-Added Agriculture 
Extension Program with fruit and vegetable growers.
    I come to the hearing today with two `hats'. First, as an organic 
farmer, my husband, Doug Alert, and I operate an organic grain, forage 
and livestock farm in North Central Iowa near the town of Hampton. We 
farm 950 acres of owned and rented land and raise organic corn, 
soybeans, oats, wheat, barley, hay and pasture, and run a beef cow 
herd. Our crops are raised and marketed for various food, feed and seed 
markets. We work with three landowners with both cash rent and crop 
share leases, as well as owned land. My husband has farmed for 27 
years: I joined him 16 years ago. We began our transition to organic in 
1994 on rented land, with the first land certified in 1997. All the 
land that we farm has been certified organic since 2007.
    I serve as an advisor to the board of the recently formed Iowa 
Organic Association (IOA) that has members from a range of interests, 
including growers, processors, buyers and consumers. This nonprofit 
organization works to educate and inform the public about organic food 
and farming and to help the industry grow.
    I also serve on the board of the Midwest Organic and Sustainable 
Education Services (MOSES) nonprofit organization. MOSES has 
coordinated the largest organic farming conference in the U.S. each 
February for the last 21 years. This year, 2010, at the MOSES Organic 
Farming Conference, we reached 2,701 farmers, aspiring farmers, 
agricultural professionals and organic industry suppliers with outreach 
and education about organic farming. MOSES is one of 40 member 
organizations of the National Sustainable Agriculture Coalition (NSAC). 
I would like to thank NSAC for helping to coordinate my presence here 
today.
    My second `hat' is one I proudly wear for Iowa State University 
Extension, where I have worked for 23 years. For the last 9 years, I 
have worked in the Value Added Agriculture Extension Program with 
specialty crop producers--fruit and vegetable growers--and with 
specialty meat producers on various aspects of their business 
development. Part of my responsibility is co-facilitating the Iowa 
Fruit and Vegetable Working Group (FVWG), comprised of growers, buyers, 
our state fruit and vegetable growers' association, nonprofits, 
government, and University personnel. The group's mission is to 
identify and work with others to overcome obstacles to increasing the 
amount of local produce available in our state and the Upper Midwest.
    I would like to speak briefly about both USDA support for organic 
agriculture and for programs supporting specialty crops.
Organic Farming in Iowa
    According to the 2008 Organic Census of Agriculture, Iowa was 
eighth among the states in number of organic farms with 513. The Upper 
Midwest is a center of organic production, with the States of Wisconsin 
(1,222 farms), Minnesota (550 farms), Iowa, and Illinois (229 farms) 
having a total of 2,514 organic farms or 17.2 percent of the U.S. 
total. Including the acres in transition in 2008, Iowa by 2010, now has 
100,000 acres or more certified for organic production.
    The total value of sales from organic commodities in the U.S. was 
reported at $3.16 billion in the Census. Sales from Wisconsin, 
Minnesota, Iowa and Illinois totaled $297 million or 9.4 percent of the 
U.S. total. States with higher value crops, such as California, 
Michigan and Florida reported higher sales values per acre than our 
states in the upper Midwest. In Iowa, total sales for crops and 
livestock, when averaged over certified harvested cropland and pasture 
averaged $871 dollars per acre.
    Our cluster of states with relative high levels of organic farming 
may be, in part, due to Organic Valley Cooperative, a producers' 
marketing co-op based in LaFarge, Wisconsin. Many of us in the industry 
think that is may also be due to a high level of creativity and 
willingness to take risk among our farming population. In addition, we 
have had excellent support from our nonprofits organizations, state 
departments of agriculture, and from our land grant universities in 
these states.
    Iowa State University has an Organic Agriculture Program that 
conducts research and extension outreach education for Iowa citizens. 
Field days, workshops, and Iowa Organic Conference and an Iowa 
Communications Network (broadband service) series on organic 
agriculture are held throughout the year.
    Our Iowa producers have been attracted to organic production 
systems for a number of reasons. The potential for higher average 
profits per acre is one, whereas some farmers find that the system 
better fits their worldview. Others are concerned about their personal 
health and find organic systems fit their goals. For smaller-scale and 
in some cases, beginning farmers, the search for a niche where they can 
compete with larger and/or more established farmers bring them to 
organic production. In addition, organic production systems are 
complex, flexible, fluid, and fascinating, so appeal to some folks who 
like a challenge!
    The growing market for organic products in the last 20 years has 
provided excellent opportunities for those interested to move into this 
niche production and marketing arena. The addition of organic farmers 
to Iowa's farm landscape has increased our diversity of crops, 
livestock and people and has also increased our agricultural sales.
    In the early stages of transition and certification, there is a 
`learning curve' to master these more diverse production systems. My 
husband, Doug, and I often joke that the learning curve to successful 
organic production and marketing is long and steep! Weather plays a 
large role in the success of organic crop production, perhaps more so 
than with non-organic systems. Based on several long-term agro-
ecological studies and, if we can interpolate from natural ecosystems, 
in the long term and with experienced growers, these more diverse 
production systems should become more stable. It is often in the early 
stages of an organic farm and the farmer's learning the system that the 
most support is needed.
Organic Provisions in the 2008 Farm Bill
Organic Research and Extension Initiative
    The Organic Agriculture Research and Extension Initiative (OREI) is 
the USDA's largest competitive grants program focused exclusively on 
organic agriculture research and extension. OREI funds projects that 
enhance the ability of organic producers and processors to grow and 
market high quality organic agricultural products. The substantial 
increased in OREI funding from $15 million to $78 million in the last 
2008 Farm Bill was a welcome development! This increase was an 
excellent step toward towards providing a fair share of funding for 
organic agriculture research. Because organic production systems are 
information intensive, the growth of these systems depend heavily on 
investments in new and innovative research and extension programs.
    The OREI has a huge unmet demand even with the 2008 Farm Bill 
funding increase. In 2009, the program received 134 proposals totaling 
$98 million but could only fund 28 of them. The appointment of Dr. Mary 
Peet as the first ever National Program Leader at NIFA for organic 
agriculture has helped OREI immensely through its expansion in the 2008 
Farm Bill. Thank you for this development.
    In my opinion, some of the most important research findings from 
Iowa State University's Organic research program corroborate and 
support other work that has found improved soil quality in organic crop 
rotations compared to less diverse rotations. Where more crops are 
grown in succession or in diverse mixes, soil quality improves.
    One of the most important aspects of research support of organic 
agriculture goes beyond its application for those specific organic 
systems as implemented today. Much of this research looks at basic 
insect, disease, and weed biology, investigates how complex 
agroecosystems function, and how crops, soils and pest interact. 
Research on soil biology, and the link to soil erosion control and 
improvement of soil quality, is critical to implementing operations and 
systems that contribute to sustainability. I feel that this work may 
have excellent application also in non-organic agriculture. Work now on 
cover crops, crop rotations, composting, manure management, sequential 
cropping, and integration of crop and livestock systems can serve both 
organic and non-organic agriculture in the future.
    I ask that you continue funding for organic agricultural research 
and move toward funding that is, at the least, comparable to the 3.5 
percent that organic agriculture represent in our food economy. With 
total USDA REE funding for organic research currently at less than 1.8 
percent of total funding, that would suggest this Committee should set 
a goal of at least doubling the current size of the OREI flagship 
program in the next farm bill to do its part to help reach ``fair 
share'' funding.
National Organic Certification Cost Share Program
    The National Organic Certification Cost Share Program (NOCCSP) 
makes financial assistance available to help defray the costs of 
organic certification for producers and handlers of organic products. 
The Agricultural Marketing Service provides funding to state 
departments of agriculture. Producers and handlers then need to apply 
to their respective states to receive cost share funds. Generally, 
organic certifiers are able to assist producers in applying for 
assistance. Producers and handlers can receive up to 75 percent of 
their annual certification costs up to a maximum payment of $750 per 
year. Recipients must be certified by a USDA accredited certifying 
agent under the National Organic Program.
    The 2008 Farm Bill reauthorized the NOCCSP and provided an almost 
five-fold increase in mandatory funding for the program, from $5 
million to $22 million. I have learned that this higher amount should 
be sufficient to cover all producer and handler requests for funding 
through the life of this farm bill.
    I urge you to continue this small, but important, program as you 
reauthorize the farm bill. Annual certification costs for farmers are 
much higher than they were before the USDA program. The National 
Organic Program (NOP) is critical to the industry, and this modest cost 
share with farmers helps ensure it is not a barrier to participation by 
small and mid-scale farm operators or by beginning farmers. The $750 
cap per farm helps ensure that funding will be available to more farms, 
regardless of scale. This program, while modest in benefit to 
individual farms, is a positive statement of support for diverse, 
organic systems.
EQIP Organic Initiative
    I also want to talk about the new Organic Initiative in the 
Environmental Quality Incentives Program (EQIP). The 2008 Farm Bill 
provides up to $50 million per year for conservation assistance to 
farmers who are transitioning to organic production or who are already 
certified and want to bring additional acres or livestock into their 
farming operation. The EQIP funding helps the farmers to plan and 
implement conservation practices that can enhance the conservation 
performance of their farms.
    A farmer can receive up to $20,000 per year, with an additional cap 
of $80,000 over a 6 year period. The farmer is required to develop and 
carry out an Organic System Plan or carry out practices consistent with 
an Organic System Plan. They must also be pursing an organic 
certification or be in compliance with their organic certification.
    In 2009, the Natural Resources Conservation Service obligated $36 
million for EQIP Organic Initiative contracts. In my home State of 
Iowa, the EQIP Organic Initiative in 2009 was initially allocated $1.4 
million by NRCS but it proved so popular, that additional funding was 
provided to bring the total to $3.5 million for 125 farm contracts. 
This year, as of July 16, 2010, Iowa has 77 Organic EQIP contracts for 
a total of $1.4 million. Forty-eight of those are contracts on 
certified organic farms and 29 contacts are for farms in transition to 
organic production. This is a tremendous boost for resource enhancement 
on organic farms. Part of our success in participation in Iowa is due 
to our Upper Midwest nonprofit sustainable organizations that work to 
educate producers about the USDA program possibilities.
    We, in Iowa, were pleased to see such a high demand by Iowa farmers 
for the Initiative. My husband and I received an Organic EQIP contract 
on our farm that will help us implement interior fencing and water 
lines and watering points to improve our managed grazing system for our 
beef herd. We received excellent assistance from our NRCS and FSA 
county staff as we processed our application.
    There were challenges, however, both with this program and the 
organic aspects of the Conservation Stewardship Program (CSP). Before 
these programs, many organic producers had had little or no contact 
with NRCS offices and their county staff, and many NRCS staff had no or 
little exposure to organic agriculture and smaller-scale farms. 
Although there are challenges implementing any new program, the lack of 
understanding by USDA staff of organic systems and small, diverse farms 
hindered the process in the Upper Midwest.
    The Subcommittee should mark as a success, however, that many new 
producers now have contact with and better understanding of their USDA 
government services and that many USDA staff have a greater 
understanding of organic and diversified agriculture. It is to USDA's 
credit to have made these moves to include more farmers in these 
programs. One small-scale organic vegetable and herb producer stated 
that, ``after all these years, inclusion in USDA programs helped me 
feel validated about my career.''
    This Initiative could be made even more successful in providing 
conservation assistance to organic farmers and ranchers in 2011 with 
some administrative improvements. The following steps could help:
    NRCS is working on EQIP Organic Initiative guidance for NRCS state 
offices and farmers, which the agency plans to issue by October 2010. 
Once this Guidance is released, NRCS should conduct a 3 month winter 
sign-up, which will give farmers time to read through the Guidance and 
decide which conservation practices are best suited for their farmers.
    NRCS should make information available about practices and payments 
in a more timely fashion, preferably at the beginning of the FY 2011 
sign-up period.
    NRCS should ensure that State Conservationists are standardizing 
their EQIP Organic Initiative web pages and keeping them up to date.
    Funding in the program for education of both farmers and USDA NRCS 
personnel about organic and diverse operations, including those 
producing specialty crops, would smooth much of the confusion among 
participants and support personnel.
Conservation Stewardship Program (CSP)
    Although the Conservation Stewardship Program was not part of the 
organic conversion assistance option in the 2008 Farm Bill, it is 
nonetheless a very important program for organic producers, including 
specialty crop producers. When the CSP became available, and it was 
clear NRCS had amended the program to an extent to take organic systems 
into account, we took steps to apply. We had, of course, to background 
ourselves about the program and the differences between the former 
Conservation Security Program and this new iteration.
    We were awarded a CSP contract on our farm, in part as recognition 
for work that we had done and, in part to implement new practices. With 
this contract, we will be able to create shallow water habitat for 
wildlife, implement a comprehensive nutrient management plan, do 
regular pest management scouting, and use cover crops more regularly in 
our rotations.
    We would like to express our appreciation for this program and to 
encourage its continuation and further fine-tuning and adjustments to 
ensure full recognition of the environmental benefits of sustainable 
and organic farming systems. Because of the inherent diversity on 
organic farms and our long-term planning window, these farms have great 
potential to further enhance wildlife populations, improve soil quality 
and sequester carbon, and implement long-term stable pest and nutrient 
management plans that should benefit the public as well as the farmer 
recipients. I would like to see this program in the next farm bill and 
over time to become a staple and centerpiece of the farm program of the 
future.
Specialty Crops in Iowa
    The 2007 USDA Census of Agriculture enumerates 1,620 farms in Iowa 
producing vegetables, fruits, nuts and berries with sales of $23.7 
million. Judging from the influx of new produce farms in the recent 
past, I would expect that number to be higher in 2010. In addition, 
there were 705 business nurseries, greenhouses, and Christmas tree 
farms with sales of 94.8 million. Even in Iowa, known for our wide 
expanses of corn and soybeans, specialty crops are a $1.18 billion a 
year business. The food crop industry in increasing in our state, 
evidenced by increased local food sales, new farm business start ups, 
increased institutional food purchases and the new food aggregation 
businesses started to fill the gap between producers and buyers. Many 
frustrations have arisen among growers and buyers, as constraints to 
growth continue to slow business development. With local efforts and 
support from USDA programs, we hope to advance the growth of the 
industry in the next few years.
    Our Iowa Fruit and Vegetable Working Group, formed in late 2007, 
comes together to address current issues and projects addressing 
industry bottlenecks three to four times each year. Participants from 
both the organic and non-organic segments of the industry are working 
together and have identified a number of areas that are constraining 
both their business growth and the growth of the industry in our state. 
These identified needs include:

   better information and access to that information for both 
        production and marketing;

   risk management;

   post-harvest handling--information, effective systems, 
        costs, methods, etc.;

   labor availability and management;

   availability of capital;

   mechanization on small and mid-sized fruit and vegetable 
        farms;

   aggregation of supply for wholesale and institutional 
        markets;

   beginning produce farmers; and

   food safety.

    It's clear that there is plenty of work for those of us in support 
and educational roles for the industry! The Working Group has initially 
focused our work in post-harvest handling of vegetables, improving 
access to information about production and marketing, and the needs of 
beginning vegetable farmers. Requests and input from our participants 
have shifted our work right now to focus on food safety education and 
mechanization on small and mid-sized produce farms. We recently 
received a Specialty Crop Grant from the Iowa Department of 
Agricultural and Land Stewardship to conduct on-farm workshops about 
post-harvest handling of vegetables. Growers are extremely interested 
in improving these systems on their farms and in how to do so 
economically.
Specialty Crops Programs in Farm Bill
Specialty Crop Block Grant Program
    Specialty Crop Block Grant Program (SCBGP) that provides grants 
annually to assist State Departments of Agriculture to enhance the 
competitiveness of specialty crops (fruits, vegetables, tree nuts, and 
nursery crops) has been enthusiastically used in Iowa. The mandatory 
funding implemented in the 2008 Farm Bill has increased the funding 
available for our state. In addition, the increased reliability of 
funding has allowed better planning by our Department of Agriculture 
from year-to-year for this program.
    We appreciate this program, in particular, for the fact that the 
funds come to our state and applications are reviewed and prioritized 
by local experts in the fruit, vegetable, and other specialty crop 
industries. Our Iowa Department of Agriculture and Land Stewardship has 
done an excellent job of convening a review team representative of 
applicants for this program and funding diverse projects in outreach, 
education, and promotion for specialty crops. Grants have been awarded 
to universities, nonprofit organizations, growers' associations, 
farmers' marketing associations, food cooperatives, and regional food 
systems working groups.
    In Fiscal Year 2009, Iowa was awarded $243,405 under this program 
and funded ten projects. These were to:

   Partner with Northeast Region Iowa State Extension, the 
        Leopold Center, and the Northeast Iowa Food and Farm Coalition 
        to initiate food safety research and quality assurance 
        activities, which encompasses six counties, to expand markets 
        for locally grown specialty crops.

   Provide marketing materials to identify and be specifically 
        aimed at specialty crop producers who sell at farmers' markets 
        in the branding campaign ``Freshness is Our Specialty.''

   Partner with Iowa Heartland Resource Conservation and 
        Development and Drake University to expand the Greater Des 
        Moines Buy Fresh Buy Local campaign to greatly increase 
        emphasis on fruits, vegetables, and other specialty crops and 
        their producers.

   Partner with Pathfinders Resource Conservation and 
        Development, Inc. to provide a Local Food Coordinator in order 
        to create new markets for locally grown specialty crops through 
        networking, marketing, and active coordination between 
        institutional buyers and regional producers.

   Partner with the Iowa State Horticultural Society to 
        facilitate an event that provides an education opportunity for 
        both home gardeners and professionals in all aspects of 
        specialty crops production and to promote horticulture in Iowa.

   Partner with the Iowa Department of Education to continue to 
        establish relationships between growers and their local 
        communities through promoting the purchase of locally produced 
        food in Iowan schools, strengthen the farm economy, and offer 
        educational opportunities to improve child nutrition and 
        health.

   Partner with the Iowa Fruit and Vegetable Growers 
        Association to bring expert speakers to the Iowa Fruit and 
        Vegetable Growers Conference 2010 to provide an educational 
        opportunity for Iowa fruit and vegetable farmers to consider 
        the many aspects of sustainability and how sustainability 
        impacts them.

   Partner with Prairie Winds Resource Conservation & 
        Development, Inc. to research the nutrient content, antioxidant 
        content, and sensory characteristics of Aronia berry products 
        including fresh juice, processed juice, freeze dried drink mix, 
        jams, jellies, and wine.

   Partner with the Iowa Fruit and Vegetable Growers 
        Association to develop production techniques specific to Iowa 
        along with utilizing various cultivars in order to support an 
        extended season for Iowa fruit growers.
Specialty Crop Research Initiative
    The Specialty Crop Research Initiative (SCRI) competitive grant 
program funds specialty crop research and extension projects conducted 
by Federal agencies, national laboratories, colleges and universities, 
research institutions and organizations, private organizations or 
corporations, addressing the following broad topics:

   Plant breeding, genetics, and genomics to improve crop 
        characteristics, including food quality and nutrient content, 
        nutrient management, and pest management among other subtopics;

   Efforts to identify and address threats from pests and 
        diseases, including threats to pollinators;

   Efforts to improve production efficiency, productivity, and 
        profitability over the long term (including specialty crop 
        policy and marketing);

   New innovations and technology, including improved 
        mechanization and technologies that delay or inhibit ripening; 
        or

   Methods to prevent, detect, monitor, control, and respond to 
        potential food safety hazards in the production and processing 
        of specialty crops, including fresh produce.

    Each of these five purposes receives at least 10% of the total 
funding for the program to ensure that one or two purposes are not 
funded at the expense of all the others. Priority is given to projects 
that are multi-state, multi-institutional, or multidisciplinary and 
that includes methods to communicate results to producers and the 
public. Matching funds at least equivalent to the grant amount are 
required.
    I am excited about this research initiative, but believe that the 
funding is inadequate to address specialty crop needs. We could easily 
use $6-$8 million for research in just Iowa each year to address our 
specialty crop needs. Additional funds can be made available through 
appropriations, which would be welcomed. In addition, I would encourage 
examination of the requirement or preference for multi-agency and 
multi-state projects. Although I do believe that these have great 
merit, some projects may best be addressed on a smaller geographic 
scale and a percentage of funds should be committed without these 
requirements.
Public Plant and Animal Breeding for Sustainable and Organic Farming 
        Systems
    We need new stress, insect, and disease resistant cultivars with 
greater nutrient density that are adapted to sustainable farming 
systems. These types of cultivars are needed, in addition to those 
developed by commercial companies, to fully address food needs in the 
U.S. and beyond. Increasing plant and animal variety and breeds with 
increased resilience, diversity and nutrition with site-specific 
adaptability will be keys to meeting these challenges.
    This Committee wisely added a new priority within the Agriculture 
and Food Research Initiative (AFRI) for classical or conventional plant 
and animal breeding. I believe that publicly funded and classical 
breeding programs are needed for three major reasons:

    1. Only classical breeding or individual selections can result in 
        improved cultivars for certified organic systems. When I 
        selected soybean seed for our farm for this 2010 growing 
        season, I had only about six cultivars that fit our maturity 
        range and could provide needed agronomic and food processing 
        characteristics. Where the need for soybean cyst nematode 
        resistance is also needed in some fields, my selection choices 
        narrowed to three cultivars. We are anxiously looking forward 
        to the RAG 1 and 2 genes for soybean aphid resistance becoming 
        available in cultivars in our Group II maturity range. These 
        cultivars were or are being developed in public breeding 
        programs, such as that as Iowa State University. This scarcity 
        of commercially available cultivars is sobering; I begin to 
        feel as if we have too few eggs in our farming `basket'.

    2. Desirable traits for many aspects of plant health and 
        productivity, such as rust resistance in oats, increased 
        protein levels in wheat, and reduced food anti quality factors, 
        such as lower erucic acid in canola are multi-gene traits. 
        Multi-gene traits are more readily altered using classic 
        breeding techniques, rather than by insertion of single genes.

    3. Niche and crops grown on a small scale often warrant little 
        interest among commercial plant breeding/seed companies. If 
        private industry is not doing any breeding and there is no 
        publicly funded breeding, the crop is at a standstill! For 
        instance, in the U.S., there is only one publicly funded flax 
        breeder, based at North Dakota State University. There is only 
        one publicly funded red beet breeder in the U.S., based at the 
        University of Wisconsin. Although these are minor crops, it 
        would seem prudent to ensure adequate support of genetic 
        improvement.

    AFRI should support breeding programs that produce a good return on 
investment. That said, however, there are many minor and specialty 
crops that need public support for breeding if genetic improvement is 
to continue. The return on investment may be lower for these, but still 
worthwhile. Public funding should help complement breeding work that is 
currently done by industry and fill gaps that will otherwise not be 
addressed.
Risk Management Needs for Specialty Crop and Organic Farmers
Specialty Crop Farmers
    In Iowa, there is no satisfactory crop insurance available for 
fruit and vegetables. When compared with crop insurance options for 
corn and soybeans growers, this seems a gross oversight and neglect of 
these important crops and crop producers. Although these specialty crop 
producers are eligible for disaster payments or the Noninsured Crop 
Disaster Assistance Program (NAP), growers have informed me that the 
compensation for losses greater that 50 percent of the yield base and 
55 percent of the average wholesale market price of the their crop does 
not make it worth their while to even process the paperwork. In 
particular, where growers are selling retail and/or selling high value 
crops, such as certified organic, the disaster payments based on 
wholesale commodity prices are negligible relative to their potential 
lost income.
    The lack of risk management products creates a double challenge for 
small- and medium-sized, diversified specialty crop producers. Not only 
is there no safety net in the event of weather, crop disease, or insect 
yield reductions, but lenders are wary of working with growers of non-
traditional commodities if they have no guarantee of some minimum 
income level that allows for debt servicing. These growers, both those 
experienced in the industry and newcomers, are challenged to manage 
their risk. Most growers manage this with a combination of direct, 
retail, and wholesale sales and with wide crop diversity. Lack of 
support to manage risk discourages growers from expanding their 
businesses and specializing in perhaps fewer crops. This may well limit 
our ability as an industry to serve the growing demand for local and 
regional wholesale fresh and processed fruits and vegetables.
    Adjusted Gross Revenue-Lite could be a good product for many of our 
specialty crop producers and organic farmers. The AGR-Lite whole-farm 
revenue protection insurance plan protects against low revenue due to 
unavoidable natural disasters and changes in market prices. Most farm-
raised crops, animals, and animal products are eligible. This insurance 
product is available in 35 states, but not in Iowa nor several of our 
surrounding midwestern states, including Nebraska, South Dakota or 
Missouri.
    AGR-Lite has some noted limitations, however, that indicate it is 
not the only risk management product likely needed by specialty crop 
and organic producers. Limitations that constrain participation and 
income protection include: (1.) the need for 5 years of Schedule F tax 
records to calculate an average gross income prevents participation by 
beginning and early stage farmers--those who may need income protection 
the most. (2.) AGR-Lite covers only income from crop and livestock 
production and marketing but not from any value-added enterprises. For 
example, a diversified fruit and vegetable farm would only be covered 
for crop production, but not for income from processed jams or apple 
pies. Diversified crop and livestock farms that direct market meat 
would be covered for production and price risk, but not for losses in 
their value-added meat sales.
    RMA data for crop year 2009 indicates that only 423 Adjusted Gross 
Revenue (AGR) and 401 AGR-Lite policies were sold, out of a total of 
over two million policies of all types. Of that total, the three West 
Coast states accounted for 339 AGR policies (80 percent of the total) 
and Washington and Oregon accounted for 282 of the AGR-Lite policies 
(70 percent of the total). Clearly there is major room for improvement 
in these policies as well as geographic expansion.
    I strongly suggest that AGR-Lite be made available in every state 
and every county of those states by 2012. I respectfully request that 
whatever is constraining the availability of this product throughout 
the U.S. be addressed by the Federal Crop Insurance Corporation and the 
Risk Management Agency. In addition, I encourage researching 
improvements to broaden the scope of this product.
Organic Farmers
    I hope that AGR-Lite (and Adjusted Gross Revenue, AGR), can be 
improved so that it becomes the option that diversified fruit vegetable 
farmers, diversified livestock and grain farmers, direct marketers, and 
value-added practitioners have been looking for. In the meantime, 
organic farmers face two specific challenges that Congress recognized 
and began to address in the last farm bill. Not only are organic 
farmers charged a premium surcharge to purchase regular crop insurance, 
but they are also paid at conventional prices in the event of a 
substantial crop yield reduction, rather than at higher organic prices. 
They face an unfair economic impact--both higher costs for sign up, and 
payouts at much lower than their normal prices.
    In the 2008 Farm Bill, this Committee required RMA to fund a study 
to explore these problems with organic insurance and to find solutions. 
That report has been transmitted to USDA. I believe these problems can 
and should be addressed now. The surcharge for organic producers should 
be dropped and coverage based on organic prices implemented just as 
quickly as RMA and its sister agencies can collect the needed data.
    I would also suggest to the Subcommittee that inquiries be made now 
about the prospects for using a portion of the $2 billion that USDA 
intends to re-invest from the recently completed re-negotiation of the 
standard reinsurance agreement to fix existing problems with AGR-Lite 
and with organic coverage. I cannot think of a better use for a portion 
of those recently-acquired funds than to start solving major current 
problems for specialty crop, organic growers and a wide variety of 
other highly diversified farming operations.
    In addition, new risk management strategies and products are needed 
for diversified farms, including those that produce a wide variety of 
fruits and vegetables, diverse organic farms, farms that engage in 
value-added enterprises, and for beginning farmers.

    The Chairman. Thank you, Dr. Smith. I was happy to give you 
extra time in light of your excellent testimony. I would also 
like to mention that a few years ago, I was thinking about 
raising some grass-fed cattle. I read a book to that name by an 
author from Iowa, from your home state, and I was amazed that 
he took a very intensive agriculture farm that was suffering 
from spending a lot of extra money in veterinary bills and 
other things, feed costs to raising grass-fed cattle and turned 
an unprofitable operation into a profitable one by actually 
raising less cattle but doing it in a more productive way for 
him. Now I am not sure that works for everyone, but it was 
certainly an interesting read for me and it was very 
instructive, and my wife and I started eating grass-fed beef 
and we love the flavor. So there is room in agriculture 
throughout this nation for all different kinds of production, 
and I think that is one of the things even though this 
Committee has the umbrella over organic, certainly other 
methods and we have room for everything. We can be a big-tent 
and accommodate many different methods of production, and I 
appreciate your testimony to that regard.
    Dr. Smith. Thank you.
    The Chairman. We are now going to open the Committee up to 
questions. The chair would like to remind the Members that they 
will be recognized for questioning in order of arrival. I will 
begin the questioning. Each Member will have 5 minutes to 
question the panel. I anticipate we will have more than one 
round of questions because the number of Members here and the 
time we have allotted, so I will begin.
    Mr. Angelucci, are there other farm bill programs that 
mushroom producers utilize?
    Mr. Angelucci. There are none. There are some of the EQIP 
funding that has been used by farms to enhance some of the 
facilities, but other than that there are no other farm bill 
subsidies that go to mushroom producers.
    The Chairman. Okay, thank you very much.
    Mr. Jones, you mentioned in your testimony that Ohio, the 
Ohio Produce Marketing Agreement, as I understand it, it takes 
a tiered approach to standards based on farm size. Could you 
tell the Subcommittee about that agreement?
    Mr. Jones. Yes, the Ohio Produce Marketing Agreement is a 
grassroots effort that began in earnest about 2 years ago in 
response to the National Leafy Greens Marketing Agreement 
Proposal by Western Growers out of California. We saw that as 
very threatening because it was a one-size-fits-all standard 
that would--is proposed through USDA to envelop all producers 
of all sizes with one set standard. The Ohio Produce Marketing 
Agreement's three-tiered approach is that it involves all 
growers. There are no growers exempted as in the National Leafy 
Greens where the small direct market growers are exempted. Our 
effort would not exempt anyone. It is still a voluntary 
marketing agreement, but it allows for the producer to choose 
at what level they choose to enter that marketing agreement. 
Tier 1 would be for direct marketers. Tier 2 would be for those 
wholesalers who are selling to food handlers within the State 
of Ohio. Tier 3 would be those larger growers who are already 
doing third-party audits and selling across the country.
    The Chairman. Okay, thank you. It is also my understanding 
that some of these standards track with the Leafy Greens 
Marketing Agreement, is that correct?
    Mr. Jones. Very similar that is. There are a lot of what we 
try to do was to take the best of what the National Leafy 
Greens or the California Leafy Greens Marketing Agreement 
Program had. It is a wonderful program developed very quickly 
and was very successful in my opinion.
    The Chairman. Very good. Thank you, sir. Given in Mrs. 
Schmidt's opening statement, and your company's shipment of 
products across the country could you tell us what you think 
about what the USDA's Know Your Farmer, Know Your Food Program?
    Mr. Jones. I think it is a wonderful program. I think that 
it complements very strongly the local food movement in this 
country. Consumers are much more aware of where their food is 
coming from. I do question some of the contradictory programs. 
The National Leafy Greens Proposal within USDA is in direct 
contradiction to Know Your Food, Know Your Farmer because they 
really are not complementary of one another. It is a great 
program. Know Your Food, Know Your Farmer, is wonderful and 
supports the local food movement within the country.
    The Chairman. Thank you, sir.
    Mr. Kohl, I am glad to hear that the farm bill section 
10201 provides assistance to better protect against pest 
threats and that research is also a key part of the strategy. 
In the farm bill we created a Specialty Crop Research 
Initiative so that applied research could be targeted to unique 
needs of specialty crops. Has the nursery industry sought 
funding from the Specialty Crop Research Initiative?
    Mr. Kohl. To my knowledge, there has been little success 
with that. One of the problems is the fact that the funding is 
matching funding. Many of the organizations in our industry 
that are providing the matching funding can't commit to multi-
year funding because of the way our industry works and in light 
of the economic situation right now.
    The Chairman. Right.
    Mr. Kohl. But it is something that is important though to 
our industry, and we continue to work on it within our own 
industry.
    The Chairman. Let me ask a follow-up then.
    Mr. Kohl. All right.
    The Chairman. Has USDA consulted with you or other nursery 
growers to develop priorities or to help you with the Specialty 
Crop Research Initiative, or to try and overcome these 
challenges?
    Mr. Kohl. I am not, I am actually not the specialist on 
this side of the industry, but the USDA has worked well with us 
as an industry, as well as our state department of agriculture 
has been very cooperative in trying to help us figure out how 
to address the threats that we see.
    The Chairman. I am going to share your concerns, Mr. Kohl, 
with my colleague and friend, Mr. Holden, who comes from 
Pennsylvania. He is the Chairman of the Subcommittee with 
jurisdiction over that section of the farm bill and the 
research section so we will try and work through these issues 
as we go forward.
    Mr. Kohl. Okay.
    The Chairman. But I would like to follow-up with Mr. Richey 
on the same question. Maybe, sir, you can answer from your 
perspective.
    Mr. Richey. Thank you, Mr. Chairman.
    Over the past 3 years, Florida has submitted several 
requests for projects under the SCRI Program and, particularly, 
in partnership with California. Unfortunately, none of those 
have transpired in positive results and no funding has been 
received. We have had great success with the block grant 
program though in lieu of this lack of funding from SCRI. We 
have received very positive response and results again due to 
the joint efforts of California and Florida working together on 
a common invasive pest and disease that ultimately leads to the 
death of a citrus tree.
    The Chairman. Thank you, sir. That concerns me greatly what 
you have said today, and it is important that the Committee 
focus in and hone in on these areas that don't work. This 
clearly seems to be one that we are going to need to adjust and 
modify. I have heard from some academicians the same kind of 
concerns that certain research is not being targeted in the 
areas they think are most beneficial to providing assistance to 
industries. So we will continue to follow-up on this since it 
is an area that I will definitely ask the Administration about 
when we have our next hearing.
    Mr. Richey. Thank you, Mr. Chairman.
    The Chairman. You are welcome.
    Mr. Nicholson, there are a number of other programs, and if 
the Committee will indulge me, I am going to ask a couple of 
more questions because I think it is important to lay the 
groundwork for the follow on questions. There are a number of 
other programs that we enhanced in the 2008 Farm Bill. One of 
those is the Tree Assistance Program. Have you accessed funds 
through the TAP Program or know someone who has?
    Mr. Nicholson. Fortunately, for us as producers and in New 
York we haven't had an immediate need for that. You know, my 
understanding now as a representative of the industry is that 
there certainly was an expectation that the program would have 
been made more immediately available since it was already an 
existing program. I think that is where some concern was.
    The Chairman. Do you believe the program is working?
    Mr. Nicholson. I don't have specific experience with it to 
comment on that.
    The Chairman. Thank you. I appreciate your comments on 
that, especially the Specialty Crop Block Grant Program. Can 
you describe the process that New York State uses to determine 
which projects will be accepted under the State's SCBGP Program 
submission?
    Mr. Nicholson. That is directed to me?
    The Chairman. Yes, sir.
    Mr. Nicholson. As you know, our experience with the block 
grant program in New York has most immediately been related to 
their Pride of New York Program, and we are very supportive of 
that program. For one thing, it has provided us with market 
expanding resources, and as I have mentioned, one of our key 
markets is Metro New York where we are a local producer and 
provider of products. It is a very expensive media market. It 
is a very expensive market to break into and make people aware 
of your existence, so it has been a very positive program for 
us there. You know, one thing I would comment on is just like 
all these other states, in New York the dire fiscal situation 
has left very little funding for producers so these Federal 
funds through the Specialty Crop Block Grant Program is really 
the only thing that is available to us right now. Even in the 
tough economic times, we have been expanding our business, and 
I credit these funds with helping us to really capture 
especially the trend towards buying local, so we are very 
supportive of how they have been used there.
    The Chairman. Thank you, Mr. Nicholson.
    I thank the Committee for its indulgence. I have many more 
questions, but I will let the rest of the Committee proceed. I 
now call Mrs. Schmidt for her time.
    Mrs. Schmidt. Well, thank you and going along the line of 
block grant programs, this is for anyone else on the panel that 
wants to address this but I am going to start with my colleague 
from Ohio. Do you think that there is appropriate outreach and 
coordination by your respective state departments of 
agriculture to work with specialty crop producers and the 
industry when formulating Specialty Crop Block Grant proposals? 
Mr. Jones, I mean do you have a good relationship, is Ohio 
working well with you on this?
    Mr. Jones. Yes, it has been, I have been involved in the 
Specialty Crop Block Grant Program for 4 or 5 years now. It has 
changed considerably, the process by which we use in Ohio. The 
Ohio Department of Agriculture, I would say, is making great 
strides in working with the specialty crop growers. The 
Department has formed a committee that reviews those block 
grant applications. I personally would like to see that 
committee include more growers. The committee itself is 
unbalanced. There are only two growers of 13 on that committee, 
currently. We are working with the Department to try and change 
that. Some of the timing references that I mentioned earlier in 
my testimony have a great deal to do with that. The time of the 
year that these grants are reviewed is at a time when most of 
the growers are very, very busy, so it is somewhat difficult to 
get the growers involved. I think that overall it is a good 
process and it is getting better each and every year.
    Mrs. Schmidt. A follow-up to you, sir, is it the timing on 
the part of the state or is it at the Federal level that makes 
the state have a lack of coordination of growing season and 
timing for these block grants?
    Mr. Jones. My understanding is it is on when the state 
departments of agriculture receives official word on how much 
funding they are going to have to use and then the RFPs go out. 
All the not-for-profit agencies, industry organizations, and 
universities in Ohio submit proposals, and then those are 
reviewed. Then there is the lengthy process of going through 
that entire process, and then going back to USDA, there is a 
long time between when that committee makes it's official 
suggestions on what projects should be funded and when official 
funding is received from USDA. There may be a 3 to 4 month lag 
time. By that time, you are through the main growing season 
where most of the research and projects could happen.
    Mrs. Schmidt. Just to follow-up with you again, sir, what 
would be your fix on this?
    Mr. Jones. My suggestion from my experience is to move it 
back, if it is possible to move that whole cycle of funding 
back a couple of months, so that those discussions with the 
specialty crop growers are happening during the off-season. If 
we were having those discussions about what projects should we 
fund in January, February and March versus April and May, it 
may help that whole process. Then get that funding or USDA 
final approval earlier in the cycle in April, May, June versus 
August and September, then we can get those projects initiated 
and going. Many of them are research projects that have to 
happen during the growing season.
    Mrs. Schmidt. Anyone else on the panel like to comment on 
that question, Dr. Smith?
    Dr. Smith. Just to add to that, although growing seasons 
vary across the country, they are not all April to November, 
April to October, that if the period would blanket a growing 
season. In Iowa, we start September 1, and so if you are trying 
to do research you cannot complete it in 1 calendar year.
    Mrs. Schmidt. Mr. Richey.
    Mr. Richey. Thank you. I would just like to echo both Dr. 
Smith and Mr. Jones. I think the block grant program is an 
excellent program. The timing is always an issue, but it really 
boils down to the relationship that we have in our, in Florida, 
anyway, between the industry and the Commissioner, our 
Agriculture Commissioner and his intimate knowledge of our 
issues. It brings it down to a more local level. The response 
is quicker. Obviously, just by the nature of it, the knowledge 
of the issue is greater, so that relationship is key in the 
success of the block grants.
    Mrs. Schmidt. Follow-up question to anyone on the panel, 
during the last farm bill there was a discussion about the 
administration of the block grant program, whether the USDA 
should run the program and decide which projects are funded or 
whether the local state departments of agriculture should 
continue to award the projects. Do you think that the Specialty 
Crop Block Grant Program should be run by the USDA at the 
Federal level, or in your respective states at the state level 
and any, yes, sir.
    Mr. Angelucci. Because mushrooms are Pennsylvania's largest 
vegetable cash crop, we have an excellent working relationship 
with the Pennsylvania Department of Agriculture and have always 
had, even prior to the Specialty Crop Block Grants. I think 
that throwing funds into a Federal pool would eliminate 
specialty crops in areas because of the lack of knowledge about 
that particular industry within the Federal Administration, 
rather than letting the individual state departments of 
agriculture handle those funds and appropriate those as 
necessary.
    Mrs. Schmidt. Anyone else want to comment?
    Mr. Nicholson. I would like to echo that. I think one of 
the most attractive things of that program is the ability to 
put it into our specific states. As everyone has mentioned that 
the uniqueness of not only different crops, but within the same 
crops, how we produce and market apples in New York, and it is 
different then how it is produced and marketed in Ohio and 
Washington State for that matter. I think what makes that 
program most attractive and effective is that it is handed to 
each individual state.
    Mrs. Schmidt. I take it everyone agrees. Before I turn it 
back to the Chairman, so I am taking from all of you that there 
is an issue with the timing of the block grants, getting them 
to the states so that the states can get them to the growers, 
so that you can effectively have a good use of the knowledge 
that you want to gain from these block grants. I think it is 
from the Federal level that we have to get the money released 
to the states more appropriately and more quickly. Is that what 
I am hearing from all of you?
    Thank you. I will turn it back over to you, sir.
    The Chairman. Thank you, Mrs. Schmidt.
    Mr. Schrader, thanks for being here today, and you now have 
your opportunity to question the panel at this time.
    Mr. Schrader. Thank you very much, Mr. Chairman. I 
appreciate the hearing. This is an important area for folks in 
the Willamette Valley that I represent in the great State of 
Oregon.
    The first question to Dr. Smith, if you will, on the cost-
sharing system, how do you feel that is working for organic 
producers? And kind of a secondary question is how is our 
labeling doing? Is it protecting organic produce?
    Dr. Smith. A question of qualification, do you mean cost-
share for EQIP?
    Mr. Schrader. Well, I was referring to the sign-up system 
itself, getting certified.
    Dr. Smith. Oh, the support and compensation for 
certification.
    Mr. Schrader. Right.
    Dr. Smith. I think that program is working well. In Iowa, 
that is administered through our state department of 
agriculture and I think that has worked well. I think that has 
been a very generous program. It is, the compensation is small 
per farm. The top cap is $750 just to help farmers defray their 
cost of certification, but it is a real mark and positive 
statement from you in support of the program. I think that is 
working fine, and the second question?
    Mr. Schrader. Well, it was just about the labeling for 
organic produce, is that good enough to protect the brand name, 
if you will? There are a lot of natural. There is light. There 
is almost organic. I mean where are we?
    Dr. Smith. Well, the labeling issue for eco-labels in these 
can be very confusing, and I don't know that there is anything 
else you need to do with the organic label to protect it. I 
think growers, grower groups perhaps USDA, as well needs to 
continue to make clear what that means but new labels will 
always come along and they will be competitive. The one 
challenge I have heard about, and I don't have personal 
experience though, is any products coming from other countries, 
do they really adhere to the National Organic Program 
standards? There have been some speculation that they do not, 
and I would like to see a greater investigation in that. It is 
hard to compete even with organic grains in Iowa when we have 
grains coming from China if they are actually certified organic 
to our standards. There is nothing wrong with that. If they are 
not then that is something I think should be regulated.
    Mr. Schrader. Mr. Kohl, with regard to the TAP Program, my 
nurseries were devastated by storms this past winter, and I 
have had a tough time with the economy like everybody else. 
But, that all together was a double whammy, and I was very 
concerned about comments in your testimony about FSA's 
requirements. Are they moving rapidly enough to change that to 
make sure that on produce-bearing trees and shrubs are actually 
protected now under TAP?
    Mr. Kohl. They have made a move in that direction somewhat 
in that in-ground trees are included as part of that program, 
however a vast majority of the trees that are grown in the 
nursery industry are grown in containers, and they are still 
outside of the plants that are qualified for the program. We 
also found that problem with the program, the fact the 
Catastrophic Insurance Program for our industry has not worked, 
has never really worked for our industry which is a requirement 
of being and getting the proceeds from the TAP Program. We have 
recently had meetings at our state-level to discuss the crop 
insurance program so that it would possibly work for a nursery 
in conjunction with the TAP Program.
    Mr. Schrader. Mr. Chairman, I think that is an area, if we 
could, we should look at in the next farm bill because it is a 
big sector of a lot of the states around the country that 
nurseries are not apparently able to take advantage of that.
    The Chairman. Well, I certainly agree with you. We will 
work together to try and craft something that works for your 
area and the rest of the country.
    Mr. Schrader. Great, thank you.
    Mr. Kohl, again, you indicated, as did one of the other 
panelists, I think Mr. Richey, about the foreign disease issue. 
Are there things we can do before they even enter our ports to 
deal with keeping foreign pests and diseases off our shores and 
out of our nurseries and farms?
    Mr. Kohl. Well, we need to expand and, again, it boils down 
to the economics of it. We need better coverage. We need better 
inspection at our entry points not only in traditional crops. 
Most of our pests that enter this country have not come here on 
plants. They have come here on tonnage, on pallets, on things 
that are not typically looked at. So, that is really the 
important thing because the pests that are coming in here are 
very damaging. You know, the Dutch Elm disease years ago 
annihilated the elm stands in this country, and the Emerald Ash 
borer and the Sudden Oak death on the West Coast stands to do 
the same thing in other varieties of plants. So it is something 
that is highly important to our industry.
    Mr. Schrader. Very good, thank you, I yield back my time.
    The Chairman. Thank you, Mr. Schrader.
    I think next up was Mrs. Lummis, she has had to go to 
another hearing. I would like to call on Mr. Rooney, if you 
have any questions, sir.
    Mr. Rooney. Thank you, Mr. Chairman, I really appreciate 
you letting me sit in on this Subcommittee meeting. I have 
learned a lot today. I want to thank the panel, and I 
especially want to echo the Ranking Member, Mrs. Schmidt, with 
her concern specifically with regard to the EPA, particularly 
considering the proposed New American Nutrient Standards for 
Florida's waters that was released in January and its assault 
on Florida's agriculture.
    I had the opportunity to go to the EPA and meet with their 
Administrator with a bipartisan group of Florida Congressman 
and it was very frustrating especially since I kind of feel 
like Florida is being used as a guinea pig. But regardless, I 
thank you for those comments and again in my home State of 
Florida, agriculture is $103 billion a year industry with a 
large portion of it being in specialty and organic crops. Over 
the past several years, Florida agriculture has endured a 
constant barrage of pests and disease as we heard, and that 
threatens to cripple our industry.
    I think it is very important to have Mr. Richey here today 
to testify and share his experiences with the Committee. He is 
the reason why I wanted to be here today, not only to support 
him and Florida, but also all Florida citrus which makes up a 
huge portion of Florida's Sixteenth District. I can tell the 
Committee also from a personal level that nobody works harder 
for Florida and Florida's farmers then Mr. Richey, whose 
reputation proceeds him and almost works too hard, some people 
would say. I wanted to ask you this question, just so you can 
illuminate and help this Committee understand the challenges 
that we face in Florida. Mr. Richey, can you briefly explain to 
us how pest and disease have affected your ability to market 
your product, both domestically and internationally?
    Mr. Richey. Thank you, Congressman Rooney, and thank you 
for your service on the Agriculture Committee. The industry is 
very grateful for you, to you for that service.
    I think a prime example would be after the hurricanes of 
2004 and 2005, devastating our industry with the spread of 
citrus canker, which as I mentioned earlier is a bacterial 
disease spread by wind-driven rain. We had four hurricanes 
crisscross our state that year which basically resulted in 
canker, citrus canker being declared endemic in our state and 
the eradication program was ceased. That caused a statewide 
quarantine on the movement of citrus. You can imagine what that 
did to us, not only for domestic shipments but international 
shipments. My company is the largest grapefruit shipper in the 
State of Florida, 80 percent of which is shipped into the 
international arena, certainly contributing to in a positive 
way to our trade deficit. We were immediately embargoed from 
shipping to Europe. We were challenged with shipping to Japan, 
which is our single largest market. We constantly have 
challenges with Korea for a variety of non-tariff trade 
barriers, but this one became another target for them to impose 
upon us, and Taiwan and all of, I may have mentioned all of 
Europe so yes, we had to work through a lot of that. We were 
certainly at the same time very sensitive to our cousins in 
California, Arizona and Texas. We agreed to not push the 
envelope to try to ship there because we weren't, it wasn't 
clear yet whether citrus canker on fruit was a true pathway to 
spread the disease. So we do work very closely together with 
our fellow citrus growing states and we agreed that threat, 
while it was unknown, was not worthy of the risk so it did 
affect us greatly.
    Not only did it affect our ability to ship, which we worked 
through over 3 years, but it also affected our cost basis. Our 
typical production costs were in the range of $1,000 per acre. 
They increased to today over $2,200 to $2,400 an acre, and that 
is strictly a result of invasive pests and diseases so we have 
it both sides. On the economics on the revenue side was 
hampered due to lack of our inability to ship to all markets, 
and our costs on the other side went up dramatically. So it 
was, it did have an absolute direct, immediate, negative impact 
on us.
    Mr. Rooney. Thank you, sir. Mr. Chairman, my time is up, 
and I yield back.
    The Chairman. Thank you, sir, both you and Mrs. Schmidt 
have indicated concern with EPA, and while that is not the 
direct jurisdiction of this Committee, I want to assure you 
that I share some of those concerns. Mr. Costa and I were just 
discussing the question of methyl iodide and how that, the 
potential restrictions on that product could devastate 
agriculture in California and other places around the country 
that rely on fumigants. There are certainly concerns about how 
the EPA is going about some of these things. I think it is 
imperative for us to discuss amongst ourselves strategies on 
how to engage the Administration in making sure that we base 
decisions on sound science and not upon conjecture. Not upon 
anything else. It is too important. The product, all of these 
different issues are too important to the industry. We want to 
protect, of course, human health, but it is very important that 
we move cautiously in these areas so that we don't devastate 
the industry while we are trying to protect human health. I 
look forward to working with both of you and the rest of the 
panel, as well as the Members of this Committee, and the full 
Committee, to ascertain what is the correct stance here. We 
will look into it.
    We still have Mr. Owens. Please proceed with your 
questioning and I probably owe you a minute or 2 extra.
    Mr. Owens. Given the time and the hearing, the extra minute 
won't be necessary.
    Mr. Nicholson, you indicated in your written testimony that 
you had some serious concerns about where we are on immigration 
reform. I would like for you to maybe give us a little bit of 
background in terms of the issues, even though you and I have 
discussed them before. I think for the benefit of the rest of 
your panelists and also for the Committee, what your views are 
on that and what you see are the solutions.
    Mr. Nicholson. Thank you very much for that question and 
the time in this venue to discuss it. You know, our farm is 
located in the central part of New York. We are in the Finger 
Lakes region between Syracuse and Rochester. We rely, as most 
people at this table who have migrant labor, rely primarily on 
a migrant labor force to do the majority of the work on the 
farm. One of the most immediate issues we have had has not been 
with the current, any new legislation but really with how 
things have evolved in the enforcement arena. We are 
unfortunately located very close to the Canadian border and 
with that we have, there is a very strong presence of 
additional enforcement in our area.
    What is going on in Arizona now has actually already played 
out in my community, on my farm, and in Geneva itself where we 
had police officers pulling over basically anybody who looked 
suspicious. And rather then asking them for drivers licenses, 
they were asking them for Green Cards and immigration papers, 
not only of drivers but of all occupants in the vehicles. Then 
they would hold them for 2 hours until Federal officers could 
come and determine the status of those individuals. And we have 
documented on numerous occasions where many of those 
individuals were properly documented and even citizens, so we 
got to the point there where we had gotten to the bottom of the 
slippery slope, as I like to put it. Absent any comprehensive 
program for ag labor, we see the ongoing status quo as being a 
great threat to us. And for those who are using H-2A that has 
been good for them, but as they have seen, as well as everybody 
that has had to turn to that program, have become overwhelmed 
and unusable, not to mention the constant changing that has 
occurred. So we fully support the passage of the AgJOBS Bill as 
an answer to that, and we certainly would encourage the 
consideration of that sooner rather than later. Our top 
priority is comprehensive reform of course but absent that, we 
are looking for support on the AgJOBS.
    Mr. Owens. Thank you. Does any other member of the panel 
want to comment on the immigration issue as to how it affects 
your operations? Mr. Kohl.
    Mr. Kohl. Yes, we use migrant labor, always have. We have 
been in the H-2A Program since 1998. We have been a user of E-
Verify Program since 1997. The program is, has always been 
difficult, a lot of red tape but we were managing with it. In 
the last 3 years though because of the inability to move a 
reform bill in Congress, there has been a lot of regulatory 
change within the rules. It seems like every year, you are not 
really sure what the rules are going to be when you are 
planning your year. You don't know what the wages are going to 
be set at because where they get them from keeps changing. It 
is hard to plan your business year without knowing, I mean 
labor is the largest single cost in our operation as it 
probably is in many, and not knowing what that number is really 
puts it at a disadvantage to plan for our year. Not only does 
it make that difficult, but there are many people out there 
that are not using this program. I promote doing things the 
right way.
    That is what we are doing, however we are being penalized 
by flaws within this program. The wage right, for example, just 
is not the fair market wage in our area. It is much over that 
so it puts us at a disadvantage to our competitors because we 
are trying to do the immigration thing the right way.
    Mr. Owens. Thank you.
    Mr. Jones.
    Mr. Jones. We also use H-2A. It is certainly not a perfect 
process but it is the best we have right now. We are supportive 
of AgJOBS. It is not perfect but it is the best alternative 
that we have seen to this date. I really believe that society 
in general in this country has a choice to make. We are either 
going to want safe food and domestic food safety program where 
we can control the food production and how safely it is done 
here in the U.S., or we want to build fences around the border 
and have true immigration reform as has been done in Arizona 
where we build that wall and we don't let these workers come 
into the country to do this work. Then we are going to ship all 
the production of our produce offshore where we have no control 
over the food safety. It really comes down to that balance. We 
are going to have to work very hard to get a situation that 
works well for both, but we are kind of creating a push for 
ourselves here. Which one do we want? Do we want to control the 
safety of our produce grown domestically, or do we want to 
build walls and not let anybody come in that wants to do this 
type of work in this country. Any one of these panel members 
can tell you, finding domestic workforce that wants to do this 
kind of work on a continual basis when it is hot and when it is 
raining, it is not there.
    Mr. Owens. So your suggestion is?
    Mr. Jones. The suggestion is to work together 
collaboratively to try and come up with something like AgJOBS. 
We are going to have to have a guest worker, a workable guest 
worker program then and at the same time work on domestic food 
safety. We can do domestic food safety in this country. We are 
working down that road. It is coming together nicely. We are 
working with FDA and USDA to come to a workable situation where 
we can protect the consumers from foodborne illness, but we 
can't do that if we don't have a good guest worker program to 
grow those crops here domestically.
    Mr. Owens. Thank you very much. I yield back.
    The Chairman. Thank you, Mr. Owens, I look forward to 
coming to your district next week.
    Mr. Owens. We look forward to having you.
    The Chairman. Thanks.
    I have a question for the entire panel. The first year that 
the block grant program was put in place, we have testimony 
that the program was implemented late in the year, and it was 
tough to get funds out in the year. I have a press release from 
the USDA dated January 29, 2010, where they announced the 
program earlier this year. My question to you all is how is 
that as far as a date? Is the program working better this year 
than it did the previous year? I want to talk about this in the 
context of the criticism we received from some of our urban 
colleagues who don't understand the program very well. They 
felt that the block grant funds were basically a fund for 
agriculture without controls. I was talking to my colleague 
Mrs. Schmidt about it just a few minutes ago. Flexibility is 
precisely what makes it effective. In the year that we have a 
new outbreak of a pest, or disease, or we find out something 
that isn't working properly, we are able through the program's 
ability to augment funds in the specific area that it is 
needed. I would like to have you all speak very briefly about 
the effectiveness of the program. If you concur with my 
statement please let us know so that we can have that testimony 
to push back against our colleagues criticisms. We need that 
flexibility in agriculture. That you can't perfectly determine 
where you need to spend money when you are writing the farm 
bill. And second, please discuss the timing of the allocations 
and the process by which USDA is making these judgments, and 
whether or not this new current timeline works for you all. We 
will start with Mr. Angelucci and just work our way down the 
panel.
    Mr. Angelucci. Mr. Chairman, I agree with your statement. 
It is very difficult to try to determine what the next disaster 
is going to be as far as research and I, our industry is 
completely different than the rest of my colleagues here at the 
table. We produce mushrooms indoors in a controlled environment 
and we do it year round, so even though we are in agriculture, 
even though we are regulated by seasonal farm statutes, we 
can't take advantage of the H-2A Program for one thing. Our 
argument is our crop is 8 weeks long. We just do it 6\1/2\ 
times a year, but as far as the funding we spend most of our 
industry on food safety which is a big concern. As more 
regulation is mandated by FDA, it is going to be increasingly 
more difficult for small farms, and especially specialty crops, 
to be able to adhere to the regulations and ensure that those 
regulations are met and verified. So for our industry, in 
addition to doing the food safety testing, we do have other 
pathogens that do affect our crops. Just because we are indoors 
it doesn't mean we are immune from them, and some of that 
research funding that would be available to test for control of 
those pathogens will be extremely important.
    The Chairman. Thank you.
    Mr. Jones. We are going to have to be brief or I am not 
going to get all of my questions in. Mr. Jones.
    Mr. Jones. I would concur with your statement. I would also 
concur with Mrs. Schmidt's statement that getting that money as 
close to the end-user, the specialty crop user, if that could 
be administered completely by the state departments of 
agriculture that would be even better, moving the timetable up 
so that we can maintain that fluidity and address the current 
problem of the time with those Federal dollars that would work 
very well.
    The Chairman. Let me address that last point. I concur, in 
theory, about getting it to the states. However, it only takes 
a couple of mistakes on the state level to become a 60 Minutes 
issue about waste and fraud with your Federal dollars. And that 
is why while the states recommend, the Federal Government needs 
to keep a little string attached. We don't want an abuse, so it 
is a real fine line we have to walk. We are trying to protect 
our reputations and make sure the projects are worthy, and at 
the same time letting the states determine what is the most 
important. I don't know what the correct balance is, but I 
wanted to share with the panelists what our concerns as a 
Committee often are as we move forward in writing these pieces 
of legislation.
    Mr. Jones. Very close parameters from your goals and 
objectives, no question. We have to make sure that we are 
meeting your intentions as close as we can to the consumer.
    The Chairman. Thank you, Mr. Jones.
    Mr. Kohl.
    Mr. Kohl. I don't know that I can add too much to what has 
already been said. The nursery industry is relatively new at 
making use of these Specialty Crop Block Grant Programs, and 
most of it has been around educational needs when something 
arises and like you say, you can't plan on these things. The 
water usage through the drought years in North Carolina was an 
excellent example that we used. In Pennsylvania, we did an 
educational piece on sustainability and maintaining a nursery 
in PennDOT, so it is a work order we have used but we are 
relatively new at doing it.
    The Chairman. Thank you.
    Mr. Nicholson.
    Mr. Nicholson. I absolutely concur with the importance of 
the flexibility. I am not exactly aware of any issues with 
timing in New York for us specifically or to other apple 
industry members. And I did just want to clarify my response on 
the TAP Program earlier, the apple industry was very pleased 
that it has been brought in as a permanent part of the farm 
bill. The frustration was a little bit more with implementation 
timing.
    The Chairman. Thank you, sir.
    Mr. Platz.
    Mr. Platz. Well, I seem to be the odd dog out of the water 
here. I don't even know what the block grant program is but it 
sounds interesting. I am going to check it out.
    The Chairman. Very good, sir.
    Mr. Platz. It seems to me that it is a way to provide some 
flexibility, and that is really what I am here to ask the 
Committee to consider is our planting flexibility and the pilot 
program was a good start. But, I think we are a little bit 
different, it seems than most of the rest of the producers 
here, I think that putting that pilot program could be made a 
lot simpler just by indicating that it applies to those growers 
for processing only. Most of these folks here seem to be for 
the most part fresh, maybe some processors, but that is what I 
am here to talk about is the planting flexibility in that pilot 
program so being I don't know much about it.
    The Chairman. I have a follow-up question for you right 
after I ask my other two colleagues.
    Mr. Richey.
    Mr. Richey. Thank you, Mr. Chairman. Timing is an issue, 
earlier is better. We would like to see an enhanced block grant 
program due to the fact that everything that has been stated 
here that certainly local knowledge is probably much better, 
much more timely and obviously we believe more effective.
    The Chairman. Thank you.
    Dr. Smith.
    Dr. Smith. I concur with your statement, as well that a 
major advantage of the program is that it does come to the 
state, and we have talked about that. The flexibility, like for 
instance the work with food safety in Pennsylvania, this is a 
big need right now in Iowa and there are some big food safety 
research grants available. This isn't our greatest need right 
here in Iowa. We need funds right now in Iowa, we need funding 
to do outreach and education in food safety. This is one avenue 
where we might be able to do that and I hope that there are 
others.
    The Chairman. Thank you.
    Mr. Platz, I know as you have said you have mentioned the 
Farm Flex Pilot appears to be under utilized. Do you know what 
the actual rate of utilization and participation is?
    Mr. Platz. Well, I can speak on two levels. Our local 
county is Nicollet County, Minnesota participation in 2010 was 
zero. There was a producer who should have signed up for the 
program but for whatever reason didn't. That producer did plant 
vegetables on regular acres and was found in planting 
violations, so he will lose his DCP countercyclical and any 
other government payments that he would have been eligible for 
so that program would have benefited him. On the state level, 
at the State of Minnesota in 2009, 4,200 acres were used. In 
2010, 4,500 and as far as national statistics, I don't know.
    The Chairman. Mr. Peterson's staff is here. Chairman 
Peterson was one of the advocates of the program. We will take 
a look at and see how we can improve it, both in maintaining 
protections against folks using subsidized land to compete 
against other farmers, but also to make sure that its 
utilization is appropriate.
    Mr. Platz. Well, there are some reasons why that program 
wasn't used very much.
    The Chairman. What are they?
    Mr. Platz. In recent years, at least in our area of the 
country, in 2008 and 2009 were just tremendous years for yield 
so supplies have grown tremendously. At the same time, everyone 
is aware of the difficult economy and demand is down for the 
product that we produce, and the processing, at least the 
products that we produce. So, those two things coming together 
have resulted in the processors reducing contracted acres for 
peas in 2010 by 40 percent, and sweet corn acres have been 
reduced by 20 percent. As it usually happens in these 
situations, as soon as you reduce acres, something happens. 
Well, this year in the Midwest, pea yield is down significantly 
and sweet corn yield most likely will be on my farm. We 
anticipate higher acres being contracted next year, and most 
likely a greater use of that program next year. So the program 
is important to us but it does need to be simplified and just 
make it available to those producers growing for processing 
only. Thank you.
    The Chairman. So you have been affected by Murphy's Law, is 
that what you are telling us?
    Mr. Platz. Yes, it happens in agriculture.
    The Chairman. I suggest that we still have a couple of 
years before we actually write the bill. Please keep Mr. 
Peterson and myself and other Members of the Committee informed 
about how it is working. I think this is one of those areas 
that we are going to need to see the full story, especially in 
light of the fact that you have been affected by cyclical 
trends.
    Mr. Platz. All right, thank you.
    The Chairman. Thank you, sir.
    Another question to you, sir, the House Education and Labor 
Committee as part of its work on the reauthorization of the 
Child Nutrition Programs has added dried frozen fruit as 
eligible items for use through the School Fruit and Vegetables 
Snack Program so long as the dried and frozen fruit do not have 
any added sugar. Do you agree with their actions, and do you 
have any suggestions regarding how the language may be 
improved?
    Mr. Platz. Yes, we support that idea. I think in general 
the health industry has long supported adding fruits and 
vegetables to the diets of children, and my wife would argue 
that I could benefit from eating a few more fruits and 
vegetables as well. I think our local school districts, our 
kids go to the GFW School District in Winthrop, Minnesota and 
the cooks and the dieticians there would appreciate having that 
flexibility. As far as perhaps the improving the language of 
that, I would suggest perhaps adding the word canned fruits and 
vegetables as well as dried and frozen. I have personally 
toured the Montgomery Processing Facility and my peas and sweet 
corn make it from the field either to the frozen area or within 
the canned in 3 hours or less. We would argue that the 
nutrition from those products once it is in the sealed can and 
the frozen bag never leaves. So I would suggest adding the word 
frozen in addition to, or I am sorry, canned in addition to 
dried and frozen. Thank you.
    The Chairman. Thank you for your testimony, sir.
    Mr. Richey, your testimony with regard to APHIS hits home. 
In California, we seem always to be fighting a new invasive 
pest. The House Agriculture Committee was disappointed and 
dismayed when in previous farm bill testimony, APHIS port 
inspectors were transferred to the Department of Homeland 
Security's Custom and Border Protection mission area. As you 
may know, we tried to fight that transfer and weren't 
successful. Here is my question, can you give the Subcommittee 
your impression of CBP's performance to date? I am talking 
about everything, identification of pests, communication with 
industry, how they are doing. What is your take on their 
performance, the whole gamut?
    Mr. Richey. Thank you, Mr. Chairman. You know, obviously we 
have seen what I would perceive, and the industry perceives, as 
a drop off in border security with the transfer of APHIS from 
the USDA to Homeland Security. I had the privilege of serving 
on the Secretary's Advisory Committee on Fruits and Vegetables 
and it was an item that we took up and was one of the top items 
that we reviewed, and one of our top recommendations was to try 
to successfully transfer that back to the Department of 
Agriculture for these types of interdictions. The record speaks 
for itself, I mean after 2001, we have had the introduction of 
several diseases in Florida, specifically. I would probably 
have to characterize our overall view of it as disappointing, 
and we would much rather have seen that stay where it was. And 
we would love to see consideration given to sending it back to 
what we believe is the proper area, because obviously if 
Homeland's has issues, be it terrorism, certainly, somebody 
bringing an orange in their bag is probably not going to be of 
their top concern, where it would be if it were for an ag 
inspector so that is our take on it, Mr. Chairman.
    The Chairman. I wholeheartedly agree with you. I have 
another question, Mr. Richey, you spoke passionately about the 
threat plant diseases pose to Florida citrus. While I am glad 
to hear that the farm bill section 10201 provided assistance to 
better protect against these threats, research is also a key 
part of that strategy. In the farm bill, we created the 
Specialty Crop Research Initiative so applied research could be 
targeted to unique needs of specialty crops. The question is 
has the Florida citrus industry sought funding from the 
Specialty Crop Research Initiative, and has USDA consulted with 
you and other Florida citrus growers to develop priorities for 
that initiative?
    Mr. Richey. Mr. Chairman, we have submitted, over the past 
3 years, multiple requests and several of those in concert with 
California and have not yet received any funding. One of the 
things we have had to do because of that is we have had to 
impose a tax on ourselves, and we have created a foundation 
through our Department of Citrus. We have used those tax 
dollars and we have had to redirect that money from 
advertising, generic advertising of orange juice to research, 
which certainly has hurt our overall success in the generic 
marketing of our product. So, while definitely the program has 
its potential, we have not realized nearly the full potential 
of that program by any means.
    The Chairman. Has USDA made you aware of results of any 
research that is funded through this Specialty Crop Research 
Initiative?
    Mr. Richey. I wish I could answer that differently but the 
answer is no, sir.
    The Chairman. That is very disappointing. I am going to 
make sure that my friend, Mr. Holden and his Subcommittee knows 
about this. This is a big problem. We have put a lot of dollars 
here that they were directed to be utilized in just these kind 
of cases, and I am very displeased about that and I plan to ask 
the Administration about that.
    Dr. Smith, you look like you have a comment on that and I 
would be happy to let you pile on.
    Dr. Smith. In all fairness to the research community, I 
believe that program has been in force 2 years or 3. We are 
very apprehensive to put out research results after just 1 year 
of data because we can be wrong. Now, where there is a great 
need that doesn't mean to sit on it and hide it but----
    The Chairman. Yes, but I don't think this is about the 
results. I think this is about funding the initial studies.
    Dr. Smith. Yes, that is what I was going to say as Mr. 
Richey said that if their need hasn't been funded in the first 
place. I think there is, I don't know the entire review process 
on that. I think the funding is modest relative to the need.
    The Chairman. I agree with you.
    Dr. Smith. And I also think that forcing researchers into a 
multi-state, multi-organization, multi-everything sometimes 
constrains the application process. You are so busy managing 
people and will you do this little piece, and will you do that 
little piece. Sometimes it actually can constrain getting the 
research done.
    The Chairman. Okay, whatever is constraining the problem, 
we have to fix it. I see in the citrus industry, in particular, 
but there are a lot of industries that we are going to have to 
review how well this program is meeting their needs. I saw the 
devastation with the glassy-winged sharpshooter in the grape 
industry in the Temecula region in southern California. I know 
that it remains a problem. We now have the light brown apple 
moth affecting and invading my area of California. I am not 
particularly pleased with the progress we are making on some of 
these pests and some of the research. We have ongoing research 
with pollinators and the problems that they seem to be facing, 
and the increased cost that farmers are paying for bees and 
pollination. We are going to have to do something about this. 
That is something that this Committee is going to focus on 
mightily.
    Dr. Smith. I would like to please request and encourage you 
also to think about that these issues are long term systemic 
issues. They are not going to be solved in 1 or 2 years of 
research, and that is the challenge for the way we function 
here is looking at long term research. But, when you look at 
pests and their complex biology and the numbers of ways we 
might address them, we need some long term focus.
    The Chairman. I agree, I pushed very hard for more research 
dollars in the farm bill, and it is probably one of the biggest 
areas of failure that I personally felt was that we could have 
done more. There were many needs and some things got left 
behind, and I think that long term research is one of those 
things.
    Before I close the hearing, I have one final question and 
we have gone over a few minutes already from the allotted time. 
Dr. Smith, you addressed crop and revenue insurance problems in 
your testimony. As you work with specialty crop farmers in Iowa 
through your work with the extension, how often does the 
insurance issue come up? Do you have any sense of its priority 
on the list of what these farmers identify as their major 
problems and barriers? And finally, in your view, is this 
problem specific to the fruit and vegetable producers, or do 
other types of diversified operations have similar issues?
    Dr. Smith. For our Iowa growers most are small to mid-
scale. It does not come up as their top priority, the reason I 
believe it does not is they don't even know that it might be 
possible for them to get crop insurance. It isn't there at all. 
We do have access to the NAP Program, the catastrophic coverage 
and it is not at all adequate. We have had a few apple growers 
apply in Iowa where that may no longer apply. It is so off the 
radar for our growers. Right now, those small-scale growers and 
mid-scale growers manage their risk by ranging a wide 
diversity, growing a wide diversity of crops, by engaging as 
much retail sales as possible through community-supported 
agriculture and farmers market, as well as their wholesale 
sales. It is a need to the growth in our industry. What I see 
is we are constraining these growers to this kind of small-
scale size, and if we do that, we are not going to be able to 
fulfill our need for local food that we see grown and not to 
insult the growers, I don't. They don't know what they don't 
know about potential for some risk management products that 
other states have access to. In addition to our fruit and 
vegetable growers, again our organic growers are not fully 
covered. As grain producers we do have access to crop 
insurance. We do purchase that every year, but it doesn't come 
close. We can't buy the level of coverage that matches the 
value of our crop. We would love to have some other options.
    The Chairman. The Chairman is very concerned about all 
this. With regard to our Committee as the organic sector 
expands into Iowa, are you aware of any efforts to track 
organic prices because as you know, organic farmers face 
particular problems with respect to insurance. One problem of 
course, is with basic insurance payouts because of the lack of 
pricing data, and each region of the country are different. 
Production volume of each farmer traditionally is different, 
and customs and practices in each region can vary depending on 
weather and climate and soil. So how do we structure that kind 
of a program?
    Dr. Smith. Well, the Agricultural Marketing Service is 
collecting some organic grain prices and are reporting those 
now on a biweekly, every 2 week basis, and that has been very 
beneficial. We check those very carefully in our operation as 
we do marketing. I think for diverse operations, revenue 
insurance products are probably better options than trying to 
insure each individual vegetable crop or organic grain crop in 
Iowa. To collect the actuary of data needed would be just a 
tremendous job, whereas if we did work with revenue insurance 
programs, then we are looking at the whole income of the farm, 
so revenue insurance is capturing of course production levels, 
price levels. Right now, AGR-Lite that I mentioned doesn't 
cover income from value-added products, so if we have a diverse 
farm that is doing some processing, those vats are not covered. 
So that is the way that I think would be a better approach to 
addressing those needs in the near future than looking at 
collecting yield and price data on every single vegetable crop. 
There are a lot of vegetable crops in Iowa, just not a lot of 
each one.
    The Chairman. Thank you very much.
    Before we adjourn, I would invite the Ranking Member to 
make any closing remarks that she would wish to make.
    Mrs. Schmidt. Thank you. I want to thank you all for coming 
here today and sharing your testimony with us. As we move 
forward with the next farm bill, I ask you to go back into your 
local communities and get very, very active with your local 
farmers. Specialty crops, especially organic production is a 
growing industry. My own daughter who is 30+ years old, that is 
all that she and her husband provide for their family are 
organic foods. I am of a different generation and I mix with 
value and price, but they don't look at price. They look at 
what they believe is the best product for their families, but 
the organic voice in farming has always been a small voice. I 
think you need to rise that, raise it up especially in this 
next farm bill and don't just look at Members of this 
Committee, look at other Members in your own states and talk to 
them about your issues with agriculture. Talk to them about 
your issues with the EPA, or with the new water program that 
could devastate your farming communities. Talk to them in very 
simple but real terms because we are all policymakers here, and 
while we have a very limited scope with the EPA, basically just 
with pesticides, there are other committees that have a wider 
scope with the EPA on other issues and just stay in contact 
with your local Congressperson, your Senators and make your 
voices heard.
    The Chairman. Thank you, Mrs. Schmidt.
    I want to thank you all for being here. Your testimony was 
helpful and enlightening and articulate. I appreciate you all 
being here and traveling to Washington to be with us, and 
taking time especially as you approach harvest season to be 
here.
    Under the rules of the Committee, the record of today's 
hearing will remain open for 10 calendar days to receive 
additional material and supplementary written responses from 
the witnesses to any question posed by a Member. This hearing 
of the Subcommittee on Horticulture and Organic Agriculture is 
hereby adjourned.
    [Whereupon, at 12:18 p.m., the Subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]
Submitted Statement by Michael Wootton, Senior Vice President, Sunkist 
                                Growers
    Thank you, Chairman Cardoza, and Ranking Member Schmidt for 
scheduling this Subcommittee hearing to review specialty crop and 
organic agriculture programs in advance of the 2012 Farm Bill 
reauthorization.
    Sunkist Growers is a 117 year old marketing cooperative, owned by 
4,000 family citrus producers in California and Arizona. The 
production, marketing and processing of our citrus supports employment 
for thousands of people and generates over $850 million in total annual 
revenue. More than \3/4\ of which is paid to our grower-owners.
    Given that 26% of our fresh fruit sales are generated through 
exports, Sunkist is strongly supportive of USDA's Market Access Program 
(MAP). That WTO green box program has enabled our cooperative to 
develop and maintain vital overseas markets for our American-grown 
fresh citrus for many years. MAP helps in some measure to counter 
significant foreign government subsidies of competing citrus products 
in those markets and helps to level the playing field for U.S. exports.
    MAP is an effective pubic-private partnership that increases 
American agricultural exports. The USDA's recent (March 2010) economic 
assessment by IHS Global Insight of the effectiveness of MAP indicates 
the U.S. receives a 35:1 return on investment, including an average 
annual increase in U.S. farm receipts of $4.4 billion.
    Given this evaluation, and the Administration's announced policy 
goal to double U.S. exports via the National Export Initiative over the 
next 5 years, we strongly urge the Committee to consider increasing the 
funding for the Market Access Program. The success of this program 
throughout the last decade validates the wisdom of Congressional 
support and funding.
    Additionally, we urge that consideration be given to strengthening 
the resources devoted to the Technical Assistance for Specialty Crops 
(TASC) program that is also administered by the Foreign Agricultural 
Service. This program is distinctly different from the Market Access 
Program, in that it seeks to remedy technical barriers to trade for 
U.S. specialty crops' access to foreign markets. Its relatively modest 
level of mandatory spending, $9 million for FY 2011 and FY 2012, is not 
sufficient to meet the demands of a host of technical issues that now 
hinder access to valuable overseas markets for our agricultural 
commodities.
    Past funding cycles have allowed TASC to support a variety of 
programs including; the creation and maintenance of a Maximum Residue 
Level database for the U.S. and Canada, research related to the 
reduction of bean thrips on navel oranges shipped to Australia and the 
establishment of an Internet tracking system for pests by the 
California Department of Food and Agriculture. Success of the TASC 
program is derived from its historic features of dexterity, quick 
response and timely action to ensure the flow of American products into 
key markets.
    Sunkist's production areas are located in California and Arizona. 
As western border states they are at high risk for exotic pest and 
disease introduction. Indeed Sunkist's growers are contending with a 
variety of destructive sanitary and phytosanitary issues as a result of 
the large urban populations in these states, the international air, sea 
and land ports of entry and the mild year round climate that can 
support these exotic pests and diseases.
    It is, therefore, essential that APHIS and U.S. Customs and Border 
Protection be provided with the necessary resources to identify the 
pathways for emerging pest and disease threats and then interdict them 
upon attempted entry into the U.S. The funding provided under Section 
10201 of the farm bill is an excellent first step in that process. For 
example, a number of projects are dedicated to researching threats to 
citrus production such a Huanglongbing (HLB) disease aka citrus 
greening. Other projects aim to enhance domestic inspection, such as 
training additional dog teams. These types of projects, when properly 
implemented, provide an prudent investment by the Federal Government, 
as their costs are significantly lower than the resource demands 
required to confront a full-blown pest or disease outbreak.
    The Section 10201 funding is properly targeted to high risk 
sentinel states. Future enhancements to the program should not 
undermine this focus. States like California, Arizona, Texas and 
Florida should receive a significant portion of this funding due to 
their higher vulnerability as the likely entry point for exotic pests 
and diseases.
    APHIS has engaged in an excellent program of stakeholder outreach 
and involvement in setting priorities for the Section 10201 program. 
Those benchmarks are established well in advance of the annual review 
process and serve to guide those local, state, Federal and industry 
evaluators during their individual and group processes.
    In contrast, the Specialty Crop Research Initiative does not appear 
to have operated in such a transparent process. Though the intent of 
that program is important and can have great value, its track record to 
date can be improved. For example, all requests for research funding 
targeting the destructive Huanglongbing disease have been rejected 
during SCRI evaluations. These rejections appear to have been largely 
technical in nature, but miss the larger point of addressing real world 
priority issues that can provide magnified impact for the government 
investment in research.
    It may be well worth the Committee's time to review and further 
guide the process surrounding SCRI in order to ensure that the Federal 
Government's investment in this program is being properly leveraged.
    Chairman Cardoza and Ranking Member Schmidt, thank you again for 
allowing Sunkist Growers to comment on some of these important topics 
as you begin the Committee's work to reauthorize the farm bill. Sunkist 
Growers appreciates your commitment to the ongoing success of the 
citrus industry and the specialty crop industry in general. We look 
forward to working with you in the months ahead on crafting relevant 
Farm Bill provisions.

Michael Wootton,
Senior Vice President,
Sunkist Growers.
                                 ______
                                 
  Supplementary Material Submitted by Mark Nicholson, Executive Vice 
    President and Part Owner, Red Jacket Orchards; Member, Board of
                   Directors, U.S. Apple Association
Fruit & Vegetable Program
    I would like to take this opportunity to expand on my testimony 
regarding the fruit and vegetable program. This U.S. apple industry has 
been working in support of this innovative program since it started as 
a pilot in the 2002 Farm Bill. The expansion of the program to all 50 
states was a top priority for our industry in the 2008 Farm Bill. The 
program is designed to expose low-income children to fresh fruits and 
vegetables and it has been a win-win for the apple industry and the 
students who receive the snack. For many of these students, the fruit 
and vegetable program is their only opportunity to eat fresh fruits and 
vegetables. I understand that there are now efforts underway to expand 
the program beyond fresh produce to include dried, frozen, and perhaps 
even processed products. I strongly encourage the Committee to protect 
the integrity of the program and allow it to continue as a ``fresh'' 
only program. There are a number of other programs for dried, frozen 
and processed foods and the apple industry strongly supports those 
programs as well.
Section 32 Purchases
    Also, in the area of Federal nutrition programs, I would like to 
address the changes that were made to the Section 32 program in the 
last farm bill. The spending cap placed on Section 32 purchases of 
commodities resulted in a substantial reduction of funds available for 
purchasing commodities. This came at the worst possible time for the 
apple industry--particularly those growing for the processed market--as 
the industry faced extremely low prices last year. Though USDA agreed 
that an apple purchase was needed they were not able to act in a timely 
fashion due to a lack of available funds. The purchases that were 
eventually made helped the industry but did not have the same impact 
that they would have if the Department had been able to act when the 
request was initially made.
    Another related problem with the 2008 Farm Bill is the elimination 
of the ability of the USDA to carry forward any unexpended funds. The 
elimination of carry over significantly reduces the flexibility of the 
USDA to manage commodity purchasing.
    The reduction in Section 32 funds has also meant that the fresh 
sliced apple pilot has not been further expanded. This program was very 
popular with schools as many wanted to purchase fresh slices but did 
not have the funds to do so in their budgets. Fresh sliced apples are 
great for kids that have braces or for students on the go. Studies have 
shown that students consume more of the apple when it is offered sliced 
and ready to eat.

                                  
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