[Senate Hearing 112-278]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 112-278
 
                           FOOD FOR THOUGHT: 
                    THE ROLE, RISKS, AND CHALLENGES 
                    FOR AMERICAN AGRICULTURE AND THE 
                       NEXT FARM BILL IN MEETING 
                     THE DEMANDS OF A GROWING WORLD 

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

                                HEARING

                              [before the]

                       COMMITTEE ON AGRICULTURE,
                         NUTRITION AND FORESTRY
                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               ----------                              

                              MAY 26, 2011

                               ----------                              

                       Printed for the use of the
            Committee on Agriculture, Nutrition and Forestry

















    FOOD FOR THOUGHT: THE ROLE, RISKS, AND CHALLENGES FOR AMERICAN 
AGRICULTURE AND THE NEXT FARM BILL IN MEETING THE DEMANDS OF A GROWING 
                                 WORLD






















                                                        S. Hrg. 112-278

                           FOOD FOR THOUGHT:
                    THE ROLE, RISKS, AND CHALLENGES
                    FOR AMERICAN AGRICULTURE AND THE
                       NEXT FARM BILL IN MEETING
                     THE DEMANDS OF A GROWING WORLD

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

                                HEARING

                               before the

                       COMMITTEE ON AGRICULTURE,
                         NUTRITION AND FORESTRY

                          UNITED STATES SENATE


                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION


                               __________

                              MAY 26, 2011

                               __________

                       Printed for the use of the
            Committee on Agriculture, Nutrition and Forestry


        Available via the World Wide Web: http://www.fdsys.gov/

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            COMMITTEE ON AGRICULTURE, NUTRITION AND FORESTRY



                 DEBBIE STABENOW, Michigan, Chairwoman

PATRICK J. LEAHY, Vermont            PAT ROBERTS, Kansas
TOM HARKIN, Iowa                     RICHARD G. LUGAR, Indiana
KENT CONRAD, North Dakota            THAD COCHRAN, Mississippi
MAX BAUCUS, Montana                  MITCH McCONNELL, Kentucky
E. BENJAMIN NELSON, Nebraska         SAXBY CHAMBLISS, Georgia
SHERROD BROWN, Ohio                  MIKE JOHANNS, Nebraska
ROBERT CASEY, Jr., Pennsylvania      JOHN BOOZMAN, Arkansas
AMY KLOBUCHAR, Minnesota             CHARLES GRASSLEY, Iowa
MICHAEL BENNET, Colorado             JOHN THUNE, South Dakota
KIRSTEN GILLIBRAND, New York         JOHN HOEVEN, North Dakota

             Christopher J. Adamo, Majority Staff Director

              Jonathan W. Coppess, Majority Chief Counsel

                    Jessica L. Williams, Chief Clerk

              Michael J. Seyfert, Minority Staff Director

                Anne C. Hazlett, Minority Chief Counsel

                                  (ii)




























                            C O N T E N T S

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                                                                   Page

Hearing(s):

Food for Thought: The Role, Risks, and Challenges for American 
  Agriculture and the Next Farm Bill in Meeting the Demands of a 
  Growing World..................................................     1

                              ----------                              

                         Thursday, May 26, 2011
                    STATEMENTS PRESENTED BY SENATORS

Stabenow, Hon. Debbie, U.S. Senator from the State of Michigan, 
  Chairwoman, Committee on Agriculture, Nutrition and Forestry...     1
Brown, Hon. Sherrod, U.S. Senator from the State of Ohio.........     4
Grassley, Hon. Charles, U.S. Senator from the State of Iowa......    13
Johanns, Hon. Mike, U.S. Senator from the State of Nebraska......     2

                                Panel I

Vilsack, Hon. Tom, Secretary, U.S. Department of Agriculture, 
  Washington, DC.................................................     5

                                Panel II

Glickman, Hon. Dan, Co-Chair, The Chicago Council's Global 
  Agricultural Development Initiative; former Secretary, U.S. 
  Department of Agriculture; and Senior Fellow, Bipartisan Policy 
  Center, Washington, DC.........................................    32
Mumby, Barry, Senior Member, Wakeshma Farms LLC, Colon, Michigan.    34
Rosenberg, Andrew, Ph.D., Senior Vice President for Science and 
  Knowledge, Conservation International, Alexandria, Virginia....    36
Devries, Douglas, Senior Vice President, Global Marketing 
  Services, Agriculture and Turf Division, Deere and Company, 
  Moline, Illinois...............................................    37
Pinstrup-Andersen, Per, Ph.D., H.E. Babcock Professor of Food, 
  Nutrition, and Public Policy, J. Thomas Clark Professor of 
  Entrepreneurship, and Professor of Applied Economics, Cornell 
  University, and Professor of Agricultural Economics, Copenhagen 
  University, Ithaca, New York...................................    39
                              ----------                              

                                APPENDIX

Prepared Statements:
    Brown, Hon. Sherrod..........................................    48
    Thune, Hon. John.............................................    49
    Devries, Douglas.............................................    52
    Glickman, Hon. Dan...........................................    61
    Mumby, Barry.................................................    67
    Pinstrup-Andersen, Per.......................................    75
    Rosenberg, Andrew............................................    81
    Vilsack, Hon. Tom............................................    85
Document(s) Submitted for the Record:
Glickman, Hon. Dan:
    ``2011 Progress Report on U.S. Leadership in Global 
      Agricultural Development''The Chicago Council on Global 
      Affairs ...................................................    94
    ``Renewing American Leadership in the Fight Against Global 
      Hunger and Poverty'', The Chicago Council on Global Affairs 
      ...........................................................   151
Question and Answer:
Chambliss, Hon. Saxby:
    Written questions to Hon. Tom Vilsack........................   407
Gillibrand, Hon. Kirsten:
    Written questions to Hon. Tom Vilsack........................   406
Johanns, Hon. Mike:
    Written questions to Hon. Tom Vilsack........................   411
Roberts, Hon. Pat:
    Written questions to Hon. Tom Vilsack........................   394
    Written questions to Hon. Dan Glickman.......................   383
    Written questions to Barry Mumby.............................   384
    Written questions to Andrew Rosenberg........................   388
    Written questions to Douglas DeVries.........................   380
    Written questions to Per Pinstrup-Anderson...................   387
Thune, Hon. John:
    Written questions to Hon. Tom Vilsack........................   414
    Written questions to Hon. Dan Glickman.......................   383
    Written questions to Barry Mumby.............................   385
    Written questions to Andrew Rosenberg........................   392
    Written questions to Douglas DeVries.........................   381
Devries, Douglas:
    Written response to questions from Hon. Pat Roberts..........   380
    Written response to questions from Hon. John Thune...........   381
Glickman, Hon. Dan:
    Written response to questions from Hon. Pat Roberts..........   383
    Written response to questions from Hon. John Thune...........   383
Mumby, Barry:
    Written response to questions from Hon. Pat Roberts..........   384
    Written response to questions from Hon. John Thune...........   385
Pinstrup-Andersen, Per:
    Written response to questions from Hon. Pat Roberts..........   387
Rosenberg, Andrew:
    Written response to questions from Hon. Pat Roberts..........   388
    Written response to questions from Hon. John Thune...........   392
Vilsack, Hon. Tom:
    Written response to questions from Hon. Pat Roberts..........   394
    Written response to questions from Hon. Kirsten Gillibrand...   406
    Written response to questions from Hon. Saxby Chambliss......   407
    Written response to questions from Hon. Mike Johanns.........   411
    Written response to questions from Hon. John Thune...........   414



                           FOOD FOR THOUGHT:
                    THE ROLE, RISKS, AND CHALLENGES
                    FOR AMERICAN AGRICULTURE AND THE
                       NEXT FARM BILL IN MEETING
                     THE DEMANDS OF A GROWING WORLD

                              ----------                              


                         Thursday, May 26, 2011

                              United States Senate,
          Committee on Agriculture, Nutrition and Forestry,
                                                     Washington, DC
    The committee met, pursuant to notice, at 10:21 a.m., in 
Room 216, Hart Senate Office Building, Hon. Debbie Stabenow, 
Chairwoman of the committee, presiding.
    Present or submitting a statement: Senators Stabenow, 
Conrad, Nelson, Brown, Klobuchar, Bennet, Johanns, Lugar, 
Boozman, Grassley, Thune, and Hoeven.

STATEMENT OF HON. DEBBIE STABENOW, U.S. SENATOR FROM THE STATE 
 OF MICHIGAN, CHAIRWOMAN, COMMITTEE ON AGRICULTURE, NUTRITION 
                          AND FORESTRY

    Chairwoman Stabenow. Good morning. The meeting will come to 
order. I am very pleased to be having our first official farm 
bill hearing and to have our distinguished Secretary of 
Agriculture with us, as well.
    Let me first start by saying that my friend and Ranking 
Member Senator Roberts would certainly not want to miss the 
hearing today, but due to a death in the family, he has had to 
do that, and our thoughts and prayers are with him and his 
family. But I am very pleased to have joining me as the Ranking 
Member, as the person that will be leading our Republican 
colleagues today, Senator Johanns from Nebraska. Thank you very 
much for being here.
    Senator Johanns. Thank you.
    Chairwoman Stabenow. We appreciate it.
    As the Secretary just indicated, we do have some wonderful 
Michigan red tart cherries for everyone, so please enjoy.
    Senator Nelson, thank you very much for being here. Senator 
Brown, welcome this morning.
    You know, the story of agriculture over the last 50 years 
is one of incredible productivity gains and impressive 
conservation achievements. Today, one American farmer feeds an 
estimated 150 people. Think about that. One farmer for 150 
people. And despite all the economic and budget struggles over 
the last decade, agriculture has remained a bright spot. We 
continue to innovate. Farmers have become even more productive 
and they have become even better stewards of our land and our 
water resources. And we are not only feeding the world because 
of that innovation, but we are showing farmers in every corner 
of the world new strategies to be more productive themselves.
    Today, as we officially kick off the process for the 2012 
farm bill, we are starting in a different spot than we have in 
the past. Instead of the usual discussion where we talk about 
each of the various farm bill programs, we are focusing today 
on the principles that are important for this discussion, the 
ability of American agriculture to feed the world, why that is 
critically important, how American agriculture can help the 
world better feed itself, and the risks and challenges that 
come with that, meeting the demands for better stewardship 
while producing more with limited resources.
    We have some great witnesses today who will testify this 
morning, and Secretary Vilsack is here, one of our nation's 
greatest advocates for agriculture, rural development, 
conservation, and innovative farming, and we appreciate that.
    Our second panel is made up of leading experts who will 
talk about the importance of getting the farm bill right for 
not only American producers, but for consumers throughout the 
world.
    This first hearing of the 2012 farm bill is a great step 
down the long, deliberative road that this committee will 
undertake over the next year as we work to craft a bill that 
effectively meets our principles and our priorities and one 
that helps American agriculture continue to lead the world in 
productivity, innovation, and sustainability.
    It is easy to take our agricultural policies for granted, 
to assume that without them, things would work just the same as 
they do now. But when we look back at history, we can only 
marvel at how far we have come.
    I will use a current example. Today, people in the Western 
edge of the Oklahoma panhandle are enduring the longest drought 
on record, with over 240 days without rain. That is worse than 
the droughts experienced during the Dust Bowl. And yet, today, 
there is no dust storm. The topsoil is not blowing away. That 
is a testament to the good work our farmers and ranchers have 
done thanks to voluntary conservation efforts in the farm bill. 
There are many other examples of positive effects of American 
farm policy.
    So as we get started with the hearing today, let us 
remember the 150 people who have food on their table today 
because of one American farmer. Let us celebrate the successes 
and recognize the challenges ahead. Let us keep focused on the 
principles, the goals, not the programs, that the farm bill 
should accomplish. And let us continue to work together to make 
sure that American agriculture remains prosperous and 
successful for years to come.
    It is now my pleasure to turn to Senator Johanns for his 
opening remarks.

STATEMENT OF HON. MIKE JOHANNS, U.S. SENATOR FROM THE STATE OF 
                            NEBRASKA

    Senator Johanns. Thank you very much, Madam Chair. It is an 
honor to be here, an honor to serve in a temporary capacity, at 
least, as Ranking Member for the purposes of this hearing.
    I know I speak on behalf of all of us when I send my 
condolences to Senator Roberts and his wife, Franki, and their 
family, and I also know that he really wanted to be here, but 
family matters, the death in the family, called him away. He is 
disappointed to miss the hearing. I offered on his behalf to 
share a few remarks, and they will be very, very brief because 
I am anxious to get to our witnesses.
    Let me also start out today and say, Secretary Vilsack, it 
is good to see you here. What an appropriate way to kind of 
kick off our efforts in farm policy.
    Secretary Glickman, it is good to see you here today, also.
    As this committee begins examining our current suite of 
agriculture and nutrition programs, it is always important to 
remind ourselves and identify the underlying reasons for those 
programs. Farming and agriculture is about supplying the food, 
feed, and fiber necessary--and energy--for a growing global 
demand.
    The challenge facing agriculture producers worldwide, 
especially in the United States, is a very real challenge and 
it is a formidable one. We have already begun to see the 
effects of not meeting this challenge in places all over the 
world, but I would mention Egypt, Syria, and, of course, 
Africa.
    With this in mind, why would the Federal Government ever 
want to do anything that would impair the ability of our 
farmers and ranchers, our growers, to meet the demands that 
exist for the future? Why would we ever want to do anything 
that would impact their ability to serve and meet the needs of 
a growing world?
    We can spend a lot of time going through those statistics, 
but I think we all know them. The population is putting greater 
and greater demands on the United States farmer and rancher and 
grower to feed the world and provide the energy sources and the 
fiber sources.
    I especially want to say thank you to the people at USDA 
who have worked so hard through the years to put us in the 
right place to get policy right. As we know, I worked with 
those fine folks for three years and they do so many good 
things.
    I also want to thank our witnesses that are here today. We 
appreciate the opportunity to hear your testimony and to ask 
you questions and I look forward to that.
    While we often think in terms of one five-year farm bill to 
the next, I would suggest that as we queue ourselves up to 
think about this farm bill, we think about agriculture's long-
term importance in feeding a troubled and hungry world and how 
that relates to our national security and to our future. I 
believe it is a key part of that.
    Well, I will wrap up by saying I associate myself with 
those comments from our Ranking Member that I just delivered. I 
do look forward to engaging in a farm bill process, I guess on 
this side of the table would be the best way of putting that, 
and I look forward to working with our Chair, as we did last 
time, in crafting farm policy, and since I have been in the 
Senate, on resolving the issues relating to the 1099 
requirements.
    With that, Madam Chair, thank you for the opportunity. I 
look forward to our witnesses.
    Chairwoman Stabenow. Thank you. Well, thank you very much, 
and let me just say, Senator Johanns, that one of the things 
that I think is really terrific about our committee is that we 
very much focus together. This is not a partisan committee. 
This is a committee where we focus together on farm policy. We 
may have differences about which crops we advocate for or what 
we believe is the most important focus, but it is very much 
done on a bipartisan basis, and I see my colleagues here on 
both sides who have been so critical in crafting farm bills and 
we very much appreciate everyone's leadership and attendance 
today.
    We have excellent panelists today, and in the interest of 
time, I will ask that members' opening statements be submitted 
for the record. We will recognize the Senators, as we always 
do, in order of appearance on alternating sides. We would like 
to thank everyone----
    Senator Brown. Madam Chair? Madam Chair?
    Chairwoman Stabenow. Yes, Senator Brown.
    Senator Brown. I have to preside at 11:00. Could I just 
have 60 seconds now----
    Chairwoman Stabenow. Yes, you may.
    Senator Brown. --since I will not get to the questions 
before I have to leave to preside.
    Chairwoman Stabenow. Absolutely.

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

    Senator Brown. Thank you, Mr. Secretary, for joining us, 
Secretary Glickman, too. Thank you for your work in helping 
with our ag research station in Worcester. Agriculture is 
still, as it is for most of us, the most important, largest 
industry in our State and research is a big component of that.
    And thank you, too, for your interest in the ACRE program 
and what you have done in crop insurance. We need to figure 
out, as the Chair and I have talked and others who have 
interest in that program, in conservation programs and the ACRE 
program both in terms of the safety net, the work we can do 
together to strengthen that and make it simpler so that more 
farmers, particularly more corn and soybean farmers who want to 
enroll in it will be crucial for only saving taxpayer dollars 
and providing that safety net for agriculture in my State.
    So I just wanted to say that, Madam Chair. Thank you.
    Chairwoman Stabenow. Well, thank you, and we thank you very 
much for your leadership. Thank you.
    Well, I am very pleased to introduce officially our first 
panelist, Secretary Tom Vilsack, no stranger to any of us. 
Secretary Vilsack is a tremendous voice for American 
agriculture in rural America, has been since the beginning of 
his public service in Iowa as a former mayor and State Senator 
and two-term Governor of Iowa. He has brought a wealth of 
experience with him to the USDA.
    We look forward to hearing your testimony, Mr. Secretary. 
Welcome.

 STATEMENT OF HON. TOM VILSACK, SECRETARY, U.S. DEPARTMENT OF 
                  AGRICULTURE, WASHINGTON, DC

    Secretary Vilsack. Madam Chairwoman, thank you very much 
for that kind introduction, and to Senator Johanns, it is good 
to see you again, as it is all the members of this panel.
    First of all, let me also add my voice to yours in 
expressing condolences to the Roberts family for the loss as 
well as all of the families in the nine States that have been 
devastated by tornadoes and floods recently. Our hearts and 
prayers go out to all of them.
    I want to thank you for the opportunity to discuss U.S. 
agriculture and the next farm bill today. Many folks do not 
recognize it, but American farmers and our agricultural 
industry are responsible in no small way for the health and 
strength of our great nation. Not only do we rely on American 
agriculture for food, feed, fiber, and fuel, our agricultural 
producers also preserve our environment and help drive our 
national economy. That is why we believe and continue to 
believe a strong and effective safety net needs to be in place 
for those who need it.
    Agriculture is responsible for one out of every 12 jobs in 
America, and while many sectors of our economy are running 
trade deficits, American agriculture has enjoyed a trade 
surplus for nearly 50 years. This year, we expect a record 
surplus and record agricultural exports should help support 
more than one million jobs across the nation.
    What is more, the incredible productivity of American 
farmers and ranchers makes all of us more prosperous. American 
families spend only six to seven cents out of every dollar on 
food, less than almost any other nation. That means we can 
spend more on a nicer home, save for retirement, or fund our 
children's college education.
    And American farmers have taken extraordinary steps to take 
care of our nation's natural resources. In the last 30 years 
alone, USDA has helped producers reduce soil erosion by more 
than 40 percent, and agriculture has gone from being a cause of 
wetland loss to leading the entire nation in wetland 
restoration efforts. Our farms act as carbon sinks, mitigate 
the impact of climate change. Our farmlands, pasture, and 
forests help clean the water we drink and the air we breathe.
    But American farmers, as the Chairwoman has noted in her 
invitation to this hearing, also have a role in feeding a 
growing world population. They not only do this through 
historic productivity and record exports, but also through the 
development and embracing of new research and innovative 
practices and technology as well as institutional structures 
that can be shared with the rest of the world.
    At USDA, we support farmers in both their domestic 
responsibilities and their international role. Additionally, 
the Department seeks to conserve the nation's natural 
resources, build thriving rural communities, and ensure that 
every American has access to healthy, safe, and affordable 
food.
    So as we prepare to write a new farm bill, you will have to 
discuss how USDA continues to support these various goals. At 
the same time, there will be considerable external pressures on 
that process, fiscal and political realities about the size of 
the debt and deficit, and the tight budget they have inspired. 
I have no doubts that the next farm bill will be smaller than 
the one that was agreed upon in 2008. In acknowledging that 
reality, I hope that this committee will give serious thought 
to your priorities for American agriculture and your priorities 
for USDA and to the values of the American people.
    We at USDA are prepared to do as much as we can with fewer 
resources, but there is no doubt that cuts will have a real 
impact on American agriculture and on American people. There 
will be pain and everyone will have to sacrifice something. 
There are no easy cuts. Waste, fraud, and abuse are real, but 
they represent only a tiny fraction of the big budget picture.
    Today, USDA is already being forced to make very tough 
choices based on the budget resolution that is funding us 
through the end of this fiscal year. As a result of those cuts 
and because I assume there will be more coming, I am asking top 
leaders at USDA to think creatively about how to do business. 
Are there changes we could make in structure, program delivery, 
staffing, or responsibilities that could improve our efficiency 
or the quality of service we provide? I want folks to look at 
this moment as an opportunity to build a USDA for the 21st 
century, one that does things differently and might not deliver 
all of the services that we do today.
    And I would ask as this committee prepared to write a farm 
bill that you do the same. Let us know what your priorities 
are. Are there places where the private or nonprofit sectors 
can or should be involved? What are the results you want? Where 
should USDA focus its energy? And what are the resources you 
will be able to provide to allow us to meet the goals you have 
set for the Department?
    When these elements begin to be settled, I would ask you to 
give USDA the flexibility to serve American agriculture and the 
American people as effectively as possible. While prescriptive 
programs are appealing, they can make it difficult for USDA to 
deliver the best results for Americans. Give us the flexibility 
and the time we need to adjust to make this big difference.
    Please also recognize that we simply cannot cut our way out 
of a deficit. We also have to grow our way out. If we want to 
grow businesses, create jobs, and increase incomes, we need to 
make sure America is built to compete. We have to bear the 
cutbacks, but also, we must invest in our future so that we can 
strengthen American agriculture, rural communities, and the 
middle class while also growing our economy. In the end, the 
American farmer and rancher should be instructive to this body. 
The strength of American producers comes from their willingness 
to adapt, to work hard, to shoulder sacrifice, and to innovate.
    As Congress moves to write a new farm bill with limited 
resources, I hope you think of USDA in a similar light. We are 
ready to adapt and innovate, but we need clear goals and the 
resources to get us there. I look forward to working with 
Congress, Democrats and Republicans, House and Senate members, 
to craft the next farm bill to serve as best we can with the 
budget we are given, American agriculture and the American 
people.
    Madam Chairwoman, that concludes my statement. I would be 
happy to answer any questions.
    [The prepared statement of Secretary Vilsack can be found 
on page 85 in the appendix.]
    Chairwoman Stabenow. Thank you very much, Secretary 
Vilsack, and let me first start by indicating that I share and 
I believe the whole committee shares great concerns here as we 
move forward on the challenges in putting together a farm bill, 
given the discussions that are occurring as it relates to the 
very important need to tackle our deficit, as I think you and I 
both share the belief that agriculture has done its part, and 
done a very big part already before anyone else is doing it and 
has taken significant cuts in the current budget that was 
agreed to. So we have got to make sure that we understand the 
importance of rural America and the 16 million people that 
already work in agriculture and the need to grow. We are never 
going to get out of debt with 13 million people out of work in 
this country, and so we have got to focus on growing the 
economy and agriculture is a very important part of that.
    So we have very challenging times to work on together and I 
appreciate your leadership in the tough challenges that we have 
got in front of us as we do this together. We will do it. We 
will do it to the best of our ability. But these are, I think, 
challenging times on the budget front.
    Let me talk a little bit about the--and ask you a couple of 
questions concerning the lessons that we have learned from what 
we have done right in American agriculture, when we look at 
this farm bill and all the positive aspects of it and the 
efforts that we have put into R&D and the efforts around 
supporting production agriculture and conservation practices 
and stewardship and so on.
    What are the top two or three lessons we have learned from 
all of that that we should be exporting and teaching to farmers 
around the world as they seek to improve sustainable 
production?
    Secretary Vilsack. Madam Chair, I think one of the most 
important lessons is the importance of continued investment in 
research. We have not been able to be productive as we have 
been without the important research that is being done, both 
publicly financed research and also privately financed 
research. That is why I think it is important for us to 
continue relationships with farmers and producers across the 
globe, making sure that we can impart our technology and our 
knowledge as well as our food assistance.
    The second thing I would say is that I think we all have a 
responsibility to continue to conserve the national resources, 
whether they are here in the United States or wherever they 
might be. And to the extent that we can encourage better 
conservation techniques, better utilization of scarce water 
resources, we might be able to be more productive and also 
create a better environment.
    And then the third thing I would say is that I think it is 
important for the rest of the world to be willing to embrace 
technology. As we have learned, one of the ways in which we can 
be more productive is by using science to increase the capacity 
of plants and livestock to withstand pests, diseases. We have 
had extraordinary increases in productivity because of science. 
And I think we have to work very hard to educate the rest of 
the world about this science and accepting science so that 
there is not the fear or concern that sometimes prohibits or 
inhibits producers in other countries from embracing that 
science.
    I would say I can answer that question in much greater 
detail, but that gives you a sense of what we have learned.
    Chairwoman Stabenow. Thank you. Let us explore a little bit 
more about conservation efforts and better farming practices 
that have helped our farmers manage the significant risks that 
they face. What are some of the practices that seem to deliver, 
in your judgment, the most benefits to risk management for 
farmers and, again, top lessons as we look not only in our 
country but around the world in terms of where our focus should 
be.
    Secretary Vilsack. On conservation specifically? Well, we 
are learning a good deal about the benefits of conservation 
through an assessment process that we have just begun to 
utilize in large watersheds. I think what we have learned is 
that while it is important to focus on individual operations, 
also, you have to have an integrated and comprehensive approach 
to conservation that focuses on large watersheds.
    So, for example, we are investing resources in the 
Chesapeake Bay area and the Upper Mississippi River area, the 
California Bay delta and other areas. We have begun an 
assessment of how effective those conservation practices are. 
We have learned the following lessons.
    One, that American producers are willing to adopt 
conservation techniques. They are voluntarily willing to adopt 
those techniques.
    Two, that it is important that there be a suite of 
conservation practices. It is not just an individual 
conservation practice but multiple practices working in an 
integrated fashion that give you the biggest bang for the buck.
    Three, we know that conservation is working. We see less 
soil erosion. We see less nitrogen and phosphorous, for 
example, getting into our waterways. We obviously have more 
work to do, and that we have got to integrate those 
conservation practices with also better nutrient management 
plans and programs.
    I am encouraged by the assessments that we have done in the 
two areas. We are doing on in the Great Lakes right now and we 
will see what that unfolds. But when you look at 40 percent 
less soil erosion since 1982 and you see that there is a 
substantial less reliance on water resources because of 
conservation, these are practices and techniques that we can 
apply not just in the United States, but all over the world.
    I would also say that it is extremely important to make 
sure that we have the resources and that we target those 
resources and that we provide the technical assistance. 
Conservation is really hands-on. You have got to have people 
working with the farmer personally to be able to have the best 
effect, and what we have seen in the past is a mismatch between 
the amount of resources being provided and the number of people 
being able to manage those resources. So we are trying to align 
that better at USDA so that we can provide more technical 
assistance and more hands-on efforts.
    Chairwoman Stabenow. And finally, information I have read 
indicates that the incredible yield gains we have seen in the 
past decade may be slowing down. Is this an issue that the USDA 
has been tracking and analyzing, and do you have any insights 
as to what might be causing this, what we are working on in 
terms of solutions, and, of course, what is happening with the 
weather, of course, is also another huge discussion point. But 
speak a little bit about what you are seeing in terms of yield 
gains.
    Secretary Vilsack. Well, I think the long term, I think 
that there are still gains to be had. We have seen enormous 
increases. Corn, in my lifetime, has increased 338 percent, 
wheat almost 200 percent, soybeans 200 percent, to give you a 
sense of the productivity gains. So, obviously, as we have seen 
these dramatic gains, what we are now getting into are 
incremental increases as we maximize our efficiency.
    Having said that, I think that there are technologies that 
are being worked on in the private sector and in the public 
sector that hold great promise for a continued growth in 
productivity. The key here is to have a regulatory structure 
and system that allows those advantages, those technologies to 
get into production more quickly, which is why we are in the 
process of putting a Process Improvement Plan in place in APHIS 
to basically try to see if we can speed up our review of the 
regulatory impacts of these technologies to try to get them 
approved more quickly. We have had a backlog and it is 
something that needs to be addressed.
    Chairwoman Stabenow. Thank you very much.
    Senator Johanns.
    Senator Johanns. Thank you, Madam Chair.
    Mr. Secretary, I was heartened during your testimony by 
your reference to the safety net, the need for the safety net 
in appropriate circumstances for farmers. Let me, if I might, 
dig a little deeper on the whole concept of the safety net.
    When I became Secretary in January of 2005, corn prices 
were, I do not know, $1.95. With Katrina, if you will remember, 
they dropped to, like, $1.60. I mean, it was a wild time. The 
concept of a safety net then was the Marketing Loan Program, 
the countercyclical program. Without those, farmers in Iowa, 
Nebraska, across the corn belt literally would have gone broke 
because they were farming and producing their crops and not 
even covering the cost of production.
    Of course, that has changed today. Prices are strong. The 
carryover shown by the USDA is historically tight. It seems to 
indicate pretty good prices as we look into the next farm bill.
    As I get around the country in Nebraska and talk to 
producers, it seems like they reference me back to the 
importance of the Crop Insurance Program as the mainstay, if 
you will, of the safety net, and I would like to hear your 
thoughts about that, because it occurs to me that we could 
leave the loan deficiency program in place, the Marketing Loan 
Program. We could leave the countercyclical program in place. 
It is not going to pay out much for most of the crops anyway, 
if anything. But it is crop insurance that we need to be 
focused on, especially with the disasters that we have seen 
this year, but disaster seems to be always a part of 
agriculture. I would like to hear your thoughts on crop 
insurance as kind of the bedrock upon which we build a safety 
net for the next farm bill.
    Secretary Vilsack. Well, Senator, it obviously depends on 
what crop you are talking about, whether or not crop insurance 
is the vehicle for the safety net. But clearly, in the area 
that you have talked about, it is an important component. And 
so it is important for us to maintain the integrity and the 
viability of crop insurance with whatever decisions you all 
make, and there is no question about that.
    The reality is, though, that you have to couple that, it 
seems to me, with a disaster program that recognizes that as 
good as crop insurance can be, there are circumstances and 
situations where it is not enough, or there are extraordinary 
and catastrophic circumstances, as we are seeing now in States 
that have been hit very, very hard recently in the South and in 
the Central part of the country, where we need to basically 
have a way in which we can provide additional assistance.
    At the same time, I think it is really important for 
everyone to understand that there are a number of different 
types of farmers in this country. There are commercial- sized 
operations for which crop insurance is vital, disaster 
assistance is important. But there are also relatively small-
sized operations, operations that maybe they will generate less 
than $250,000 in sales. Those folks, in the second best year we 
have had in agricultural income in 35 years last year, will be 
lucky if they average $10,000 from their farming operation.
    And you might want to say, well, you know, maybe those 
folks do not--maybe it is time for them to consider something 
else. But to me, we want to make sure that rural communities 
still are thriving. We want to see them populated with young 
families. We want to see folks get back into the farming 
business. So as you craft your safety net, I hope everyone 
keeps their attention focused on that middle group who struggle 
mightily, who work off the farm, whose spouse works off the 
farm, who want to stay connected to the land.
    And so crop insurance is important. Disaster assistance is 
important. And we obviously want strong markets. We want to 
continue to promote exports. And, frankly, we also want to find 
more domestic opportunities to link those producers with local 
consumers so that perhaps there are additional opportunities 
for them that did not exist.
    Senator Johanns. You are kind of, I think--and I could not 
agree with you more. I always said I grew up on one of those 
small farms, as you know, in your home State, and I just love 
all of agriculture. I love the small operator to the big 
operator. I just love agriculture.
    But I think kind of what you are thinking about is kind of 
what I am thinking about, and that is that as you think about 
agriculture for the future and the importance of that safety 
net, and recognizing the severe budget limitations, I am hoping 
to encourage people to focus on the dollars that are available 
in the current agriculture programs and saying to ourselves, 
those dollars need to be committed to that because there is a 
better job we can do in crop insurance. There are some other 
things we can do. You expanded disaster relief beyond that. 
Well, what it comes down to is it just takes some money to 
finance that. Any reaction to that comment?
    Secretary Vilsack. Well, it does take money, but I think we 
are obviously facing the fiscal reality that there is just not 
going to be as much money as there has been in the past. I have 
a--I have seen a chart, and I do not know if it is accurate or 
not, but over the last 30 years, if you look at real growth in 
spending by function in terms of outlays in constant dollars, 
agriculture as one of the many responsibilities, whether it is 
defense or space and science or transportation, agriculture has 
pretty much flat-lined in that 30-year period, and I think that 
is really an important consideration as you all discuss how you 
allocate these resources and how you allocate the reductions.
    Agriculture has been a good steward of the fiscal resources 
that have been provided to it. It has increased productivity. 
It has made food available and affordable. It has provided 
export opportunities. It has created jobs. You got a pretty 
good return for your dollar.
    So, clearly, we are going to have to be innovative, and I 
think one place where we can be innovative, if I can just take 
a second, is in addition to the safety net, the conservation 
programs. I think there are ways in which we can utilize 
conservation programs to encourage more private sector 
investment, and we are working with the EPA in a way to try to 
figure out if there is a way in which we could provide 
regulatory certainty for producers when they follow a suite of 
conservation practices.
    If you combine regulatory certainty and creating and being 
able to define the environmental results that you get from 
certain conservation techniques that somebody in the private 
sector may want to purchase, you now have a new opportunity to 
leverage those Federal dollars in an effective way, and that is 
what I think we are challenged to do. How do you leverage--how 
do you expand opportunities with those Federal dollars?
    Senator Johanns. Thank you.
    Chairwoman Stabenow. Thank you very much.
    Senator Nelson.
    Senator Nelson. Thank you, Madam Chair, and thank you, Mr. 
Secretary, for being here today and for your extraordinary 
service for American agriculture. We appreciate it so very 
much.
    I want to continue with something that Senator Stabenow 
brought up more specifically here. The 2008 farm bill 
Environmental Quality Incentives Program, or as we all refer to 
it, EQIP, gave priority to water conservation or irrigation 
efficiency applications that reduce water use, projects where 
the producer agrees that associated water savings would not be 
used to bring new land under irrigation production, and 
proposals that improved conservation practices or systems that 
were already in place.
    And while the Agricultural Water Enhancement Program has 
provided financial and technical assistance to help farmers and 
ranchers conserve ground and surface water and improve the 
quality on agricultural lands, the first question I have is, 
have these programs been successful in helping producers reduce 
or more efficiently utilize their water resources in their 
production?
    Secretary Vilsack. The quick answer is they have, Senator, 
roughly, a 40 percent greater efficiency as a result of these 
programs, and it goes along with the additional soil erosion 
benefits from conservation. So the combination of the two 
indicates that they are working.
    Senator Nelson. And it is as though I am seeking to get 
another positive answer here, which I am. And do you believe 
that EQIP is effective in balancing environmental 
considerations and the need to produce a reliable and safe food 
supply versus the alternative of additional regulations?
    Secretary Vilsack. Yes.
    [Laughter.]
    Senator Nelson. Okay. And then the final question in this 
area is to what extent is the Department working to promote 
these more efficient technologies that we have developed 
domestically to help other countries that are facing astute or 
very acute water shortage problems themselves?
    Secretary Vilsack. Senator, as part of the Feed the Future 
Initiative, we are focusing our efforts on capacity building, 
and one of the aspects of capacity building is taking our 
technical information and knowledge to countries and basically 
imparting that knowledge to farmers and producers as well as 
researchers and academic folks. We have, as you know, a very 
robust fellowship program with the Borlaug and Cochran 
Fellowships, which provide us an opportunity to share that 
information.
    An example is what we are doing in Afghanistan, where we 
have got teams of folks from USDA working with USAID and with 
Afghan farmers to try to convince them to move away from poppy 
production to pomegranates or apricots or things of that 
nature, and we are beginning to see some positive results. Our 
focus is obviously limited by resources, but nevertheless, I 
think we are making a real impact with the transfer of 
technology and information.
    Senator Nelson. Well, I think it is important that we 
continue to do that, because while only 17 percent of the 
world's arable land is irrigated today, it still produces 
roughly 40 percent of total output, so it seems that we are 
going to have to continue to try to get better water use and to 
limit the quantity of water that is used to produce the kind of 
production that we are expecting today.
    Secretary Vilsack. Well, we are working and experimenting 
and researching various irrigation techniques which are being 
transferred as well as--and this gets back to the comment I 
made earlier--the importance of having countries embrace new 
technologies. We are working on drought-resistant seed, and to 
the extent that we can develop seeds that are more resistant to 
tough, stressful environmental conditions, the more productive 
folks can be around the world. But there has to be an openness 
and a willingness to embrace that technology. At this point in 
time, there is sometimes a reluctance.
    Senator Nelson. Well, in China, approximately 1,400 square 
miles of land in the northern regions turn to desert every 
year, and, of course, this limits their production and creates 
a greater demand with less production. So I hope that we are 
able to find the willingness to follow our lead in China and 
other locations in the use of water to certainly conserve it.
    Moving to another area that the Chair has referenced, 
biotechnology, I know that you support biotechnology and the 
benefits that it provides agriculture in being more efficient 
in meeting the needs of the growing world population. I really 
was appreciative of your efforts with Roundup Ready sugar beets 
when we were facing some challenges in getting that handled 
because of some court cases. Because of your efforts, I have 
heard often from my producers the frustration of the growing 
length of time it is taking for the Department to grant 
authorization for new products that have been submitted for 
review. Could you give us some idea of what steps are being 
taken by the Department to perhaps approach this in a more 
timely manner?
    Secretary Vilsack. Well, there are a greater number of 
these and they are far more complex than when we first started 
this process, which is one of the reasons why it is taking a 
little bit longer. We have done a couple of things.
    First of all, as I indicated earlier, we are engaged in a 
Process Improvement Program in which we are trying to eliminate 
steps in the regulatory process that are duplicative or 
unnecessary.
    We are also expanding the number of people that are working 
on this particular area. We have proposed, notwithstanding the 
budget difficulties, to reallocate resources in creating 
additional teams of people that can look at this.
    We have also suggested that we can follow the same process 
that EPA and other regulatory bodies follow in encouraging or 
providing an alternative to us reviewing information, providing 
an independent contractor paid for by those who are seeking the 
regulatory relief to do a review, and then we at USDA would 
review the review, if you will, to ensure that its integrity--
that it is solid and that its science is sound. This might 
speed up the process significantly.
    Having said that, I think that there continue to be 
challenges, which is why we are trying to encourage dialogue 
and a conversation between those who have questions and 
concerns about biotechnology, those who wish to proceed in a 
different direction, which we also support, organic production. 
There needs to be a more serious conversation between those 
groups so that we can find common ground, and we are trying to 
facilitate that at USDA.
    Senator Nelson. Well, as you know, the new biotechnology 
that continues to increase every day has resulted in far better 
yields in America than perhaps in other countries. Where their 
production has leveled off, ours continues to increase very 
dramatically because of these measures and the advancement of 
the biotechnology and the development of the seed grains and 
other plantings. So I hope that we can find ways to do it in an 
appropriate fashion. We do not want to make mistakes rushing 
forward, but we do not want to lose ground in the process, 
either.
    So thank you very much. Thank you, Madam Chair.
    Chairwoman Stabenow. Thank you very much, Senator Nelson.
    Senator Grassley.

 STATEMENT OF HON. CHUCK GRASSLEY, U.S. SENATOR FROM THE STATE 
                            OF IOWA

    Senator Grassley. Thank you, Madam Chairman.
    I want to read a short paragraph out of a statement I am 
going to put in the record before I ask questions.
    The American family farmer is going to lead the way in 
producing food for the world, but we all know prices fluctuate, 
weather changes, foreign markets may be open and closed without 
much warning, all leading to unpredictability for today's 
farmers. Farmers have to have a good safety net and farm 
programs serve an important role as part of that safety net and 
we have to make sure that the farm program gets directly to the 
farmers that need it the most.
    [The prepared statement of Senator Grassley can be found on 
page 13 in the appendix.]
    Senator Grassley. Before I ask a question, I would 
compliment you, first of all, in two areas that you have taken 
a leadership role in that I am glad to have a Secretary of 
Agriculture do that, in the area of civil rights and in the 
area of enhanced competition.
    I want to start with a question where you left off on what 
you said in response to a question from my colleague, the 
junior member from Nebraska, about helping small farmers. I 
believe both in the President's budget, and I am not sure 
exactly what you have said about it, but we have proposals for 
hard caps on what can--payment limitations, I should call it. 
So could you comment, since you brought up the issue of small 
producers, comment on having payment limits better direct those 
farm programs so those family farmers that need them the most?
    Secretary Vilsack. Senator, I think we are faced with a 
fiscal reality and we are also faced with an economic reality, 
and the fiscal reality is that you have got far less resources 
to deal with. The economic reality is, as Senator Johanns 
indicated earlier, prices are pretty good right now. And when 
you have the combination of those two things, you have got to 
look for ways in which you can prioritize where your resources 
go.
    That is one of the reasons why the President has been 
fairly insistent that there be a reduction in the Adjusted 
Gross Income limits. Right now, you could, theoretically, have 
$750,000 of Adjusted Gross Income from your farming operation 
and another half-a-million dollars of income from non-farm 
sources and still get payments from the government. At a time 
when we are really challenged in terms of where the money is 
going to go and who it helps, it may make some sense for this 
body to take a look at that process, and the President has 
suggested that. I think you have, as well. This recognizes that 
these operations, these large operations, have substantial 
capital at risk, but they also have, in these good times, 
pretty good incomes, so----
    Senator Grassley. Yes. And I would like to suggest my 
willingness to work with you on that and the other members of 
this committee, as well.
    Even though it is a little bit out of the farm program but 
it is very closely connected with prosperity in agriculture, I 
would like to have you discuss the continuing role of ethanol 
and its part in any farm bill discussion.
    Secretary Vilsack. Well, I think this is extraordinarily 
important. I mean, first of all, the American consumer is the 
beneficiary of ethanol. We are now enjoying 89 cents a gallon 
less in cost for our gasoline because we have an ethanol 
industry.
    We also have somewhere between 400,000 and 440,000 jobs 
that are directly or indirectly created as a result of this 
industry, and it is fairly clear that it also helps to improve 
the bottom line for the producers. So producers not only can 
profit from production of agricultural products, but they can 
also profit from processing.
    It is also true that the process of ethanol production 
creates coproducts or byproducts which are very helpful to 
other aspects of agriculture, including the livestock industry.
    So there are a multitude of reasons why we need to continue 
to have this industry, in my view, but we need to be able to 
expand it to meet the renewable fuel standard guidelines of 36 
billion gallons. When we do, it is a million new jobs in rural 
America. It is $100 billion of capital investment in rural 
America. Rural America, 90 percent of persistent poverty 
counties are located in rural America. The per capita income 
differential is significant in rural America. The poverty rates 
are higher. The unemployment rates historically are higher. So 
we really have to pay attention and address the concerns of 
rural America, which oftentimes are sort of an afterthought, in 
my view.
    The ethanol industry has provided real hope. It is a 
linchpin for revitalizing the rural economy. And my only hope 
is that as you deal with the fiscal challenges that you 
confront here, that you do not create a cliff for the support 
that has been provided to the industry, because when we did 
this with the biodiesel industry, we saw 50 percent of 
production end and 12,000 jobs lost immediately. So if there is 
to be an end to those support levels, there needs to be a 
glidepath and perhaps a redirection of those resources in a way 
that can help bolster this industry, provide a maturing 
industry firmer ground, and allow us the opportunity to expand 
the feedstocks beyond just corn-based ethanol to a wide variety 
of things that we think have great promise.
    Senator Grassley. I had the same question on crop insurance 
that Senator Johanns had, and so I will not ask that, but I do 
want you to know and the members of the committee to know that 
I think that is a very important part of the farm safety net.
    The last thing I will end with, but this is not a question, 
it is just something to take into consideration along with all 
the other good things you said about helping food production 
around the world, enhancing it so that we can feed--not just 
rely upon American farmers, but farmers to produce for 
themselves, and that is the studies that Hernando de Soto has 
done about the very important role that farmers or anybody, 
even people living in the cities, have title to land and 
ownership of land and be able to prove it, that it is theirs, 
if you measure those societies that have that and those 
economies that have that versus ones that do not have it, you 
will find out that the productivity of people in those 
countries is much, much greater. And I am not talking about 
just Europe and North America, but there are other countries 
that are developing that have gone that direction and have 
enhanced their productivity very much and I think it would be 
very helpful for our government to be promoting that concept 
among governments of other countries as well as all the other 
stuff that we are doing.
    Thank you, Madam Chairman.
    Chairwoman Stabenow. Thank you.
    Senator Conrad.
    Senator Conrad. Thank you, Madam Chairman. Thank you for 
holding this hearing. It is a very good beginning to our 
contemplation of a new farm bill, which is extraordinarily 
important not only for the rural parts of the country, but the 
urban parts of the country, as well. I think, as every member 
of this committee knows, the vast majority of funding in the 
farm bill does not go to directly support farmers and ranchers, 
but directly goes to support nutrition programs across America, 
that is felt in every community across our country, and I think 
it is important to remember that. Well over 85 percent of the 
funding in the farm bill goes for nutrition.
    Mr. Secretary, welcome. Thank you for your leadership. I 
believe you have been doing a superb job. It is confirmed for 
me by the excellence of your testimony here this morning. I was 
just listening to you talk about ethanol and the review that 
you gave of the importance to our economy, not only our rural 
economy but the national economy of biofuels and ethanol 
specifically, I was impressed, and I hope others are listening, 
are paying close attention to the very thoughtful testimony you 
are providing.
    I would just like to talk for a moment about America's 
competitive position with respect to our toughest competitors 
in world agriculture, which remain the Europeans, and what they 
do to support their farmers and their ranchers compared to what 
we do. I was just having a chance to review the most recent 
World Trade Organization data, and when I look at what the 
Europeans are doing on a comparison basis, it is sobering. If 
you look at the most narrow measure of support, on a per acre 
basis, the Europeans are outdoing us three-to-one. On the 
broadest measure of support, they are outdoing us eight-to-one.
    So our farmers and ranchers are out there competing in 
world agriculture and the playing field is tilted against them, 
because, again, on the most narrow measure of support, the 
Europeans are outdoing us three-to-one on a per acre basis. On 
the broadest measure, they are outdoing us eight- to-one.
    And I know they have a strategy and a plan to dominate 
world agriculture because I have heard them describe it to me, 
and their plan is very simple. They have got farm supports at a 
higher level than we do. They are up here. We are down here. 
They want to keep getting equal percentage reductions until we 
fall off the table. That is exactly their strategy and plan. 
And shame on us if we fall for it. But they are very good about 
this. They say, well, everybody is taking equal percentage 
reductions. They never point out, from a very unequal base.
    The point of this is, I now look at the House budget that 
passed the House of Representatives, cuts agriculture $50 
billion, by far the biggest percentage cut anybody is being 
asked to take, and I think we have got to ask the question, 
what is that going to do to the competitive position of the 
United States? If a budget like that were actually enacted--and 
it failed here in the Senate yesterday, thank goodness it did--
but if a budget like that were enacted, what would it do to the 
competitive position of the United States?
    I would just ask you, do you have concerns that in doing 
what we all know has to get done to get our deficits and debt 
under control, are you concerned that this could go too far? 
And let me just end by saying, the Fiscal Commission on which I 
served recommended $10 billion of reductions over ten years.
    Secretary Vilsack. I want to make sure that I am clear 
about this. I do not underestimate the extraordinary difficult 
challenge that this committee and the Senate and the Congress 
have in terms of getting our fiscal house in order. I think 
agriculture has been instructive to the rest of the country 
that if you keep a lid on debt, you continue to work hard and 
you embrace technology, you can be productive and you can be 
successful.
    Having said that, I think, candidly, that the USDA has 
taken a disproportionate share of the cuts and we are now at a 
place where I have had a very serious conversation with all of 
the under secretaries. I suspect that Senator Johanns knows 
what those conversations are kind of like, where you 
essentially say, look, we are looking at potentially a 25 to 30 
percent cut in our discretion budget. That means we really have 
to start thinking about what we can do as well as what we 
cannot do.
    One area in particular is in the research area. At a time 
when we ought to be out-innovating and out-building and out-
educating, as the President calls for us to be competitive, we 
are reducing our commitment to research at a time when we 
should be actually looking at ways in which we can leverage and 
increase our commitment to research.
    This research is one of the reasons why we have higher 
productivity, because it is producing genomes. It is producing 
more information and knowledge. It allows us to be better. It 
allows us to be protecting our crops against pests and 
diseases. It is developing new technologies and new ways to 
produce crops more effectively and efficiently. It is really 
something that we really ought not to shortchange, and it is 
part of the reason why I say we have to also grow our way out 
of this deficit in addition to cutting our way. Investments in 
research, every dollar that you spend, ten dollars return.
    Trade is another area. When you cut the Foreign Agriculture 
Service, it seems like a small thing, $10 million, does not 
seem like much. This is a relatively small part of our budget. 
Every dollar that we spent in trade promotion generated $35 of 
economic opportunity for farmers and producers and business 
leaders and job growth in the country.
    So I think you have to be really careful about this, and I 
think we have gotten to the point with the agriculture budget, 
if this chart that I alluded to earlier is correct, we have 
been flat-lined for 30 years. The Defense Department has not 
been flat-lined. Health and Human Services has not been flat-
lined. Science and technology has not been flat-lined. 
Transportation has not been flat- lined. And I am not taking 
anything away from all of those. They are very important. But 
when you look at our numbers and then you look at that chart, 
it is hard to make the case that somehow agriculture can give 
more.
    Senator Conrad. I just want to conclude, if I can, Madam 
Chairman, by saying this. Look, we know agriculture has to take 
reductions, as does every part of the Federal budget. We are 
borrowing 40 cents of every dollar we spend. It cannot 
continue. But it should not be disproportionate. And I am 
extremely concerned that we are headed in a direction where we 
could see disproportionate cuts to a part of the budget that, 
frankly, has not contributed to the deficit. We paid for the 
last farm bill. We paid for it. And I just hope that message is 
being heard in other parts of this town. I thank you.
    Chairwoman Stabenow. Well, thank you very much, Senator 
Conrad.
    Before going on, let me just indicate, as you know, that I 
feel strongly and agree with you on this question. We have 
already seen a net $4 billion contributed towards the deficit 
as a result of crop insurance cuts. We are seeing 
disproportionate cuts in agricultural research as a result of 
the way we are changing the way things are funded and the other 
cuts that, Mr. Secretary, that you have talked about. And I 
share a deep concern and am conveying that at every point.
    The fact that agriculture is willing to do--we are willing 
to do our part in agriculture, but it is a mistake to 
undervalue the importance of agriculture to our economy and to 
the world, which is part of what this conversation is about, in 
terms of growing our economy and innovating and supporting our 
capacity to feed the world and to feed Americans, as well. And 
so this is a time, I think all of us who care deeply about 
agriculture need to be engaged in this discussion.
    Secretary Vilsack. Madam Chair, could I just respond-- just 
30 seconds?
    Chairwoman Stabenow. Yes, please.
    Secretary Vilsack. When you realize that roughly 200,000 
producers in this country produce 85 percent of what we 
consume, I challenge anybody in the country to show me 200,000 
folks who have contributed more to the American economy and 
more to the American nation.
    Chairwoman Stabenow. Well said. Thank you very much.
    Senator Thune.
    Senator Thune. Thank you, Madam Chair, and Mr. Secretary, 
welcome. Thank you. Great to have you with us.
    I also am concerned about the perception that a lot of 
people have that the entire agriculture budget goes into 
production agriculture when about a dime of a dollar of 
agriculture actually supports the commodity title of the bill, 
conservation programs, and other programs that actually 
directly benefit production agriculture. I guess that is part 
of the job that we have in educating people, our colleagues 
included, about where that spending occurs.
    You only have to look across the country this year, from 
the droughts that we have seen in the Southwest, you have got 
severe flooding in the Northern Plains, in the Midwest and in 
the South, and, of course, you have got record-setting numbers 
of tornadoes in numerous States, and you realize the incredible 
devastation that natural and weather-related disasters have on 
millions of acres of farmland and to poultry and other 
livestock producers.
    From any perspective, and it has been talked about a little 
bit, the effective risk management for agriculture producers 
needs to be one of the highest priorities that all of us, I 
think, have on this committee as we look to writing the next 
farm bill.
    But I did want to bring up an issue with you with regard to 
risk management that is a little bit more of an immediate 
concern and that has to do with crop insurance, which is a 
critical feature of the safety net across the country, and 
especially in my State of South Dakota. My understanding is 
that RMA is proposing a change specific to the Prairie Pothole 
region to existing rules effective for the 2012 crop year that 
basically would remove prevent planting eligibility for acreage 
that was not planted and harvested in at least one of the three 
most recent crop years using recognized good farming practices.
    This proposed provision has caused considerable concern in 
Northeastern South Dakota. I fully understand that there may be 
prevent planting abuses that RMA is trying to overcome with 
this policy change. However, I also believe that this proposed 
change has the potential to cause financial hardship on many 
farmers in that area and in North Dakota and Minnesota who have 
not abused prevent planting provisions.
    Would you be willing to consider other alternatives to 
RMA's proposed change that would not allow continued prevent 
planting abuse, but that would still offer a certain amount of 
prevented planting assistance in those areas, assuming that 
prevent planting is an issue in 2012?
    Secretary Vilsack. Senator, we are always willing to work 
with folks to try to get to the right solution. The key here is 
to balance the workability of the program with the integrity 
and the fiscal stability of the program. I mean, there are 
circumstances, unfortunately, where folks, because of the 
nature of their land, have had areas that have been, in a 
sense, flooded or ponds for an extended period of time who 
continue to receive crop insurance benefits when, in fact, they 
have never really for a long period of time been able to plant 
anything there. So I think what we have to do is figure out how 
do we separate that circumstance from the circumstance where it 
occasionally occurs and people are losing potential income.
    I am happy to work--if your staff has ideas or thoughts, I 
am happy to communicate those to Mr. Murphy, happy to have Mr. 
Murphy come up and visit with you and your staff if you think 
that would be helpful.
    Senator Thune. That would, and we would love to have that 
happen because there are, I think, legitimate circumstances in 
which--and I understand what you are trying to target here and 
fully support that. But there are circumstances, and 
Northeastern South Dakota is a good example of one of those, 
where these rules have really, I think, gotten at farmers who 
are using recognized good farming practices. And, frankly, in 
Northeastern South Dakota, you have to understand, people have 
used analogies like pouring water on a pool table. It just kind 
of spreads out. The Prairie Pothole region is very flat and we 
have hundreds of thousands of acres now for consecutive years 
that have not been able to be planted. I do not think that the 
changes that are being proposed were directed at those 
particular types of producers, so I would like to work with you 
and your staff if we could do that.
    Mr. Secretary, one of the provisions in the 2008 farm 
bill--I should not say one, I guess there were several 
provisions that provided incentives for beginning farmers and 
ranchers. I guess I am interested in knowing from your 
perspective, as USDA Secretary, do you believe that the 
existing beginning farm programs administered by USDA have been 
effective and do you have any suggestions for improving those 
initiatives or for new ones as we get into this next farm bill? 
I think getting into agriculture for young farmers today is 
very, very hard because of the capital requirements, the cost 
of farmland, and those sorts of things, and I am curious to 
know what your assessment is of the existing programs and what 
your recommendations might be for other ones.
    Secretary Vilsack. Senator, it is tough to move the dial in 
this area with the limited resources that have been allocated 
to the beginning farmer program. I would say that the monies 
are being wisely used, but I think we have to be a bit more 
creative.
    When you take a look at the last agriculture census, what 
you find is that we had 100,000 new farmers in the category of 
very, very small operations, small acreages that basically 
finance or provide commodities to farmers' markets, things of 
that sort, and we want to encourage that because that helps to 
repopulate rural communities.
    But when you look at production agriculture and look at the 
commercial-sized operations, what you found was that we had a 
net loss of about 40,000 producers. And if you combine that 
with the aging nature of farmers, average age 57, 30 percent of 
our farmers over 65, you look and you see that the trend line 
is not what it needs to be.
    So I think we need to figure out ways in which we can 
provide sweat equity opportunities for young people who want to 
get into farming. Perhaps it is the tax code. Perhaps it is 
estate tax. Perhaps it is income tax. Some way or process by 
which someone can work on a farm, and as a result of that, 
generates some degree of equity that allows them then to go to 
a banker, be able to have a proven track record to have some 
equity, some collateral that they can use that allows them to 
expand their operation.
    I cannot say that I have a specific idea today, but I just 
know that there has to be something more than what we are 
doing, because what we are doing, while it is okay, is 
obviously not bending that trend line in the right direction.
    Chairwoman Stabenow. Thank you very much.
    Senator Thune. Thank you, Madam Chair.
    Chairwoman Stabenow. Senator Bennet.
    Senator Bennet. Thank you, Madam Chair. Thank you for 
holding this hearing.
    Mr. Secretary, thank you for your excellent testimony 
today. We appreciate it very much.
    I actually will start where you guys just left off, maybe, 
and broaden the question a little bit, because as I travel the 
State, people in Colorado are really worried about where the 
next generation is going to come from, whether they are going 
to be able to stay on the farm, be able to stay in rural 
America. We know that today, more than 90 percent of farm 
household income comes from off-farm activities and that, as 
you and I have discussed before, that means Main Street and a 
healthy non-farm economy is hugely important to our rural 
economies.
    In Colorado right now--I wanted to mention this to you in 
case you did not know--Governor Hickenlooper has been leading a 
sort of ground-up discussion with every county in the State 
about what their economic future looks like, what their plan 
for the future looks like. We have been encouraging--he has 
been encouraging people to think regionally, which I think is 
an enormously important part of what we need to do and what we 
have not done well. With stovepiped agencies and stovepiped 
programs, I am not sure we have encouraged or incentivized the 
kind of regional thinking we need.
    And I wonder whether, in the context of the farm bill we 
are going to take up, you might be willing to share your 
perspective on how our discussion of agriculture really fits 
into a conversation about what the trajectory and future is of 
rural communities in this country.
    Secretary Vilsack. Agriculture, Senator, is at the center 
of rural development. It has been always and it will continue 
to be. But it has to be supported. There are far too many 
farmers today that need off-farm income, as you have indicated, 
either themselves or their spouse or a combination, to be able 
to preserve the farm. So rural development, job growth, is 
important to preserving farm ownership.
    In order to do that, number one, small communities have to 
recognize that they probably by themselves do not have 
sufficient resources, either financial or brain power-wise, to 
be able to do it on their own. They do have to think 
regionally. They have to think collaboratively. They have to 
look at what their natural resources are and how to better 
utilize those natural resources.
    I think there are essentially four key elements. We have to 
figure out additional ways to encourage private investment in 
rural areas. We have to think of ways in which we can expand on 
the innovation that agriculture has shown in rural America. We 
have got to create networks, both in terms of regional 
approaches to economic development, but also broadband 
expansion allows folks to be connected with the 21st century 
infrastructure. And we have to celebrate place. We have to do a 
better job of maximizing the economic opportunities from 
natural resources.
    When you look at what we are investing in, whether it is 
renewable fuel and energy, whether it is broadband expansion, 
whether it is these local regional food systems that can help 
create economic opportunity or it is the Great American 
Outdoors Initiative the President has launched, all those are 
strategies to try to advance rural development, create jobs, 
and help to support agriculture. And, in turn, agriculture 
helps to support the rural community. So it is a partnership.
    Senator Bennet. I would be interested--we do not need to do 
it today, but if your staff knows of models of places that have 
done four of those things well or some combination of those 
things particularly well, I think it would be interesting to us 
in Colorado to be able to see some of those examples. We may 
have some of our own, but----
    Secretary Vilsack. We have invested in a program called 
Great Regions, where we have identified roughly 22 regions 
where we are investing some of the rural development resources 
that were provided in the 2008 farm bill that are doing a lot 
of this, a lot of strategic thinking and a lot of investment. 
We will provide your staff with the locations of those Great 
Regions, and Doug O'Brien from my staff would be happy to visit 
with your staff about what is taking place in those regions and 
what might be applicable to Colorado.
    Senator Bennet. Great. I wanted to shift gears in the last 
minute that I have here. You mentioned at the outset of your 
testimony that we were having a record year of exports, a 
record year in our trade surplus. And I just wondered whether 
would share with the committee, beyond Colombia, South Korea, 
and Panama, what the administration is doing to resolve 
existing trade disputes with Mexico, Japan, and China to make 
sure that we continue on this trajectory of growing our 
exports.
    Secretary Vilsack. Well, I had a very productive meeting 
with the Secretary of Agriculture of Mexico in December and we 
identified a number of issues, potatoes and beef on our side, a 
couple of issues involving specialty crops on his side, which 
we are in the process of working through. The resolution of the 
truck issue will be very helpful in terms of reducing tariffs 
that Mexico has assessed on agricultural products. And I am 
confident that we are--we are working through a process on 
potatoes that involves sort of a binding arbitration process 
that was put in place. We are waiting for a certificate from 
the Health Ministry on beef and the efforts to reopen the beef 
trade.
    In China, we are focused, as we have been for some time, on 
reopening the beef industry in China. I think the Korean Free 
Trade Agreement, when it is passed, will give us the impetus to 
go back to the table and to continue to negotiate with the 
Chinese. We are separated by a position on offals. We 
identified 15 to 20 offals which we think should be part of an 
expanded trade opportunity in China. China has identified three 
or four or five. Frankly, they did not identify the ones that 
actually could create market opportunities for us. We do not 
think it is science-based. And so we have got to keep going 
back to them with that.
    On the Japanese side, I had very fruitful conversations 
with the minister there, but they have changed the ministers. 
There have been three in the time that I have been Agriculture 
Secretary. And obviously, in light of what has happened in 
Japan, we are giving them enough space and time to get their 
feet back on the ground before we reengage in negotiations.
    Senator Bennet. And I think that is exactly the right thing 
to do. I would say that my understanding is that there may be a 
new appreciation of science-based analysis in the wake of this 
accident in Japan on the part of the Japanese, which may give 
us some help on the beef negotiations. So I think at the right 
time, that may be of some use. And I want to say thank you--I 
am out of time--on behalf of our potato farmers and our beef 
producers for your work to try to expand these markets. Thank 
you.
    Thank you, Madam Chair.
    Chairwoman Stabenow. Thank you very much.
    Senator Boozman, and then Senator Klobuchar.
    Senator Boozman. Thank you, Madam Chair, and we appreciate 
you being here, Mr. Secretary.
    I really--you made some comments about trade. I think in 
your testimony, you devoted an entire page to the importance of 
that. And in these very difficult economic times, not only does 
that increase markets and things like that, but that really is 
a thing that will help provide another security network, in 
other words, making our farmers more secure by getting those 
agreements done.
    The other thing is we have the information put out on the 
importance of the global stuff and what is going on. Again, the 
trade agreements, in getting those done, you also create a 
situation where you start putting the infrastructure in more 
overseas, you know, the storage components, all of those 
things, the transportation components which are so important.
    So I guess my question is, how can we help you? You have 
come out very strongly. How can we help push the 
administration, push Congress, whatever we need to do to get 
these things enacted?
    Secretary Vilsack. You know, Senator, I think there is a--I 
believe there is a consensus on the importance of these trade 
agreements and I think there is a growing consensus on the 
importance of also having some trade adjustment assistance that 
will help those workers who are displaced or impacted 
negatively as a result of trade, and my hope is that as you 
consider that, that you include farmers in that category, 
because there are some farmers that sometimes do not get fairly 
treated in these arrangements.
    But on balance, these trade agreements are not just about 
increasing opportunity for farmers, as you pointed out, but to 
supplement what you said. It is for every billion dollars of 
agricultural trade, we generate 8,400 jobs. So when you are 
looking at Korea, $1.9 billion of additional agricultural 
trade, to a point where the Korean Free Trade Agreement, the 
agricultural component of that will be equal to the previous 
nine Free Trade Agreements that we have signed. So it is a 
tremendous opportunity for us to grow, and I think it does 
provide some momentum for further opportunities in other parts 
of Asia.
    So I think it is just continue to promote the benefits of 
this and continue to see this in a comprehensive way to move 
trade opportunities, not just the bilaterals but also the 
multilateral discussions with the Trans-Pacific Partnership. 
You know, the Doha Round is a little bit problematic right now 
because we just do not see the balance. We are hopeful. We want 
to have a strong Doha Round. Again, Senator Johanns, I am sure, 
is well aware of the challenges there from his past 
experiences. So I would say just continue to advocate for this 
and continue to point out the importance of trade in terms of 
security, economic, and for that matter, national security, as 
well.
    Senator Boozman. Very good. I agree. The other thing that 
you mentioned was the importance of the research, and we have a 
number of facilities in Arkansas. There is just a tremendous 
amount going on nationwide. You made the point that 200,000 
supply 80 percent, and I would argue that the reason that we 
can have 200,000 good is because of the research that came out 
of a much, much smaller group giving them the knowledge that 
they were able to go froward.
    So, again, I guess I am saying the same thing. How can we 
help in promoting the value of the research and maintaining 
those facilities that are doing such a tremendous job?
    Secretary Vilsack. You know, Senator, I think it is--I 
think understanding that as you deal with the deficit, which is 
real, that you also recognize that you need to grow your way 
out of a deficit, and this research investment pays.
    When you look at the amount of money that we spend on 
invasive species and pests and diseases, some of that money 
could potentially be prevented if we continue to be aggressive 
in terms of our research, or we may be able to mitigate the 
damage by those pests if we continue to promote research. We 
might be able to figure out how to be more productive with that 
research. We might be able to figure out ways in which we can 
do a better job of transferring knowledge and information to 
other parts of the world so they, too, can be in better shape 
from a food perspective.
    So this is a really important component, often not fully 
articulated. We are always talking--you know, one of the 
frustrations of this job is that when you go out and you talk 
to folks, when they hear ``farm bill,'' they immediately think 
of subsidies and that is about all they think of. And the 
reality, which you all know, is that the farm bill is far more 
expansive than that, and a component that is often ignored is 
the research component.
    Senator Boozman. Right.
    Secretary Vilsack. I mean, it just--people--when you say, 
we do research at USDA, they go, ``Huh? Really?'' So I think 
publicizing the important role that research plays in 
agriculture, I think would be helpful.
    Senator Boozman. Then very quickly, Madam Chair, can I just 
say that the flooding that is going on right now, you know, we 
have been waiting for the floodwaters to go down and everybody 
expected them to go down, but it is continuing to rain, and I 
would really encourage you, and I know you are doing this, but 
some things were done after Katrina, you know, similar 
situations where you had lots of damage to the farm community, 
to really look at ways that we can be helpful. I know even 
little things.
    You have got a lot of people with product in silos that 
they have contracted. The roads are gone. The water is up 
around them. They cannot get to it. Things like that, that 
maybe that is due at the end of the month, things that we can 
do to just look in and to help to remediate would be very, very 
helpful.
    Secretary Vilsack. We have instructed our teams to work 
with farmers and to work with communities that have been 
negatively impacted by these floods so that they are given the 
time and the opportunity to get themselves back on their feet. 
Our heart goes out to those folks. I mean, the tornadoes and 
floods are just devastating.
    Senator Boozman. Thank you, Madam Chair.
    Chairwoman Stabenow. You are welcome.
    Senator Klobuchar.
    Senator Klobuchar. Thank you very much, Mr. Secretary. 
Thank you for your recent visit to Minnesota and your work on 
biofuels, and I appreciated all your work. Many people have 
talked about your work with genetically modified seeds, which I 
am head of the Biotech Caucus in the Senate, so I appreciate 
that as well as the work that you have done with exports, as 
has been pointed out. When we have had issues with certain 
markets, you have been incredibly helpful.
    My first question--Senator Conrad touched on this--is just 
some of the budget proposals which are going to directly affect 
our work on the farm bill. I know he asked about the Ryan 
budget, the Republican budget that came over from the House, 
but that is, just to clarify that--and I think you know I have 
been one of the leaders on some of the reform efforts. I had a 
bill that did not pass a few years ago to try to focus our farm 
payments more on family farmers. But, in fact, the Ryan budget 
would cut agriculture by $30 billion, conservation by $20 
billion, the nutrition program by $125 billion, is that right?
    Secretary Vilsack. I will defer to you on the figures- -
    Senator Klobuchar. I think it is right. And then the 
Deficit Commission, which was a bipartisan effort, actually is 
very different. It is a $10 billion cut, and I think everyone 
knows we are going to have some cuts. And could you--I know you 
talked to Conrad about this, but could you just expand a little 
bit on what this would mean? I will be honest. My biggest fear 
is we are going to start being dependent on foreign food and 
foreign oil, just like we are on foreign oil if we are not 
careful here.
    Secretary Vilsack. Senator, one of the great advantages we 
have in America is that we have a degree of self-sufficiency in 
food that is the envy of the world and we have got 
extraordinary productivity. So we obviously do not want to harm 
that.
    One of the areas that I am concerned about as we look at 
reductions is in the area of conservation, and there are 
several reasons for that. The obvious reason is that 
conservation is helpful to the producer and it is also helpful 
to the environment and it helps to preserve these natural 
resources that provide us this bounty.
    But there is another reason, and that is that these 
conservation payments go to those folks that I mentioned 
earlier, the 600,000 that are struggling every day to make ends 
meet. Their land may not be as productive or they may not have 
as rich a soil. So when you cut and significantly reduce 
conservation--significantly reduce conservation, which is what 
that would be--you basically limit the capacity of those 
operations to continue to do what they need to do to stay in 
business and to stay on the farm and to stay supporting schools 
and the local community and the small businesses in those 
communities. So I have deep concerns about that.
    Senator Klobuchar. Next, on biofuels, I think you know 
there are a few of our colleagues here that just want to pull 
the rug out from under immediately, and could you talk about 
the uneven playing field that would be created if we were to 
allow the oil subsidies to keep in place and then completely 
take away even the ability for biofuels to have infrastructure 
and blender pumps and things like that?
    Secretary Vilsack. We spend a billion dollars a day and we 
take hard-earned American dollars and we send them overseas. 
The renewable fuel standard basically would allow us to reduce 
our imported oil by 17 percent, which is roughly equivalent to 
the President's goal of reducing imported oil by a third. What 
that would do is it would create, as I said earlier, nearly a 
million jobs in rural America, $100 billion of capital 
investment. None of that is going to take place unless folks 
know what the rules are and unless folks have an understanding 
of where we are headed.
    When you create a cliff--and we saw this with biodiesel--
when you create a cliff, when you just cut it off, no 
transition, no time, you just cut it off, basically, the 
markets get scared, the capital dries up, the production stops, 
and jobs are lost, and an opportunity for producers, 
particularly those producers in the middle that need off- farm 
income or they need another market for their product, end.
    Why we would do that at a time when we have the capacity to 
wean ourselves from foreign oil and we have the capacity to 
take those dollars that we are shipping overseas and creating 
economic opportunity, to create it in rural communities, why we 
would not create some kind of glide path and redirect those 
resources in a way that would build a stronger renewable fuel 
industry is, frankly, beyond me. And there are so many myths 
associated with this that need to be addressed. The land use 
myth--a recent study has shown that that is not correct. The 
energy efficiency myth, which is that it takes more energy to 
produce ethanol than it does, that is not correct. In fact, the 
most recent studies show that it is more energy efficient than 
oil. So there are a multitude of reasons why this industry is 
important and I sincerely hope that we do not make the mistake 
of creating that cliff.
    Senator Klobuchar. Right, and I think you are aware that 
Senator Thune, Senator Grassley, Senator Harkin, and I, and a 
number of other people, Senator Stabenow, have been working on 
that glide path, to find a way to actually ratchet down the 
subsidies of biofuels to basically nothing, which is very 
different than what we have been hearing from the oil people.
    Secretary Vilsack. That is really important, and I would 
say that it also creates an opportunity for us to expand these 
production opportunities in all parts of the country, which I 
think is important, as well.
    Senator Klobuchar. Okay. And my last thing, which we can 
talk about later, it is just the wolf issue. I think you are 
aware that in the last negotiations on, I think it was Montana, 
Wyoming, and Idaho, I think, are exempt from the Endangered 
Species Act, yet the State of Minnesota has double the amount 
of wolves in all three of those combined States. And then we 
lost our wolf management funds in that deal and last year we 
lost over 100 cows, 15 pet dogs, and a number of other animals 
to the wolves.
    So we are continuing to work with you to at least maintain 
our wolf management program in our State, to hopefully go 
through the Endangered Species Act delisting. If that is not 
working, most of the mainstream groups are not suing, but if we 
get delayed, we will be coming back here with legislation, 
because it is somewhat hypocritical that certain States got 
exempt when one State whose basketball team is named the 
Timberwolves----
    Secretary Vilsack. Timberwolves.
    Senator Klobuchar. --is left with no wolf management funds. 
So that is something that I hope we will continue to work 
together on.
    Secretary Vilsack. I would be happy to work on it. I think 
this is an instructive point for the committee, though. In the 
past, there could have been an opportunity with the kind of 
flexibilities we had to be able to move some resources, but the 
reality is, with the depth of these cuts, there just is not 
that flexibility.
    Chairwoman Stabenow. Thank you very much.
    Senator Lugar, and before you speak, Senator Lugar, in 
thinking, turning to you, it reminds me just how fortunate we 
are in this committee to have such depth of knowledge about 
agriculture, a former Secretary of Agriculture, four former 
Chairs, including yourself, and Senator Roberts having chaired 
the committee in the House, and so I think if any group of 
people will have the opportunity to actually put together the 
very best farm bill we can with the challenges that we have, I 
think it will happen here. It is just great to have you as a 
member of the committee. Senator Lugar.
    Senator Lugar. Madam Chairman, thank you very much for that 
introduction.
    Let me just take advantage of your general statesmanship, 
Secretary, to raise a broad question that is often raised in 
other fora about the fact that the rural food supplies are 
limited, and in this particular year in certain crops that we 
produce, whether it be corn or soybeans or wheat, the supplies 
have diminished precipitously. In fact, many people write that 
unless we have very good crops this year in the United States, 
this crisis will take on even larger dimensions of human 
suffering throughout the world. Others have correctly been 
talking about the problems we are having with barriers to 
trade, and these have existed even given the human conditions 
we are talking about, for a long time.
    So I do not ask you to hop over all of that, but think, for 
a moment, how in the United States will it be possible for us 
to find more acres on which we might cultivate crops, or is 
that really a task that is not going to find solution given our 
geography, our history, and so forth? And beyond that, how are 
we going to move maybe even in a ten- or 20- year period to 
perhaps as much as a 20 percent increase in yields on the acres 
that we have?
    This would not solve the world problem, but nevertheless, 
it would indicate an extraordinary statesmanship on our part in 
moving at least to do our part and maybe to stimulate 
Europeans, as the arguments we have with them on genetically 
modified seed and so forth, to think also in a production way 
so that, somehow, the increasing population in the world, which 
is happening, and apparently the decreasing supplies that make 
markets precarious do not envelop all of us. We cannot solve 
all this in our own farm bill, but I ask you for your counsel 
as we take up the farm bill as to what are the productive steps 
we might take along with you to bring about greater acreage, 
greater yields in the United States, even as we are working 
through the trade barriers that bollox up our movement.
    Secretary Vilsack. Senator, that is a very, very important 
question and it requires a comprehensive answer and I will try 
my best to touch on a couple of things.
    First of all, I think we have to continue to focus on 
research. There is no question that I have a great confidence 
in our ability to continue to be productive so long as we 
continue to invest in the research that allows us to figure out 
how to be more productive or how to protect our crops from 
diseases that might reduce yields.
    You know, there may be some circumstances and steps that we 
can take in terms of increasing acreage, but honestly, I am not 
sure that those steps will fundamentally change the equation. I 
think the key here is for us to be as productive as we can with 
the land that we have, and then, secondly, to be able to work 
with other nations to make sure that their productivity is as 
good as it can be. I do not think there is any question that 
there are many, many parts of the world today that are 
underperforming simply because they have not embraced the 
technologies or have been concerned about the science that we 
have embraced in this country.
    And so my hope is that, over time, we can break those 
barriers down. We are beginning to see more and more countries 
begin to recognize the need to have regulatory systems and 
structures that will allow this science, the biotechnology and 
others, to take hold. We need to continue to focus on that.
    And I think, frankly, we need to figure out how to be more 
creative with the production processes that we have. For 
example, when we deal with biofuel production, interesting 
technology in Shenandoah, Iowa, I saw recently, where they are 
taking the CO2, the reclaimed water and heat from an ethanol 
production facility and producing algae, which they harvest 
daily. Algae can be used as a feedstock for biofuels. It could 
be used for aquaculture feed. It can be used for livestock 
feed. It can also be used for cosmetics. Tremendous 
opportunity, and they are going to have algae farms, which are 
very small in size in terms of acres because they can basically 
do them both horizontally and vertically, these tubes. I mean, 
it is a brave new world out there and we need to be confident 
and optimistic about it and we need to make sure that we 
continue the investments that allow those kinds of things to 
happen.
    Senator Lugar. I just note as a personal point, on our farm 
in Indianapolis, my dad was getting 40 or 50 bushels to the 
acre when I was a boy and we are getting 170 regularly. This is 
not an all-star situation, but at least moderate, average 
Indiana, a four-fold increase even in my lifetime. This is why 
I am excited about the possibilities of going even further with 
the next generation, because I note not only is this a human 
task, but likewise, because of this crisis, land values in 
Indiana and many other States are going up very sharply. In 
other words, we are discussing this farm bill in a time in 
which, by and large, the net worth of most farmers is 
increasing substantially. The balance sheets are much better. 
So both of these things are moving along in ways that may be 
helpful. But I really trust your judgment to give us good 
counsel as those things that would be helpful to you either 
administratively or for inclusion in our farm bill, and I thank 
you for coming this morning.
    Chairwoman Stabenow. Thank you very much. Thank you.
    Senator Hoeven.
    Senator Hoeven. Thank you, Madam Chairman.
    Secretary, good to see you again. Thank you for appearing 
in front of us. I am sorry I missed your comments earlier. I 
had a conflicting Energy Committee meeting.
    I want to pick up on a couple of the themes, though, that I 
did at least hear part of the discussion on, one of which is 
flooding. We are having a tremendous amount of flooding in our 
State and prevented plant is going to be very important to our 
farmers this year. I know you will be out around the country. 
You have been very good about coming to our State in the past 
and I would like to begin by inviting you to come out to our 
State and see some of the impacts of that flooding, not only to 
get your assistance with programs like prevented plant, but we 
have a unique situation in Devil's Lake where we have an 
enclosed basin and the lake keeps getting bigger and bigger, 
inundating farmland. So we are trying to use the programs, crop 
insurance programs that apply, the Wetland Reserve Program, 
which is a newer program that is an easement program that we 
are trying to make work, CRP, where it works. There is another 
program, Water Bank, that could apply, but does not have 
funding in it.
    I guess two questions. One is would you be willing to come 
out and see some of the impacts of the flood, and the second is 
what ideas you have or what assistance you can offer for some 
of these inundated acres in the Devil's Lake area due to this 
very difficult growth of this enclosed basin lake.
    Secretary Vilsack. Senator, let me answer the second 
question first. I do know that Dave White, Chief of the NRCS, 
has been working with a number of folks in your State as well 
as in Minnesota to address this and I believe he has identified 
up to $10 million of additional resources that are going to be 
put into this effort to try to provide some relief and some 
assistance. We will continue to work with folks to figure out 
creative ways to do this, but obviously the resources are 
somewhat limited.
    You know, one of the questions there, one of the points I 
would raise in terms of the farm bill is to the extent that we 
can have flexibility to use some of these programs, we have a 
lot of programs. Maybe we need fewer programs and more 
flexibility within programs to be able to address unique 
circumstances and situations that we find in other parts of the 
country, including North Dakota.
    I am always happy to travel to the Dakotas. I cannot 
promise you when that will be, but I am sure that we will be 
back to the Dakotas at some point in time.
    Senator Hoeven. We are working with Chief White. I thank 
you for that assistance. And, of course, your support behind it 
makes a big difference.
    The flexibility, I think, is an excellent point. You have 
got a number of programs, some of which I just identified, that 
have different strengths and weaknesses. If the Secretary, 
yourself or future Secretaries, had the ability to move dollars 
amongst those programs to meet the needs, I think that would be 
an important tool and would help our dollars go further and 
more effectively.
    Secretary Vilsack. Yes. I mean, the challenge here, 
obviously, with fewer dollars is to figure out how to leverage 
them, and I think that there are ways in which you can do that, 
but sometimes when you are prescriptive in these programs, 
which I understand why, it limits your capacity to be flexible 
and to be responsive. So I think to be nimble, to be a 21st 
century agency, if we had fewer programs but more flexibility 
within programs that survive or exist, we might be able to do a 
better job.
    And if the committee and the Congress would be clear about 
the results that they want from these programs--to me, if you 
said to me, here is a conservation program and we expect you to 
do X, this is the result that we expect and here are so many 
billions of dollars to do it, come back next year and tell us 
how you have done, that would hold me far more accountable than 
having a whole series of programs with no specific result other 
than hopefully it is going to do a good thing for the farm 
economy.
    To the degree that you can be very specific about results 
that you want, it will make it easier for us to be held 
accountable, and if we have the flexibility, if I can stand on 
my head and get Devil's Lake figured out, what difference does 
it make how I do it so long as the result is what you want.
    Senator Hoeven. I think you make a very good point and it 
is something we will have to look at in developing the next 
farm bill.
    On biofuels--Senator Klobuchar brought that issue up-- we 
really are working to transition to blender pumps, flex- fuel 
vehicles, and higher blends allowed through the EPA, and then 
also help from the EPA with some of the regulations so that 
more of these fueling stations can utilize their equipment to 
dispense ethanol. I think it is a good transition that can work 
and I am optimistic that we are going to make that transition, 
which I think will be good for the industry and actually 
probably bring the biofuels and the traditional fuels industry 
together in some good partnerships.
    Do you have any thoughts beyond that as to how we continue 
to build the biofuels, again, in an environment where we have 
limited dollars? What else can we do, in your opinion?
    Secretary Vilsack. We have clarified our REAP program to 
provide some financial assistance to convenience store 
operators and petroleum marketers to be able to finance these 
flex pumps or these blender pumps. The budget that was passed, 
the budget resolution that was passed by the House, I think, 
eliminates that funding, which you can eliminate the funding, 
but the reality is, it is very difficult to get these 
convenience store operators to install these very expensive 
systems unless they have some incentive.
    The second thing, you know, I think there ought to be ways 
in which we can encourage auto makers and/or consumers to 
embrace flexible fuel vehicles. I am told by Secretary Chu--he 
knows a lot more about energy than I do--that a $150 part on 
every car that is coming off the line would basically make 
every vehicle a flexible fuel vehicle. If that is true, is 
there not some way in which we can encourage Detroit either to 
do that or consumers to be encouraged to purchase a car that 
has that capacity and, therefore, create greater demand. So if 
you make supply more convenient and you create greater demand.
    The last thing I would say is I think you want to be 
mindful of the fact that we are also working on aviation fuel, 
which is a tremendous opportunity. We have got a very 
interesting relationship with the Navy and the Department of 
Energy that we are working on to try to figure out how 50 
percent of the Navy's fuel needs could be met with biofuel. 
That would be true for the Air Force, I am sure, and the Army, 
as well. So there are tremendous opportunities here. I just--
hopefully, we do not pull the rug too quickly out from under 
this industry.
    Senator Hoeven. Madam Chairman, I know my time is up. Just 
one quick final comment. I appreciate the work on the biofuels. 
I think we are working to make that transition. Again, I am 
optimistic.
    The other is I also appreciate your earlier comments on the 
trade agreements. We need to get those trade agreements 
ratified, and your help there is greatly appreciated.
    Chairwoman Stabenow. Thank you, Senator.
    Thank you very much, Secretary Vilsack. As you can tell, we 
have spent extensive time this morning, many members here, 
because obviously we are extremely interested and appreciate 
all of your input and leadership. So thank you for joining us.
    We are going to immediately move to our second panel. We 
have very important witnesses and we are at that point. I 
allowed this morning a little bit longer than the five minutes 
on questioning for our Secretary, but I am going to hold to 
five minutes on our next panel so that we can move through 
this.
    Thank you again, Mr. Secretary. We are going to ask each of 
our witnesses to move forward and we will have an opportunity 
to hear from each of them and then we will go to our round of 
questioning.
    [Pause.]
    Chairwoman Stabenow. Well, good morning. I think it is 
still morning. Yes. Thank you very much to each and every one 
of you for coming in, and let me introduce our panel and then 
ask you to move forward. As you know, we ask for five minutes' 
verbal testimony and then, of course, we want to have whatever 
additional testimony that you would like to give the committee.
    Let me first, in introducing our panelists, welcome the 
Honorable Dan Glickman, who is certainly no stranger to this 
committee. We very much appreciate your leadership over the 
years as former Secretary of Agriculture and currently the Co-
Chair of the Chicago Council's Global Agricultural Development 
Initiative, where he is actively engaged on issues regarding 
food security. I also on a personal note want to note he is a 
graduate of the University of Michigan, so we appreciate why 
you have done such a great job over the years.
    Let me also welcome Barry Mumby from Michigan and his wife, 
Diane, who is here. We appreciate both of you coming in. He is 
a third-generation farmer from Southwest Michigan in St. Joe 
County, where his family grows soybeans and corn, among other 
things, on 2,200 acres. He is a founding Director and ten-year 
member of the United Soybean Board, and through them has 
traveled to 27 countries to promote open markets for U.S. 
soybeans and currently in the process, I understand, of 
transitioning the land to the fourth generation, which includes 
his two sons and daughters. So welcome. It is good to have you.
    And Mr. Doug DeVries is a Senior Vice President for 
Worldwide Agriculture Marketing at Deere and Company, which is, 
of course, a preeminent global farm machinery manufacturer, and 
in this position, he is responsible for global marketing 
activities for Deere products, so we welcome you.
    And then Dr. Andrew Rosenberg is the Senior Vice President 
for Science and Knowledge at Conservation International as well 
as a professor and former Dean at the University of New 
Hampshire with background in public service, including a former 
Deputy Director of NOAA. So we welcome you.
    And certainly last but not least at all, Dr. Per Pinstrup-
Andersen is the 2001 World Food Prize Laureate for his landmark 
research that prompted several governments to reform their food 
subsidy programs and increase food availability to the severely 
impoverished, currently a professor at Cornell University in 
three disciplines: Food, Nutrition, and Public Policy, 
Entrepreneurialship, and Applied Economics and Management, and 
we are so pleased to have you with us this morning, as well.
    I will first turn to Secretary Glickman. Welcome.

STATEMENT OF HON. DAN GLICKMAN, CO-CHAIR, THE CHICAGO COUNCIL'S 
 GLOBAL AGRICULTURAL DEVELOPMENT INITIATIVE; FORMER SECRETARY, 
 U.S. DEPARTMENT OF AGRICULTURE; AND SENIOR FELLOW, BIPARTISAN 
                 POLICY CENTER, WASHINGTON, DC

    Mr. Glickman. Thank you. I am glad you mentioned my 
Michigan connections, including my wife----
    Chairwoman Stabenow. That is right.
    Mr. Glickman. --my son, my brother-in-law, my sister- in-
law----
    Chairwoman Stabenow. That is right.
    Mr. Glickman. --the whole team, you do know well.
    Chairwoman Stabenow. Yes, exactly.
    Mr. Glickman. And I also appreciate being before one of my 
successors, Mike Johanns, who did a wonderful job as Secretary, 
and my mentor, Dick Lugar, whom I was confirmed before he and 
his panel, it seems like in the 18th century----
    [Laughter.]
    Mr. Glickman. --but we are both still alive, Senator, so--
--
    [Laughter.]
    Mr. Glickman. Let me just first mention, my testimony is 
offered on behalf of Catherine Bertini, who is the former 
Executive Director of the World Food Program, and I. We have 
been involved in the project for years through the Chicago 
Council on Global Affairs that looks at the need for the U.S. 
support for agriculture development abroad and ways the United 
States can be a global leader in this effort, and this was 
funded largely by the Bill and Melinda Gates Foundation, and we 
have sent you a whole bunch of materials, reports, and 
testimony, which we will assume will be part of the record.
    I just want to make a few points. Number one, we are going 
to need to double food production in this country, double--in 
the world, not in the country--in the world over the next 30 
years. We are going to have an addition of 2.6 billion people 
in this world by the year 2050, so that is two Chinas. And we 
are dealing with a supply situation which is in much greater 
equilibrium than it has been in the past, which is going to 
cause much greater food price volatility and many other issues 
that result from that, political instability and an increase in 
poverty and hunger and a variety of issues there. And so that 
is a given, and I think that everybody understands that.
    What we have been looking at, is the United States poised 
to lead the world in trying to help not only feed the world, 
but move us to more global food self-sufficiency. And based on 
our review, this country in the last two years has made 
transformational progress in the areas of food assistance, food 
assistance delivery, reform of our food and foreign assistance 
programs, the metrics of the program, and the government 
working together, and that is through the efforts of the 
Secretary of State, the head of AID, Raj Shah, and partnerships 
with the private and public sector. So things are much better.
    This was a listless period for the last ten to 20 years in 
terms of the ability of the United States to be a vital force 
in leading the world in foreign assistance, development 
assistance, but it has changed and it is a different world. And 
even Secretary Gates as Secretary of Defense has said that the 
three pillars of America's leadership in the world are 
diplomacy, defense, and development. And development took a 
bottom line, a back seat to a lot of these efforts, and I think 
it has begun to change.
    I am not saying it is perfect now. We need more investments 
in agricultural research. More foreign students need to go to 
school here. The units of government often do not work 
perfectly with each other. There are not the partnerships with 
private universities that we would like to see. The land grant 
world was very much involved in the science and research of 
developing food self-sufficiency in the 1960s and 1970s. That 
slipped for a while. Hopefully, that is coming back.
    And the report gives a grade card of how the government has 
done. I mean, we actually, like, we gave the government a B-
minus overall. But from the standpoint of how USAID is doing, 
how the State Department is doing, they actually fared very 
well.
    The second point I would like to make is the fact that 
America's power to lead and change the world is in large part 
based upon our ability to be engaged in the developing world 
and helping them feed themselves. Catherine Bertini and I went 
to Mozambique and Tanzania just recently to see what is 
happening on the ground and it is tough out there, I have to 
tell you. I mean, the impediments to change are very great. In 
some respects, we saw more Chinese engagement in that part of 
the world than we saw American engagement.
    But the truth of the matter is, there is still great 
promise for our country to lead the world, and I wanted to give 
you one anecdote. We were in Tanzania and we were meeting with 
some government officials, and I forgot who it was, but 
somebody said to me, he says, ``You know, America is great and 
you have got three great leaders who are moving America's 
influence in this part of the world along.'' And he said the 
leaders are Bill Clinton, George Bush, and Barack Obama.
    I do not think you could find very many people in our 
country that would list those three leaders as moving America 
along. Bill Clinton, because of the efforts of the Clinton 
Global Initiative, the Clinton Foundation, efforts in the 
developing world. Obviously, George Bush because of his 
leadership in AIDS and malaria and the PEPFAR Initiative. And 
Barack Obama because of who he is and where he is from, and 
also because of his commitment to try to make the farms 
flourish in the developing world.
    Our potential to be a factor in leading these parts of the 
world into becoming food self-sufficient, reducing their 
poverty, helping all of the population, particularly women and 
girls, get out of poverty, because they produce most of the 
agricultural commodities in the developing world, and building 
democracy in governance systems is to a large extent dependent 
upon our continued engagement in this area.
    I know Secretary Vilsack talked about the budget 
conditions, and I recognize that. I am reminded of all the 
years I testified on a lot of similar things, as I am sure Mike 
Johanns did, as well.
    But I would tell you that if we unilaterally disarm from 
our development agenda, now that we have a team in there that 
really knows what they are doing, it is really going to 
handicap the United States in terms of being a leader in the 
future of the world. Almost one-third of all the members of the 
General Assembly of the U.N. are from Africa. These people need 
our--not our assistance from the standpoint of charity, but 
they need our technical capability, our minds, our resources in 
terms of agriculture productivity, and it is not all exotic 
technologies, either. A lot of it is the basics.
    And if we can stay engaged, and that is my plea to you 
today, as part of the farm bill, as part of the budgeting 
process, if we can stay engaged, we will have great impact in 
the developing world and it will affect America's economic, 
foreign policy, and national security interests, as well.
    So the recommendations are contained in our report. I would 
like to pay tribute to my former colleague, Mr. Roberts, who I 
had hoped he would be here and I regret that he is not for 
difficult circumstances. He and I have had, I would say, a 
wonderful marriage--I do not want anybody to take that too 
personally--here over the years in terms of the relationship 
back in Kansas, and he is a great friend of mine, as well. So I 
want to just pay tribute to him, too.
    Thank you.
    [The prepared statement of Mr. Glickman can be found on 
page 61 in the appendix.]
    Chairwoman Stabenow. Thank you very much.
    Mr. Mumby, welcome.

 STATEMENT OF BARRY MUMBY, SENIOR MEMBER, WAKESHMA FARMS LLC, 
                        COLON, MICHIGAN

    Mr. Mumby. Thank you. Thank you, Senator. I guess I am here 
because I have been in agriculture a long time and I bring to 
you basically the view from a family farm. I am a third-
generation farmer and I am involved in the transition to a 
fourth generation. It has been a very rewarding life and, I 
guess overall, I could not have chosen a better profession. 
When I was at Michigan State University, I had an opportunity 
to do some other things and I chose to come back to the farm. 
My two boys achieved educations at Michigan State University in 
other fields. They chose to come back to the farm. A lot of 
roots. It brings you back.
    As I near the end of my career as an active farmer, I have 
become more and more involved in world issues in terms of what 
can the American farmer do to help foreign countries. In my 
travels, I witness almost an adulation, if you will, of 
farmers. Any farmers, any fish farms, any place that I visited 
around the world, whether it be China or Asia, Tunisia, 
wherever, American agriculture is so highly regarded, it is 
frightening, because you do not want to tell them what you do 
to be successful because they will do it, whether it is the 
right thing in their situation or not. It is not a process of 
evaluation. They just do it. And that is a responsibility that 
Americans carry when they travel.
    I think my normal workday starts around 5:00 in the morning 
at this point in time and I continue to do a news world search, 
try to gather anything that is pertinent to agriculture. I 
share that with a bunch of associates that we convene a 
conference call every morning at 7:15, and that usually takes 
until about 8:00.
    My associates consist of risk managers for grain 
originators, risk managers for ethanol plants, a think tank in 
Detroit, two other services, and anyone else. We have some 
livestock specialists, as well, and I guess I serve on that and 
have for probably ten years now just because I am an average 
farmer. We are not a large farm. You know, 2,100 acres is not 
large. But it is a family farm and it is a solid family farm 
and I think if you go across America, you will find a lot of 
that. That is the insight that I bring.
    I really focused on risk management at this point in my 
career. I wish you folks a lot of luck because you have a big, 
big task. The risk management issues that I see right now for 
U.S. farmers, of course, prices, but that can be handled. There 
are methods to handle prices. Violent weather--I do not know 
how you deal with that. As I looked at some of the footage of 
the recent tornadoes, it may not be a disaster for a county, 
but if you are in the path of that storm, not only have you 
lost lives and property, you have lost crops. I mean, there was 
a path viewed from a helicopter that was brown. Nothing was in 
the path of that tornado left. Now, that has taken a lot of 
cropland out. That is a very localized, specific loss, but it 
is 100 percent. How you--I do not think you can write a farm 
bill that deals with that, frankly. But those are issues that 
we are going to face as we come to the fruition of this crop 
and see what we have this fall. I fear that we are going to 
fall substantially short of what is projected right now and I 
think we are on the edge of a very, very dangerous time.
    The next--we are up at bat. It is our turn to produce a 
crop. The next time, it will be South America. They need to 
come in with another big crop. Brazil had 73 million metric 
tons of beans this year, which is huge, but we are just 
basically treading water. We are not gaining anything in 
inventories. So the world carry-out stocks are flat. We are 
trying to build them, but the demand curve is way ahead of us.
    The U.S. farmer is not going to solve this problem by 
ourselves. We need to outreach to farmers in other countries 
and encourage them to adopt technologies that are commonplace 
here.
    I believe that we have done a great deal in soil 
conservation, no till drills. We have a lot of CRP acres that I 
believe could be farmed with no till technology now. I think 
that was basically laid out before no till drills and no till 
farming was a common practice.
    I think farmers in the United States will do everything 
they can to be as productive as possible. I think there are 
yield gains to be made with current technology right now if a 
lot of practices were adopted. I think the price structure 
right now is good enough so that it encourages farmers to adopt 
some of those practices and take a little more risk. You can 
afford to invest a little more in a $7 bushel of corn than you 
can a $3 bushel of corn. So you invest money and you take the 
risk, and farmers are entrepreneurs and they will do what they 
can to be profitable and they will do what they can to feed the 
world, but I do not believe the United States alone can do it.
    Thank you.
    [The prepared statement of Mr. Mumby can be found on page 
67 in the appendix.]
    Chairwoman Stabenow. Thank you very much. I really 
appreciate your being here representing the folks that we all 
talk about all the time who are at the heart of what s 
happening for American agriculture, so thank you very much.
    Dr. Rosenberg, welcome.

   STATEMENT OF ANDREW ROSENBERG, SENIOR VICE PRESIDENT FOR 
SCIENCE AND KNOWLEDGE, CONSERVATION INTERNATIONAL, ALEXANDRIA, 
                            VIRGINIA

    Mr. Rosenberg. Madam Chair and members of the committee, I 
am Andrew Rosenberg, the Chief Scientist for Conservation 
International, and thank you very much for the opportunity to 
testify today on the risks and challenges facing American 
agriculture as the world population grows from seven billion to 
more than nine billion over the next 40 years and global food 
demand doubles by 2050.
    Food security is part of Conservation International's 
mission to empower societies to responsibly and sustainably 
care for ecosystems and the services they provide for the well-
being of humanity, and our staff of over 800 people here in the 
United States and across the globe work together to address the 
challenges of food security and more broadly sustainable 
development.
    Conservation International partners with government, civil 
society, and the private sector, including leading U.S. 
companies such as Monsanto, Bunge, Cargill, Starbucks, JPMorgan 
Chase, and Wal-Mart to help reverse the unsustainable draw-down 
of earth's natural resources and ensure that development is 
based on the principle of sustainability.
    For example, we are informal advisors to the Global Harvest 
Initiative, a partnership that includes Archer Daniels Midland, 
Monsanto, John Deere, and DuPont to address hunger and food 
security by sustainably closing the agricultural productivity 
gap.
    Conservation International views the agricultural sector as 
a priority because it is a major driver of rural economic 
development, providing income, employment, and prosperity for 
farmers and farm workers around the world. Ensuring a reliable 
food supply directly supports broader U.S. policy, helping 
enhance our national security through improved regional 
stability in developing countries and supporting U.S. 
competitiveness by creating growing markets for U.S. exports.
    The challenges of feeding a growing global population are 
three-fold: Meeting the demand for food from a growing and more 
affluent population; increasing production in an 
environmentally and socially sustainable manner; and ensuring 
the world's poorest people are no longer hungry.
    From our work over the last 25 years, we know that we must 
not only improve food production from agriculture, aquaculture, 
and fisheries, but also conserve the natural systems upon which 
that production depends. Natural systems provide many of the 
essential supporting services for agriculture, including 
fertile soil, runoff protection, water regulation, and 
pollination, to name a few, and for a quick example, native 
bees provide valuable ecosystem services worth $8 billion to 
U.S. agriculture alone each year.
    Farmers are already experiencing the consequences of 
declining natural ecosystem health through increasing severity 
and frequency of shocks, such as droughts, storms, and 
flooding, and this will require the agricultural sector to 
continue to innovate and to engage in more sustainable 
practices. And towards this end, Conservation International has 
worked with our many partners to test innovative methods and 
promote conservation in agricultural landscapes.
    Conservation International is working with the Gates 
Foundation in Africa to develop a monitoring system for 
ecosystem health, the services ecosystems provide, and human 
well-being in agricultural land states to create the kinds of 
tools and systems that can improve food production while 
ensuring that the natural systems are not undermined.
    We are a founding member of the Keystone Field to Market 
Initiative that has developed objective data-driven tools to 
help U.S. farmers manage farms, explore different management 
scenarios, and compare their performance to peers.
    And through our partnerships with agribusiness companies 
such as Bunge and Monsanto and their network of farmer clients, 
we have piloted programs in Brazil to encourage protection and 
creation of private protected areas in agricultural landscapes 
to demonstrate that production and conservation can coexist.
    In Indonesia, Brazil, Liberia, and Peru, Conservation 
International is working with farmers to identify degraded 
lands appropriate for restoration through crop cultivation, and 
we work closely with corporations such as McDonald's and 
Starbucks to develop sourcing polices that encourage purchase 
of sustainably grown commodities. Our experience has shown us 
that sustainable food production relies on health ecosystems 
and such that enhanced food security depends upon the 
protection of those natural systems.
    We look forward to working with the committee to ensure 
that the United States meets the challenge of innovation in our 
agriculture sector, ensure that American farmers remain leaders 
in providing sustainable food supply while maintaining the 
natural systems we all depend upon.
    Thank you for the opportunity to testify and I would be 
happy to answer questions.
    [The prepared statement of Mr. Rosenberg can be found on 
page 81 in the appendix.]
    Chairwoman Stabenow. Thank you very much.
    Mr. DeVries, welcome.

  STATEMENT OF DOUGLAS DEVRIES, SENIOR VICE PRESIDENT, GLOBAL 
 MARKETING SERVICES, AGRICULTURE AND TURF DIVISION, DEERE AND 
                   COMPANY, MOLINE, ILLINOIS

    Mr. DeVries. Thank you very much, Madam Chairwoman, Senator 
Johanns, Senator Lugar. Thank you for the opportunity to be 
here. On behalf of John Deere, we appreciate the opportunity to 
provide testimony today on this issue that is most important to 
not only our country, but the world, and that is global food 
security. For 174 years, John Deere has been driven by a 
consistent purpose to achieve that, and that is improving 
productivity and efficiency of our equipment for the benefit of 
our customers and food production.
    As this committee begins deliberation on the future of U.S. 
food and agricultural policy, Deere believes it is critical 
that the policies and programs be reviewed in light of the new 
reality in agriculture. This reality entails more volatility, 
greater need for risk management, and a growing reliance on 
international commerce to support.
    The U.S. has long recognized the importance of strategic 
food and agricultural policy in supporting rural development, 
economic improvement, and social well-being, both at home and 
around the world, and strong partnerships between public and 
the private sector will be increasingly important in achieving 
these strategic goals and John Deere is committed to that 
opportunity.
    The global agricultural challenge that everybody has 
addressed this morning is significant. The population is 
increasing, and not only increasing but having increased 
purchasing power, meaning diets improving at the same time 
while becoming more urbanized. These givens require that we 
double agricultural output by mid-century, and we must achieve 
this additional output in a sustainable manner. Doubling output 
while not appreciably increasing inputs.
    For example, most of the world's productive agricultural 
land is already in use. Some incremental acreage can be brought 
in, but it tends to be less fertile, more costly to farm, and 
often less sustainable. Clean water is also becoming 
increasingly scarce for urban and industrial needs, but 
significantly for agricultural irrigation. Add to these 
challenges unpredictable weather patterns and the enormity of 
the task becomes very clear. In short, we must produce more 
food in the next three decades than we have in the previous 
10,000 years.
    So, how can we sustainably double agricultural output by 
mid-century? Clearly, we must be more productive than we are 
today. Specifically, the rate of future agricultural 
productivity growth must increase compared to the trend rates 
of the past. Although this challenge is significant, the 
technologies exist or are under development today to help do 
just that, not only in mechanization, but also in crop and 
livestock genetics and, importantly, in water use efficiency.
    Advances in machinery will play a big part in reaching this 
goal as agricultural equipment gets ever more powerful, 
smarter, and more efficient. For example, today's large John 
Deere tractors include more lines of software code than the 
early Space Shuttles did. GPS technology today guides tractors 
and implements in the field with near perfect precision, 
reducing overlap in seeding, tillage, and crop care 
applications. This reduces input usage, saves time, reduces 
fuel requirements, and saves dollars for producers, all the 
while reducing environmental impact.
    Additionally, Deere strongly believes the strategic 
investments must be made in expanding and enhancing 
infrastructure. Investing in infrastructure in rural areas will 
significantly boost agricultural output. And that investment 
must also require a focus on soft infrastructure, those 
policies that reduce or eliminate legal, financial, and social 
barriers to land ownership, property rights, and investment 
across the entire agricultural chain.
    We must also, as was indicated earlier, prioritize 
investments in research that will help accelerate agricultural 
productivity. We failed to increase investments in these areas 
in recent decades despite the growing challenge. Targeted 
priority research in efficient water use, specific crop 
genomics, agronomic practices, enhanced nutritional and health 
benefits of crops, and reducing post-harvest losses will pay 
enormous dividends.
    Finally, we strongly believe that expanding access to 
markets worldwide is critical and that the United States must 
lead in these efforts. One-quarter of all food and agricultural 
products today are traded and that figure will grow, making 
trade even more integral to improving food security for a 
growing global population.
    We believe the challenge before global agriculture still is 
not well understood, and this must change. This challenge 
requires us to think differently and to act more aggressively 
to ensure future generations are able to flourish while 
protecting critical natural resources. To promote awareness of 
this challenge and the opportunities, John Deere joined DuPont, 
Monsanto, and ADM to form the Global Harvest Initiative in 
2008. GHI collaborates with key partners like Conservation 
International in the related spaces of food security, hunger, 
environment and conservation, economic development, 
sustainability, and national security to promote policies that 
can ensure we meet global agricultural demands while 
responsibly meeting societal needs.
    In closing, I want to express our optimism--no, more 
importantly, our confidence in agriculture's ability to 
accelerate productivity and growth sufficient to meet future 
global requirements for food, feed, fuel, and fiber. I am also 
confident John Deere can contribute significantly in that 
offering.
    We thank you for the opportunity to come today.
    [The prepared statement of Mr. DeVries can be found on page 
52 in the appendix.]
    Chairwoman Stabenow. Thank you very much.
    Dr. Pinstrup-Anderson, welcome, and again, congratulations 
on your efforts.

 STATEMENT OF PER PINSTRUP-ANDERSEN, H.E. BABCOCK PROFESSOR OF 
 FOOD, NUTRITION, AND PUBLIC POLICY, J. THOMAS CLARK PROFESSOR 
   OF ENTREPRENEURSHIP, AND PROFESSOR OF APPLIED ECONOMICS, 
 CORNELL UNIVERSITY, AND PROFESSOR OF AGRICULTURAL ECONOMICS, 
            COPENHAGEN UNIVERSITY, ITHACA, NEW YORK

    Mr. Pinstrup-Andersen. Madam Chair, distinguished committee 
members, my name is Per Pinstrup-Andersen. I am a professor at 
Cornell University.
    I can think of no better way of beginning deliberations 
about the 2012 farm bill than to look at the global food 
situation, something that is so very much on so many people's 
minds right now. This is clearly the way to start the 
deliberations and I congratulate you, Madam Chair, for taking 
that position.
    I would like to mention six points that I think are very 
important as you proceed with the deliberations and decisions 
on the farm bill.
    First, U.S. agriculture is and will continue to be a very 
important source of food for the world population, let there be 
no doubt about that. The value of agricultural exports from the 
United States has doubled during the last eight years and will 
continue to increase. Much of that increase will come from 
developing countries and it will depend on successful economic 
growth in those economies and those countries, and that is why 
initiatives such as the Global Agricultural and Food Security 
Program and Feed the Future are very important to promote 
agricultural growth in the United States and the employment 
that comes with it, because those programs, if successful, will 
expand agricultural exports out of the United States. It is 
clearly a true win-win scenario that can be achieved.
    Secondly, current estimates are that demand for food and 
feed will increase by about 70 percent by 2050. This is the 
first time in my professional life I have disagreed with 
Secretary Glickman. He thinks it will be a 100 percent 
increase. I think it will be a 70 percent. I am willing to 
split the difference. We do not really know, but what we do 
know is there is going to be a tremendous increase in the 
demand for food and feed over the next 40 years.
    I do not think there is any doubt that this increase can be 
met with an equal supply increase. The earth's productive 
capacity is very far from being fully utilized. The key 
question really is whether appropriate investments and policies 
will be made to exploit the capacity to produce the food needed 
in a sustainable manner. It is not a question of not having the 
resources, it is a question of whether they are being 
appropriately used.
    My third point is that sustainable intensivication is the 
key to meeting future food demand. By sustainable 
intensivication, I mean increasing productivity per unit of 
land and water while maintaining the productivity of natural 
resources for future generations, and for that we need 
investments in agriculture research and technology and in 
extension. We have heard this mentioned several times this 
morning, critically important, both in the United States and in 
developing countries. Modern science, including genetically 
modified seed, offers tremendous opportunities. Agricological 
approaches in ecosystem management combined with productivity-
increasing technology deserve a lot more attention than what 
that combination has been given in the past.
    My fourth point, large fluctuations in food production and 
dramatic food price volatility lead to increasing risk and 
uncertainty by farmers, consumers, and traders. Large 
fluctuations in fertilizer, oil, and pesticide prices add to 
those risks. And there is, in my opinion, no reason to believe 
that the price volatility in the international food market is 
going to be less severe in the future. Therefore, we need to 
focus, as has been mentioned this morning, on improved risk 
management, whether we are talking about producers, farmers, 
whether we are talking about consumers, or whether we are 
talking about the trading sector.
    My fifth point is that although we do not know for sure, we 
think that between 800 million and one billion people suffer 
from hunger. That is roughly three times the total U.S. 
population that does not get enough to eat. Many more suffer 
from insufficient intake of nutrients. Overweight, obesity, 
related chronic diseases affect about one in seven of the 
world's population. Agriculture and other parts of the food 
system play a key role in assuring good nutrition, not just by 
producing food, but in a number of other ways, and to fully 
exploit that role, policy and research priorities for the food 
system should explicitly consider opportunities for improving 
health and nutrition.
    My sixth and last point is that recent food price increases 
brought, as I mentioned earlier, new international attention to 
the need for increasing investments in agricultural development 
and improved food security. That attention culminated in terms 
of promises for funding, culminated with a commitment of $20 
billion by G-8 and other countries at a meeting in L'Aguila in 
Italy. The problem is that the follow-up has been extremely 
disappointing. Not very much of the $20 billion have yet been 
allocated. There is an urgent need for the kind of investment 
we have been talking about this morning in public goods such as 
roads, irrigation facilities, agricultural research, local 
markets, rural institutions, to facilitate agricultural and 
rural developments in low-income developing countries.
    Without these investments, the private sector cannot do its 
job. It cannot operate efficiently and it will not make the 
necessary investments in food supply chains. We are going to 
have more food riots. We are going to have more political 
instability if these investments are not being made, and the 
opportunities for improving health and nutrition will not 
materialize. Neither will opportunities for expanding exports 
of agricultural commodities. So it is a true win-win 
possibility that we have.
    Thank you, Madam Chair.
    [The prepared statement of Mr. Pinstrup-Andersen can be 
found on page 75 in the appendix.]
    Chairwoman Stabenow. Thank you very much. We very much 
appreciate all of your testimony.
    Let me start questions with Mr. Mumby. Again, welcome for 
coming. As you look at transitioning to your fourth generation 
on the farm, I think it is important that we look at how we can 
ensure that new farmers are going to be able to continue the 
great work of your generation and others. I wondered if you 
might talk a little bit more about the top challenges for new 
farmers as well as for those that are transitioning, not just 
of the land but the expertise that is transitioned, and what 
else can we do? What should we be focused on as it relates to 
the next generation of farmers?
    Mr. Mumby. Thank you for that question, Senator. In my 
estimation, we need to support our land grant universities. 
They have been reduced substantially in their budgets. They 
have a real problem trying to originate young agricultural 
people. There is not a lot of those folks out there. There are 
fewer and fewer. As was mentioned, there are 200,000 basically 
farmers that supply the majority of product. Those individuals 
in that 200,000 area are very, very important. They need to 
have more than Dad's education.
    I was very pleased my sons chose to attend the university 
and really obtain their degrees in other areas and then decide 
to come back to the farm. I feel it broadened their education, 
made them more business-oriented, if you will. But I think that 
is one of the key things. We have to support our universities 
and educate the young farmers. They cannot get it all from 
suppliers or from vendors. And there is a lot of education out 
there that is helpful there, but really, we have seen the 
decimation in Michigan of the Extension Service. Personally, I 
benefitted a great deal from the Extension Service. I was the 
first one in my family to graduate from college of any sort. So 
I really relied on the Extension Service. But budget 
constraints have made it very difficult. I guess that is my 
first concern.
    Chairwoman Stabenow. Well, thank you very much.
    I should have mentioned, as you are sitting next to a 
University of Michigan graduate, that you get extra points 
graduating from Michigan State University, my alma mater, Mr. 
Former Secretary. I appreciate----
    Mr. Glickman. Sometimes, I wish my parents had sent me to 
Michigan State.
    [Laughter.]
    Chairwoman Stabenow. Well, when I was on campus, I actually 
worked for Cooperative Extension, and so, Mr. Mumby, I share 
your strong support, having seen it up close and in person, 
what they do.
    Dr. Pinstrup-Andersen, when we talk about the world 
population growing and the increased demands that we all know 
are coming, we are also seeing an increased demand for high-
value foods, as well. In your testimony, you mentioned the need 
for policies that increase access for fresh fruits and 
vegetables, other highly nutritious foods. What types of 
policies would you recommend and how can we implement them in a 
way that encourages production both here in the United States 
as well as in developing countries?
    Mr. Pinstrup-Andersen. The key issue, it seems to me, is to 
change the relative prices consumers, particularly low-income 
consumers, have to pay for certain vegetables and what they 
have to pay for other things, like sweeteners and animal 
products. And one way to change those relative prices to make 
vegetables less expensive is to invest more in research to 
reduce the unit cost of production by certain vegetables and by 
certain fruits. Another way, of course, is to have direct 
interventions in the prices, but that tends to distort markets 
and that is probably not the best way to go about it.
    Nutrition education can play a major role, as well. In 
spite of much of the--in spite of all the information that is 
available to consumers, particularly low-income consumers, low-
income consumers may need a lot more understanding of how to 
change their diet. So those are some of the things that can be 
done.
    But the point, I think, that is very important to get 
across is that we do not deal with nutrition in one box and 
agriculture in another box but that we integrate the two, and 
there are many, many ways of doing that.
    Chairwoman Stabenow. Thank you very much.
    Mr. DeVries, John Deere is relatively new, a recent entrant 
into the crop insurance business and I wonder if you might just 
talk a little bit about the company's decision to get involved, 
what you are learning from providing insurance to farmers in 
addition to your other lines of business.
    Mr. DeVries. We are in the crop insurance business and the 
discussion today around risk management and the issues facing 
producers today, growers of all kind, I think, underscores the 
reason why. If you think about the volatility, the variability 
in the marketplace and the need for producers to continue to 
have confidence to make investments over the long term in 
productivity improvements, whether it is in the form of 
equipment or seed technologies or other things that go along 
with that, protection is required to be able to support that 
and we believe that the combination of that risk management 
coupled with the kinds of things we can bring in the form of 
common agronomic practices, new technologies, we can allow for 
a better risk management profile for a producer going forward 
and that has proven to be the case. We believe it is a very 
interesting opportunity, continues to be, and we think it is a 
core part of our financial offerings going forward.
    Chairwoman Stabenow. Thanks very much.
    Senator Johanns.
    Senator Johanns. Let me just start out and say this has 
been a very, very good panel, a very interesting panel in terms 
of the breadth of things that you have all talked about, so it 
is a little bit difficult even to know where to begin with a 
question or two.
    But Mr. Mumby, if I could start with you, you are kind of 
the boots-on-the-ground witness, if you know what I am saying. 
You are out there every day. You mentioned your concern about 
supply, and, of course, having been a Secretary of Agriculture, 
I pay attention to those USDA numbers kind of religiously. 
Those carry-out numbers are historically tight, if you look at 
corn, soybeans, and, of course, that impacts other products 
that are raised.
    I look at the flooding that is going on out there. You 
know, I asked farmers from other States, how are you doing in 
planting. We have got States where they are just barely 
planting, and here we are, the first of June. It is getting 
awful late for corn. So you kind of wonder if they are going to 
start switching their focus to soybeans, and it is even getting 
a little bit late for soybeans. So all of that together raises 
concerns in my mind about supply and whether there will be an 
adequate supply.
    You talked about risk management and I would like to hear 
your thoughts about that, again, in terms of the boots- on-the-
ground witness. What are you concerned about as you look out 
there at the next 12, 18 months?
    Mr. Mumby. I think we are going to have historically low 
corn stocks at the end of this year. September is going to be 
very difficult for anyone to buy a bushel of corn anyplace. I 
do not know where we are going to come up with a substitute for 
that. You can only feed so much wheat in most rations. There is 
a lot of that substitution that will take place. The crops down 
South did not get planted on time for them, not timely. We 
always count on the South to bring in an early corn crop, maybe 
400 million bushels, to supplement when we have a tight 
reserve, which we have extremely tight reserves. I do not 
believe that is going to happen. There is enough demand down 
there to probably soak up what early corn comes.
    The North Central Corn Belt, Ohio has a disaster. It got 
worse last night, again.
    Senator Johanns. Yes.
    Mr. Mumby. I cannot see them plating 50 percent of their 
corn--this is just my number, but they were only 11 percent 
planted last week. They are going to struggle to get it from 
here on. Yields will go down, that is a fact, unless we have 
extraordinarily good summer weather.
    Senator Johanns. Secretary?
    Mr. Glickman. First of all, I want to echo what Mr. Mumby 
said. I just was looking at my Blackberry. There is a Reuters 
story to expect corn plantings down about two percent more than 
projected, in part because of weather conditions.
    Senator Johanns. Mm-hmm.
    Mr. Glickman. I think what is happening is we are, after 
almost 50 years of high supplies of almost all the major 
supported commodities, we are in for a long-term period of 
greater equilibrium between supply and demand. I am not saying 
worldwide shortages, but equilibrium, which means you will have 
significant shortages in various parts of the world at times 
when weather or natural disasters get there.
    It has got a most interesting ramification for how you are 
going to deal with the next farm bill, because farm policy, as 
you know more than--both of you--has been traditionally based 
upon low price, high supply since the Second World War. We are 
probably going into a period that is substantially different, 
both here at home and around the world, and it is going to have 
great ramifications to how the United States helps the world 
lead, and that will mean much greater attention to research, 
much greater attention to technical assistance.
    And the final thing I would say is the problems that the 
developing world are having with drought, pests, water, and 
energy are not limited to the developing world. We have got a 
lot of the same exact problems here. We are ahead of them in 
most cases, but a lot of these issues now, we are inexorably 
linked to the rest of the world, not just--they are not all by 
themselves.
    Senator Johanns. We are about out of time here and I want 
to be very respectful of your time. We have maybe even extended 
a little longer than we thought we would. But here is a thought 
I would offer as we are kind of wrapping up here today.
    As we think about the next farm bill, in many respects, I 
am coming to the conclusion that this farm bill is about risk 
management, because I think you are absolutely right. When we 
were working on farm bill after farm bill through the years, we 
were often using kind of the Roosevelt-World War II-Dust Bowl-
Depression era approach. But the world has changed so vastly. 
We can have great technology. We can have Deere and others do 
wonderful things with equipment and et cetera, et cetera. The 
one thing that we all know we cannot control very much is what 
Mother Nature does to a farmer on any given day, and I just 
think that risk management policy is critical.
    A final thing I would offer, and I have been thinking a lot 
about this as each of you testified, what you are all 
describing to us is we need a 21st century model for 
agriculture because there are huge demands on the U.S. 
agricultural system and people need to eat or we have worldwide 
chaos. We all know that.
    What I think we need to maybe spend some time talking about 
as a committee is how do we make sure we have got a 21st 
century USDA. And I do not say that critically of current 
leadership at all. It is just that you look at the time span to 
get things approved, and that has been slipping for years. I 
mean, you look at some of this stuff--Mr. Secretary, I am sure 
you did. I know I did as Secretary. And you would see these 
protracted processes that you go through. There are regulatory 
processes, and I could go on and on. If we tangle up the system 
in trying to overcome hurdle after hurdle after hurdle, then 
the problem we have is that we are not going to meet these 
demands. We are not going to see the progress we need. So how 
we deal with that, I think, has got to occupy some of our time 
as we think about the farm bill.
    Mr. Glickman. May I just----
    Chairwoman Stabenow. Yes, Mr. Secretary.
    Mr. Glickman. I also think we need a 21st century review of 
our agriculture research, because my experience at USDA was a 
lot of the research was important, but a lot of the research 
was repetitive and routine, not enough public research being 
done, that is, generic, basic research, because there was an 
awful lot of research focused on specific crops, and I 
understand a lot of that stuff.
    But, boy, if we are going into a world where supply and 
demand is much more fragile than it used to be, which means big 
dislocations in farm prices and food prices all over the world 
and possible political dislocations, which we have seen in 
Tunisia and Egypt and Yemen and other places, then we are going 
to have to really double down on finding ways to increase 
yields and produce crops that use less water, less energy, and 
do it sustainably, and that is a variation on the theme which I 
would agree, in addition to risk management.
    Chairwoman Stabenow. Well, thank you very much, and thank 
you, Senator Johanns. Thank you to each of you. This has been a 
terrific way to begin the discussion. There is more to do. We 
will follow up individually and want to speak and continue to 
get your input. We, of course, will make sure that any 
additional questions for the record will be submitted within 
the next five days.
    We thank you again, and this meeting is adjourned.
    [Whereupon, at 12:47 p.m., the committee was adjourned.]
      
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