[Senate Hearing 112-279]
[From the U.S. Government Publishing Office]






                                                        S. Hrg. 112-279

                       OPPORTUNITIES FOR GROWTH:
                    MICHIGAN AND THE 2012 FARM BILL

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

                             FIELD HEARING

                               before the

                       COMMITTEE ON AGRICULTURE,
                         NUTRITION AND FORESTRY

                          UNITED STATES SENATE


                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION


                               __________

                              MAY 31, 2011

                               __________

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            Committee on Agriculture, Nutrition and Forestry










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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 P. CASEY, Jr., Pennsylvania   JOHN BOOZMAN, Arkansas
AMY KLOBUCHAR, Minnesota             CHARLES E. 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

Field Hearing(s):

Opportunities for Growth: Michigan and the 2012 Farm Bill........     1

                              ----------                              

                         Tuesday, May 31, 2011
                    STATEMENTS PRESENTED BY SENATORS

Stabenow, Hon. Debbie, U.S. Senator from the State of Michigan, 
  Chairwoman, Committee on Agriculture, Nutrition and Forestry...     1
Roberts, Hon. Pat, U.S. Senator from the State of Kansas.........     3

                                Panel I

Coon, Thomas G., Director, Michigan State University Extension, 
  East Lansing, Michigan.........................................    10
Gray, J. Ian, Vice President For Research and Graduate Studies, 
  Michigan State University, East Lansing, Michigan..............     8
Simon, Lou Anna K., President, Michigan State University, East 
  Lansing, Michigan..............................................     6

                                Panel II

Blauwiekel, Peter B., Pork Production; Member, Michigan Pork 
  Producers Council, Fowler, Michigan............................    23
Gerstacker, Clark, Corn and Soybean Production; Member, Michigan 
  Corn Growers Association, Midland, Michigan....................    13
Lacross, Ben, Cherry Production; Chair, Young Farmers and 
  Ranchers Committee, American Farm Bureau, Cedar, Michigan......    15
Nobis, Ken, Dairy Production; President, Michigan Milk Producers 
  Association, St. Johns, Michigan...............................    21
Rothwell, Julia Baehre, Apple Production; Chair, U.S. Apple 
  Association, Belding, Michigan.................................    19
Van Driessche, Ray, Sugar Beet Production and Conservation; 
  Director of Community and Government Relations, Michigan Sugar 
  Company, Bay City, Michigan....................................    17

                               Panel III

Armstrong, David, President and Chief Executive Officer, 
  Greenstone Farm Credit Services, East Lansing, Michigan........    46
Davis, Eric, Director, Food Initiative, United Way For 
  Southeastern Michigan, Detroit, Michigan.......................    41
Holt, Kristen, President, Quality Assurance International (QAI), 
  and Senior Vice President, Food Safety and Quality, NSF 
  International, Ann Arbor, Michigan.............................    39
Reid, James, Reid Dairy Farm, Grant Township, Michigan...........    45
Serfass, Karen, Forestry Production; Past President, Michigan 
  Forest Association, Dafter, Michigan...........................    37
West, Dennis, President, Northern Initiatives, Marquette, 
  Michigan.......................................................    43
                              ----------                              

                                APPENDIX

Prepared Statements:
    Armstrong, David.............................................    58
    Blauwiekel, Peter B..........................................    63
    Coon, Thomas G...............................................    78
    Davis, Eric..................................................    84
    Gerstacker, Clark............................................    88
    Gray, J. Ian.................................................    91
    Holt, Kristen................................................    96
    Lacross, Ben.................................................   122
    Nobis, Ken...................................................   124
    Reid, James..................................................   130
    Rothwell, Julia Baehre.......................................   133
    Serfass, Karen...............................................   144
    Simon, Lou Anna K............................................   152
    Van Driessche, Ray...........................................   155
    West, Dennis.................................................   161
Document(s) Submitted for the Record:
Serfass, Karen:
    Additional letter to Hon. Pat Roberts........................   174


 
                       OPPORTUNITIES FOR GROWTH:
                    MICHIGAN AND THE 2012 FARM BILL

                              ----------                              


                         Tuesday, May 31, 2011

                              United States Senate,
          Committee on Agriculture, Nutrition and Forestry,
                                                   East Lansing, MI
    The committee met, pursuant to notice, at 9:08 a.m., in the 
Kellogg Center, Michigan State University, East Lansing, 
Michigan, Hon. Debbie Stabenow, Chairwoman of the committee, 
presiding.
    Present or submitting a statement: Senators Stabenow and 
Roberts.

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

    Chairwoman Stabenow. Good morning. We are so happy to have 
all of you with us today for our first official field hearing 
of the Senate Agriculture, Nutrition, and Forestry Committee. I 
am particularly pleased to have Senator Pat Roberts, who is my 
partner, my Ranking Member, and friend, who is here with me, 
from Kansas. We are doing our first two field hearings, first 
in Michigan and then in Kansas, and then we will be listening, 
of course, to folks from across the country. But it was 
important to me to start here.
    As you all know, I have said many, many times, I do not 
think we have an economy or a middle class unless you make 
things and grow things, and that is what we do in Michigan. We 
make things and we grow things and we do, I think, a doggone 
good job of it. So when we talk about what is important to the 
farm bill and the fact that I think every page affects us 
because of the diversity of crops, I think it is really 
terrific that we are able to start here in Michigan and at 
Michigan State.
    Just last week, we held our first official farm bill 
hearing in D.C., where we discussed how U.S. farmers and 
ranchers help to feed the world and the importance of 
agriculture as part of the global economy. Today in Michigan, 
where one in four jobs rely on agriculture and where 
agriculture contributes over $71 billion to our economy, when 
we talk about the farm bill, as we all know, it is really a 
jobs bill.
    You know, we had to postpone our hearing back in April due 
to a looming government shutdown, and even though we were able 
to keep the government open, we still have a very tight budget 
to work with and it is going to be critical as we are focusing 
on larger issues around budgets and deficits that we examine 
every part of the farm bill, every program, evaluate whether it 
is working or not. With the cold, wet spring and planting 
delays in Michigan, it is more important than ever that the 
farm bill risk management programs work for our farmers.
    Difficult budgets also provide reason and opportunity to 
simplify and streamline programs so that they work better for 
the people that are relying on them. We need to stretch every 
single taxpayer dollar to get the absolute best return on our 
investment, and that is what we intend to do.
    In today's hearing, we will continue the farm bill process 
with a focus on principles and bottom lines and focus on the 
folks who actually are using programs and what all of you 
think--what is working, what is not working, what we can do 
better, what we should continue to do from the 2008 farm bill. 
We want to hear about your farms, your communities, our needs 
across Michigan that should be addressed in the farm bill. And 
we want your input as to the most effective ways to do it, 
because that really is what the process of the farm bill and 
the next several months are all about.
    Fundamentally, we write farm bills to help producers in the 
face of real challenges and to conserve natural resources. We 
help real people who struggle to put food on the table in 
difficult economic times. We help rural communities improve 
their economies and offer good jobs to their citizens. And we 
help our nation take important steps toward a better energy 
future.
    We have got three great panels today of witnesses. Our 
first panel features our wonderful hosts, as you know, my alma 
mater, Michigan State University, founded over 100-- yes, let 
us give a round of applause to Michigan State.
    [Applause.]
    Chairwoman Stabenow. President Simon, I think you brought 
your fan base with you today, and I am one of them, so--but 
founded over 150 years ago as America's first land grant 
college, MSU's pioneering advances have changed the face of 
agriculture in our country. It was here that Malcolm Trout 
first discovered how to link pasteurization and homogenization 
of milk, which revolutionized the dairy industry. William Beal 
pioneered the hybridization of corn. And Robert Kedzie 
organized the forerunner of MSU Extension back in 1876, and I 
do not think you were there at that time, Pat----
    Senator Roberts. No.
    [Laughter.]
    Chairwoman Stabenow. Today, MSU continues that legacy, 
leading the country in advances in controlling invasive 
species, fighting plant and animal disease, biotechnology and 
bio-based manufacturing.
    Our second panel is made up of farmers and others involved 
in agriculture that represent the broad diversity of 
agriculture in Michigan. We will hear about traditional 
commodities, specialty crops, the sugar program, dairy and 
livestock operations. We will also hear about some of the 
challenges and risks our farmers deal with on a daily basis and 
how they balance those challenges and risks in their 
operations.
    In our final panel, we will hear about nutrition, rural 
development, energy, conservation, credit, and forestry, which 
is also very important to Michigan's economy, rounding out the 
most significant titles in the farm bill.
    I have to say, Senator Roberts, we are very excited to have 
you here, and I know you often joke about how the State Tree in 
Kansas is the telephone pole, but we have got a lot of trees 
all around Michigan and national forests and great beauty and 
we are so glad that you are here to be able to hear from key 
leaders about some of our great natural resources and to meet 
our wonderful people.
    Agriculture in Michigan continues to be one of the bright 
spots in our economy. Our agricultural sector has grown at a 
faster rate than the rest of our economy, and as Chair of this 
committee, I am committed to doing whatever I can to keep that 
momentum going and to continue supporting the great men and 
women, the great families of our State who work so hard, day 
in, day out, to produce a safe and abundant food and fiber 
supply that powers our nation's economy.
    It is now my great pleasure to turn to Senator Pat Roberts 
for his opening remarks. He indicated a little while ago that 
he has been through eight farm bills, I understand, and was 
Chairman during 1995 and 1996 in the House of Representatives 
of the Agriculture Committee and has a wealth of knowledge and 
expertise and I am very pleased to have him partnering with me 
as we go forward in writing the next farm bill. Senator 
Roberts, welcome to Michigan.

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

    Senator Roberts. Yes, ma'am. Thank you.
    [Applause.]
    Senator Roberts. Good morning and go Green!
    [Applause.]
    Senator Roberts. That sounded pretty good. Let us do it 
again. Go Green!
    [Audience responds.]
    Senator Roberts. All right. Part of my remarks here, and 
the appendix I am not going to read to you--it is the playbook 
of the University of Nebraska----
    [Laughter.]
    Senator Roberts. Dr. Simon, I will just give it to you. It 
is like everything else. It is ``top secret,'' so I am making 
it public.
    [Laughter.]
    Senator Roberts. But I got a glimpse of Spartan Stadium. My 
staff and I were testing my time on the 40. I still have some 
eligibility left for Kansas State----
    [Laughter.]
    Senator Roberts. --and I got it down to 40 seconds this 
morning.
    [Laughter.]
    Senator Roberts. But at any rate, thank you so much for 
bringing the committee to Michigan. This is a tradition of the 
Senate Agriculture Committee, to go out and have field 
hearings, and you always get a different perspective than when 
you have people come into Washington and read their prepared 
statement, and if you dare ask them to get away from that, they 
get a little nervous, but not when you come to Michigan or 
Kansas, I can assure you, so it is a good thing.
    Dr. Simon, thank you so much for hosting this this morning. 
As I indicated, I do not think that Nebraska will walk onto 
your field until 2012, but when they do, rest assured, 
everybody in Kansas will be shouting ``Go Green,'' as well.
    [Laughter.]
    Senator Roberts. Madam Chairwoman, it is appropriate that 
our first farm bill hearing takes place at a research 
institution, and as you have indicated, the first land grant 
institution. I have said before, we face a great challenge. We 
have been trying to indicate that to those in the Congress and 
anybody that will listen, and we had a hearing last week that 
really concentrated on that, about American agriculture and the 
global economy, but even more than that, our national security 
and what agriculture can do as a tool for peace.
    Our population is now about six billion--I am talking about 
our, the world. It is going to go to about 9.3 billion in the 
next several decades. That is an awful lot of folks to feed, 
and we are not going to be able to do that unless we have the 
appropriate research base to give us the technology to enable 
us to do that, and why on earth would anybody in the Congress 
of the United States, or for that matter, any one of our 
numerous critics of production agriculture, why would they 
pass, or why would they enact spending cuts that would tear at 
the base of that effort, or for that matter, tax policy, or for 
that matter, regulatory overkill, which is one of the things 
that we want to touch on as of today.
    The Chairwoman is going to hold a hearing with EPA, or what 
Chuck Grassley from Iowa says, the End of Production 
Agriculture Agency----
    [Laughter.]
    Senator Roberts. --but maybe it is not that severe or not. 
But at any rate, emerging economies are demanding higher-value 
proteins, grains, and specialty crops, so those prospects are 
out there. We have to take advantage of that. We must be very 
aggressive. I am very sad to see that the three trade pacts 
that we thought that we could pass on a fast track and that 
have been delayed years are now again in the midst of a 
political debate, but we will persevere and I hope that we can 
get that done.
    The key factor in doing all this is technology. That starts 
at universities like Michigan State, Kansas State, the home of 
the ever-optimistic and Fighting Wildcats, and other 
institutions where agriculture research is a priority.
    And I really want to thank our producers and our witnesses 
on the second and third panels for joining us today. The three 
here, we are not allowed to ask them questions. They are at a 
higher level. But at any rate, it takes time to come here and 
to testify, to take time out of your valuable schedule, and I 
really appreciate it and I know the Chairwoman does, as well. 
It is your perspectives on current agriculture programs and the 
direction of this next farm bill that are critical to the 
committee's work in drafting policies that provide producers in 
rural America with the tools necessary for success.
    And some folks question the need for a farm bill with 
commodity prices where they are today. I do not have to tell 
you that prices can fall much more quickly than they rise. We 
have been through this before and people do not seem to realize 
the cost inputs and everything else that goes into this.
    The worst thing that can happen is happening out in Kansas, 
and more especially in the Southwest part. We are very dry. I 
wish you would send some of this rain back, if you possibly 
could. But here we are with a farmer with-- now, this is going 
to sound to you like a big farmer, but out in our country, it 
is not particularly that big--maybe 10,000 acres. He had a 
pretty good crop there, but, bang, we end up with a hailstorm, 
and then, bang, we get into a drought, one of the worst since 
the 1930s. We have wheat at over $8, which is just incredible, 
and there he is, stuck with no crop. And so that indicates the 
tremendous value of crop insurance. The Chairwoman and I share 
that very strong feeling. So it is a paradox of enormous irony 
that when we have high prices and everybody thinks everything 
is fine in agriculture, that is fine except if you lose a crop.
    So we both believe that without an adequate safety net, 
many producers will struggle to secure their operating loans 
and lines of credit to cover input and equipment costs, always 
rising. We need those producers to stay in business if we are 
going to meet this global challenge.
    Folks, this is not only a challenge for us. It is a moral 
issue. We started this with Food for Peace in the Eisenhower 
administration, and if we are going to feed a troubled and 
hungry world and be able to do that, we must have the base from 
which we can operate. It is a national security issue. Show me 
a country that cannot sustain itself in regards to its food 
supply, I will show you a country that is wavering and having 
problems and probably getting into a little bit of terrorism, 
so it is a national security issue, as well.
    Unfortunately, our farm programs are not the only policies 
that affect production. I am looking forward to hearing from 
today's witnesses about the impact of Federal regulations on 
their operations. The cost of regulations on an annual basis to 
American today with existing regulations and some that are now 
pouring out like a Katrina, it seems to be, in all phases of 
our economy is now over $1 trillion. That is incredible. 
Surely, we can do a better job on a cost-benefit basis, and we 
hope to get your input.
    Our Kansas producers continue to tell me that Federal 
actions from outside of the Department pose just as great a 
threat to their ability to feed a troubled and hungry world as 
anything else. At a time when the future of agriculture 
production so heavily impacts our national security, why would 
we do anything from the Federal Government's standpoint to 
hinder their efforts?
    Madam Chairwoman, you have convened a diverse panel 
representing a wide range of issues under our committee's 
jurisdiction. I look forward to hearing their testimony, 
tasting the fruits of their labors--bing cherries--while we are 
here in Michigan. Thank you so much.
    Chairwoman Stabenow. Thank you.
    Senator Roberts. Thank you all for taking your time to come 
out. This is a wonderful group. This is a wonderful audience, 
wonderful turnout. Thank you so much.
    Chairwoman Stabenow. Thank you very much, Senator Roberts. 
Thank you very much.
    [Applause.]
    Chairwoman Stabenow. We will turn to our excellent hosts 
this morning, who will bring opening comments, of course, 
Michigan State University's President, Dr. Lou Anna Simon, Vice 
President for Research and Graduate Studies, Dr. Ian Gray, and 
Director of MSU Extension, Dr. Thomas Coon. President Simon, we 
are so happy to be here. Good morning.

   STATEMENT OF LOU ANNA K. SIMON, PRESIDENT, MICHIGAN STATE 
               UNIVERSITY, EAST LANSING, MICHIGAN

    Ms. Simon. Good morning, and we are delighted to have you 
here, and welcome home. Senator Roberts, this is going to be 
your second home, particularly if you deliver that playbook in 
a way that helps us in October.
    But it is my distinct pleasure to welcome you to Michigan 
State University and to pause a moment and to reflect on your 
title, Chairwoman. It is an extraordinary honor for you, but 
also for Michigan State University and for the State of 
Michigan. You have been a tireless advocate for this 
University, but also for agriculture, from the very beginning 
of your career, and so this position and this opportunity to 
have an important role in shaping not simply next week but the 
future of this country for a very long time, we are so proud of 
the role that you will play. And Senator Roberts, your record 
is extraordinary and we could adopt you as a son of Michigan, 
if that is appropriate.
    [Laughter.]
    Ms. Simon. Let me not go through the formal testimony- -you 
have it in front of you--but make about three observations, if 
I might, and turn it over to my colleagues.
    You reflected on the pioneering land grant university, and 
we are celebrating the Sesquicentennial of the Morrill Act in 
2012 and it will be a time in Washington where there will be 
parties on the Mall and posters and a lot of discussion. But 
that was an extraordinary time in our history, when the Morrill 
Act was adopted, in a time of war, a time of great economic 
stress, and a time when our country needed to chart a future 
that was simply different than where we had been.
    Michigan State University was the prototype, being founded 
seven years before the Morrill Act as a way of thinking about 
how we could blend, as Senator Stabenow says, the making and 
the growing in a way that was not simply about making and 
growing. It was about economic independence and quality of life 
and a way in which the research that has occurred at this 
university could have profound impacts on the people of 
Michigan and, therefore, the people of the United States. This 
is a uniquely American institution. It is a bit muddled at 
times because we try to balance access, being good enough for 
the proudest and open to the poor, competing in international 
competition, at the same time being very locally connected.
    When John Hannah returned from U.S. AID and a stint in 
World War II, he understood that this was going to become a 
global competition, a global society, and that places like 
Michigan State, with its values, should participate in that 
global dialogue, establishing the first Dean of International 
Studies Programs in 1956, well before the issues of 
internationalization or food were a part of the national 
security interest that you are talking about today.
    So Michigan State University has in its DNA this capacity 
to be internationally focused and locally relevant and 
connected, at the same time, trying to open its doors widely, 
but also expecting the best and to be able to compete with the 
best, whether it is on the football field or anyplace around 
the world. That spirit is what animated the Morrill Act and 
what we should be celebrating in 2012.
    Also, the Morrill Act understood that research had to 
underpin whatever we did, that true democracy was based on the 
capacity to have people across all walks of life have access to 
the best information, and that we could be both relevant today, 
but also forward-looking for tomorrow. So the research agenda 
for the land grant university had to anticipate tomorrow's 
problems, not simply address the day- to-day economic issues of 
difficulties of floods and droughts and all the things that 
might occur. That balanced portfolio was really important for 
the growth of America and the growth of Michigan agriculture.
    So as you think about the farm bill and its profound impact 
going forward, it has to have this proactive element so that it 
can anticipate the problems of tomorrow in this global context 
that you have described, Senator Roberts, and that Michigan and 
the United States can play an important role in solving those 
problems in ways that rebound positively to the prosperity for 
the people of Michigan and the people of the United States, and 
those two are not mutually exclusive. And that really is the 
21st century land grant university and the role we can play in 
helping you and others both identify those issues as well as 
staking out an agenda that is long-term and short-term.
    We also must stay connected to the people, and that becomes 
more difficult, and sometimes as we are all sort of fascinated 
by our iPads and phones and testing. But Extension needs to be 
relevant for the 21st century, as well, and that requires some 
reorganization, and Tom will talk about the challenges that we 
are facing, but also how we think that technology as well as 
our connections with people in this room and many across the 
State can help us find the new rhythm for Extension for the 
21st century that blends this technology, but also thinks about 
the role that Extension must play in bringing and making sure 
that we are monitoring what is happening around the world so we 
can learn from the best practices in the world and remain very, 
very competitive, and Extension needs to play a role in making 
sure that we are bringing those best practices, not simply from 
a part of the United States, but from around the world back to 
Michigan so that we can be competitive.
    We have all faced enormous budget challenges. Michigan has 
been no exception. Those challenges have frayed some of our 
trust and our relationships. They have put friends at odds with 
one another over priorities. And they have also, though, been 
an opportunity for us to reassess what we need to do for the 
future.
    We are very pleased that as a part of the ongoing 
discussions there will be an ag summit here in Michigan, I 
think now scheduled for August, as away of having the 
Department of Agriculture and Rural Development, the 
University, the State's land grant university, and the various 
constituents be able to think together about how we can better 
frame the problems of today and for tomorrow.
    The farm bill as it stands now had CREATE-21. It was an 
opportunity to be able to fund the kind of work needed for work 
in the State and to really capitalize on the opportunities that 
are available. We really understand the difficulties that you 
will be facing but have trust that you will be able to rise 
above the political nit-picking of the day and be able to find 
that framework that will be a parallel to the celebration of 
the Morrill Act in the future.
    Ian?
    [The prepared statement of Ms. Simon can be found on page 
152 in the appendix.]
    Chairwoman Stabenow. Dr. Gray?

   STATEMENT OF J. IAN GRAY, VICE PRESIDENT FOR RESEARCH AND 
  GRADUATE STUDIES, MICHIGAN STATE UNIVERSITY, EAST LANSING, 
                            MICHIGAN

    Mr. Gray. Thank you, President Simon. Good morning, 
Chairwoman Stabenow, Senator Roberts. Welcome again. And I 
welcome the opportunity to make a few remarks about research 
and the need for research and the critical role that USDA- 
funded research plays in the long-term sustainability of the 
agricultural system in the United States.
    I will divide my remarks into three discrete areas: CREATE-
21 and its future and its impact on agricultural research, the 
MSU research programs and support of Michigan agriculture and 
natural resources industries, and the need for a balanced 
research portfolio within the National Institute of Food and 
Agriculture and in those universities which obtain research 
support from the USDA.
    CREATE-21, and I would like to express our deep 
appreciation to you, Chairwoman Stabenow, for your strong 
commitment and support of this initiative. This has been a 
major change in direction. It is really a need. And the growth 
of research funding in the United States has not paralleled the 
need that faces the agricultural industries. Research funding 
is almost static and has grown at an average annual rate of 
just 1.85 percent over the last four decades. CREATE-21 called 
for increasing competitive funding to just over $2 billion per 
year over a seven-year period with fundamental or basic 
research constituting 55 percent of the total and integrated 
programs the remaining 45 percent. And this would be a 
wonderful paradigm to follow and bring to completion because 
that is what is needed to support not only the universities, 
but the research programs for global and U.S. agriculture.
    Michigan agriculture contributes almost $70 billion 
annually to the State's economy, making it the second largest 
industry. We have over 200 commodities, and that makes us 
second to California in terms of agricultural diversity. 
Michigan State research relies heavily on USDA funding, State 
funding, particularly the Project GREEN, and also commodity 
funding.
    We face a myriad of challenges and, therefore, it is very, 
very critical that the research grows and the programs within 
the University grows at the same time to address those unique 
needs facing Michigan agriculture, and I would acknowledge the 
importance of the Specialty Crop Research Initiative that was 
established by NIFA to resolve critical industry issues through 
research and Extension activities, and Chairwoman Stabenow, I 
would like to particularly recognize your strong advocacy for 
this initiative, as it pertains directly to the needs of our 
specialty crops in Michigan and this is a unique change in how 
we do research. It was multi-institutional, multi-disciplinary, 
multi- investigator activity coming together, the sharing, 
blending of disciplines to address critical, critical problems, 
and MSU has been successful in those initiatives. As a 
particular example, we received $14.4 million to lead a team of 
scientists from 11 U.S. institutions and six international 
partners to improve the quality of fruit in the globally 
important Rosaceae family, and that was very, very good.
    There is also a need for flexibility in USDA funding. We do 
not mind--in fact, we encourage competition. But Michigan, as 
many other States do, we face some critical problems. So, in 
other words, we need a pool of funds to address problems such 
as the marmorated stink bug in Michigan, which is a serious 
problem that was identified in Michigan, in two counties in 
Michigan, reported by the MDA in February of this year. Control 
of this pest and others, such as the spotted wing drosophila, 
is necessary to secure the viability of our plant industries in 
Michigan.
    The third point I would like to make is about the need for 
USDA to commit strongly to promoting and funding basic 
research, and basic research is the basis of the coming up with 
solutions. Basic research is the underpinning mechanism for 
problem solving in the State of Michigan. The report, ``New 
Biology in the 21st Century: Ensuring the United States Leads 
the Coming Biology Revolution,'' it was concluded that 
integrating knowledge from many disciplines will permit deeper 
understanding of biological systems which will both lead to 
biology-based solutions to societal problems and also feedback 
to enrich the individual scientific disciplines that contribute 
new insights.
    So we have been promoting this integrated research approach 
at Michigan State for many, many years, and I would like to 
provide a few brief examples. One, the genetics [sic] and 
improved potato breeding, a project that we get funded through 
the Specialty Crop Research Initiative. That is a program 
taking basic researchers and computational biologists to work 
together to come up with solutions. The Cold Tolerance Project 
for Arabidopsis with Dr. Tomascho [phonetic] in which we can 
actually insert cold tolerant genes into canola to allow 
greater growth of the canola crop in Michigan. The RosBREED 
project, I just mentioned. The swine production--many of our 
researchers are integrating genetic technologies to identify 
DNA markers.
    So those are some of the examples, and it is also important 
that I advocate for the concern of our basic research is for 
continuation of basic research support. It is all about 
research, research, research, and we thank you for your 
appreciation. Thank you.
    Now, I will turn to my colleague.
    [The prepared statement of Mr. Gray can be found on page 91 
in the appendix.]
    Chairwoman Stabenow. Thank you very much.
    Yes, Dr. Coon.

     STATEMENT OF THOMAS G. COON, DIRECTOR, MICHIGAN STATE 
          UNIVERSITY EXTENSION, EAST LANSING, MICHIGAN

    Mr. Coon. Thank you. Honorable Chairwoman Stabenow, Senator 
Roberts, thank you for the opportunity to share with you some 
of the important changes that are going on in Extension both 
here and across the country and the importance of the farm bill 
in support of Cooperative Extension.
    Michigan is a State that we think of ourselves as being a 
State of innovation and entrepreneurship, and that certainly is 
part of the spirit that we have brought to the redesign of MSU 
Extension. Our charge from President Simon was to create a 
Cooperative Extension System that Michigan needs for the 21st 
century.
    In order to accomplish that, we have had to step back, ask 
ourselves what is most important and what is really nice but 
perhaps not something we can afford to do any longer. In doing 
that, we have come to the realization there are four key 
program areas that we need to focus on. Agriculture and agri-
business comes first. Health and nutrition is also just as 
important. Working with our youth and preparing them for 
tomorrow is also important. And then, finally, in our community 
development and environmental programs, which we call our 
Greening Michigan programs, because green is such an important 
color for us. Those are really our four key areas that we 
focused on, and they are certainly in line with the priorities 
in the farm bill. But we also feel we have priorities to share 
back with you in what we can be doing in the future.
    Some of the things that we have done in our redesign, in 
addition to focusing in these four areas, is we reduced our 
administrative layers and cut our administrative FTEs in half. 
We have accelerated our use of technology. I am sure you are 
aware and familiar with eXtension, the online presence of 
Cooperative Extension across the nation. We have made a very 
serious commitment to that with our own funds as well as our 
own people, and what we are finding is that by working together 
across the States, we have actually created something very new 
in the spirit of that innovation that I think is serving people 
in Michigan as well as across the country.
    Today, someone can go to eXtension, type in the ``Ask an 
Expert'' app, and ask a question about a problem they are 
having perhaps with their tomatoes or what have you and have an 
answer in 24 hours, and it goes through--it is like FedEx. It 
goes through someplace--it is not Memphis, but someplace and 
comes to Michigan. We answer it here and it gets back to them 
and they have connected with their Cooperative Extension System 
in a new way. That is happening in every State.
    We have also streamlined our business strategies, trying to 
be as frugal and as efficient as we can be. If you think about 
it, we are an institution that works with three different 
government levels--Federal, State, and county level. You can 
imagine the red tape we can find ourselves in at times, and we 
are really trying to simplify that as much as possible through 
some of the innovations that the President has led here with 
our own administrative services, and that is working very well 
and the counties are now signing on with our new cooperative 
agreement that really centralizes that a bit more.
    Finally, our focus is what is most important, and that is, 
as President Simon said, on Michigan's economy--creating and 
retaining jobs, improving the health of individuals, 
communities, and the environment, and enhancing the quality of 
life for people in Michigan.
    I would like to just showcase a few of the things that we 
do with the Federal investment through the farm bill. 
Certainly, the Smith-Lever title and the Hatch title in the 
research--Hatch and Smith-Lever lines in the research title are 
fundamental for our support. For every dollar that Michigan 
State receives from Smith-Lever and Hatch, we leverage another 
$16 in State, local, foundation, and other grant funding.
    With that, we have also expanded into other areas that are 
touched by the farm bill, including the Specialty Crops 
Initiative that Dr. Gray mentioned, certainly with the USDA 
Rural Development. We now host the North Central Regional 
Center for Rural Development at Michigan State University. We 
are very pleased to provide leadership for that, and as part of 
that, we have joined forces with USDA Rural Development in the 
Stronger Economies Together program, the SET program. It began 
last year. The four Regional Centers for Rural Development have 
provided the lead for this for Cooperative Extension, in 
working with rural development.
    In the North Central Region last year, two States, Ohio and 
Missouri, were our pilot States, and multiple county regions 
came together in rural areas in those States, developed 
proposals for how they might work together to enhance economic 
development in their regions and have been successful in 
obtaining funds with this. In 2011, more States were brought on 
board, including Michigan and Ohio-- or Michigan and Indiana, 
and we currently have two proposals, from Southwest Michigan 
and from Northeast Michigan, to take advantage of that and 
build on that regional approach to rural development.
    In our agriculture and agri-business programs, we are 
provided leadership by Dr. Wendy Powers, but her research in 
Extension program is really exemplary of the kind of things 
that we see ourselves doing, the kind of integration that Dr. 
Gray talked about. She works particularly in livestock 
management practices, evaluating them for the impact that they 
have on air quality and water quality and then providing 
translational work that helps producers understand what they 
can do to reduce the impact that their operations may have on 
the environment.
    We have also showcased some other efforts around the State. 
We are doing a concentrated effort in Saginaw and Genessee 
Counties. Those two counties have our highest rates of obesity 
of any counties in the State and we have a concentrated six-
month campaign going on there right now called ``I Know My 
Numbers,'' helping people change their eating habits and in the 
process improve their health, reduce their risk of becoming 
obese or reduce their obesity, and in the process reduce health 
care costs.
    We have also been innovating in community food systems. We 
see that Michigan has a great opportunity to become a global 
center for innovation in metropolitan food systems to help 
address that challenge of feeding the extra three billion 
people that we will acquire in the next few decades, most of 
whom will be concentrated in urban areas.
    And then, finally, we are helping to prepare the youth for 
tomorrow, particularly the sciences, improving science literacy 
for young people, enriching the experiences that they have in 
school with science educational opportunities that are really 
true to the 4-H model, that is, learning by doing.
    With these areas, we really see some tremendous 
opportunities for us to grow and expand Extension. It is ironic 
to be at a time where the Department of Health and Human 
Service and the Department of Energy are trying to figure out 
how to do something like Extension. We keep telling them, work 
with us. We will show you how to do things like Extension.
    Thank you for the opportunity to provide testimony----
    Chairwoman Stabenow. Well, thank you.
    Mr. Coon. --and thank you for your leadership.
    [The prepared statement of Mr. Coon can be found on page 78 
in the appendix.]
    Chairwoman Stabenow. Thank you very much to all three of 
you. Let us give our panelists a round of applause. Thank you 
very much.
    [Applause.]
    Chairwoman Stabenow. Thank you so much. Again, we are so 
proud of all that you do and we will excuse you and invite our 
second panel to come and join us as we continue on with the 
hearing, so thank you very much.
    [Pause.]
    Chairwoman Stabenow. Well, good morning again and welcome. 
We are so pleased to have all of you with us. Let me introduce 
each of our witnesses on this panel and also remind people, we 
have asked for longer written testimony, but we will ask, 
because we have so many people that we want to hear from today, 
that you keep your comments, remarks, to five minutes, so that 
is the reason for the clock. So we will ask you to pay 
attention to that. And then, of course, we want to have follow-
up with questions and have the opportunity to receive any other 
written information that you have for us this morning and 
deeply appreciate your time in being with us.
    Let me introduce all of our panelists. Our first panelist 
is Mr. Clark Gerstacker. He and his brother, Kirk, farm 1,500 
acres, I understand, of corn, soybeans, sugar beets, and dry 
edible beans on a farm that has been in their family for 115 
years and four generations. He went to school right here at 
Michigan State, is a member of the Corn Board of the National 
Corn Growers Association, has served on numerous positions with 
the Michigan Corn Growers Association, and we are so pleased to 
have you with us today.
    Our next panelist is Ben LaCross. He is a cherry farmer 
from Cedar, Michigan, and a graduate of Central Michigan 
University. He farms on his family farm, where they grow 700 
acres of tart cherries, sweet cherries, plums, and now apples, 
I understand. Ben was elected Chair of the Farm Bureau's Young 
Farmers and Ranchers Committee this year and is focusing on 
helping the next generation of farmers become interested in the 
industry and make their voices heard with policy makers, so 
welcome. Good to have you.
    Ray Van Driessche is a third generation farmer from Bay 
City. He operates his farm in partnership with his brother, 
Gene. They grow sugar beets, corn, soybeans, and wheat. He is 
currently the Director of Community and Government Relations 
for the Michigan Sugar Company and is former President of the 
American Sugar Beet Growers Association. Good to have you with 
us.
    Julia Rothwell was raised on Baehre Orchards, where her 
family farmed over 400 acres of apples, cherries, peaches, and 
plums, and spent all of her growing up years working in the 
orchards and the packing shed. For 28 years, she was a partner 
of those Hersee Brothers [phonetic], a Michigan fruit growing, 
storage, packing, and shipping organization. Julia currently 
serves as the Chair of U.S. Apple as well as the Michigan Apple 
Association. Good to see you.
    Ken Nobis has been farming in the St. Johns area since 
1968, after completing his college education at Western 
Michigan University and two years in the Army. He operates 
Nobis Dairy Farm, a 950-cow dairy farm, with his brother, 
Larry. In addition, they farm 3,000 acres. He is currently the 
President of the Michigan Milk Producers Association and has 
held national leadership positions with the Michigan Milk 
Producers, as well. He was awarded the Dairy Farmer of the Year 
from Michigan State University in 2006. Great to have you with 
us.
    Pete Blauwiekel and his wife, Brenda, own and operate Blue 
Wing Farm, a farrow to finish facility in Fowler, Michigan. In 
addition to being pork producers, they also are committed to 
educating and engaging young people by being active 4-H 
leaders. Pete is also involved in the Michigan Pork Producers 
Association.
    So we are so pleased to have each and every one of you with 
us today, and we are going to start our conversation and 
testimony this morning with Mr. Gerstacker. Welcome.

  STATEMENT OF CLARK GERSTACKER, CORN AND SOYBEAN PRODUCTION; 
  MEMBER, MICHIGAN CORN GROWERS ASSOCIATION, MIDLAND, MICHIGAN

    Mr. Gerstacker. Well, thank you. Thank you. Good morning. 
And first, I want to thank Chairwoman Stabenow and Ranking 
Member Roberts for your time today and for selecting Michigan 
as the site of the Senate Agriculture Committee's first 
official field hearing.
    As the second leading industry in our State, Michigan's 
$71.3 billion agricultural industry, as you know, has been a 
bright spot in our dim economy throughout the recession. We are 
very appreciative of the Senate Agriculture Committee's 
consideration of how our diverse yet strong agricultural sector 
will impact the upcoming farm bill.
    Today, I would like to testify before you not as a member 
of any organization but as a rural crop farmer who depends on 
the farm bill to protect my farming operation and to ensure 
that my centennial farm can be passed on to my children.
    Americans enjoy the cheapest food on the planet, as they 
spend only ten percent of their annual budget on food. In other 
countries, such as India, as much as 50 percent of one's budget 
is spent on food. While farmers like me are eager to provide 
this safe, abundant, and inexpensive food supply, we face 
increasingly tumultuous markets that rise and fall with the 
wind. At the same time that we encounter ever-changing market 
opportunities, farmers also face higher input costs, such as 
feed, fertilizer, and fuel, all of which are necessary 
components of a year's harvest.
    In addition to market volatility, farmers are also 
confronted with the constant uncertainty of weather. We wait 
for the thaw, the sun, the rain, the heat, all of which are 
conditions completely out of our control. Each of these can 
present a make-it-or-break-it factor for our crop.
    Due to these ever-present vagaries, farming operations like 
mine are forced to take on a considerable amount of risk each 
year we cultivate our land. The fact is, we are faced with the 
task of providing feed and fuel for a growing world population. 
We cannot simply sit out a planting season until farming 
becomes more profitable. It is no surprise to anyone in this 
room that a farmer's entire year's work can result in a loss 
with as little as a drop in prices, a spike in fuel costs, a 
drought, or an early frost.
    The increased cost of this amplified risk means that 
farmers and consumers need some stability to ensure a reliable 
and affordable food supply in our country. Farmers like me need 
to have access to affordable risk management tools to better 
mitigate the impact of significant crop losses and sharp price 
declines. This is why the upcoming farm bill is so important. 
It is not about providing income to less than two percent of 
the American population that farms. It is about ensuring that 
the same two percent can continue to provide affordable food 
for the other 98 percent of Americans who rely on them.
    At Gerstacker Farms, we have utilized a variety of farm 
bill programs over the years, such as crop insurance, the ACRE 
program, LDP, CRP, as well as EQIP and disaster assistance 
programs. Faced with the growing national debt and budget 
constraints across the board, I realize some of these programs 
may be changed in the next farm bill. Here in the agricultural 
industry, we want to do our part to improve the Federal deficit 
situation. We have already contributed substantially with 
savings from the Federal Crop Reinsurance as well as taking 
budget cuts in the areas of rural development, conservation, 
and research.
    I do feel the risk management programs, such as ACRE and 
crop insurance, are absolutely vital and cannot be lost in the 
new farm bill. The ACRE program, as an example, can be made 
more efficient and useful to farmers by increasing the 
timeliness of payments and bringing program triggers closer to 
the farm. In States such as Michigan, the average yield differs 
vastly throughout our State's various corn regions as a result 
of diverse soil and weather variations. By adjusting program 
triggers so they are tied more closely to the individual farm, 
gaps in the current farm bill programs will be bridged to help 
protect farmers from shallow repetitive crop losses. I also 
feel the crop insurance premiums should be adjusted to reflect 
today's yield trends and Michigan's average indemnity payment 
ratio of less than 70 percent.
    Additionally, programs in the next farm bill should strive 
to be producer-based as opposed to land owner-based. This will 
ensure that programs assist the farmers who grow the crops and 
assume the risk. By improving these risk management tools, we 
can provide the best possible safety net for America's farmers 
and for the American food supply.
    As you look to the future of Michigan agriculture, our 
industry continues to be a beacon of promise and I am proud to 
be a part of this sector. Michigan's farmers and ranchers 
provide a bounty of fruit, grain, vegetables, and protein which 
is enjoyed by people across the globe. Crops such as those 
grown on my farm are utilized as feed, fuel, food, and fiber, 
and these important resources will continue to play a vital 
role in our economy throughout the next farm bill and the next 
century.
    Thank you for your time and consideration, and I look 
forward to your questions and comments. Thank you.
    [The prepared statement of Mr. Gerstacker can be found on 
page 88 in the appendix.]
    Chairwoman Stabenow. Thanks very much.
    Mr. LaCross, welcome.

   STATEMENT OF BEN LACROSS, CHERRY PRODUCTION; CHAIR, YOUNG 
 FARMERS AND RANCHERS COMMITTEE, AMERICAN FARM BUREAU, CEDAR, 
                            MICHIGAN

    Mr. LaCross. Thank you, Chairwoman Stabenow. Senator 
Roberts, welcome. I had the opportunity to visit your State of 
Kansas this last winter for a Young Farmers and Ranchers 
conference and you definitely have a great group of young, 
vibrant, optimistic young farmers in your State.
    Before I begin today, I want to take a moment and thank 
you, Senator Stabenow, for your leadership on the last farm 
bill. Today, we have a specialty crop title in the farm bill, 
which is a result of your hard work and determination these 
past few years. Specialty crop farmers have benefitted from 
your vision and leadership.
    I am here today as a young farmer from Cedar, Michigan. My 
wife and I farm with my parents, Glen and Judy LaCross, and we 
grow tart and sweet cherries, plums, and apples. I am currently 
the Chairman of the American Farm Bureau Federation's Young 
Farmer and Rancher Committee.
    Strong agricultural markets, increasing demand for niche 
products, and a general public that is showing an increasing 
awareness of agriculture make today an exciting time to be a 
farmer or rancher. Young farmers and ranchers face many of the 
same challenges that have plagued our industries for years--
access to credit, limited abilities to transfer ownership from 
one generation to the next, and marketing limitations, to name 
a few.
    We have a great tradition of family farmers in our country. 
We measure the longevity of our operations not in years, but in 
generations. Young farmers and ranchers need your committee to 
show strong leadership to ensure that the challenges of farming 
and the risks we undertake as farmers do not eclipse the 
rewards that family farmers reap every day by working the land. 
Young farmers need a stable farm bill that consists of 
research, usable support mechanisms, rural development, 
conservation, and market access.
    Research and conservation are pillars of farm policy whose 
payday is not measured in return on investment but on the 
sustainability of farmers and ranchers nationwide. Safety nets 
are crucial for farmers to be confident that the future of 
their farms will not be devastated by market or weather 
fluctuations. Most farm families are able to sustain the ebbs 
and flows of farm income by supporting themselves through off-
farm income. Rural development is a jobs initiative, compounded 
with the benefits it gives farm families and the rural 
communities that are vital to our nation. Market access 
provides our crops stay competitive in a global marketplace.
    Michigan is second only to California in crop diversity. 
Michigan farmers produce some of the finest specialty crops in 
the world. Fresh and processed fruits and vegetables are vital 
to Americans' diets, and increased consumption of fruits and 
vegetables has shown to lower the instances of obesity. This is 
an area of the farm bill we should be celebrating, America's 
farmers growing nutritious food while the nutrition title gives 
consumers access to these foods. What harmony.
    As a specialty crop grower whose fruit goes mainly into the 
processing market, it is very important for my crop to be 
recognized as a healthy snack alternative. I was dismayed that 
dried cherries, a ready-to-eat form of our perishable crop, 
were excluded from the snack program. Value-added agriculture 
is a significant driver of our State's and our nation's 
economy, and canned, frozen, juiced, and dried fruits can be 
easily added to healthy menus.
    I have two examples of Michigan's value-added processing 
industry, dried apples and single-serving applesauce. In our 
on-the-go lifestyles, ready-to-eat processed fruits give 
consumers the convenience they want while the farmer's fruit 
gives them the nutrition they need. While fresh fruits and 
vegetables have their place on the nation's collective plate, 
so do processed fruits and vegetables, and I urge your Senate 
committee to restore processed fruits and vegetables back into 
the snack program.
    As a farmer, I understand firsthand the need to spend money 
wisely. I also understand how to make the difficult decisions 
to cut expenses when my income comes up short. Chairwoman 
Stabenow, Senator Roberts, you are both placed in the 
unenviable position of having to write a farm bill during 
challenging economic times. I appreciate Chairwoman Stabenow's 
characteristic of the farm bill as a jobs bill. Agriculture is 
economic development. It is also crucially important to the 
well-being of our nation. This farm bill must maintain the 
vital areas of research, usable support mechanisms, rural 
development, conservation, and market access.
    Young farmers and ranchers are optimistic about their role 
in American agriculture. I urge your committee to give them the 
stability they need from their government to continue to 
produce the safest, most abundant, most affordable supply of 
food, fuel, and fiber the world has ever known.
    Senator Stabenow and Senator Roberts, I appreciate the 
opportunity to testify before you today. I would be happy to 
take any questions you might have.
    [The prepared statement of Mr. LaCross can be found on page 
122 in the appendix.]
    Chairwoman Stabenow. Thank you very much. Ben, you are 
making me hungry as you are holding up that food.
    [Laughter.]
    Mr. LaCross. They are right here. We can pass them over.
    Chairwoman Stabenow. We should be passing it out.
    All right. Mr. Van Driessche, welcome. Good to have you 
here.

   STATEMENT OF RAY VAN DRIESSCHE, SUGAR BEET PRODUCTION AND 
 CONSERVATION; DIRECTOR OF COMMUNITY AND GOVERNMENT RELATIONS, 
           MICHIGAN SUGAR COMPANY, BAY CITY, MICHIGAN

    Mr. Van Driessche. Thank you. Thank you, Chairwoman 
Stabenow and Senator Roberts, for bringing the hearing to East 
Lansing here. I appreciate the opportunity to speak on behalf 
of the more than 1,000 Michigan sugar beet growers regarding 
the 2012 farm bill. Sugar beets have been grown in Michigan for 
over 114 years. Family farms have been passed down through 
several generations because of the stability this industry has 
provided to us and to our bankers.
    In 2004, 1,300 growers of the Michigan and Monitor Sugar 
Companies merged to form Michigan Sugar Company Grower 
Cooperative, which is based in Bay City. Our four factories 
produce about 12 percent of the sugar beet production in the 
United States. Our farmers took on substantial debt, with many 
of them mortgaging their farms, to purchase the two companies 
and save the industry here in Michigan. The significance of 
that kind of commitment exemplifies why we need a strong farm 
policy to ensure that we have a viable industry to pass on to 
the next generation.
    Today, the Michigan sugar beet industry generates $1.2 
billion in economic activity and supports over 10,000 farm and 
factory jobs. We are essential suppliers of the State's diverse 
food industries, and as the only sugar beet producer east of 
the Mississippi River, we are also strategically important 
suppliers to customers in other Midwestern States that do not 
have their own sugar production, primarily Indiana, Ohio, 
Illinois, and Pennsylvania.
    We need to maintain a strong domestic sugar industry and an 
effective no-cost U.S. sugar policy for the following reasons. 
Dependence on unreliable and unstable foreign suppliers is a 
threat to our food security, which is why a strong, 
diversified, and reliable domestic industry has long been 
recognized as important to the nation. Sugar is an essential 
ingredient to our nation's food supply, and as an all-natural 
sweetener, bulking agent, and preservative, it plays an 
important role in about 70 percent of processed food products. 
The U.S. sugar beet and sugar cane industries in 18 States 
generate more than 146,000 jobs and over $10 billion per year 
in economic activity.
    Despite our efficiencies, we are an industry that has been 
under enormous stress, and from 1985 until 2009, the price 
support level did not increase, causing a long period of very 
low prices. As a result, from 1985 to 2009, 54 of America's 102 
cane mills, beet factories, and cane sugar refineries shut down 
and will never reopen.
    The United States is the world's fifth largest sugar 
producer, the fifth largest sugar consumer, and the world's 
second largest snack importer. We are among the lowest cost 
producers in the world. Forty countries have duty-free access 
to our market for over 1.4 million tons of sugar each year, or 
about 15 percent of our domestic consumption, as required under 
the trade laws. Trade agreements have given more and more of 
the American sugar market to foreign producers, even if the 
foreign producers are highly subsidized and inefficient. In 
addition, Mexico enjoys unlimited access to our market.
    Finally, American food manufacturers, consumers, and 
taxpayers continue to benefit from a reliable supply of sugar 
that is reasonably priced, high in quality, and safe to 
consume. Sugar is the only major commodity program that 
operates at no cost to taxpayers, and government projections 
through 2021 feel it will remain at no cost over all those 
years.
    In summary, the U.S. sugar industry has endured a wrenching 
restructuring over the past two decades. American sugar farmers 
who remain are grateful to Congress for crafting a sugar policy 
that balances supply and demand, ensures that consumers have a 
dependable, high-quality supply of a vital food ingredient, and 
in improving the market conditions. The policy achieves all of 
these goals at zero cost to American taxpayers. We strongly 
urge the continuation of this successful no-cost policy in the 
next farm bill.
    I would like to add a couple other comments very quickly. 
Agriculture research is one of the most important investments 
this government can make in the future of American agriculture. 
Year after year, the USDA ARS has supported leading-edge sugar 
beet research at the Sugar Beet and Bean Research Unit right 
here in East Lansing. Unfortunately, the lack of funding and 
inflation has threatened sustained research and the unit has 
not received any additional funding since 1994, resulting in 
reduced staffing. No other public agency or entity in the 
United States has responsibility for sugar beet genetic 
improvements to address the challenges that confront our 
industry nationwide.
    My final point. USDA conservation policy is tied very 
tightly to the improvement and sustainability of sugar 
production and Michigan agriculture as a whole. For example, on 
our harm, we participate in the crop program with seven CP-21 
contracts totaling 26 acres of filter strips that border miles 
of drainage ditches to control soil and water erosion. We also 
have two CP-23 wetland restoration contracts with 23.7 acres 
under the program. We have established autumn olive windbreaks 
to control soil erosion from wind on highly erodible soils, and 
we are gradually increasing the amount of no till factors on 
our farm each year.
    Jean and I believe that incorporating conservation 
practices into our operation has not only improved production, 
but it also allows us to maintain sound environmental 
stewardship in conjunction with protecting the water quality of 
the Saginaw Bay Watershed District.
    Thank you again, Chairwoman Stabenow, Senator Roberts, for 
holding this important hearing and for all that you and the 
committee do for American agriculture. We look forward to 
working with you on the farm.
    [The prepared statement of Mr. Van Driessche can be found 
on page 155 in the appendix.]
    Chairwoman Stabenow. Thanks so much.
    Ms. Rothwell, welcome. Good to have you.

 STATEMENT OF JULIA BAEHRE ROTHWELL, APPLE PRODUCTION; CHAIR, 
           U.S. APPLE ASSOCIATION, BELDING, MICHIGAN

    Ms. Rothwell. Thank you. Chairwoman Stabenow and Ranking 
Member Roberts, thank you for allowing me the opportunity to 
testify today.
    Senator Stabenow, I want to personally thank you for your 
strong leadership during the last farm bill. At that time, the 
programs that were included in the specialty crop titles were 
just concepts. Today, they are fully implemented and yielding 
significant results for the apple industry and for other 
specialty crops. We note this is directly attributed to your 
efforts on our behalf and we thank you.
    Senator Roberts, thank you for your strong leadership on 
behalf of agriculture. I also want to thank you for your 
military service to our country and your continued support of 
our troops. My son is a Captain in the Army, based out of Fort 
Bragg, and he was just redeployed on May 17 to Iraq, so thank 
you for your support, as well.
    My name is Julia Baehre Rothwell, and my family farm, 
Baehre Orchards, has been growing apples and cherries for 
generations in the heart of Michigan's fruit ridge. I am 
married to Michael Rothwell, who is the President of Belding 
Fruit Storage and BelleHarvest Sales. They handle apples for 
approximately 120 growers throughout the State of Michigan and 
they are one of the largest apple shippers east of the 
Mississippi.
    As Chair of the U.S. Apple Association, I represent all 
segments of the apple industry--growers, packers, marketers, 
processors, and exporters. I have been a member of and an 
advocate of the apple industry my entire life.
    There are several farm bill programs I would like to 
highlight. Exports are extremely important for the apple 
industry, with about 25 percent of crop sold overseas. Apple 
growers utilize the MAP and TASC programs, which promote 
American apple consumption around the world.
    A foreign pest or disease can easily devastate our 
orchards. Now, we are dealing with the brown marmorated stink 
bug. It is in over 30 States, spreading, has over 300 hosts, 
including apples, cherries, peaches, grapes, tomatoes, corn, 
and soybeans. Today, our worst fears are being realized as the 
stink bug activity is rapidly increasing at least two months 
ahead of where it was last year. Researchers and U.S. Apple 
staff were in an orchard in Maryland last week just at the time 
that the stink bug was exploding in activity, the reported 
damage levels ranging from four to seven percent to the peach 
and apple crops already. Last year, the level of damage was not 
observed until July.
    So we have a critical need for research funding to combat 
this serious invasive pest. Over 50 researchers have submitted 
SCRI grant initiative proposals to the USDA to develop methods 
of controlling this monster. If this rate of damage were to 
occur nationally, the losses would be measured in the billions 
of dollars. We are asking for approximately $10 million over 
the next five years to save billions in agricultural 
production. The brown marmorated stink bug represents a real 
threat to the U.S. food supply and I believe it is the greatest 
pest threat to agriculture in a generation.
    Chairwoman Stabenow. I know you are aware China has 
requested access to our market for their fresh apples. This 
fall, the USDA moved closer to granting that request when they 
completed work on the pest list. There are over 60 quarantined 
pests and diseases on that list that China has and we do not. 
Each one of them could be the next emerald ash borer, spotted 
winged drosophila, or stink bug. Funds for pests and diseases 
in the SCRI initiative are very important to us. These programs 
are underfunded now and we are worried they will be cut.
    I know that immigration issues do not fall under your 
jurisdiction. However, I must comment on immigration reform and 
specialty crop agriculture. We strongly favor securing our 
borders, but if we do not have a workable guest worker program 
in place and if e-Verify becomes mandatory, the time spent here 
will be for naught because we will absolutely cease to exist. 
The lack of workers to harvest our crops and the threat of the 
brown marmorated stink bug are, in my opinion, the greatest 
immediate threats to my family's farm and to the whole 
specialty crop sector.
    Our industry believes that our agriculture and food policy 
should better reflect the dietary guidelines for Americans, and 
Ben reflected on that very strongly. We support the 
continuation and expansion of the fresh fruits and vegetables 
program and a direction to the USDA to buy more fruits and 
vegetables in all forms for Federal nutrition programs.
    The Specialty Crop Block Grant Program focuses on regional 
and local priorities for specialty crop producers. This has 
been utilized in Michigan in many ways and much credit needs to 
be given to the Michigan Department of Agriculture for 
successfully implementing this program.
    There are many other programs in the farm bill that are 
just as important as the ones I have mentioned today and they 
are included in my written testimony. We need these programs to 
grow demand and build long-term competitiveness, and we 
strongly support the expansion and continuation of all of them. 
Without, we could see U.S. specialty crop production, apple 
production, relocate to foreign growing areas. The outsourcing 
of our food supply would not only be economically devastating 
to our production areas, but pose a serious threat to our 
national security.
    Thank you for allowing me the opportunity to testify today, 
and we look forward to working with you in the development of 
the next farm bill. Thank you.
    [The prepared statement of Ms. Rothwell can be found on 
page 133 in the appendix.]
    Chairwoman Stabenow. Thank you so much.
    Mr. Nobis, welcome.

 STATEMENT OF KEN NOBIS, DAIRY PRODUCTION; PRESIDENT, MICHIGAN 
        MILK PRODUCERS ASSOCIATION, ST. JOHNS, MICHIGAN

    Mr. Nobis. Thank you, Senator. Thank you, Senator Roberts. 
We appreciate you holding this first official farm bill hearing 
in the State of Michigan. We greatly appreciate that. And I 
appreciate the opportunity to testify on dairy policy this 
morning.
    As was mentioned by Senator Stabenow in her introduction, I 
am President of Michigan Milk Producers Association. We are a 
cooperative with 2,100 owners, farmer members, are primarily 
located in Michigan, but also Wisconsin, Indiana, and Ohio.
    I would like to add that dairy is the largest commodity 
group in the State of Michigan. We contribute about $6 billion 
to the Michigan economy. We are also the eighth largest dairy 
State, which many people do not realize, and we are growing 
very rapidly in both production capacity and processing 
capacity. The production level in Michigan has increased over 
40 percent in the last ten years.
    My testimony today is greater and reaches far beyond the 
Michigan borders. I would like to testify representing the 
national dairy industry. The dynamic dairy industry of the 
United States has been marked by continuous change, but dairy 
policy has remained remarkably constant for the past several 
decades. Until recently, almost all the milk produced in this 
country was marketed in this country. World trade in dairy 
products had been relatively small and conducted at prices 
below those prevailing in the U.S. domestic marketplace. Until 
recently, feed grain prices were relatively low, and for the 
most part were stable. Major changes in world supply and demand 
conditions together with our nation's need to seek alternative 
energy sources have made grain prices much more volatile and 
driven them to levels that put dairy farmers' cost of 
production far below the support levels fixed in the current 
farm bill.
    Portions of our current dairy policy date back to the late 
1940s. It was designed for an industry that has changed 
dramatically. Current dairy policy cannot serve the needs of 
dairy farmers, and in some ways is now actually harmful to 
them. Growing world demand for dairy products has boosted world 
dairy market prices and rapidly turned the U.S. dairy industry 
into a commercial exporter. U.S. dairy exports have shot up 
from the equivalent of less than six percent of U.S. milk 
production in 2003 to almost 13 percent in 2010. Further growth 
in dairy exports is expected as world population grows, and 
more significantly for the dairy industry is the growth in the 
number of middle-class consumers around the world.
    The U.S. dairy industry faced a crisis in 2009. The United 
States lost a substantial share of the growing world markets 
during 2008 and the resulting loss of commercial sales volume 
built up as large unsold inventories here in our domestic 
market. U.S. dairy exports had reached the equivalent of 11 
percent of domestic milk production in 2008. Then, with 
resistance to high milk prices built up, credit was tight and 
import buyers with full product type lines held off further 
purchases when prices showed signs of weakening. World prices 
then plummeted, taking U.S. prices down with them. However, the 
U.S.'s major export competitors, with a more flexible marketing 
mechanism, were better able to maintain their export volumes 
when world demand soon picked up, albeit at lower prices, in 
2009. U.S. exports dropped off and did not return for almost 
two years.
    During the last half of 2008, total U.S. dairy exports 
plunged by over five percent of U.S. milk production. The loss 
resulted in a build-up of commercial inventories of cheese and 
government-owned inventories of non-fat dry milk that kept milk 
prices depressed, even though about a quarter-of-a-million 
dairy cows were removed through the Cooperatives Working 
Together Program, which was an industry-funded program.
    The current price support program also encourages non- fat 
dry milk and other basic dairy products to be produced to 
government standards. These standards were developed to ensure 
long storability and do not reflect the products that dairy 
importers want to buy in today's global dairy marketplace, 
where individual end user specifications rule the day. 
Furthermore, the price support program has increasingly become 
a price support program for the world, benefitting dairy 
farmers in other countries, such as New Zealand, more than it 
does U.S. dairy farmers.
    The Milk Income Loss Program, which makes direct payments 
to dairy farmers when milk prices are low, actually falls short 
of being an adequate safety net, even with the addition of the 
feed cost adjustor.
    With this as background, it is clear that current dairy 
policy is no longer serving the needs of U.S. dairy farmers and 
is in need of a major overhaul. Over the last two years, dairy 
producers and cooperatives representatives have been meeting 
through the National Milk Producers Federation Strategic 
Planning Task Force, which developed a Foundation for the 
Future, a comprehensive package of dairy policy programs that 
would bring much-needed change. The Foundation for the Future 
is designed to help reduce price volatility and protect milk 
producer income by focusing on producer margins rather than on 
milk prices alone. Revenue supports are meaningless when the 
cost to produce exceeds the revenue received.
    Any questions we had about the adequacy of our current 
dairy policy were answered in 2009. If we were to experience 
another 2009 in the near future, the U.S. dairy industry would 
be decimated. There is little equity left to borrow our way 
through another 2009.
    The components of Foundation for the Future include, one, 
replacing the existing Federal dairy support programs; two, 
introducing a new margin protection program to protect producer 
equity; three, implementing a market stabilization program to 
address market imbalances; and four, reforming milk pricing 
regulations set by the Federal Milk Marketing Order System. 
Including revisions of the Federal Milk Marketing Order Program 
in the proposal is important to address some basic concerns 
that both producers and processors have with the current 
pricing system. This multifaceted approach dramatically 
improves dairy policy and provides for a more economically 
viable and secure future for dairy producers in the 21st 
century's global economy.
    Thank you. I look forward to answering your questions today 
and working with you for the completion of a successful dairy 
policy in the 2012 farm bill.
    [The prepared statement of Mr. Nobis can be found on page 
124 in the appendix.]
    Chairwoman Stabenow. Thank you very much.
    Mr. Blauwiekel, it is wonderful to have you.

  STATEMENT OF PETER B. BLAUWIEKEL, PORK PRODUCTION; MEMBER, 
       MICHIGAN PORK PRODUCERS COUNCIL, FOWLER, MICHIGAN

    Mr. Blauwiekel. Thank you. Good morning, Chairwoman 
Stabenow, Ranking Member Roberts, and committee staff. I also 
want to compliment Senator Stabenow and her staff, back when 
the looming government shutdown was going on, your staff did an 
excellent job of keeping me abreast of the situation and I--you 
have an excellent staff, so thank you for that.
    Chairwoman Stabenow. Thank you.
    Mr. Blauwiekel. My name is Pete Blauwiekel. My wife, 
Brenda, and I own a 150-sow farrow to finish operation near 
Fowler. I have a daughter who is a technical service provider 
for a local agriculture supply company and I have a son who 
next week, probably about this time, will be returning from 
Afghanistan as an ensign in the SeaBees, so Memorial Day comes 
next week for us.
    Chairwoman Stabenow. Absolutely, and thank him for his 
service, and, Julia, your son, as well.
    Mr. Blauwiekel. I appreciate the opportunity to appear 
before you today to testify on behalf of the Michigan Pork 
Producers Association and the National Pork Producers Council.
    The U.S. pork industry represents a significant value added 
activity in the economy. America's 67,000 pork producers 
generate more than $34 billion of Gross National Product and 
help support more than 550,000 mostly rural jobs. Pork 
producers have a keen interest in the next farm bill, and NPPC 
has a Farm Bill Policy Task Force to gather input from 
producers. NPPC is committed to working with Congress on the 
2012 farm bill.
    As this committee and the Congress begin to write the next 
farm bill, pork producers like me hope you will maintain, 
strengthen, and defend the competitiveness of the U.S. pork 
industry by opposing unwarranted and costly provisions and 
mandates. In our written testimony, which we have submitted for 
the record, we lay out how the farm bill can maintain, 
strengthen, and protect the competitiveness of the U.S. pork 
industry. Let me discuss several issues.
    In the 2008 farm bill, Congress asked USDA to address five 
specific issues related to the buying and selling of livestock 
and poultry. Unfortunately, the agency's proposed GIPSA rule 
goes well beyond those five issues. According to a study by 
Informer Economics, the rule would cost the pork industry alone 
nearly $400 million annually. It would create legal 
uncertainty, raise production cost, lead to more vertical 
integration in the industry, and could force producers like me 
out of business. NPPC wants USDA to scrap the proposed GIPSA 
rule and write a regulation that sticks to the five mandates 
Congress gave us.
    Another concern we have is the availability of feed for our 
animals. Last year was the third highest corn harvest on 
record. Despite that, USDA estimates we only have about two 
weeks of corn stocks. If we have a drought in the corn belt or 
if China, for example, makes a major corn purchase, we could 
see regional feed shortages. To address those, NPPC would like 
the productive lands now in the Conservation Reserve Program 
released without penalty so that they can be planted to feed 
grains. We also would like a mechanism that ensures producers 
can feed their animals if there is a corn shortage. This may 
mean a change in U.S. biofuels policy.
    To strengthen our competitiveness and grow our industry, we 
need to increase our exports, which last year added $56 to the 
price of each hog I sold. The best way to do that is through 
Free Trade Agreements. Currently, the U.S. has pending 
agreements with Colombia, Panama, and South Korea. When fully 
implemented, those trade agreements will increase live hog 
prices by $11.35 and create more than 10,000 pork industry 
jobs. NPPC urges the Obama administration to send the 
implementing legislation for those Free Trade Agreements to 
Congress soon and urges Congress to approve them before its 
August recess.
    Finally, it is important to adequately fund USDA programs 
that deal with foreign animal disease and disease surveillance, 
which not only protect our animals, but our export markets. 
Also, we must address the country's feral hog situation, which 
now is a problem even here in Michigan. Feral hogs often carry 
diseases that put our swine herds at risk and our operations.
    Thank you for inviting me to testify. I would be happy to 
answer any questions.
    [The prepared statement of Mr. Blauwiekel can be found on 
page 63 in the appendix.]
    Chairwoman Stabenow. Well, thank you very much, and thank 
you to all of you.
    We would like now to open it up to some questions, and let 
me start with Mr. LaCross. As we look to the next farm bill, we 
are obviously looking to the next generation. The average 
farmer today is 55 years of age or older and we are looking to 
you. We are looking to the next generation of how we can 
continue to keep the family farm and to be able to have new 
farmers as well as those passing down from generation to 
generation.
    But I wonder if you might speak a little bit more about the 
kinds of things you are involved in to engage young farmers as 
well as obstacles that you see in finding credit or technical 
assistance. And as you do that, I want to also mention, we 
engaged with my regional managers around the State. We asked 
others that were not able to be here to ask questions today, 
the kinds of questions they would want us to ask of all of you, 
and what came up over and over again was what can be done for 
beginning farmers. We have heard a lot about that, you know, 
how can we help farmers get started and so on.
    So on behalf of folks who submitted questions to us as well 
as my own interest, I know that there is a great deal of 
interest from people around Michigan in how we can support your 
efforts, the beginning farmers' efforts. What should we be 
doing? What are you doing right now? And what are the biggest 
obstacles, from your perspective?
    Mr. LaCross. Well, one of the exciting things that my 
nationwide Farm Bureau committee did this last year, along with 
Farm Bureau, is we partnered with the USDA to begin a program 
called Start to Farm. You can find it at starttofarm.gov. And 
we started the first ever beginning farmers and ranchers 
conference. That was held in conjunction with our Farm Bureau 
annual Young Farmer and Rancher Leadership Conference. That 
brought in a whole new host of new farmers who are looking to 
get into agriculture but do not know where to begin, do not 
know where to start with technical assistance, and this showed 
them some of the avenues that they can utilize through USDA 
resources to begin farming. I think, by all accounts, that was 
a rousing success.
    Some of the great challenges that I outlined that young 
farmers and ranchers do have are a lot of the things that have 
plagued our agricultural industry for years--access to credit, 
generational transfer of farmland. And I think a lot of young 
farmers are being creative in how they do that. They are 
partnering with retiring farmers so that they can build up a 
sweat equity in the retiring farmer's operation so that when 
that farmer is ready to retire, they can take over. I think a 
lot of States are very successful at utilizing a program such 
as that called Farm Link, where they link retiring farmers to 
beginning farmers.
    I think in our State, we have seen great success in the 
Farm and Ranch Land Protection Program. That has protected a 
lot of desirable land for development and that has been able to 
keep that in agriculture, and so that has been another avenue 
where young farmers can defer some of those high asset costs 
and be able to do what they want to do, which is grow food.
    So I think young farmers, in general, are very excited. I 
think a lot of young farmers have been able to utilize niche 
agricultural markets to be able to get their foot in the door. 
Sometimes the capital investments are less intensive and the 
cash flow is a little bit easier to handle than some of the 
traditional markets.
    Chairwoman Stabenow. Great.
    Mr. LaCross. So young farmers are----
    Chairwoman Stabenow. Well, no, thank you. We all have a 
great stake in our next generation of farmers being successful 
and young people being excited about agriculture as a future, 
as a profession. So I very much appreciate all that you are 
doing.
    Ms. Rothwell, if you would talk for a minute--you have 
talked about pests, incredibly important, the challenges that 
we have on research. I mean, I have heard that from each of you 
on the panel, talking about the importance of research, and 
this really needs to be a focus for us. Senator Roberts and I 
have talked about that as one of the major issues for us going 
forward.
    But could you also talk about the challenges that relate to 
what has happened on natural disasters. I think about last 
year, where our grape growers lost about 50 percent of their 
production in Michigan and what happens in terms of weather. I 
mean, we have been more fortunate than others this year, but 
when we look at improving crop insurance or disaster response 
for specialty crop producers, if you could talk a little bit 
about what has worked and what do we need to do in that area 
for specialty crops.
    Ms. Rothwell. Well, the Tree Assistance Program, and thank 
you very much for your role in that because that was a great 
asset, a great help to the growers in Southwest Michigan who 
suffered from fire blade [phonetic], but that funding was made 
mandatory, so we appreciate that. That has been working well. I 
think if there are concerns with that, it has to do with the 
thresholds of loss or the death of the trees and right now that 
is at 15 percent.
    And if you have 1,000 trees to an acre, you would have to 
lose 150 trees, obviously. But several of the growers that 
sustained damage from the windstorm a year or two ago and lost, 
you know, maybe they only lost 12 percent or ten percent, so 
they did not qualify to be under--to receive assistance from 
that program. So I think that would probably be very helpful, 
is to have the threshold lowered so that more--you know, 
because even a ten percent loss is----
    Chairwoman Stabenow. Right.
    Ms. Rothwell. --I do not want to say even--it is 
disastrous. It is disastrous for that grower, and sometimes it 
can ruin a whole orchard block to have just a few trees that 
are--I say just a few, 100 trees that are not right.
    As far as crop insurance, the U.S. Apple Risk Management 
Task Force has worked with RMA for probably ten years in trying 
to improve that program, and it is still a work in progress. It 
has been--the new rules have been in place, and I think the 
difference for the apple growers that we truly appreciated was 
that instead of having to declare units of processed and--or we 
can now declare or ask for coverage for units of processed or 
fresh apples as opposed to having to ask for all one or the 
other.
    I know there are some concerns with the appraisal of the 
fruit that has been damaged and the grade standards that are 
applied to that, that maybe they are not necessarily applicable 
in today's marketplace.
    Another concern is about the salvage and how the salvage 
can be utilized. So, for instance, if you have a loss and you 
are paid for that loss, but then the salvage you want to be 
able to run through a fresh packing line, you cannot do that 
and you are penalized for that.
    I understand that Congress has given a directive to the RMA 
to be actuarially sound and that may be the issue there, but 
those are the concerns that the growers are still feeling about 
the crop insurance program, and----
    Chairwoman Stabenow. So what are you doing with the 
salvage?
    Ms. Rothwell. I am sorry?
    Chairwoman Stabenow. You are saying--what happens, then, 
with the salvage?
    Ms. Rothwell. With the salvage?
    Chairwoman Stabenow. Yes.
    Ms. Rothwell. They cannot utilize it--they cannot run it 
over a fresh line. They have to--it has to go for processing--
--
    Senator Roberts. Why?
    Ms. Rothwell. That is the question they are asking.
    Chairwoman Stabenow. That is the question.
    [Laughter.]
    Chairwoman Stabenow. That is a very good question.
    Ms. Rothwell. Thank you.
    Chairwoman Stabenow. Evidently, that is the question we 
need to answer----
    Ms. Rothwell. You know, because a lot of the growers feel--
--
    Senator Roberts. Okay. You say it is the RMA?
    Ms. Rothwell. I am sorry?
    Senator Roberts. You say it is the RMA folks?
    Ms. Rothwell. Yes.
    Senator Roberts. Bless their hearts.
    [Laughter.]
    Chairwoman Stabenow. I am going to write that one down. 
Okay. Thank you.
    I am going to turn it over to Senator Roberts for a couple 
of questions, and then I have a couple more.
    Senator Roberts. Clark, thank you for being here. You 
mentioned that you signed up for the ACRE program. How is that 
working out for you?
    Mr. Gerstacker. As of this point, it has been there as the 
backstop, have not utilized it.
    Senator Roberts. Now, you are one of six percent of 
Michigan farmers who signed up for that. We had two percent in 
Kansas. Not a very big turnout. You said it would be a better 
program if it were administered at the county level, but I have 
talked to a lot of producers in Kansas who did sign up. It is 
hard to find them, but at any rate, they tell me that even with 
the county trigger, they would not necessarily receive a 
payment when they have a loss, and so because of this 
difficulty with ACRE, our producers opted instead to buy up on 
crop insurance.
    My question to you is, does crop insurance help you on your 
farm to cover the same type of risk that the ACRE program 
covers? Do you use crop insurance to cover yield and price risk 
just like you use, or try to use with the ACRE program? I know 
you are in it, and if you are in it, you are in it for three 
years.
    Mr. Gerstacker. Correct.
    Senator Roberts. It is like the Marine Corps. You sign up 
and--or Airborne. At any rate, I am sort of giving you a 
curveball question here. And then there were 23 steps, as I 
recall, that you had to go through to sign up for the program.
    Mr. Gerstacker. That----
    Senator Roberts. My Lord, if we cannot offer a program with 
two steps or one as opposed to 23, it would just seem to me 
that that was not a very good way to start off with the 
program. Your comments?
    Mr. Gerstacker. I think a couple issues with the ACRE 
program moving forward from the last farm bill was the timing 
and the complexity. I think it was very difficult for growers 
and our field service teams to really understand it and be able 
to sell it----
    Senator Roberts. It was very difficult for the committee.
    Mr. Gerstacker. Agreed. So I think that was a very 
difficult position for growers to be in, along with our field 
staffs trying to help us. It is a three-year commitment, so the 
decision you made at that time based on the market parameters 
you were given, I think it is a very viable program and it was 
one that I was very comfortable with.
    The crop insurance additional to it, it is a yearly basis. 
You know, I may or may not enroll in different crop insurance 
programs that year. However, I have the ACRE program as the 
backstop and our decision to choose a particular crop insurance 
program is really--that decision is made in March based on the 
parameters and the tables and risk assessment that we can look 
at for that year moving forward, so----
    Senator Roberts. And you would sign up for it again?
    Mr. Gerstacker. Yes.
    Senator Roberts. You would not opt out, you would sign up, 
even if we--mission impossible--improve the crop insurance 
program? So you like ACRE?
    Mr. Gerstacker. I do like ACRE. I think it has some very 
good pieces behind it. You know, one of the other issues with 
it is getting the, I apologize for the term, but, you know, the 
rate. You had to get your landowners and everybody else to buy 
in for a long period of time. I mean, three years is a long 
period of time if you are looking at arraying out your land and 
tying it up in someone else's farm unit and so forth.
    Senator Roberts. Okay. I appreciate that very much. You are 
sort of a Braveheart here in regards to ACRE.
    Mr. LaCross, when you talk to your lender and you go in, of 
course, given your status and your leadership, I think it would 
not make too much difference, but what does your banker tell 
you when you come in to apply for a loan? Do they place any 
requirements on you they might not place on more established 
farmers?
    Mr. LaCross. Well, Senator Roberts, I am lucky in that I 
farm with a family unit, and so I have that established farm 
and the reputation of my parents when I walk into the banker--
--
    Senator Roberts. Okay. Speak for the people who do what I 
cannot do, and that is to go on the Internet and look up 
starttofarm.com. I could probably do that, with help, but 
anyway----
    [Laughter.]
    Senator Roberts. They took away my typewriter some years 
ago.
    [Laughter.]
    Senator Roberts. At any rate, speak for them.
    Mr. LaCross. Yes. Well, I have heard a lot of negative 
stories from young producers who claim that when they walk into 
a lender to get access to credit to put a crop in the ground in 
the spring, they cannot meet the collateral needs of the bank. 
They do not have that beginning up-front capital to be able to 
collateralize that loan, and so they do not have the 
opportunity to expand their business in the spring. You know, 
our farms are so cash-flow intensive that we have to put all of 
our money up front and cross our fingers and hope in the long 
run that we get a payment, and a lot of times that is hard when 
you walk into a banker and try to explain that story to them. 
So I have heard a lot of horror stories from young farmers who 
have not been able to expand into different areas of 
agriculture that they wanted----
    Senator Roberts. Of course, your community banks now are 
under the gun, too, in regards to Dodd-Frank, the bill that is 
coming down the road, and also FDIC, who sweeps in and says, 
let us take a look at your books and the mark-to- market 
situation. It is just a very difficult situation. But when you 
said access to credit, I think that is probably one of the 
biggest hurdles you have.
    Mr. LaCross. Absolutely.
    Senator Roberts. Okay. My time has run out, Madam Chairman, 
or do you want me to keep on firing? There is a red light 
blinking here.
    Chairwoman Stabenow. Oh, well----
    [Laughter.]
    Senator Roberts. You usually gavel me down when I am in 
Washington.
    Chairwoman Stabenow. I usually do. I am being polite today.
    [Laughter.]
    Chairwoman Stabenow. We have a lot of guests here. I am 
being polite.
    [Laughter.]
    Chairwoman Stabenow. If you would like to ask one more, 
that would be fine.
    Senator Roberts. Okay. Let me go to Mr. Van Driessche. You 
announced the partial deregulation of round- up-ready sugar 
beets if producers undertake certain conditions associated with 
planting. I was pleased that the Department could reach this 
decision, but I remain concerned about the uncertainty for 
producers from the repeated lawsuits filed against the 
Department of Agriculture approving biotech crops. If we could 
just rename things a little bit, instead of talking about 
genetically modified organisms----
    Mr. Van Driessche. Right.
    Senator Roberts. I mean, who wants to put--that is like 
something that you put on your breakfast food or something, and 
who would want that? We ought to say ``scientifically 
improved'' products or something like that.
    I changed an acronym once when I was Chairman in the House, 
the Market Promotion Program to the Market Access Program. You 
change an acronym in Washington, that is big time, so I hope we 
can do that.
    At any rate, biotech is, as you know, a critical component 
of our ability to feed what we are talking about here, and we 
have the science-based regulatory system. How important is this 
technology for our sugar beet producers?
    Mr. Van Driessche. Well, you know, it is a great question 
and it is extremely important, not only for sugar beets, but 
for corn, wheat, and soybeans and other crops that are now 
developing that kind of technology. What it has allowed us to 
do in the sugar beet industry is essentially go from using 
three or four different crop protection products. Now, it is 
down to one. We are making as many as five and six passes 
across the field to try and control weeds when I can do that in 
either one or two passes, which means we are burning a lot less 
fuel.
    When we were using each one of these products in spring 
multiple times, we were setting our crop back each time that we 
sprayed them, injuring them a little bit. Now, with the 
Department that we have there currently, we are not injuring 
that beet. We are not setting back our crop. Like I say, we are 
burning less fuel, using less chemicals. Environmentally, it 
could not be a better thing to do.
    And it allows us to--and it has increased our production. 
We have essentially gone up in the last few years from an 
average of about 23 ton to the acre just a few years ago to--
well, it was in 2008, we hit 28.9 ton as an average across the 
State of Michigan, which is just unbelievable. So this new 
technology is extremely important when you look at being able 
to feed the numbers we are talking about here in the future.
    And my concern is that if we start to restrict the ability 
to use new biotechnologies, you are not going to only hurt 
sugar beets, you are going to hurt a lot of other crops that go 
along with it.
    Senator Roberts. Madam Chairwoman, I have had questions for 
three. I am going to turn it back to you, and then I am going 
to save Ms. Rothwell for the last dance.
    Chairwoman Stabenow. Okay. Thank you.
    Okay. Well, let me ask Mr. Nobis, you have talked about the 
volatility in the dairy industry. We all know what happened in 
2009. I have heard really devastating stories from our dairy 
farmers and we certainly do not want to go through that again, 
there is no question about it.
    But we also know that our industry in Michigan has grown 
consistently across the last few years. You talked about that, 
as well. Have we fared better than other parts of the country, 
and if so, why is it? Or is that true?
    Mr. Nobis. We have. It is because we are smarter.
    [Laughter.]
    Chairwoman Stabenow. Well, I figured that. I figured that 
much, so----
    Senator Roberts. Is that a softball or what?
    [Laughter.]
    Chairwoman Stabenow. So share what it is that we are doing 
that is better than other places.
    Senator Roberts. I am going to write this down.
    Mr. Nobis. Well, I think--I do not think, I know in 
Michigan it is the dairy industry that we are very, very proud 
of. I have the opportunity to travel around the country a lot 
in my position with National Milk Producers and I am always 
really happy to come home, because I know I do not have to go 
to California or Arizona or New Mexico or Idaho to learn the 
latest and the best in the dairy industry. I can just look at 
my neighbors.
    We have a super infrastructure here. We have the good 
fortune to be born, most of us, in Michigan, which is an ideal 
climate for dairy cattle. We have adequate water, which dairy 
cattle really love. We have a temperate climate. We do have 
some heat stress issues in the summertime, but they do not go 
on and on like they do in Florida, for six months at a time. It 
is more like six days at a time here.
    And we think that we have a very cooperative marketing 
group here in Michigan, that Michigan Milk, for example, works 
with the other cooperatives in the State to the advantage of 
all dairy producers in this area, and I keep saying Michigan, 
but it expands beyond the Michigan borders.
    We have a very good working relationship with the State 
regulators and we have had a very good working relationship 
with our legislators in the State of Michigan. I think we 
should take a great deal of pride in the cooperative that all 
levels of the production agriculture has in the State of 
Michigan, and I look forward to continue.
    Chairwoman Stabenow. Great. All right. Well, thank you very 
much.
    Mr. Blauwiekel, let us talk for a minute about livestock 
producers, and I know that there are parts of the farm bill 
that are not utilized by our livestock producers, but there are 
others that are, that are very important, and I wonder if you 
might speak a little more about how you feel as a producer 
about areas like EQIP and CFP or permanent disaster assistance. 
I mean, talk from your perspective about what are the most 
important parts of the farm bill for you.
    Mr. Blauwiekel. I think we personally have used the EQIP 
program and we have some--we went through some of the CRP 
program initially when it was by watershed. So the CFP program 
now is quite a bit different from what it was when I signed up. 
But the EQIP program is a really valuable program for us 
livestock producers to help us to be more responsive to our 
environmental impact and to try to design structures and 
facilities that will minimize any environmental impact we have.
    Our CSP program, or contract, also has a component in there 
that, you know, has a recordkeeping component that makes us 
aware of where our manure is going, if we have a CNMP, which 
our farm does. Those types of things help us to be a 
responsible neighbor environmentally.
    Chairwoman Stabenow. Great. Thanks.
    I wanted to throw open one question, too, that came again 
from folks as we reached out across the State saying, what 
would you like to ask a distinguished panel like this, and we 
heard--and I am not sure who to direct this to, but I will just 
throw out it out because it is something we have heard a number 
of times, and this relates to new opportunities for existing 
farmers and looking at the farm bill as a jobs bill. 
Agriculture, of course, is jobs. But specifically, we had a 
number of people ask about what should be considered to help 
develop and sustain local food systems as well as helping start 
or sustain new value-added products from our farms, fields, 
such as bio-based products. What can we be doing for new kinds 
of value-added products, if anybody would want to comment about 
that.
    Mr. Van Driessche. Well, I would make a couple of comments, 
if I could, and that is that in the State of Michigan, as you 
know, we have a lot of production, and we are so fortunate to 
have over 200 commodities represented in Michigan. What I think 
we are lacking here in the State is processing, and we have 
tremendous opportunities to increase our processing, and along 
with that increase the value-added product opportunities.
    And so any type of USDA funding that would help advance 
this processing would be a very big benefit. You look at the 
amount of livestock we have here in the State of Michigan and 
most of the meat processing is done outside of the State. And 
whether it is livestock or whether it is vegetables or whatever 
it is.
    And one commodity ties in with the others many times, and 
if I think about all the different processing that uses sugar, 
if we had more processing, whether it is a confectioner or an 
ice cream maker, whoever it is, the more of the opportunity for 
processing, the more of the opportunity to use the other 
commodities from the State of Michigan. So any type of funding 
for increased processing would be helpful.
    Chairwoman Stabenow. Great. Well, I know this is something 
I have talked with the Governor about, and I think I saw our 
Director Keith Creagh here from the Michigan Department of 
Agriculture. Good to have you here, Keith. This is something 
that we have talked about, as well, that this is a real 
opportunity for us to leverage and expand what we are doing in 
Michigan as we look at food processing. So it is certainly a 
priority for me.
    Does anybody else--yes?
    Mr. Gerstacker. Yes, Senator. Research is obviously part of 
that, coming from the governmental side, but on the buy bio 
products and the government buy bio programs and so forth, and 
I forget the acronym, but it was BEES----
    Chairwoman Stabenow. Right.
    Mr. Gerstacker. --B-E-E-S--it is very difficult to get 
comparative products favorable stature in the marketplace 
because of some of the constraints that they have to go through 
to be looked at, whether it is marketing support or promotion 
or so forth. We have viable alternatives. It is generating the 
public buy-in, is one of those things I think the agricultural 
sector needs support with.
    Chairwoman Stabenow. And talk a little bit more about that 
in terms of the public buy-in.
    Mr. Gerstacker. Well, if it is a plastic replacement, if it 
is a biodegradable plastic and so forth, you know, as a parent 
going to the grocery store, do I want a milk jug that will go 
to a landfill or will need to be recycled or do I want one that 
can be composted and just go back to the soil through microbial 
growth? Which is better for the--I would believe it would be 
better for the environment. But to get that push and that push 
from our side and the pull from the consumer that they will 
actually want that, may pay a little premium or something and 
so forth, but to have that drive. There is just some disconnect 
there.
    Chairwoman Stabenow. There are some real opportunities for 
us. It is very exciting, and, of course, a lot of work being 
done by so many people here at Michigan State and related 
efforts around bio-based alternatives. I think there are great 
opportunities that meet environmental needs that address a 
number of concerns that people have today, and it is a matter 
of getting the word out and continuing the research and making 
sure that we are bringing that together.
    Actually, we have a long history of that in Michigan, I 
will just say to my distinguished Ranking Member, back to the 
origins of the automobile industry when Henry Ford was looking 
for a way to help farmers back in the Great Depression and 
started looking--and ended up looking at soybeans as a way to 
be able to bring in bio-based products for automobiles, and to 
this day now, we actually--in the new Ford Focus and Chevy 
Volt, there are soybeans in the seats. So if you get hungry and 
you are driving a car, you can----
    [Laughter.]
    Chairwoman Stabenow. But there is a great coming together, 
I think, and some very exciting opportunities to really expand 
on that in a way that really creates jobs for us.
    Senator Roberts, do you have any other questions?
    Senator Roberts. Yes, ma'am, for the last three, if I 
could----
    Chairwoman Stabenow. Please.
    Senator Roberts. --and I will try to make them real quick.
    Pete, thank you for your comments on the GIPSA rule. We 
have heard a lot of fears and frustrations over that proposal 
from pork producers all across the country, and I really hope 
that the Department will offer the public an opportunity to 
comment on the economic analysis of this. It is terribly 
important, and any changes to the proposal, because substantial 
changes are necessary to ensure our markets are innovative and 
able to meet the consumer demand. This is one of those where I 
think they went outside what we told them not to do in the farm 
bill, which is one of our problems. People might be somewhat 
amazed at that, but that is something that we have to deal 
with.
    Now, what is the greatest regulatory challenge you face in 
your operation? Which program in the farm bill is the most 
important to you in addressing that particular challenge, and 
how can we improve it to be even more effective?
    Mr. Blauwiekel. Well, those are excellent questions. I 
think when you look at the farm bill and pork production, I 
think, basically, there are not really specific titles, other 
than some of the environmental things, that will affect us as 
pork producers. We kind of want to make sure we do not get hit 
by the wagging tail of something, some other part of the 
program. You know, for instance, if you look at some of the 
biofuel fallacies, I am scared to death going into this fall. I 
do not know how I am going to access my corn.
    But that being said, the GIPSA thing, some of the things 
that appear to be a little bit government overreach, I guess I 
would call them, some of the innovation that has occurred in 
the industry with regards to contracting arrangements that were 
entered in freely between producers and packers are kind of 
threatened. Those kinds of things probably concern me more 
than--I guess specifically on the farm bill, until I actually 
see what is going to be in it, I really cannot comment on that.
    Senator Roberts. We will save you and have you come in in a 
covert room and you can say what you really think.
    [Laughter.]
    Senator Roberts. Thank you for your son's Navy service in 
Afghanistan. Which deployment is he on now, his first, second, 
third, what?
    Mr. Blauwiekel. This is his first deployment.
    Senator Roberts. First deployment. Well, you tell him
    for us that I am now the last Marine in the U.S. Senate, 
which is sort of a novel thing, but at any rate, we want to 
thank him so much for his service.
    Let me move real quickly. We have not done dairy yet. I do 
not do dairy anymore. As Chairman way back in 1996, and my 
staff member will hit me here for bringing that up, but at any 
rate, the last thing, Madam Chairwoman, that we always have to 
deal with is dairy, in any farm bill, 11th hour, 59th minute, 
here they come.
    [Laughter.]
    Senator Roberts. You know, we had two Senators in 
particular and we could not even get out of session and it was 
just really a problem. So I remember when the Leader asked me 
to come over. He said, ``You are Mr. Agriculture,'' and I said, 
``No, I am not.'' And he said, ``What do we do about dairy?'' I 
said, ``Punt.''
    [Laughter.]
    Senator Roberts. But are we considering a reliable dairy 
supplier to the world marketplace? Could we resolve part of 
this if we produced more whole milk powder for export and less 
non-fat dry milk? What do you think?
    Mr. Nobis. I am not sure it is whole milk powder. That is 
one of the products. But just the current policy of the court 
of last resort is to sell it to the government, and it is only 
in that form of non-fat dry milk, and that was done for 
storability reasons, and that is not a product that is in high 
demand in the export market.
    Of greater concern to us, though, what happened to us in 
2009, the dairy industry, was that we had that underpinning of 
approximately 990 support price for milk, a little higher than 
that. It depends on how you calculate it. But it was still 
higher than what the world price was at that point in time. So 
the co-ops, in particular, were buying that milk, making it 
into skim milk powder, selling it to the government because it 
was guaranteed money.
    Senator Roberts. Right.
    Mr. Nobis. If that had not existed, we would have been 
forced to sell it, probably at cheaper prices than what the 
government was buying it for at that point in time, but it 
would have caused a rebound in the prices in this country much, 
much sooner than what we experienced. It was almost two years 
before we saw a rebound here. But we had frozen ourselves--we 
take ourselves out of the international market because we 
choose to sell it to the government. Again, that is a sure 
thing. When we do that, then we are no longer a reliable seller 
to that international buyer, and they are going to go back to 
their buyer of first choice who has been dealing with them for 
many years. We get away from that.
    That is why we are asking for a change in dairy policy. The 
most important part of that is to get rid of the support price 
so that we can be a--it will force us to be a consistent 
supplier to the international market, but at the same time, we 
want that money that is being used, what is left of it, for 
support in MILC so that we can still have a safety net, because 
when we run into that situation, that actual pay price on the 
farm, it will be a shorter period of time, but it is going to 
get really bloody and we need that safety net for those periods 
of time.
    Senator Roberts. I appreciate that so much.
    Ms. Rothwell, thank you so much for your comments. There 
are a lot of us--I think all of us in the Senate and the House 
want to thank those in uniform who are protecting our freedoms. 
I notice you mentioned he was in the Army, but he is a member 
of the Airborne Division----
    Ms. Rothwell. Right.
    Senator Roberts. --so he is right up there in the front 
lines. What deployment is he on? Is this his first, second----
    Ms. Rothwell. Third deployment, his first deployment----
    Senator Roberts. Third deployment.
    Ms. Rothwell. Well, first deployment was to Iraq. Second--
and he was with the 101st Airborne at the time. The second 
deployment, he was with the 82nd. He went to Haiti.
    Senator Roberts. Is he married and have a family?
    Ms. Rothwell. No, he would like to have, and I would like 
for him to have one.
    [Laughter.]
    Ms. Rothwell. I have to rely on communication from his 
girlfriend to know what is going on.
    Senator Roberts. I will give her a call.
    Ms. Rothwell. Okay.
    [Laughter.]
    Ms. Rothwell. We will tell her that.
    Senator Roberts. It is so tough when you have third, 
fourth, fifth, sixth deployment, and more especially with 
people with families----
    Ms. Rothwell. Oh, definitely.
    Senator Roberts. We are wearing a lot of people out and I 
really worry about that, but this is not a defense hearing.
    Would you list the top--I have three, I will put two-- the 
top two programs authorized in the 2008 farm bill that are most 
valuable to you and your produce operation, and just tell me 
what that is?
    Ms. Rothwell. I had a feeling you were going to ask me that 
question. I thought it was either going to be that or ag----
    Senator Roberts. Well, we leaked it to you, so I thought it 
was----
    Ms. Rothwell. Okay.
    [Laughter.]
    Senator Roberts. No, we did not. I just said that.
    Ms. Rothwell. I am going to have to go the way of my friend 
down here at the end of the table. You know, they are all very 
important. I think they all contribute and help the specialty 
crop industry in their own unique way.
    I think the comments that I made this morning may tell you 
what is the most urgent at this point in time. I think the 
research component and the things that are going on with pests 
and diseases, I think is incredibly important, but I do not 
want to negate the importance of the others because they all 
play a significant role in us being productive and staying in 
business and being able to feed everybody.
    Senator Roberts. Well, that is the----
    Ms. Rothwell. You will have to get me alone.
    Senator Roberts. Right. We will work on that.
    [Laughter.]
    Senator Roberts. You know, Madam Chairwoman, that is really 
reflective of what our responsibilities are as we deal with a 
tremendously difficult budget situation and people basically 
playing the numbers game and saying, we have to reach this 
number, and we are making a determined effort to try to discuss 
with them that number to begin with----
    Chairwoman Stabenow. Right.
    Senator Roberts. and secondly, to let us do that work, let 
the authorizing committee, the people that at least we think we 
know something about agriculture to make these cuts. They may 
be very, very, very painful, but at least let us do that job.
    Chairwoman Stabenow. Right.
    Senator Roberts. And so what you are telling me is, okay, I 
have got probably three or four or five things I would like to 
talk about, very difficult to say this is a priority and this 
is not, and that is our problem, as well, because it is going 
to be a very difficult task for us to try to settle this out. 
But we are more than willing to do it. We do not want other 
people to do it for us.
    Chairwoman Stabenow. Absolutely.
    Senator Roberts. Thank you.
    Chairwoman Stabenow. Well, thank you so much. Please join 
me in thanking our great panel.
    [Applause.]
    Chairwoman Stabenow. We will ask our next panel to come 
forward, and we thank you so much.
    [Pause.]
    Chairwoman Stabenow. I call the meeting back to order. We 
have got a lot of great energy in the room and we are 
appreciative of that.
    We are going to continue now with our third panel, and we 
are very excited because there are so many parts of the farm 
bill. One of our challenges is that--I have always said, every 
page of the farm bill affects us in Michigan. I am always 
envious of my colleagues who only have to care about one or two 
sections. We have everything, and every part of the farm bill 
matters to us. We are involved in it, and our third panel 
reflects a number of different issues that are very important 
to us.
    And so let me start with Karen Serfass, who is a lifelong 
Michigander. She and her husband, Richard, are semi-retired 
from the family business, a pet store in Waterford, Michigan, 
which they have owned and operated since 1983. They have been 
acquiring forestland in the U.P. since the 1990s. They own two 
properties, one in Chippewa County that is a former hay farm, 
and the other in Mackinac County. Karen is the Past President 
of the Michigan Forest Association and is currently serving as 
the Treasurer of the Michigan Tree Farm Operating Committee, so 
welcome. It is so good to have you.
    Kristen Holt is the President of Quality Assurance 
International and Senior Vice President of the NSF 
International Global Food Safety Division. Quality Assurance 
International provides USDA certification for organic products. 
Ms. Holt has more than 15 years of food industry experience. In 
2010, she was elected to the Board of Directors of the Organic 
Trade Association as its Treasurer Elect. She now serves on the 
Board of Directors for United Way of Washinaw County and is 
also a licensed CPA. We are going to need your help as we put 
this together here in the farm bill.
    Eric Davis is the Director of the Food Initiative at the 
United Way for Southeastern Michigan--so pleased to have you 
here--where he is dedicated to promoting food security for the 
people of Michigan. Eric has been involved in public policy 
ever since graduating from Michigan State and served as Chief 
of Staff for two State Representatives as well as Deputy 
Director for Legislative Affairs for our former Governor 
Granholm. Welcome.
    Dennis West--it is great to see you, Dennis--who is 
President of the Northern Initiatives since 1997. I appreciate 
your being with me last week in D.C. for a different session on 
rural development. Northern Initiatives provides rural small 
businesses in Michigan and Northeast Wisconsin with access to 
capital, information, and markets. Mr. West is active on 
several boards, including the YMCA of Marquette County, so it 
is great to have you with us.
    Jim Reid, welcome. Jim and his wife, Pam, have been farming 
in Jeddo, Michigan, for more than 30 years. Their son, who I am 
happy to say is also in MSU's dairy and management program, 
also farms with them. They milk 170 cows in addition to growing 
wheat, corn, and soybeans on 1,000 acres. Jim was recently 
recognized by the Michigan Farm Bill for ecology leadership, 
and his farm is certified by the Michigan Agriculture 
Environment Assurance Program, so congratulations.
    Dave Armstrong has over 30 years of experience with Farm 
Credit Services in Michigan. He is also a proud Spartan--that 
seems to be a theme here--having earned his Bachelor's degree 
here in animal sciences. After graduate school in Wisconsin, he 
came back to work for the Production Credit Association of 
Southeastern Michigan. That company merged with three others in 
1999 to form Greenstone Farm Credit Services, where he now 
serves as President and CEO. Dave is also active in several 
boards, including Michigan SFA Foundation, Chicago Federal 
Reserve Bank's Advisory
    Committee on Agriculture, Small Business, and Labor, and 
the Michigan Livestock Expo.
    So we welcome all of you. We thank you so much for your 
time this morning. We will start with Ms. Serfass. Welcome.

     STATEMENT OF KAREN SERFASS, FORESTRY PRODUCTION; PAST 
    PRESIDENT, MICHIGAN FOREST ASSOCIATION, DAFTER, MICHIGAN

    Ms. Serfass. Thank you. Good morning. Chairman Stabenow and 
Senator Roberts, thank you for the opportunity to testify this 
morning. I am here today as a tree farmer from Dafter, 
Michigan, certified by the American Tree Farm System, a program 
of the American Forest Foundation. My remarks reflect the views 
of the Foundation and the 95,000 tree farmers like me that the 
Foundation works with every day.
    Most Americans do not realize that much of the clean water 
we drink and the clean air we breathe, the wood products we use 
everyday, the wildlife we hunt and fish for, comes from forests 
owned by families like mine. More than ten million American own 
large segments of our nation's forests, and here in Michigan, 
more than 438,000 families own more than half of our State's 
forests.
    Forests in America are the ultimate public-private 
partnership. Families like mine invest in and make improvements 
in our nation's forests and keep these forests productive and 
all Americans benefit. This is why the farm bill conservation 
programs and the USDA Forest Service Private Forest Programs 
are so important to family forests and to the public.
    My husband, Rich, and I purchased 205 acres of mixed forest 
in the Eastern U.P. in 1988. This has provided us a place to 
hike, observe wildlife, cross-country ski, and hunt safely. 
When we purchased the land, we had no idea how to manage it. 
With the help of a Michigan Department of Natural Resource 
Service forester and a private consulting forester, we found 
very little had been done to manage it, to mimic the natural 
disasters, and create the diversity needed for wildlife 
habitat. Our forester explained all this to us and helped us 
plan out what we could do to improve the habitat by using a 
Forest Stewardship Plan, which is funded in part by the USDA 
Forest Service.
    The plan recommended diversifying the age of our forest so 
that wildlife had both younger forests and areas to forage as 
well as older forests for dens and nests. We also had stands of 
aspen, which is a good wildlife species, which was aging and 
not regenerating. We needed to help these stands come back and 
thrive.
    To create this diverse forest habitat for the wildlife, in 
1995, we harvested timber on 45 acres to create openings and 
help our aspen stands regenerate. We do this every ten years or 
so, moving the harvest to different parts of the forest to keep 
the forest healthy and keep the wildlife habitat.
    The income we earn from these harvests, we invest it in 
more food plots for wildlife, planting other tree species that 
are good food sources, such as black cherry and oak, and 
improving our roads and trails, which help with water quality.
    In addition to this woodland, in the mid-1990s, we 
purchased an old hay farm with 160 acres, which is where we now 
live. We again put together a Forest Stewardship Plan for this 
property, even though there were only a few acres of woods and 
a small stream running through that we wanted to enhance for 
wildlife value. Since this property is open with heavy winds, 
we decided we needed a windbreak around the property to keep 
the soils intact and help to reduce the cost and conserve 
energy to heat our home in the winter. To improve the wildlife 
habitat, we also decided to put in wildlife corridors to enable 
the wildlife to make their way from forage to nesting sites.
    We are currently implementing an EQIP contract, which is 
leveraging our own investment to plant 6,000 trees and shrubs 
as windbreaks and travel corridors. While we probably could 
have paid for this project on our own, it would have taken us 
several years to put together the funds needed for this 
project. Because of the EQIP cost share, we will get the energy 
savings for our home much sooner and see the wildlife habitat 
in our lifetime, since the trees are growing now.
    Unfortunately, too many forest owners are not familiar with 
the benefits of forest management. In Michigan, only 13,000, 
just three percent, of forest owners who own 1.1 million acres 
have Forest Management Plans. Nationally, we see similar 
trends, where less than four percent of forest owners have 
management plans. This is a good barometer for how active they 
are in their forest management.
    The farm bill Conservation Program, combined with the 
Private Forest Owner Program, supported by the USDA Federal 
Reserve, are an incredibly valuable tool for families like 
mine, leveraging our investment to make improvements to the 
land that benefit all Americans. In 2008, Congress made a 
number of improvements to the farm bill Conservation Program, 
without which I probably would not be here today.
    The American Forest Foundation is working with a coalition 
to develop specific recommendations for the 2012 farm bill. I 
am sure they would be happy to share them once they are 
complete.
    I think I speak for most family forest owners when I 
suggest a focus on two key areas for the 2012 farm bill, 
especially given the budget climate. First, I think it is 
important to maintain and improve these conservation and forest 
programs, ensuring family forest owners are on level ground 
with agriculture producers.
    Second is the issue of technical assistance. As I 
mentioned, my husband and I would not be here today and have a 
well-managed forest if it were not for the USDA Forest 
Stewardship Program that supported the assistance from our DNR 
Service forester and our consulting forester. I hope in the 
farm bill Congress can find ways to improve the availability of 
forestry technical assistance, perhaps with more private-public 
partnerships.
    Chairwoman Stabenow. thank you for your leadership on this 
important issue and for inviting me to share the story of my 
family forest. I welcome you and any other members of the 
committee who would like to see an actively managed forest to 
come and visit us.
    [The prepared statement of Ms. Serfass can be found on page 
144 in the appendix.]
    Chairwoman Stabenow. Thank you so much.
    Ms. Holt, welcome.

    STATEMENT OF KRISTEN HOLT, PRESIDENT, QUALITY ASSURANCE 
INTERNATIONAL (QAI), AND SENIOR VICE PRESIDENT, FOOD SAFETY AND 
        QUALITY, NSF INTERNATIONAL, ANN ARBOR, MICHIGAN

    Ms. Holt. Thank you, and thank you for the invitation to 
speak with you today. Chairwoman Stabenow, Ranking Member 
Roberts, and Senate Agriculture Committee staff, my name is 
Kristen Holt and I am President of Quality Assurance 
International and Senior Vice President of the Global Food 
Division at NSF International, based in Ann Arbor. Today, I am 
testifying on behalf of the more than 6,500 Certified Organic 
Operations represented by the Organic Trade Association, where 
I serve as Treasurer Elect on the OTA Board of Directors.
    NSF International is an independent, not-for-profit 
organization that develops standards, certifies products, and 
provides testing, auditing, and training services for public 
health. NSF employs over 1,000 people, and almost 500 are in 
the State of Michigan.
    NSF acquired QAI, a pioneer in organic certification, in 
2004. QAI is an accredited USDA National Organic Program 
certifier and is one of the leading U.S. certifiers. QAI 
certifies 1,700 organic operations and 60,000 organic products.
    Organic agriculture is the fastest growing segment of the 
food industry, growing at 18 percent per year from 1997 through 
2008. Organic was a $29 billion industry in 2010, and even in 
2010, the sector grew by eight percent compared to less than 
one percent growth for the food industry as a whole. Organic is 
responsible for growing jobs, businesses, and revenues that 
especially benefit rural and small businesses.
    Michigan ranks 11th in organic annual output and has 460 
Certified Organic Operations, producing over $71 million--I 
wish it was billion, I have heard that a few times today--in 
farmgate revenue. The organic sector plays a contributing role 
in revitalizing Michigan's and America's rural economy through 
diversity in agriculture.
    The 2008 farm bill contained several funding provisions 
that have proven vital to the organic industry's growth, 
including, one, resources for the National Organic Program, 
NOP, to promulgate and enforce certification rules; two, 
certification cost share support for new organic farmers; 
three, the Environmental Quality Incentive Program, or EQIP, to 
assist in the conversion to organic farming; four, providing 
more organic production and market data; and five, providing 
funding for more organic production research.
    These measures, totaling $125 million since the passage of 
the bill, have contributed to the growth of the organic sector 
and have served as a modest downpayment on future innovations 
in agriculture that have demonstrated an impressive 40-to-one 
return on investment.
    I will focus my comments on the top three provisions. 
Protecting the integrity of the USDA Organic Label is the 
highest policy priority for the organic sector. There is still 
significant work to be done to institute a regulatory framework 
appropriate to a $29 billion a year industry. The NOP performs 
regulatory oversight of the Organic Label and ensures that 
consumers are getting what they expect when they buy organic. 
These functions are essential for the growth of the organic 
sector.
    Regardless of where food is produced, all foods labeled and 
sold as organic in the U.S. must be certified to the NOP in a 
consistent manner. Maintaining a level playing field in this 
global regulatory program, such as the NOP, requires adequate 
resources for oversight of foreign certifiers. Otherwise, U.S. 
organic producers will be disadvantaged.
    The 2008 farm bill funding has enabled the NOP to better 
address organic labeling violations and has improved the 
consistency of accredited certifiers worldwide. Continuing 
funding here is critical to ensure market stability, ongoing 
capital investment, and continued sector growth.
    The 2008 farm bill also expanded the National Organic 
Certification Cost-Share Program, providing organic operations 
with 75 percent of the cost of annual inspections, up to $750 
per certification. This low level of annual assistance reduces 
the cost burden of certification, especially for small farmers, 
and helps eliminate a barrier for new organic farmers. 
Currently, 25 percent of Michigan's Certified Organic 
Operations participate in the Cost-Share Program. Eliminating 
this program in 2012 would result in fewer organic farmers in 
Michigan and in the U.S.
    The 2008 farm bill also recognized that conservation 
programs should work hand in hand with the organic sector, 
because by definition, organic farming improves the health of 
the farmland. A new provision, known as the Environmental 
Quality Incentive Program, or EQIP, was established to provide 
assistance to producers for conservation practices related to 
organic production as long as they are pursuing or meeting the 
requirements for organic certification. This is the only 
program designed to assist farmers in the transition to organic 
production practices and needs to be continued.
    Looking to 2012, the new farm bill should optimize these 
programs and provide the tools necessary for more farmers to 
take advantage of organic opportunities so that U.S. farmers 
can remain globally competitive. It is understood that no part 
of the farm bill is safe from cuts in this fiscal environment. 
However, the prospect of funding cuts to organic programs will 
result in uncertainty and instability in the organic sector 
which can jeopardize this growing $29 billion per year 
industry. Government investment in a high-growth 40-to-one ROI 
in industry should continue because the investment is modest 
and the benefits to the U.S. economy and to the environment are 
significant.
    Thank you.
    [The prepared statement of Ms. Holt can be found on page 96 
in the appendix.]
    Chairwoman Stabenow. Thank you very much.
    Mr. Davis, welcome.

STATEMENT OF ERIC DAVIS, DIRECTOR, FOOD INITIATIVE, UNITED WAY 
          FOR SOUTHEASTERN MICHIGAN, DETROIT, MICHIGAN

    Mr. Davis. Good morning, and thank you, Chairwoman Stabenow 
and Ranking Member Roberts, for the opportunity to talk with 
you today about hunger and the critical importance of nutrition 
assistance in Michigan. My name is Eric Davis and I am the 
Director of the United Way for Southeastern Michigan's Food 
Initiative. Today, I would like to share with you about how the 
problem of hunger is affecting people in Southeast Michigan and 
what the United Way and our partners are doing about it and how 
innovative, community- based efforts that promote access to 
nutrition assistance are critical in closing the gap.
    Hunger is all too common in Southeastern Michigan. Too many 
people and families in our region cannot afford enough food, 
and so they face difficult choices: Gas or dinner, winter coats 
or groceries, school supplies or breakfast, medications or 
meals. While families in Southeastern Michigan are struggling 
to keep a family home or find a job, they too often face the 
additional burden of hunger. Even for those that are employed, 
hunger can have a negative impact on their productivity, as 
they often skip meals to ensure their children have enough to 
eat.
    Today, 18.5 percent of people in the Detroit Metro Area 
struggle with hunger. More than 700,000 residents of 
Southeastern Michigan depend on the Supplemental Nutrition 
Assistance Program for food each month. Over 300,000 of these 
are children.
    Since 2004, the number of Michiganders counting on Food 
Stamps to feed their families increased by 66 percent, from 
just over one million to almost 1.7 million people. We expect 
unprecedented amounts of people that continue to rely on Food 
Stamps until unemployment rate have decreased significantly.
    Families with children are the hardest hit by hunger. While 
this is a crisis itself, it becomes more troubling when you 
consider that children experiencing hunger have lower math 
scores and are more likely to repeat a grade. They are more 
likely to be absent and tardy and to have behavioral issues and 
attention problems. Teens experiencing hunger are more likely 
to be suspended from school and have difficulty getting along 
with their classmates. These proven effects of hunger are also 
known predictors of negative life outcomes, including high 
school dropout, low IQ, and lower lifetime earnings.
    The United Way for Southeastern Michigan is proud to be a 
part of a committed, dynamic, and inclusive community of 
advocates for food security, fresh food, nutrition education, 
and a sustainable food economy. I would like to share with you 
just a few of the innovative initiatives designed to create 
better outcomes for our region by leveraging local assets in 
combination with Federal Nutrition Assistance Programs.
    United Way for Southeastern Michigan is one of the many 
proud supporters of the Fair Food Network's Double Up Food 
Bucks Program, which doubles the buying power of SNAP dollars 
when they are used to buy Michigan-grown produce at farmers' 
markets. In partnership with Gleaners Community Food Bank, 
United Way is committed to establishing more client choice food 
pantries in Metro Detroit. Another initiative, Detroit FRESH, 
is a project of a Wayne State University group known as SEED 
Wayne, in collaboration with the Capuchin Soup Kitchen and 
works to supply corner stores with local, fresh, and affordable 
produce.
    The final project I would like to highlight is the Michigan 
Benefits Act Initiative, or MBAI, a community-based outreach 
initiative that utilizes web-based technology to register 
individuals for available government benefits. As United Way 
strives to build stronger and healthier communities, one of the 
lessons we have learned is that greater access to benefits 
positively impacts all of us. Michigan loses almost $1 billion 
annually in unutilized Federal benefits. Increasing SNAP 
participation would bring those funds to Michigan, where they 
would provide a valuable boost to the economy as they flow to 
local businesses.
    It is with this in mind that the United Way for 
Southeastern Michigan is actively participating in the MBAI, 
along with more than 50 partners Statewide, including State and 
Federal Government agencies, businesses, and nonprofits. The 
MBAI will use an online tool developed and operated by the 
Michigan Department of Human Services called MiBridges to 
streamline multiple benefit applications. Currently, MiBridges 
allows applicants to apply for SNAP and LIHEAP, or utility 
benefits, using one integrated application. It is currently 
being expanded to integrate other benefit applications, as 
well. This model is a one-stop method for connecting families 
to benefits and is coupled with an outreach program that 
utilizes the resources of community organizations around the 
State.
    The outreach portion is an essential component of the MBAI, 
designed to help the MiBridges tool meet people where they are 
through a dedicated network of community-based organizations 
whose staff will be trained to assist those eligible within 
their communities in successfully applying for benefits. 
Families that are struggling with hunger for the first time due 
to recent economic crisis often lack familiarity with 
assistance programs. Therefore, using established community 
organizations and modern technology are crucial to successfully 
reaching these and other populations.
    We at the United Way for Southeastern Michigan encourage 
the committee to maintain SNAP to meet the needs of 
Southeastern Michigan, Michigan as a whole, and the United 
States. We also appreciate the opportunity to voice our support 
for innovative programs that leverage community resources to 
help all families access benefits for which they are eligible. 
And finally, to ask the Federal Government to focus on 
strengthening the safety net in local communities by supporting 
cross-sector efforts to modernize and streamline access, such 
as the Michigan Benefit Access Initiative.
    Chairwoman Stabenow. I would like to thank you for your 
strong record of advocacy on behalf of the children of our 
State and issues like poverty and hunger that impact our 
families and our economy. I urge you and your fellow Senators 
of this committee to protect funding for SNAP and to support 
hungry children and families in accessing available benefits as 
you focus on the upcoming reauthorization of the farm bill. 
Thank you very much.
    [The prepared statement of Mr. Davis can be found on page 
84 in the appendix.]
    Chairwoman Stabenow. Thank you very much for your 
testimony.
    Mr. West, welcome.

  STATEMENT OF DENNIS WEST, PRESIDENT, NORTHERN INITIATIVES, 
                      MARQUETTE, MICHIGAN

    Mr. West. Good morning. Thank you, Senator Stabenow, 
Senator Roberts, for this opportunity to provide testimony. 
Northern Initiatives is a nonprofit community development 
financial institution and micro lending intermediary. We work 
in 46 rural Michigan counties, everything north of Claire in 
Michigan, and five border counties of Wisconsin. We are based 
on the campus of Northern Michigan University that founded us 
back in 1991.
    USDA programs have been critical for Northern Initiatives 
and they have helped us to make close to 600 loans, ranging in 
size from $4,000 to $1.8 million. Those programs that we have 
used have also supported the ability to offer technical 
assistance, and so half of our loans have been to start-ups and 
40 percent of our loans have been to women-owned businesses.
    We are in the process of scaling our ability to make more 
loans. We now have an online loan application that is for all 
loans under $50,000, which gives a consumer or customer a 
credit response in 24 to 48 hours, and later this year, we will 
move that application up to $100,000. So it gives us the 
ability to scale capital and to serve a large geographic area 
efficiently.
    The third area of our work is regional strategies to 
support natural and cultural tourism and to help parts of the 
Upper Peninsula grow as regional and national tourist 
destinations.
    I am here to testify on the importance of rural development 
programs for entrepreneurship and strengthening community 
capacity. On the entrepreneurship side, rural development 
programs are providing credit for rural businesses complemented 
by TA, and specifically, the programs vital to Michigan are the 
Intermediary Lending Program, the Rural Micro Entrepreneur 
Assistance Program, Business and Industry Loan Guarantee 
Program, the Rural Business Enterprise Grants, the RBEG, and 
the Rural Business Opportunity Grants, the RBOC. The community 
capacity programs of importance are the Rural Community 
Development Initiative and the Water, Sewer, and Community 
Facilities Programs.
    Let me say a few words about entrepreneurship. In the last 
decade, things were simply horrific for Michigan and much of 
rural Michigan, yet 45 of the 46 counties in which we work saw 
growth and that growth was in small businesses employing one to 
nine people. So consistently through the period, there was 
something growing and it was small businesses, which is a great 
sign of innovation and new ideas taking place throughout our 
State.
    Some examples of where we have used IRP and helped small 
businesses get started and grow, Dan Torres in Marquette, 
Michigan, has started a fresh Mexican concept 14 years ago, now 
has three locations, 100 employees with benefits.
    Mike Zacharias has started a small business in Wakefield 
which is in the mold making business, what would otherwise be 
considered a dying industry in America, but his speed of 
delivery and commitment to his customers has resulted in a 
global company with three locations and over 50 employees.
    Alternative loan product has helped Bob Jacquart and 
Jacquart Fabric Products in Ironwood, Michigan, to take an 
industry that we would not expect to succeed in America, the 
cut and sew business, and now to be able to use speed of 
delivery and technology and employ 150 people in Ironwood, 
Michigan.
    So these are examples of where this money has been used to 
start up and produce results with technical assistance and 
growth, and nationally, the IRP program has made over $700 
million in capital available to intermediaries like Northern 
Initiative. In the history of the program, it has never had a 
default or a delinquency while providing capital to 8,000 
businesses. With some seasoning, I am sure the Rural Micro 
Assistance Program will get to the same point.
    While these rural development programs appear to be 
categorical, they very much interrelate and support one 
another. Capital investments in broadband bring about high- 
speed access. The capital and technical assistance help 
individual rural businesses overcome distance, isolation, and 
seasonality using e-commerce to sell regionally and even 
globally.
    And these rural development programs leverage private 
support, local dollars, and bring about increased taxes for the 
State and localities and the Federal Government while lessening 
the use of the social safety net. Just as importantly, they are 
building bridges to long-term private capital and private 
service providers, as our borrowers are typically going into a 
commercial bank within three to five years.
    So thank you for this opportunity to testify today and I 
look forward to questions.
    [The prepared statement of Mr. West can be found on page 
161 in the appendix.]
    Chairwoman Stabenow. Thank you. Terrific. Thank you.
    Mr. Reid, welcome.

   STATEMENT OF JAMES REID, REID DAIRY FARM, GRANT TOWNSHIP, 
                            MICHIGAN

    Mr. Reid. Welcome, and good morning, Senator Stabenow, 
Senator Roberts.
    Chairwoman Stabenow. Good morning.
    Mr. Reid. Thank you for holding this first official field 
hearing on the upcoming reauthorization of the farm bill. I 
appreciate the opportunity to provide testimony regarding the 
reallocation of the Rural Energy for America program to the 
Rural Development Department of USDA.
    You already know my name. My farm is located in St. Clair 
County. I am just four miles from the Lake Huron shoreline. I 
was born and raised on a dairy farm in St. Clair County, worked 
alongside of my dad through my school years and into college. 
After graduation from Michigan State, I pursued a teaching 
career for five years and my wife and I, Pam, decided to 
purchase an operating dairy farm just in our neighborhood from 
a retiring couple in 1978. We combined the two herds, ended up 
with a 50-cow herd. As years went on, we gradually grew the 
dairy and cash crop farm to a 1,000-acre 90-cow herd by 2007.
    The same year, we began planting and implementing a project 
that would bring us at today's level, a little bit revised from 
what you stated, Senator Stabenow, we are at 225 cows----
    Chairwoman Stabenow. Oh, great.
    Mr. Reid. --1,100 acres. My son, Jeff, is currently 
enrolled in Michigan State University's Dairy Management 
Program. He is doing his internship this summer at another 
farm. I really miss him, but hopefully, his education will 
contribute to our farm.
    I recently had an opportunity to use the REAP Grant Program 
to install a solar power system on our 225-cow dairy operation 
in the thumb of Michigan. After exploring several renewable 
energy alternatives, including wind power, we chose solar as a 
way to provide energy on our farm. We installed 96 205-watt 
Evergreen solar photovoltaic panels on the roof of our 
freestall barn. These panels will generate roughly 27,000 
kilowatts per year, or about a third of our energy needs.
    While use of solar power is beneficial to us in the 
reduction of energy costs on the farm, the cost of the solar 
panels and installation would have been cost prohibitive 
without the assistance of REAP and other incentives through 
Detroit Edison, in our case. Total investment costs for 
installing the solar panels was over $140,000. Our reduction in 
energy costs is expected to be approximately $5,000 a year. As 
you can see, without any financial assistance, the return on 
investment would have taken over 28 years. With the REAP Grants 
and other incentives, our investment is now going to be 
recouped in about four years.
    Aside from the financial gain of using solar energy, the 
implementation of renewable energy fits well with our overall 
farm strategy and priorities. Over the past several years, we 
have worked to make our farm as environmentally friendly as 
possible. Working through the Michigan Agriculture 
Environmental Assurance Program, we have implemented new 
management strategies to protect the livestock and the land on 
our farm. We are certified in all three MAEAP programs, 
Farmstead, Livestock, and Cropping. This past winter, our 
efforts to be good stewards of the resources earned us the 
selection of Ag Ecologist of the Year from Michigan Farm 
Bureau.
    Many of the changes we have made around the farm, including 
renovating buildings, were made to help make way for the next 
generation, my son, to continue working on the farm.
    Programs like REAP help farms implement new areas of energy 
efficiency and conservation on the farm. While we used the 
program to install a renewable energy program on our farm, 
other farms have used the program to make relatively small 
changes on the farm that result in large savings of energy 
consumption. Farmers by their personal nature want to conserve 
and protect our natural resources as much as possible. The REAP 
Program makes it financially feasible for us to explore new 
energy sources on our farm.
    Supporting efforts like the REAP is one more step in our 
nation's move towards less dependency on foreign energy 
sources. President Obama has called for ten percent of our 
nation's energy to come from renewable sources, like wind and 
solar, by 2012, and 25 percent by 2025. We are proud to have 
done our part in the effort to gain energy independence. We 
encourage you to continue the REAP Program and to allow other 
farmers the chance to bring renewable energy and energy 
conservation to their operations. Thank you.
    [The prepared statement of Mr. Reid can be found on page 
130 in the appendix.]
    Chairwoman Stabenow. Thank you so much.
    Mr. Armstrong, welcome.

  STATEMENT OF DAVID ARMSTRONG, PRESIDENT AND CHIEF EXECUTIVE 
    OFFICER, GREENSTONE FARM CREDIT SERVICES, EAST LANSING, 
                            MICHIGAN

    Mr. Armstrong. Thank you. Last but not least, right?
    Chairwoman Stabenow. Absolutely, not least.
    Mr. Armstrong. Good morning, Madam Chairman, Ranking Member 
Roberts. Thank you for the opportunity to participate in 
today's hearing and allowing me to share some of the great 
things going on at Greenstone Farm Credit Services that we are 
doing for our farmers and rural residents. I would also like to 
provide you with a brief overview of the credit conditions in 
our local service area and then touch on a couple of areas that 
are important to the Farm Credit System to carry out its 
mission nationwide.
    Greenstone Farm Credit Services is the largest agricultural 
lender throughout the State of Michigan and Northeast 
Wisconsin. We are a financial service cooperative, which means 
our stockholders are the more than 21,000 farmers and rural 
residents that do business with us. In fact, Greenstone 
distributed 20 percent of its 2010 earnings to its members in 
patronage refunds, bringing our five-year total to just over 
$85 million.
    Greenstone is part of the National Farm Credit System, 
which was established by Congress in 1916 as a means to provide 
farmers and ranchers with a stable and secure source of credit. 
Some 95 years later, Greenstone is a $5.6 billion financial 
institution, placing it seventh in the nation in terms of asset 
size among the 86 Farm Credit Associations, with a market share 
of 65 percent of the agricultural debt when compared to 
selected commercial banks active in agricultural lending within 
our territory. We are headquartered right here in East Lansing, 
Michigan, and have more than 450 employees working out of 37 
locations throughout our service area.
    Turning to credit conditions, the growing season in our 
territory was good to excellent in 2010 for row crops and below 
average for the apple and cherry industries, which were 
adversely impacted by an early frost, which contributed reduced 
yields of approximately 50 percent over the 2009 levels. Crop 
insurance minimized the financial impact for the apple 
industry. However, the cherry industry did not fare as well, as 
it continues to work with excess inventory carryover that is 
keeping prices low.
    Grain commodity prices started the year at moderate levels. 
Favorable growing conditions deteriorated in the Midwest during 
July with excess levels of moisture in the Corn Belt, similar 
probably a little bit what we are experiencing this year. There 
was also an increase in export levels due to the drought in 
Eastern Europe later in the year. The industry went from 
expectations of losing money to near record profits as 
expectations of ending stock levels shrank. As a result, grain 
prices have risen steadily.
    Input costs for seed, fuel, fertilizer have also increased 
significantly and we are seeing an upward pressure on land 
rents as a result of the current price environment. Even with 
these increases in input prices, the opportunity for solid 
profit margins still exist in 2011 for grain and crop producers 
in general, and again, that is assuming that we are still able 
to get average yields despite this very late start in planting.
    Turning to dairies, Midwest dairies returned to profitable 
levels in 2010 after losing money in 2009. The run-up in feed 
prices that started in August of last year will place 
significant pressure on margins in 2011. This increase in costs 
should first be felt in the Western U.S., where the majority of 
operations purchase their feed. Dairies in Michigan enjoyed a 
good to record feed harvest in 2010. Most operations have large 
high-quality forage inventories to work with in 2011, and 
improved milk prices and relatively lower feed costs in 2010 
provided the opportunity for many of our operations to recover 
most of their 2009 operating losses.
    The slow recovery of the general economy continues to 
negatively impact timber, greenhouse and nursery operations. 
Several timber and greenhouse assets in our portfolio were 
downgraded to an adverse asset classification during the year 
and are not expected to improve significantly until the housing 
sector also improves.
    The 2011 outlook for the protein sector is for reduced 
earnings. Feed costs will likely eat into available margins and 
have the potential to send several industries into the negative 
earnings range. Current 2011 CME Class 3 milk prices are above 
2010 levels, which should hopefully allow our Midwest dairies 
to maintain break-even or better margins.
    Interest rates continue to be at or near record low levels, 
which, when coupled with relatively high margins for most feed 
grains, can, and it is, leading to rapidly increasing farm land 
values in several parts of the country. Fortunately, we have 
experienced only moderate land value increases in Michigan to 
date, which should help mitigate our impact of any significant 
decline in crop prices on our customers' ability to service 
their debt. As an agricultural lender, we are very sensitive to 
escalating land values and continue to follow sound 
underwriting standards when extending credit to the industry.
    Some of the farm bill issues I wanted to touch on, at Farm 
Credit, we continue to utilize our available authority and 
program resources that permit us to make credit available to 
the broadest group of producers. The Guaranteed Loan Programs 
of the Farm Services Agency help us work with farmers that may 
not be as sound financially or that present a greater risk than 
for some other reason compared to other customers. We urge you 
to review these programs to ensure that they reflect the needs 
of today's farmers.
    It is essential that the caps on loan size be allowed to 
increase to reflect continued inflation of land values and the 
cost of production. Farmers must be able to obtain sufficient 
financing for them to have a viable sized farm operation.
    And before I conclude my testimony, I would also like to 
bring to your attention an issue that will have an impact on 
small rural financial institutions that make up the Farm Credit 
System and our ability to continue helping agriculture and 
rural development grow. As you know, the Commodity Futures 
Trading Commission is proposing a rule requiring the mandatory 
clearing of swaps. While appropriate for large commercial 
banks, this rule will have an unintended negative impact on 
small rural lenders. We have relayed our concerns to CFTC 
Commissioner Gary Gensler and would like to briefly state our 
main arguments for requesting exemption from mandatory clearing 
of swaps.
    First, the Farm Credit financial institutions like 
Greenstone have a proven record of being competitive, 
dependable, and responsible sources of credit for Michigan 
agricultural producers. The Farm Credit System is not 
interconnected to the banking industry. It has not had nor is 
it at risk of a credit crisis. Farm Credit banks within the 
Farm Credit System serve as a pass-through for their member 
associations, which individually have assets less than $10 
billion, meaning they should be given the same exemptions as 
many other small financial institutions and commercial end 
users.
    Madam Chairman and Ranking Member Roberts, I want to thank 
you again for inviting me to participate in today's hearing and 
look forward to assisting you and your staff in any way we can 
as Congress begins the process of rewriting the 2008 farm bill. 
Thank you.
    [The prepared statement of Mr. Armstrong can be found on 
page 58 in the appendix.]
    Chairwoman Stabenow. Thank you very much.
    I should mention that we will be holding our second 
oversight hearing of the CFTC in June. We continue to raise a 
number of questions and bring the issues that you are talking 
about and others to the CFTC, and we will continue to be 
actively involved with them, both the committee and the staff, 
as well, so thank you.
    In our last few minutes, I am going to quickly move through 
some things, see how much we can cover. But let me ask, Mr. 
Armstrong, as we look at cropland values increasing, and 
increasing significantly, and then we think back to the 
previous panel with Ben LaCross talking about beginning farmers 
and our young people getting into--or older people getting into 
farming for the first time, what is your experience in lending 
to beginning farmers? Have you set any goals for attracting 
young farmers into agriculture? And of the benchmarks that you 
have used in that area, what is the most difficult to meet as 
we look at making sure that there is credit available?
    Mr. Armstrong. Well, as you know, Senator, being a member 
of the National Farm Credit System, we are mandated to make 
sure that we have programs in place to finance young beginning 
and small farmers, and Greenstone, I am very pleased to report, 
is in full compliance with those standards and, in fact, we 
exceed many of our peers around the country in terms of the 
percentage of small, young, and beginning farmers that we do 
serve.
    We have a number of different programs that we can use for 
particularly young farmers who want to get started, where we 
will use reduced underwriting standards in some cases with some 
offsetting risk mitigators, like a USDA guarantee. We may 
require some crop insurance. There are some areas where we 
would want them to have a well proven financial recordkeeping 
system, a marketing plan.
    And unfortunately, sometimes, most--many--I should not say 
most--many young producers want to get out there and farm. That 
part of the business, they do not really enjoy and would like 
to defer. And so it is sometimes a challenge in getting them to 
work through those pieces of their plan before they just jump 
on the tractor and farm, and that is probably one of the 
biggest challenges for us.
    The other one is probably just upright having equity, 
having enough equity that they are not financing 100 percent of 
their entire operation.
    Chairwoman Stabenow. Great. Thanks very much.
    I want to ask Ms. Serfass and Mr. Reid both questions in 
terms of conservation and managing risk. When we look at 
managing whatever the risk it is, whether input costs, pests, 
diseases, and so on, could both of you talk about the 
conservation programs and how they assist you as it relates to 
managing risk and remaining competitive? Ms. Serfass?
    Ms. Serfass. Oh, remaining competitive--our Forest 
Stewardship Program really helps tremendously. If we did not 
have that plan--which my husband and I had no clue how to 
manage our property when we first bought it. We just thought we 
just wanted a nice place to get away from retail and people and 
traffic and had no clue at all what we were getting into. We 
just--so with my husband's curiosity--he is always, if you get 
into anything, he is question, question, question, which is 
fantastic, really--he contacted the DNR and they helped us get 
started. He told us we should have the Forest Stewardship Plan. 
He told us about the Forest Association and tree farms and all 
the different programs that were out there to help us manage 
this property.
    If it was not for this contact--at that time, we had seven 
Service foresters throughout the State, and Michigan is a 
pretty darn big State. Now, we only have three, and most of the 
conservation districts have lost their foresters, and these 
people help beginning wood lot owners and other even 
agriculture owners--it is not just forestry-- on how to take 
care of their property and the best way to handle it.
    I am not sure if I answered your question completely----
    Chairwoman Stabenow. And just one quick follow-up to that, 
because, I mean, you were curious. You reached out. And you 
were saying in your testimony, only about three percent of our 
family forest owners are actually engaged and actually have a 
Forest Management Plan. What can we do to do better outreach so 
that there are more folks that are coming into the programs?
    Ms. Serfass. I kind of always thought, if we could get the 
real estate people who sell these blocks of land to let people 
know that there are programs out there and organizations out 
there to help them learn how to manage their property so that 
it stays healthy. If you do sustainable management, you have 
the healthier forests, you are going to help the environment 
much better. You take out the trees that are in poor condition 
and susceptible to disease and make room for the stronger trees 
to have a better forest for the wildlife and for the 
environment.
    Chairwoman Stabenow. Great. Well, thank you very much.
    And Mr. Reid, if you could talk more about managing risk 
and being competitive. You are obviously an example of someone 
who has been very involved in focusing on environmental 
protection. I am sure it is not easy to be certified in all 
three areas of the Michigan Agriculture Environmental Assurance 
Program, and congratulations on receiving the recognitions that 
you have. But speak about conservation programs a little bit 
more.
    Mr. Reid. Well, the MAEAP program goes a long way as far as 
keeping your risk at a minimum. In order to achieve MAEAP 
verification, EQIP plays an important role in that. EQIP will 
allow the farmers to help finance those practices that help 
take control of those risks. A livestock farmer, such as 
myself, creating or building a manure storage facility, for 
example, is very expensive. The other practices that go along 
with it, collecting the dirty water, as we call it, and making 
sure it does not impact the environment, collecting it into the 
storage facility and then using those nutrients in place of 
commercial fertilizer, for example, it is a big savings to us. 
I think those two programs coupled together do a lot to 
minimize our risk.
    Chairwoman Stabenow. Great. Thank you.
    And then finally, and then I will turn it over to Senator 
Roberts, Ms. Holt, could you talk more about the challenges and 
opportunities of farmers who are converting to organic 
production and what sort of tools are most valuable to them in 
converting? What are the obstacles to our farmers that wish to 
convert to organic farming?
    Ms. Holt. Well, I think the most important thing is 
maintaining the integrity of the USDA Organic Label. It is a 
pretty small funding amount for the NOP program, but it is 
critical to make sure that there is going to be an ongoing 
market for the organic products. They are going through a lot 
of work. They have to be certified organic, unlike anyone else 
who is selling their products. And so if they are going through 
all of that, that label needs to mean something to the U.S. 
consumer. So that is the most important thing.
    Then just from a funding standpoint, the Cost-Share Program 
has really helped to offset costs. It is only giving $750 per 
farmer, but that is something and it does make a difference to 
help offset that certification cost that another farmer does 
not need to go through.
    And then EQIP, we have talked a lot about that, but those 
programs, as well, will help with the conversion by providing 
some funding to help that farmer make that conversion, and it 
does take three years to convert the land over to organic 
production, and so during that time, they are doing the work 
and basically farming organic, but they are not able to sell 
the product as organic, so it does help offset some of those 
costs.
    Chairwoman Stabenow. Great. Thanks very much.
    Senator Roberts.
    Senator Roberts. I will try it in reverse order. Mr. 
Armstrong, did you ever hear back from Gary Gensler about your 
recommendations on CFTC and the rulemaking?
    Mr. Armstrong. No, sir, not to my knowledge.
    Senator Roberts. Remind me again, this was not just your 
letter, but it was a consortium kind of letter in response to 
the rulemaking that CFTC has proposed, is that correct?
    Mr. Armstrong. Correct.
    Senator Roberts. When did you send it in?
    Mr. Armstrong. There were letters that were sent in earlier 
this spring on behalf of the National Farm Credit Council----
    Senator Roberts. What happened to those letters? Do you 
know?
    Mr. Armstrong. Well, I assume that Mr. Gensler received 
those letters as well as others on the CFTC Board, and to my 
knowledge, we have not heard a formal response yet.
    Senator Roberts. I mean, have they even acknowledged that 
they received them?
    Mr. Armstrong. I would have to check with our national 
office.
    Senator Roberts. Well, I had an interesting talk with Gary 
Gensler. I made a speech on the floor where I mispronounced his 
name and----
    Chairwoman Stabenow. That did not help.
    Senator Roberts. No, it did not help at all.
    [Laughter.]
    Senator Roberts. He expressed his desire that it was a 
crucial need that CFTC needs somewhere between 200 to 300 more 
lawyers----
    [Laughter.]
    Senator Roberts. and that did not go down very well. At any 
rate--with parking spaces.
    [Laughter.]
    Senator Roberts. That means they stay there. That is the 
problem.
    All right. On page three, you are talking about a moderate 
increase in land values. Tom Hoenig used to be our Kansas City 
Fed Chairman, the only guy who testified before the Fed to quit 
using the Fed's money to try to keep pace with the economy, a 
lone dissenter. He is a little worried that we might see a 
repeat of the 1980s, and Lord knows you went through that. A 
lot of that depends on the weather, just all sorts of things, 
all of the variables. What do you see out there? You say it is 
moderate. Where are we going?
    Mr. Armstrong. In Michigan, and this is not to be an 
evasive answer, but talking to one of our chief appraisers 
recently, I asked him the same question about values in the 
State, and he said, ``Dave, it is zero to 25 percent in 
Michigan.'' We have areas of this State where we have less 
productive soils. We have areas that are closer to the urban 
populations of this State, where development pressures have all 
but evaporated. So poor soil, smaller size parcels, and those 
parcels close to urban areas, we have seen very little in terms 
of escalating land values. In the very strong ag areas of this 
State where we have highly productive soils, large tracts, 
highly competitive neighborhoods, that is where we are seeing 
some of the 25 percent increases.
    And so when you kind of average that out across Michigan 
because of the diversity that we have, in general, we would say 
land values overall are more moderate. If we were in the middle 
of your Fed district, they probably would be north of moderate, 
certainly.
    Senator Roberts. Mr. Reid, you installed those solar panels 
and figured out that without the REAP program, that they would 
have paid off in 28 years, $5,000 a year, I think, as I recall. 
But with the REAP program, you were able to make that work in 
four years' time, is that correct?
    Mr. Reid. That is correct.
    Senator Roberts. All right. Do you think we will ever see a 
day when the solar energy program can stand on its own two 
feet? Do not misunderstand me, I am not criticizing the 
program. I hear that a lot.
    Mr. Reid. Well, I think the cost of these panels will 
probably go down as more of them are produced.
    Senator Roberts. Sure.
    Mr. Reid. I would assume that is going to happen. And I 
think the cost of electricity that you and I pay for every 
month is probably going to increase. So between those two 
factors, we will probably see some improvement in the cost, in 
the initial cost of that program. Other than that, I cannot 
give you a foreseeable answer----
    Senator Roberts. Well, it is a hard thing to figure----
    Mr. Reid. Yes.
    Senator Roberts. --and I am not asking you to do that. But 
down the road, that would be the hope, of course----
    Mr. Reid. Yes.
    Senator Roberts. --if, in fact, that would take off. The 
same thing with wind power. The President says we can do this 
in 2012, upwards of ten percent. Do you think we can make that?
    Mr. Reid. It is going to be tough. I actually think that 
maybe on a more residential usage of this, I think that is 
where you are going to see the growth. These panels can be put 
on, they can be mounted on roofs of houses, for example. They 
have to be on a north-south orientation, I guess, or they can 
be ground mounted. There are several alternatives. But they 
can--I think they can--I think I see more use in the 
residential field, at least on a widespread basis.
    Senator Roberts. I appreciate that. Thank you very much.
    Mr. West, welcome to Garden City, as in August when you 
have the family reunion. That is in Kansas, by the way, folks. 
His wife is from Kansas, and so he grabbed one of our 
sunflowers and brought her up here.
    [Laughter.]
    Senator Roberts. You mentioned the five Cs in regards to 
capital resources investment, or whether you are talking to 
your friendly hometown banker or whatever lending institution, 
and the one that really stood out, you indicated, was 
character, especially, and we talked about young farmers and 
the Chairwoman talked about that. How does a banker evaluate 
character, especially what we have been through in regards to 
who got loans and who was able to pay them back and et cetera, 
et cetera, with Freddie and Fannie and so on and so forth? And 
what is your experience with that? I mean, how did----
    Mr. West. Well, as an alternative lender, character matters 
a great deal to us. So partially, what we will do, since we are 
doing so many start-ups, is we will go through a series of 
asking a business person to do more research to help us 
understand where they are trying to go. And as they go and 
perform more research, it is a great indicator of their 
commitment, and largely that is what we are investing on, is 
their character and their commitment.
    Senator Roberts. So it is what Mr. Armstrong indicated when 
a farmer wants to hop on the tractor and go farm as opposed to 
sitting down and saying, okay, what is your plan? What is your 
financial plan? Where are you in five years, et cetera, et 
cetera?
    Mr. West. Well, we look at all the same things.
    Senator Roberts. Right.
    Mr. West. It is just that as an alternative lender, we are 
going to do the loans the banks cannot do, should not do, or 
will not do.
    Senator Roberts. All right.
    Mr. West. And as such, that means that almost anything we 
are going to get into has either had a credit blemish-- often, 
those credit blemishes were because of health issues, they have 
had a collateral challenge that they cannot overcome with 
respect to the bank, or there is not enough equity initially to 
get started. So those are the gaps that we try to fill. So it 
is incumbent upon us to really understand character and really 
get focused on----
    Senator Roberts. Well, thank you for your efforts. I know 
that is a difficult job.
    Mr. Davis, what can we do to get more folks in the private 
sector to invest in the Double Up Food Bucks Program in regards 
to SNAP folks?
    Mr. Davis. Well, I would say that it can be seen as an 
economic generator. If we are able to convince businesses that 
by providing more buying power, spending power, by some of our 
citizens that have less resources, then that would really 
create an economic impact----
    Senator Roberts. Do you have an outreach program with 
Chambers of Commerce and other business groups or other civic 
groups, et cetera, et cetera, to step up to this?
    Mr. Davis. Well, the United Way does not per se. We were a 
contributor to the Double Up Food Bucks. That was really being 
driven by the Fair Food Network, and I know that Oran 
Hesterman, the Chair of the Fair Food Network, has done a 
really good job of encouraging buy-in from local businesses and 
other advocates around----
    Senator Roberts. The SNAP Program is going to have to 
stretch that dollar a little bit more. We had the same program 
in Kansas with the farmers' markets. So I wish you well and I 
hope that you can get a good outreach program to have more 
success.
    Mr. Davis. Thank you.
    Senator Roberts. Flipping very quickly here, Ms. Holt, 
Secretary Vilsack just last week, I think, testifying before 
our committee, cautioned against us being too prescriptive with 
programs, more especially with organic, and said perhaps there 
are other programs available at the Department, particularly in 
the area of research and conservation, for which organic 
growers can utilize in similar fashion. That is just a 
statement by the Secretary. Do you have any comments?
    Ms. Holt. I just--that because of the regulatory oversight 
that exists with the organic program, it is necessary to make 
sure that that funding is there so that they can do the job 
that they need to do. So that is a specific program. Certainly, 
organic can take advantage of some of the other programs within 
the farm bill, but the National Organic Program does need its 
own funding----
    Senator Roberts. I sure would like to have a nice visit 
with you, because I went through that controversy on what is 
organic and what is not. Dan Glickman from Kansas was 
Secretary. He says it is one of the worst times he ever had, 
trying to figure out from organic producers what is organic, 
what is not, and the label and all of that, and I know that is 
always a chore for you, but just let me indicate my interest in 
that and the Chairwoman in that.
    Let me see, here. How are you getting along with those 
wolves out there, Ms. Serfass?
    Ms. Serfass. Directly on our property, we have not had too 
many wolves. I did see one, oh, within a mile of our property, 
but we just had a nice little stare-down and he went his way 
and I went my way. And I was in the car, thank heavens.
    [Laughter.]
    Senator Roberts. Right. So you are not in the wolf- raising 
business----
    Ms. Serfass. No.
    Senator Roberts. All right. Okay. EPA regulatory action as 
it relates to clean water permits--since the 1970s, EPA 
regulations have interpreted the Clean Water Act to define most 
forest management activities as non-point sources, therefore 
not requiring NPDES permits, long permit. If EPA advances this 
regulatory action, this is proposed and will no longer consider 
forest management as a non-point source. How would this new 
permit requirement affect the way you and other private forest 
land owners manage your land? What costs would be associated? 
What challenges will you face in the future, none of which are 
good?
    Ms. Serfass. I am not exactly sure what that whole permit 
is all about----
    Senator Roberts. That is the point.
    [Laughter.]
    Ms. Serfass. I do not know----
    Senator Roberts. Welcome to the world of Washington 
regulatory nonsense. I mean, you are going to wake up to it on 
a Thursday morning, when all of a sudden you are going to get 
something in the mail.
    Ms. Serfass. I do know that the last time we had a logging, 
they were talking about that each time they are going to a 
different property, they are to make sure that their equipment 
has been totally cleaned down, because we have been having 
problems with garlic mustard being spread very easily----
    Senator Roberts. Right.
    Ms. Serfass. --and other invasives----
    Senator Roberts. I am not sure that is EPA, as opposed to 
the State----
    Ms. Serfass. I am not sure of this, either----
    Senator Roberts. --but this permit, I want to get at this 
permit. I want you to get educated and I want you to get 
involved with whatever associations you have to weigh in on 
this because that is another thing we do not need, big time. 
And I appreciate your saving your aspens. I love aspens.
    [Laughter.]
    Senator Roberts. You must have a beautiful place.
    Ms. Serfass. Thank you.
    Senator Roberts. You went on that property to make a home, 
and you not only made a home, but you contacted your forester 
and so on and so forth. I was a little struck that only 13 
percent of the people that have forest ground are into that 
program, know anything about it, really, in Michigan. I do not 
know what it is nationwide. But thank you, and thank you for 
your example. I think it is wonderful.
    Ms. Serfass. Thank you.
    Senator Roberts. I appreciate it, Madam Chairwoman.
    Chairwoman Stabenow. Thank you very much.
    Well, we have come to the end of our time for the hearing. 
I am going to ask each of you to follow up--I will not ask you 
the question today, but as we look at various programs, various 
efforts, one question I have is how can we do a better job or 
help you do a better job working across the lines or reducing 
the lines between various parts of the farm bill. I know there 
are areas where definitions are different as to what is rural. 
I mean, how do we streamline those things? How can we create 
more flexibility so that you have the opportunity to meet your 
goals and do the best job that you can, and that is part of 
what we are going to be doing in this farm bill, is focusing on 
how to streamline, how to take away the paperwork that Senator 
Roberts is talking about, how to streamline, how to be able to 
create more flexibility when it is appropriate and be able to 
work across lines so that we are growing those fruits and 
vegetables and making those available, Mr. Davis, and being 
able to do the kinds of things that we can do by working with 
all parts of agriculture. So we are going to ask for your input 
as we go along to be able to do that.
    We have had a really terrific opportunity today. I want to 
thank all of your for your input. And I want to thank not only 
Michigan State, as always, but I want to thank our staff, as 
well, who have done a terrific job. A lot of work goes into 
putting this together, and Chris O'Donnell [phonetic], my 
Director of our staff, and Mike Seaford [phonetic], who is on 
Senator Roberts' staff, as well, I know you join me in thanking 
both of them.
    For purposes of everyone in Michigan, I just want to make 
sure that you know on our staff who is here. Jonathan Coppis 
[phonetic] is here, who has done a lot of our work on Title 1, 
the commodities, and all the budget. It is your fault, Jonathan 
and Chris, on the budget here, making this all add up. Joe 
Schultz [phonetic]--where is Joe--also working on those issues, 
as well. Tina May [phonetic], who is working on conservation 
and a number of other issues. Jacqueline Snyder [phonetic], who 
is our specialty crop person, as well as nutrition and so on. 
And Kelly Fox [phonetic] from our Michigan local regional 
manager. I do not know if Mary is here, as well. We have got 
our other regional folks here, as well. So we want to thank 
everyone that is involved in putting this together. It takes a 
lot of hard work to put together a field hearing like this and 
we appreciate all the staff's response.
    This is field hearing one. We have more to do. We are in a 
process that will take the rest of the year and into next year 
as we go through, both in D.C. and around the country, and for 
me, around Michigan. We will be doing a number of sessions, 
continuing to sit down with community leaders and local growers 
and so on around the State. But this all adds up to giving us 
the information we need and the input we need so that as we sit 
down next year to put together the farm bill, we have got the 
very best input possible and the very best ideas.
    So thank you very much for coming. Thank you to our 
wonderful panel here.
    [Applause.]
    Chairwoman Stabenow. Thank you. We are officially 
adjourned.
    [Whereupon, at 12:12 p.m., the committee was adjourned.]
      
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