[Senate Hearing 112-287]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 112-287
 
                             LOOKING AHEAD:
                     KANSAS AND THE 2012 FARM BILL

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

                             FIELD HEARING

                               before the

                       COMMITTEE ON AGRICULTURE,
                         NUTRITION AND FORESTRY

                          UNITED STATES SENATE


                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION


                               __________

                            AUGUST 25, 2011

                               __________

                       Printed for the use of the
            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

                              ----------                              
                                                                   Page

Field Hearing(s):

Looking Ahead: Kansas and the 2012 Farm Bill.....................     1

                              ----------                              

                       Thursday, August 25, 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.........     1

                                Panel I

Brownback, Hon. Sam, Governor, State of Kansas, Topeka, KS.......     6
Schulz, Kirk, Ph.D., President, Kansas State University, 
  Manhattan, KS..................................................     8

                                Panel II

Baccus, Steve, Kansas Farm Bureau, Minneapolis, KS...............    13
Esping, Karl, Kansas Sunflower Commission, Lindsborg, KS.........    14
Goyen, Kent, Kansas Cotton Association, Cunningham, KS...........    15
Grecian, Ken, Kansas Livestock Association, Palco, KS............    17
Henry, Bob, Kansas Soybean Association, Robinson, KS.............    18
McCauley, Kenneth, Kansas Corn Growers, White Cloud, KS..........    19
Schemm, David, Kansas Association of Wheat Growers, Sharon 
  Springs, KS....................................................    21
Shelor, Gregory, Kansas Grain Sorghum Producers, Minneola, KS....    22

                               Panel III

Bach, Ron, Director, High Plains Farm Credit, Jetmore, KS........    32
Brinker, Kathleen, General Manager, Nemaha-Marshall Electric 
  Cooperative Association, Inc., Axtell, KS......................    33
Brown, Ron, President, Kansas Association of Conservation 
  Districts, Fort Scott, KS......................................    35
Crouch, Barth, Conservation Policy Director, Playa Lakes Joint 
  Venture, Salina, KS............................................    36
Tempel, Robert, General Manager, Windriver Grain LLC, Garden 
  City, KS.......................................................    38
Whitham, Jeff, Chairman and CEO, Western State Bank, Garden City, 
  KS.............................................................    39
Wilder, Karen, Scientific and Regulatory Affairs Director, The 
  Schwan Food Company, Salina, KS................................    40
                              ----------                              

                                APPENDIX

Prepared Statements:
    Baccus, Steve................................................    56
    Bach, Ron....................................................    62
    Brinker, Kathleen............................................    66
    Brown, Ron...................................................    81
    Brownback, Hon. Sam..........................................    85
    Crouch, Barth................................................    89
    Esping, Karl.................................................    97
    Goyen, Kent..................................................   100
    Grecian, Ken.................................................   103
    Henry, Bob...................................................   111
    McCauley, Kenneth............................................   116
    Schemm, David................................................   120
    Schulz, Kirk.................................................   123
    Shelor, Gregory..............................................   131
    Tempel, Robert...............................................   134
    Whitham, Jeff................................................   138
    Wilder, Karen................................................   141
Additional Document(s) Submitted for the Record:
Brownback, Hon. Sam:
    Change in Water Levels, Predevelopment to Averag 2009-2011, 
      Kansas High Plains Aquifer.................................   154
Crouch, Barth:
    Farm Bill Biologists in Playa Lakes Joint Venture............   155
    Playas and the Ogallala Aquifer-What's the Connection?.......   156
Tempel, Robert:
    Company profile containing various figures and photographs, 
      Windriver Grain LLC........................................   158
    U.S. Corn Production Pie Grows...............................   162
    Kansas Planted Acres.........................................   163



                             LOOKING AHEAD:
                     KANSAS AND THE 2012 FARM BILL

                              ----------                              


                       Thursday, August 25, 2011

                              United States Senate,
          Committee on Agriculture, Nutrition and Forestry,
                                                        Wichita, KS
    The Committee met, pursuant to notice, at 9:17 a.m., at the 
Hilton Wichita Airport, 2098 Airport Road, Wichita, Kansas, 
Hon. Debbie Stabenow, Chairwoman of the Committee, presiding.
    Present: Senators Stabenow, Roberts

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

    Chairwoman Stabenow. Well, good morning and we will call 
the Committee to order, the Senate Committee on Agriculture, 
Nutrition, and Forestry. It is my great pleasure to be here in 
Kansas with all of you. I have been very much looking forward 
to the opportunity to hear from you about what we can do to 
support agriculture in Kansas and rural communities, our great 
universities, and all those that help to strengthen agriculture 
for our country.
    It was my pleasure a while back to have the opportunity to 
host Senator Roberts in Michigan at Michigan State University, 
and I returned the favor today by wearing purple for Kansas 
State.
    [Applause.]
    Chairwoman Stabenow. I said, do not tell my friend at 
Michigan State, though. But it really is wonderful to be here, 
and I think before going farther in an opening statement, I 
will turn it over to Senator Roberts. I do want to say a 
special hello to the Governor, though, who we worked together 
on many things and, Sam, it is wonderful to see you, Governor 
Brownback, and, of course, Dr. Schulz, it is wonderful to have 
you here as well.
    But I am going to turn it over first to Senator Roberts.

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

    Senator Roberts. Well, thank you, Madam Chairwoman, for 
calling this field hearing today. Welcome to Kansas and welcome 
to Wichita. We are delighted to have you. I would just simply 
say that when I was in Lansing, Michigan, home of the Fighting 
Spartans, their colors are green and white. And I got this 
lovely green and white tie that I wear a lot.
    [Laughter.]
    Senator Roberts. But I promised her----
    Chairwoman Stabenow. Another one.
    Senator Roberts. I promised her, I promised her I would 
wear that green and white Spartan tie when Michigan State plays 
Nebraska, that is for sure.
    [Applause.]
    Senator Roberts. Before I begin my statement, I want to 
thank the 46th Governor of Kansas, my dear friend and 
colleague, Sam Brownback. We served together in the Senate for 
12 years and had a very unique and close relationship. Thank 
you for joining us, Sam. I know your schedule is very, very 
busy. We had served alongside the Governor, as I say, in the 
Senate.
    As a former State Secretary of Agriculture, why we are 
fortunate to have Sam's perspective on Federal farm policy. 
Seated next to the Governor is the 13th President of Kansas 
State University, home of the ever optimistic and fighting 
Wildcats, Kirk Schulz, Madam Chairwoman. You will be happy to 
know that President Schulz spent some time teaching in Michigan 
earlier in his career.
    Kansas State, like many of our Nation's land grant 
institutions, is vital to development and well-being of 
America's agriculture sector. The Research and Extension 
Services that are provided by these institutions, more 
particularly Kansas State, lay the foundation for our farmers 
and our ranchers and our agribusinesses. Thank you, President 
Schulz, for being here this morning.
    We are here to talk about the next farm bill and how Kansas 
farmers and ranchers, agribusiness, and rural communities are 
impacted by policies that are created in Washington, for better 
or for worse. Agriculture is the backbone of our state's 
economy. It provides roughly $15 billion worth of sales, 
according to the most recent census by the Department of 
Agriculture.
    Each year, each year Kansas has planted nearly 23 million 
acres to a variety of crops like wheat, grain, sorghum, corn, 
sunflowers, cotton, and potatoes. I do not know if we have 
anybody growing cherries here in Kansas, but if you do, raise 
your hand and you will get a big welcome from the Chairwoman.
    Well, Kansas is home to 2.8 million people. It is also home 
to over 6 million cattle, 1.8 million hogs and pigs, 120,000 
dairy cows, and usually they are in a better mood today than 
some of our producers.
    As we prepare for the reauthorization of the Farm Bill, it 
is important for us to begin by listening to these producers, 
those with the dirt under their fingernails, to provide the 
best perspective on the effectiveness of Government regulations 
and programs.
    Let me just say at the outset that we have, because of the 
time restraints, witnesses who I think will speak for all of 
agriculture, but if any individual producer out there wants to 
submit a statement for the record, it will be made part of the 
record. Simply give it to me or one of my staff and you can 
either email it, you can Twitter it, you can tweet it. Do not 
put in on Facebook. Or you can simply write it out on a yellow 
tablet--I still use that--and give it to us.
    Farm bills are not designed with one state in mind. They 
are national in scope because all that they must protect 
producers from all states at a base level. This year in Kansas 
is a case in point of a need for a strong safety net. Boy, did 
we find that out yesterday and what we have found out this 
year.
    I do not know what it is about Mother Nature. Here we are 
going from an earthquake yesterday to a drought today and some 
people are going back to Washington to a hurricane. This is a 
very unusual year.
    But anyway, our Kansas producers have experienced floods 
where they are still putting up sandbags on the Missouri as we 
are dealing with a drought in 70 counties. The Governor has 
asked the Secretary of Agriculture now for 70 counties being 
designated in regards to emergency status.
    Yesterday I led a drought tour to see firsthand the effects 
of Mother Nature. Tammy Oast's [phonetic] camp has already done 
that. The Governor has done that. Others have done that. And we 
wanted to do it as well. I have been working with the state and 
the USDA to find ways to provide necessary and responsible 
relief for our farmers and ranchers.
    We know that our programs face budget pressure, and they 
should. The Federal debt and deficit are out of control. All of 
the Department programs should be under consideration and a 
budget review. The Chairwoman agrees with me on that point. And 
the Agriculture Committees, with the best experience and 
knowledge of these programs, should lead in that effort.
    Agriculture faces a tough challenge ahead. Global 
population continues to grow at a rapid pace. We are going to 
exceed 9 billion people on this planet in the next several 
decades. That is a lot of mouths to feed. At the same time, 
emerging economies are demanding higher valued protein and 
grains.
    In order to meet this demand, agriculture must double our 
production. Some folks question the need for a Farm Bill with 
commodity prices where they are today. I do not have to tell 
this crowd that prices can fall much more quickly than they 
rise. And one thing about it, when you have good farm prices 
and you do not have a crop, that is sheer frustration.
    Without an adequate safety net, plenty of producers 
struggle to secure operating loans, lines of credit, cover 
input and equipment costs. We need those producers to stay in 
business if we are going to meet this global challenge and do 
so in a way in that protects our most valuable resource, our 
future generations.
    Thank you to all of our witnesses today. I know you are 
very busy. Thank you for taking time out of your busy schedule. 
I look forward to your testimony, along with the Chairwoman, 
and hearing not only about the Farm Bill, but also the impact 
of Federal regulations on your operations, the number one issue 
that I continue to hear about. It used to be, Did you read the 
bill? Now it is, Did you read the regulation? Now it is, Are 
you even aware of the tidal wave of regulations that are coming 
down the pike?
    So often I hear from producers that the heavy hand of 
Government intervention impacts them more than any other 
program. With this in mind, last week I sent the President a 
list of proposed regulations put forth by his Administration 
that impact our agriculture industry. I am hopeful that he will 
take a close look at them.
    By the way, the Chairwoman held our very first hearing with 
the head of EPA and with the Secretary of Agriculture on the 
impact of regulations. So I am hopeful that he will take a 
close look at the letter that I sent listing the regulations 
that you all have told me are simply counterproductive, and 
other regulations, and try to insert some good old Kansas 
common sense into these actions.
    Again, thank you to all of our witnesses today and those in 
the audience who have traveled a long way to be with us. We 
want to hear from you, too. Again, anyone may submit testimony 
by signing near the entrance, and then you can send us an email 
or drop off a hard copy by September 1 to be part of the public 
record. Thank you, Madam Chairwoman.
    Chairwoman Stabenow. Well, thank you very much, Senator 
Roberts, and let me emphasize again, we do want to hear from 
each and every one of you, and please submit in writing, if we 
are not hearing from you as one of the panels today.
    Let me also follow up and just emphasize again, I know all 
of you know this, but we need to say over and over again that 
the Farm Bill is a jobs bill. 16 million people in this country 
work because of agriculture, because thousands and thousands 
and thousands of people in Kansas and all around our country, 
one out of four in Michigan, jobs are in agriculture.
    And so, it is critically important, not just for producers, 
but for all of us to care about agricultural policy and having 
it be effective in this country. And certainly, farmers, 
ranchers here in Kansas know the importance of a strong safety 
net.
    You have been dealing, of course, with devastating 
droughts, too much water on one end, huge droughts on the other 
end, and I think if there ever was a time that it was clear or 
if anybody ever needed to be reminded about the risks that 
farmers face, they should be very aware of it this year, and 
the need for a strong safety net or effective tools to manage 
risk are critically important now more than ever and we are 
committed to working with you to do the very best we can.
    It is the top principle that we are focused on in the Farm 
Bill. But as we go into the process, let me just remind you 
that we are in a very serious budget situation, as you know, 
that is forcing us to look at the Farm Bill differently than in 
the past. We need to be evaluating everything the Government 
does, measuring every program, streamlining and consolidating 
programs.
    We have done that. We are doing hearings on that. We want 
to make it easier for you, not harder. If we can streamline and 
take away some of the paperwork, we certainly want to do that, 
like we did with the 1099 forms earlier this year, and we need 
your input on that as well.
    But we also know we have some tough choices ahead. There is 
no doubt that we are going to face another round of serious 
cuts in the deficit reduction process that has been set up. 
Agriculture has already taken substantial and, in my judgment, 
disproportionate cuts in the current budget. And Senator 
Roberts and I are working very closely to make sure that does 
not happen in the future.
    Let me just review the facts of what we are dealing with 
this year. The House of Representatives passed a bill earlier 
in the year that would have cut $48 billion in production 
agriculture's baseline. That did not have the votes in the 
Senate. Instead, Senator Roberts and I have worked very hard 
and successfully to create a process where our Agriculture 
Committees can recommend to the Deficit Reduction Committee 
what we believe should be the cuts and the policies related to 
that.
    As a result, the Deficit Reduction Agreement did not make 
any immediate cuts to agriculture, which, frankly, was a short-
term victory for us, to be able to create a process where our 
Agriculture Committees are the ones that are proposing the 
policies that make most sense for agriculture.
    But we also know that agriculture remains a target with 
this new super committee as they finalize their plans to reduce 
another $1.2 trillion in spending. Again, we know that the 
deficit is real. We know we need to tackle it. We know 
everybody in farm country and every rural community understands 
that they have to do their part like everybody else. But we 
also know it has got to be done right and that is what we are 
committed to doing, and it has got to be fair for agriculture.
    The process is that on the Committee, we have until October 
14th, which is not very long, to give this new committee our 
recommendations, so it is even more important that we are here 
today and that we can hear from you, because our staffs are 
working closely and effectively together to put together what 
it is that we will be recommending.
    Bottom line, I think it is clear that we in agriculture 
must make some tough decisions or somebody else is going to 
make them. And so, we are anxious to work with you to make sure 
we get this right. We know the Farm Bill is going to look a 
little differently than it has in the past, but we are asking 
everybody to look at again what is most effective, what do we 
need to do to make sure that we are strengthening our support 
for your efforts.
    We do not want to get bogged down in old arguments or 
bureaucracy, but we need to focus on what you need, what is 
most cost effective, what are the tools you need, what does the 
safety net look like. So we welcome your input. We need it. We 
need to hear from you so that we can get this right. What 
should an effective farm safety net look like? What are your 
priorities? What programs can be streamlined, consolidated? 
What does not work? What do we not need to be doing?
    This is not going to be easy, but I have a great partner in 
Senator Roberts and we have a great seasoned Committee, as he 
and I both emphasize to folks, with more former Chairs of 
Agriculture Committees and Agriculture Secretaries and 
Governors and the Chair of the Budget Committee and the Chair 
of the Finance Committee, and I think if there ever was a time 
when we had an experienced group of folks in the Senate to be 
able to focus on the right kind of agricultural policy, I think 
it is now.
    So I am confident that we can come up with common sense 
solutions that will support and strengthen American agriculture 
and rural communities, while helping to put our country on a 
better financial footing for years to come.
    So let me turn it back to Senator Roberts to introduce our 
first guest. And welcome again.
    Senator Roberts. Our first witness is his Honorable 
Governor of Kansas, Governor Sam Brownback.

   STATEMENT OF HON. SAM BROWNBACK, GOVERNOR, STATE OF KANSAS

    Governor Brownback. Welcome to Kansas. Delighted to have 
you here and looking with your purple on and this panel, we 
have a saying here, Every man a Wildcat, every man, woman a 
Wildcat. That would be true, I think, across this panel here. 
Probably true in the room, by and large, so we are delighted to 
have you here, delighted to have you in the state. You would 
welcomed to any K-State football games, too, that you would 
like to come to. Kirk----
    Mr. Schulz. Yes, I can work that out.
    Governor Brownback. We can work that one out. We ought to 
be able to handle that one.
    One quick observation. Glad to be on this panel and 
delighted to be with my former colleague, Pat, who I loved 
serving with and he is just a fun, knowledgeable guy. There are 
two people in this room, I would submit to the entire audience 
and to you, Madam Chairwoman, that no ag policy in this 
country, I would stack them against anybody in the country, in 
Pat Roberts and Barry Flinchbaugh that are sitting up here on 
the front row.
    These are two gentlemen that have been through, I do not 
know, how many farm bills, written them, and--six, seven farm 
bills, literally, that they have been through from staff member 
on up to chairing the Committee in the House, and you were 
right. We are going into this huge deficit time period.
    You are going to have to rewrite the restructuring of the 
Farm Bill and I cannot think of a better time to depend upon 
that expertise and get from the rest of the Congress, All 
right, here is the number, then how do we fit within this 
number, and that number is going to be lower than what it has 
been in the past. And we are planning at state government now 
for a substantially lower level of Federal money.
    Over half of our budget is Federal pass-through money, and 
I am telling everybody that in our departments, that number is 
going down and it is going down substantially and we should 
prepare for it, because the Federal deficit is completely 
unsustainable. Everybody knows that. And if we do not decide on 
this and do something about it, other forces will, whether it 
is market forces or somebody else on Appropriations or Super 
Committees or something like that.
    So I just think it is critical that we do that and you have 
got great expertise in my former colleague that I am delighted 
to be here on the panel to share with.
    I want to focus in a very brief period of time comments on 
one sector of the Kansas agricultural economy and that is the 
sector that is over the Ogallala Aquifer. And you have got much 
broader issues to deal with, but in the western third of our 
state is fossilized water, the Ogallala. It is a High Plains 
aquifer over several states and we have got a chart here 
somewhere, I think they are going to put up or we have got it 
back here, of the region and the decline in the Ogallala.
    Now, the significance of this is the region that it 
overlays, the 1st Congressional District of Kansas, which Tim 
Huelskamp was here, Pat used to represent that district, is the 
number one agricultural district in America. Now, I am sure 
some people in Michigan are going to want to check that number 
out and see if they are not in that, but I will bank that 
number with you. That is the number one agriculture-producing 
district in America for value of agricultural products.
    It is where much of the cattle herd of the United States is 
fed out. The people that eat beef in this country and around 
the world, they get it from there. We have an issue with the 
decline of this aquifer and we need to maintain the water and 
we need to conserve and extend it into its future.
    So at state level, we are looking at things we can do to do 
that. I am pushing that we move away from the use it or lose it 
doctrine of western water law in the State of Kansas and that 
we get away from this development policy because we need a 
conservation policy.
    We are looking at local management districts. We call them 
Intensive Groundwater Management Districts, and having these 
originated on a local basis. As you will see as well from this 
chart, the saturated thickness of that aquifer varies from 
region to region. It is different. The water does move, but not 
fast. It moves about a foot a day. But if you have got a well 
that you are pulling water from, it pulls from that region and 
the water does move, but not fast.
    We need to conserve and extend the Ogallala if we are to 
conserve and extend, and I want to see us grow the agricultural 
production in the 1st Congressional District. So I have put 
forward written testimony in front of you today of what we 
could use and would be very helpful in Federal farm policy to 
help us do that.
    One is a High Plains groundwater resource conservation 
program. No new Federal monies, but using the current funds to 
encourage the movement to dry land in some of this region 
because the water is over-appropriated in the Ogallala Aquifer 
and I described this in this particular piece.
    A second one that I think would be critically important to 
us, and Senator Roberts knows this issue better than anybody in 
America, is crop insurance for limited irrigation. Right now, 
your two options on crop insurance are full irrigation or no 
irrigation, dry land. You have got one of two options.
    Well, we really need a middle option here about, Okay, we 
cannot put on 18 inches of water this year of this aquifer. We 
can do six or 12, but you cannot get crop insurance on that, 
and you know that for so many people, if they cannot get crop 
insurance, I cannot get financing for this. So this is not 
going to happen.
    But that would help us tremendously and that is being 
discussed already with the USDA Risk Management Agency for a 
three-state pilot on this, our state, Colorado, and I think 
Nebraska is involved in that over the Ogallala region. It would 
be very helpful for us to be able to move that forward.
    The next is a currently existing program, the AWEP 
[phonetic] Program that has been used to pull some irrigated 
land out of production. That needs some more flexibility for us 
to be able to work. That was put in the 2008 Farm Bill. It has 
been of some use. We think it needs to be used not only to 
implement for foregone income, but to provide incentive 
payments for this transition in a period of time, and we have 
put forward specifics here that we have worked through as a 
state.
    And then finally, as far as specific recommendations, and I 
think Dr. Schulz will go into this more, we need agricultural 
research into low water areas, or what we can do with lower 
water amounts, and the one that quickly comes to mind is in the 
grain sorghum field. We need more crop variety development.
    And I might suggest to you a different route of doing crop 
research. One of the things we have had difficulty with is, we 
will do the research, but getting it out--a seed variety out to 
farmers is a tough high-cost thing.
    Maybe we could put some of our agricultural research in 
this and with private companies to develop these varieties, 
these grain sorghum varieties, or having scientists at Kansas 
State University work with a private company to develop the 
varieties, so we do not have this huge gap between research and 
what I can plant in my field, because what our guys need, 
ladies and gentlemen need, we need the varieties.
    We need these that are drought tolerant, that can produce 
on less water, and we need it now. We need it yesterday. And to 
get that partnership and do it with a private company, along 
with the K-State land grant involved in it as well, those 
partnerships are starting to develop in other areas and would 
be very useful in crop production, the crop industry, crop 
variety development.
    I am delighted to join with you. This is a narrow piece of 
a big Farm Bill you have to consider, but on our issues of 
water over the most productive agricultural district in 
America, this is probably the biggest thing you could help us 
out with. Thanks so much.
    [The prepared statement of Governor Brownback can be found 
on page 85 in the appendix.]
    Senator Roberts. Thank you, Sam, for your testimony. Let me 
indicate that the Topeka regional office for RMA, the Risk 
Management Agency, and Rebecca Days is the person that we have 
been working with there, and that has now gone to the 
Washington level for a limited irrigation crop insurance 
program, just as you have recommended. The plan would allow 
farmers with limited water resources to ensure their crop 
yields between the irrigated and the dry land levels with the 
use of limited irrigation.
    We have sent a letter to the RMA. We have been in touch 
with the RMA. I will be calling the RMA urging them to consider 
this new program as quickly as possible, and I want to thank 
Rebecca for all of her help.
    It is my pleasure now to introduce our second witness, the 
President of the Kansas State University, Dr. Schulz.

   STATEMENT OF KIRK SCHULZ, Ph.D., PRESIDENT, KANSAS STATE 
                           UNIVERSITY

    Mr. Schulz. Thank you. It is a real pleasure to be here 
this morning. I appreciate the opportunity to speak on behalf 
of Kansas State University.
    Chairwoman Stabenow. it is indeed my pleasure to welcome 
you on behalf of Kansas State University, to Kansas, the 
heartland of our great country. We are pleased to have you in 
our state and we thank you and value your leadership and the 
work of this important Committee.
    To Senator Roberts, welcome back home. I am pleased to tell 
you that Coach Snyder has told me, we will throw to the tight 
end more this season. So I wanted to be sure that my testimony 
was particularly relevant to the things you were interested in 
besides agriculture.
    [Laughter.]
    Mr. Schulz. As you know, Senator Roberts, Kansas State 
University has long been an active player in agricultural 
science, animal health, and plant sciences. This research 
indeed is one of the University's premier areas of expertise 
and was one of the key factors in the locating, by the 
Department of Homeland Security, the National Bio and Agro-
Defense facility in Manhattan, Kansas on the campus of Kansas 
State University. NBAF will be next door to the University's 
state of the art, biosafety level three research facility as we 
affectionately know it as Pat Roberts Hall.
    This is home to the University's Biosecurity Research 
Institute which will provide an important transition for 
research from Plum Island to NBAF when it is complete and built 
in Manhattan, Kansas.
    Also this morning, I would like to welcome our valued 
friends and stakeholders to this hearing. Without question, 
this group represents a broad range of interests that are all, 
in one way or another, affected by the health and vitality of 
Kansas and U.S. agriculture. These folks have been and will 
continue to be key leaders ensuring a safe and secure food 
supply, not only for Kansas and the Central Plains, but indeed, 
our nation and the world as well.
    It is also my pleasure to testify on a panel with Governor 
Sam Brownback, a noted agricultural leader in our state and 
nation, and former student body president at Kansas State 
University. Thank you, Governor Brownback, for your service to 
agriculture and the State of Kansas.
    I would like to direct my comments now a little bit towards 
the 2012 Farm Bill. It is indeed fitting and appropriate that 
these hearings begin in states where agriculture remains a 
major force in the economy. Agriculture and related food system 
enterprises are indeed drivers of the Kansas economy.
    In Kansas, the value of commodity cash receipts from 
agricultural products is about $12 billion annually. Roughly 53 
percent of that value is from livestock, in particular beef 
cattle. The livestock inventory on January 1st, 2001 [sic] 
reported 6.3 million cattle and calves, ranking Kansas second 
in the nation in that category. Indeed, cattle outnumber the 
citizens of Kansas by over two to one, with 2.8 million 
residents, and you can win a whole lot of Trivial Pursuit games 
by knowing that particular fact.
    In support of the beef cattle inventory in the state, 
Kansas is one of the leading states in numbers of cattle and 
feed, and it leads the nation in meat processing capacity. 
Kansas continues to be a national leader in both wheat and 
sorghum acres, and in grain-milling capacity.
    Because agriculture and related food industries are central 
to the Kansas economy, this testimony and the content of the 
2010 Farm Bill are of keen interest to Kansans, land grant 
institutions, and the many industries that the Farm Bill 
affects in our state.
    Kansas State and Michigan State maintain a friendly banter 
around which school was the first and which school the second 
land grant university. I can answer that question for you. We 
do not have to go anywhere else.
    [Laughter.]
    Mr. Schulz. That particular debate, however, has historic 
significance in that 2012 will mark 150 years since the signing 
of the Merrill Act and the establishment of the land grant 
system which, by any measure, has had a great effect on this 
country, both educationally, through ag, through research and 
extension, and I think is one of the reasons really the U.S. 
has been so competitive in this area.
    The partnership that has developed between the states and 
the Federal Government with the enactment of the Merrill Act, 
and subsequently the Hatch and Smith-Lever Acts, provide a 
broader access to higher education and application research 
findings on and off campus. Efficiencies that have been 
achieved or knowledge generated by research and communicated to 
producers through extension programming have been a solid 
investment of public resources and will continue to really 
affect the future of agricultural research in this country.
    Public investment in agricultural biosciences is leveraged 
to maintain an abundant and safe food supply, sustainably use 
natural resources, and promote healthy communities. Therefore, 
we encourage the Committee to craft language that increases the 
authorization for capacity funding of Hatch, Smith-Lever, 
Extension Services of the 1994 Institutions, the Evans-Allen 
Program, which is 1890s research, 1890 Institutions Extension, 
and McIntire-Stennis Cooperative Forestry.
    So let us look back very quickly at the 2008 Farm Bill 
which really had some important language in the form of the 
innovative proposal referred to as Creating Research, 
Extension, and Teaching Excellence for the 21st Century, or 
simply Create 21.
    Some important elements of Create 21 are as follows: 
Following enactment of the 2008 Bill, funding for AFRI, which 
is the Ag and Food Research Initiative, grew from $191 million 
in fiscal year to $262 million in fiscal year 1. However, that 
funding remains far short of the $700 million that was 
authorized in the 2008 Farm Bill and could be a target of 
budgetary cuts as Congress continues to pressure reductions in 
discretionary Federal spending.
    Like many land grant universities, Kansas State University 
relies heavily on extramural funding from USDA to drive 
research and outreach programs in support of the food system. 
In 2009, nearly one-third of all external awards coming to 
Kansas State University were from the U.S. Department of 
Agriculture.
    Therefore, for our scientists to continue to multiply 20-
fold, the Federal investment in agriculture research and 
discovery for certainly the good of Kansas and the U.S 
economies, AFRI must grow to meet that $700 million expectation 
to make sure that we are continuing to move forward in research 
and extension.
    One of the things, too, that has been a very popular 
political discussion has been earmarks and the bridges to 
nowhere controversy. However, Federally-directed funding in the 
agricultural sector has generally resulted in tremendous public 
good.
    There are lots of examples that every land grant 
institution could lay out there of where these congressionally-
directed dollars have had a substantive and important impact on 
the states, and make sure that they are directing dollars 
towards issues of importance in that particular region and 
state.
    A few things out of Kansas State University that have 
resulted from these congressionally-directed dollars include 
the Wheat Genetics and Genomics Research Center which has been 
funded through earmark appropriations since 1984. The genetic 
tools derived from this collection have been deployed around 
the world and contributed significantly to the development of 
high-value wheat germplasm.
    The Governor already talked a lot about the aquifer and 
those particular issues in the western part of the state, and 
water use efficiencies and things like that are also the type 
of research done through the land grant institutions that will 
form the basis for continued agricultural success in these 
areas.
    Food safety, pre-harvest work focused on E. coli, a major 
cause of food-borne illnesses in humans in the United States, 
again through congressionally-directed funding. And finally, 
the Great Plains Sorghum Improvement and Utilization Centers, 
truly one of the pride of Kansas State University, is the 
largest consortium of multi-disciplinary sorghum researchers 
covering all aspects of research and education from genomics 
through utilization and economics.
    All these programs, formerly funded by earmark 
appropriations, have yielded tremendous results that provided 
excellent benefits to the citizens of Kansas and beyond. We 
encourage language in the 2012 Farm Bill that authorizes 
appropriations to restore these important programs.
    We understand the need for Federal spending priorities, but 
these programs are investments that are good for Kansas and 
good for the nation. We also are very, very proud, and a part 
of the land grant institutions across the country are 
extension. Our research and extension professionals throughout 
the state deliver solutions to the folks in the field, bring 
the research to bear, and make sure that we are continuing to 
make great advances in agricultural research and extension, not 
only in Kansas, but elsewhere.
    Just a few ways that our extension service continues and 
has delivered solutions in Kansas include work on watershed 
protection and improvement. Solutions for rural communities, 
which our Governor has led some really exciting initiatives to 
try and make sure that we are doing everything we can to 
support our rural communities.
    4-H. This is a tremendous program. Kansas is very proud of 
our 4-H program, and this involves a lot of young people, 
getting them interested in agriculture, but preparing those 
leaders for tomorrow that will be so important as our nation 
looks forward.
    Air quality solutions for beef feed yards. Improved health 
and well-being for individuals of all ages. And I could go on 
and on about the terrific things that research and extension 
professionals do in Kansas and across the country.
    It is my hope that this testimony captures the enduring 
optimism and can-do spirit that has been a common thread 
connecting almost 150 years of history in the land grant 
university system. That thread is a valued service to the 
clientele of that system. Faculty and staff at Kansas State 
University and land grant universities across the nation 
recognize that their work takes place on behalf of the greater 
good, a broader goal, and a common vision that is much bigger 
than their individual achievements.
    Members of the United States Senate Committee on 
Agriculture, Nutrition, and Forestry can be confident that 
every dollar of Federal investment authorized by the 2012 Farm 
Bill and expended at Kansas State University will be a wise and 
lasting investment.
    That investment is guaranteed to be leveraged further and 
to spawn innovation, discovery, and creativity that will be 
translated into solutions to improve the lives of Kansans, the 
lives of people in the Midwest, our country, and the world.
    I thank you for this opportunity to provide testimony and 
wish you the best of luck.
    [The prepared statement of Mr. Schulz can be found on page 
123 in the appendix.]
    Senator Roberts. Thank you, Dr. Kirk, and thank you, 
Senator Brownback. I know that you have a very busy schedule. 
You are certainly welcome to stay for all of the hearing and 
hear all the witnesses, should you choose to. You are excused 
and we are ready for the second panel.
    Chairwoman Stabenow. Thank you very much. We do want to ask 
our panelists to come forward now as quickly as we can. We want 
to make sure we have ample time to hear from everyone and to be 
able to ask questions of you. Please come forward.
    Senator Roberts. Our second panel is being greeted by the 
Chairwoman. Mr. Steve Baccus of the Kansas Farm Bureau; Mr. 
Karl Esping, the Kansas Sunflower Commission; Mr. Kent Goyen of 
the Kansas Cotton Association. I like to think I had something 
to do with that.
    Mr. Ken Grecian, the Kansas Livestock Association; Mr Bob 
Henry, the Kansas Soybean Association; Mr. Kenneth McCauley of 
the Kansas Corn Growers; Mr. David Schemm, the Kansas 
Association of Wheat Growers way out there in Sharon Springs; 
Mr. Greg Shelor of the Kansas Grain Sorghum Producers from 
Tineola.
    Gentlemen, you may start and we can start with Steve 
Baccus. Mr. President?
    Chairwoman Stabenow. I would just remind, at this point--
and again, welcome. We have asked each of you to speak for four 
minutes. We certainly want any written testimony that you have, 
but because of the number of people that we have today, we are 
going to ask you to keep your statements to four minutes. Thank 
you.
    Senator Roberts. Madam Chairwoman, if I could, I would like 
to have the representative from the big 1st District, who is 
here sitting on the front row, Mr. Tim Huelskamp, our 
Congressman from the 1st District. Tim, would you please stand? 
Thank you for coming.
    [Applause.]
    Chairwoman Stabenow. Welcome. Glad to have you.
    Please.

         STATEMENT OF STEVE BACCUS, KANSAS FARM BUREAU

    Mr. Baccus. Madam Chair, Ranking Member, thank you for 
coming to Kansas and for the opportunity to provide comments to 
this Committee. My name is Steve Baccus. I am a producer from 
Minneapolis, Kansas. My operation consists primarily of corn 
and soybeans, and we do occasionally grow a little wheat.
    I have the privilege of serving as President of Kansas Farm 
Bureau, the State's largest general farm organization. Kansas 
Farm Bureau represents nearly 40,000 families who work each day 
to grow crops and livestock that travel around the globe to 
feed this hungry world. Our grassroots organization can be 
found in every one of the state's 105 counties.
    As you well know, these local entities are the foundation 
of our organization and the starting point for our policy 
development process. Our member-adopted policy generally 
supports development of the next Farm Bill that preserves the 
principles of the 2008 Bill. However, these are challenging 
times, so concerted efforts to determine which programs have 
broad support as well as deliver the best return in terms of 
providing a strong safety net as well as ensuring fiscal return 
need to be our focus.
    Madam Chair, let me cut to the chase. There are essentially 
two items that I would like to leave you with today that are 
critical to American agriculture. American agriculture relies 
on a strong safety net. In today's market, that consists 
primarily of crop insurance as well as the direct payment.
    As you know, crop insurance allows us to manage risk and 
protect revenue on our farms. Depending on who you ask, recent 
cuts to crop insurance and changes in the SRA have resulted in 
between $12 and $20 billion in savings. You probably also know 
that are additional cuts will result in either increased 
premiums to producers or reductions in the number of products 
available. We cannot afford this kind of weakening of the 
safety net in today's market.
    As you heard, we in the Midwest have been experiencing a 
record drought this summer. In fact, you do not have to drive 
too far from this hotel to observe first-hand those conditions, 
as many of your staff did yesterday. That weather reality 
illustrates the need for the continuation of direct payments 
used by producers to continue operations when markets or Mother 
Nature are not so kind.
    They also provide stability for younger producers to enter 
our very capital-intensive business. So supporting a strong 
safety net, Madam Chair, is Job 1.
    American agriculture can remain viable and sustainable only 
when given the opportunity to operate in an environment free 
from burdensome and costly regulations. Currently, Federal 
agencies have proposed rules or are drafting guidance on a 
significant list of topics which will quite literally make 
continuing the family farm a daunting task.
    I know this is a Farm Bill hearing, but efforts to inject 
common sense into regulatory schemes will go far in ensuring 
that we as producers can continue our efforts to provide safe, 
affordable, and abundant food both at home as well as abroad.
    In short, we are grateful for your service and commitment 
to Kansas and to American agriculture. We look forward to the 
opportunity to work with you and the Committee to craft a farm 
bill that keeps producers profitable as well as competitive. 
Thank you and I would be happy to take questions at your 
convenience.
    [The prepared statement of Mr. Baccus can be found on page 
56 in the appendix.]
    Senator Roberts. Our next witness is Mr. Karl Esping of the 
Kansas Sunflower Commission. Thank you, Steve, for summarizing 
so quickly.

     STATEMENT OF KARL ESPING, KANSAS SUNFLOWER COMMISSION

    Mr. Esping. Thank you, Chairwoman Stabenow, Senator 
Roberts, distinguished members of the Committee, welcome to 
Kansas. My name is Karl Esping. I am a fifth generation farmer 
from McPherson County, which is about an hour north of here. 
And I am sure pleased that you have chosen Kansas as a venue to 
listen to the impact of the Farm Bill hearings.
    Although I am Chairman of the Kansas Sunflower Commission 
and a member of the National Sunflower Association, I am here 
today representing myself and fellow oil seed producers in 
Kansas. Some quick facts about sunflowers. Kansas plants about 
125,000 to 150,000 acres per year. In 2011, USDA has estimated 
1.8 million flowers are planted nationwide, of which about 80 
percent of these are planted to oil seed varieties.
    Most of these flowers are grown in the eight Midwestern 
states, as we affectionately call them, the High Plains. Farm 
Bill programs, and particularly the Risk Management programs, 
are a vital food security mechanism that keeps American food 
safe and affordable. Kansas producers are a part of that 
industry that has a positive trade balance. More importantly, 
these programs keep American agriculture successful and give 
producers a much-needed safety net.
    As we look at the future of the Farm Bill, cuts in funding 
are eminent. However, I hope the appropriators in Washington 
will allow your Committee the opportunity to determine how 
these funds are distributed. The expertise and ag backgrounds 
of the Committee members will be extremely important as the 
limited resources are being distributed.
    As you look at the priorities of the Farm Bill, please 
consider that producers need a safety net for crop failure. 
Crop insurance has been and still is the best tool for these 
situations. I feel that full funding for the Crop Insurance 
Program is of the highest priority for oil seed growers. Both 
production and revenue protection insurance products are 
important options. I encourage the Committee to continue the 
flexibility currently found in Federal crop insurance.
    Conservation programs are also very important. Flowers are 
generally a part of a robust no-till rotation, a practice which 
has gained wider acceptance through EQIP funding.
    Direct payments and market loan programs are also important 
pieces of the Farm Bill. Direct payments provide the financial 
security needed for producers to remain in business. Market 
loan programs serve an equally important role in sustaining 
producers. These loans allow debt repayment while still being 
sensitive to market trends. Just as with all other programs, we 
see and understand the need for fair reductions.
    In the world of sunflower production, research is vital. We 
have talked about that already this morning. Although not 
directly tied to the Farm Bill funding, it is important for 
members of Congress and appropriators to understand how 
research helps agriculture producers keep up with the 
increasing demand for food in the world. The USDA ARS system is 
a key component of conducting genetic research and pest 
management.
    Partnerships with the National Sunflower group and its 
growers and the Kansas Sunflower Commission have provided vital 
funding through the ARS. These partnerships link ARS with 
Kansas State University and other universities in the Midwest. 
Over the last three years, $2.6 million has been invested by 
this partnership while USDA has invested approximately $6 
million.
    I understand there will be many more public interests 
lobbying your Committee for debt reduction actions. We still 
produce the safest and most abundant food worldwide. We need 
your support and we need your leadership in Congress to 
continue our tradition and our way of life.
    With the utmost respect to you and the difficult decisions 
that you have ahead, I would ask that you remember those of us 
who are out in the country that put food on the world's tables 
as you make these decisions. Thank you.
    [The prepared statement of Mr. Esping can be found on page 
97 in the appendix.]
    Chairwoman Stabenow. Thank you very much.
    Senator Roberts. Thank you very much, Karl. From 
Cunningham, Kansas, representing the Kansas Cotton Association, 
Mr. Kent Goyen.

       STATEMENT OF KENT GOYEN, KANSAS COTTON ASSOCIATION

    Mr. Goyen. Chairman Stabenow, Senator Roberts, thank you 
for this opportunity to discuss farm policy issues before this 
Committee today regarding the 2012 Farm Bill. I am Kent Goyen, 
a cotton and grain farmer from Pratt, Kansas. Our farm has been 
producing cotton since 1999 when cotton production came to 
Kansas.
    I am here today representing the Kansas Cotton Association 
and our 2,000 members who produce cotton or have cotton grown 
on their land in our 23 southern Kansas counties. Our cotton 
production is certainly not the cornerstone of Kansas 
agriculture. We are Kansas growers who have invested over $60 
million since 2000 in gins, warehouses, and cotton-specific 
farm equipment. Policy related to cotton and farm legislation 
is vital to us and to the commitment we have made to cotton 
production in Kansas.
    Nationally, cotton has a footprint of approximately 19,000 
growers who plant between 10 and 13 million acres in 17 cotton-
producing states. Direct and indirect employment within the 
cotton industry surpasses 420,000, and generates economic 
activity in excess of $100 billion.
    The debate over this legislation will take place in an 
environment of limited budget outlays and the perception that 
high prices negate the need for a safety net as well as trade 
policy negotiations. The Agriculture Committee is willing to 
contribute its fair share to deficit reduction, but reduction 
should consider savings already achieved and reductions should 
not dictate policy changes to the authorizing committees.
    Committees should be allowed to develop policy that 
complies with the mandatory reductions. Policies should allow 
farm programs to continue as a viable safety net. The WTO-
Brazil case puts cotton's marketing loan program and counter-
cyclical programs under special scrutiny. It is imperative that 
the framework agreement negotiated by the respective 
governments remain in effect until the 2012 Farm Bill is 
enacted and the dispute resolved.
    We believe effective farm policy should be market-oriented, 
allow for full production to meet the market demand, provide 
for an effective safety net, ensure availability of 
competitively-priced cotton domestically and internationally, 
encourage maximum participation without regard to farm size or 
structure.
    We support the 2008 Farm Bill's approach to cotton program 
and all its components, from the marketing loan to the direct 
and counter-cyclical payments. The centerpiece of the cotton 
program has been the effective marketing loan program. It 
provides a safety net for producers, but does not harm the 
competitiveness of cotton.
    It gives rural lenders the confidence they need to make 
critical operating loans available. It has been a lever to move 
other important reforms such as standardized bales and bale 
packaging, electronic warehouse receipts, and heightened 
standards for cotton warehousing and shipping.
    Direct payments are an integral part of the current farm 
safety net. Opponents look at high commodity prices and seek to 
cut or eliminate these payments. However, farm bills are 
written for the longer term and elimination of these payments 
could prove disastrous when prices fall.
    Direct payments provide a level stability for our food and 
fiber supply and financial stability required by lenders and 
suppliers without distorting production decisions. It is 
critical to preserve as much baseline spending authority as 
possible for this primary piece of the safety net.
    Crop insurance is an essential risk management tool for 
cotton producers. Our industry continues to examine concepts 
that improve the various cotton crop insurance products. 
Revenue coverage, enterprise policy rates, and group risk 
products are examples of improved products that can provide a 
menu of risk options for growers.
    The cotton provisions of the 2008 Farm Bill worked well. If 
policy changes are inevitable in the 2012 Bill, the cotton 
industry remains ready to work with the Agriculture Committees 
to explore alternative programs that provide the needed safety 
net to our industry in a manner that is consistent with our 
international trade obligations and within budget constraints. 
Thank you for this opportunity.
    [The prepared statement of Mr. Goyen can be found on page 
100 in the appendix.]
    Senator Roberts. Thank you, Kent. And if I just might make 
an observation, Madam Chairwoman, after '96, in a different 
kind of Farm Bill, we got into the cotton production and I am 
always fond of telling the National Cotton Council and my 
southern colleagues that when Stephen Foster wrote that little 
song, Those Old Cotton Fields Back Home, he was talking about 
Kansas.
    [Laughter.]
    Senator Roberts. Our next witness from Palco, Kansas, 
representing the KLA, Mr. Ken Grecian.

     STATEMENT OF KEN GRECIAN, KANSAS LIVESTOCK ASSOCIATION

    Mr. Grecian. Madam Chairman, Senator Roberts, my name is 
Ken Grecian. My wife and I have a grain and cow-calf operation 
in Graham County in northwest Kansas. I am President of the 
Kansas Livestock Association and also serve on the Board of 
Directors of the National Cattlemen's Beef Association, which 
KLA is an affiliate. I am very pleased to be with you today.
    KLA is a trade organization representing 5,600 members in 
legislative and regulatory issues. KLA members are involved in 
many aspects of the livestock industry, including seed stock, 
cow-calf and stocker production, cattle feeding, dairy 
production, grazing land management, and diversified farming.
    KLA members believe the livestock industry is best served 
by free enterprise and free trade. KLA members oppose attempts 
to narrow the business options or limit the individual freedom 
of livestock producers to innovate in management and marketing 
of their production.
    KLA strongly opposes the regulation commonly referred to as 
the GIPSA rule issued by the Grain Inspection, Packers and 
Stockyards Administration last year. In short, the U.S. 
producers are concerned the GIPSA rule would greatly expand the 
role of government in marketing livestock and eliminate 
producers' ability to benefit from their efforts to improve the 
quality of their livestock.
    The proposed regulations ultimately would remove from the 
marketplace products that consumers prefer. Producers have 
responded to consumer demand by finding innovative ways to 
develop and market premium quality branded products. Programs 
like Certified Angus Beef, U.S. Premium Beef, naturally-raised 
and others would be jeopardized.
    These alternative marketing arrangements have allowed 
producers to get paid for the value that they add. These 
arrangements ensure a consistent supply of livestock that meet 
requirements of such programs. Without these arrangements, 
neither these programs or producer alliances that support them 
are sustainable.
    KLA members believe that the proposed rule would set the 
beef industry back to a time when all cattle received the same 
average price and beef demand was in a downward spiral. How can 
a system that sells the entire show list for the same price 
each week be more fair than the current system that pays for 
the actual value of cattle?
    When prices for all classes of cattle have reached record 
highs this year, how can claims of market manipulation by 
packers or the lack of competition in the beef industry be 
taken seriously? We strongly urge you to take action to prevent 
the implementation of this rule.
    Senator Roberts, in June you asked my friend, Frank Harper, 
if he thought we needed a Livestock Title in the next Farm 
Bill. And I would say, No, thank you. The Livestock Title 
reminds me of the old adage, We are from the Government and we 
are here to help.
    KLA members believe free markets or markets free from 
Government interference best serve the beef industry. The 
Livestock Title only provides a home for misguided initiatives 
like the GIPSA rule; that we prefer that the Farm Bill does not 
restrict our marketing options or distort market signals.
    For any additional issues that affect livestock industry, I 
would ask you to refer to my written comments. And again, I 
thank you for the opportunity to be able to testify today. 
Thank you.
    [The prepared statement of Mr. Grecian can be found on page 
103 in the appendix.]
    Senator Roberts. Thank you, Ken. And now we turn, from 
Robinson, Kansas, representing the Kansas Soybean Association, 
Mr. Bob Henry.

       STATEMENT OF BOB HENRY, KANSAS SOYBEAN ASSOCIATION

    Mr. Henry. Good morning, Madam Chairwoman, Ranking Member 
Roberts. I am Bob Henry, a soybean farmer from Robinson, 
Kansas. I am a member and serve on the Board of the Kansas 
Soybean Association and I represent Kansas on the American 
Soybean Association Board of Directors. In that capacity, I am 
serving on the American Soybean Association's Farm Bill Task 
Force.
    The Kansas Soybean Association is pleased to provide our 
initial thoughts on priorities for the 2012 Farm Bill. I want 
to highlight the significance and value of soybean production 
to the economy in Kansas. In 2010, Kansas produced 
approximately 138 million bushels of soybeans, making it the 
9th largest soybean producing state in the country.
    At an average price of $12 per bushel, the farm-gate value 
of soybeans produced in Kansas in 2010 exceeded $1.6 billion. 
Soybean products provide additional value to Kansas as well. 
Soy meal is used for livestock production and soy oil is used 
for bio-diesel, as well as bio-based products. Some bio-based 
products have been developed using check-off dollars to fund 
university research in Kansas.
    Kansas agriculture has long enjoyed the stability that farm 
programs have provided. Over the years, these programs have 
taken many different forms such as freedom to farm. Direct 
payments historically have provided basic support for farm 
income.
    The programs included in the current Farm Bill have helped 
to stabilize the farm economy while providing the cheapest food 
of any country in the world. Other programs such as crop 
insurance and the ACRE program have become very important to 
agriculture as producers attempt to manage risk.
    Kansas soybean producers feel that crop insurance has 
matured into a valuable risk management tool, this year a great 
example of the variability of the Kansas producers can 
experience. The record production for soybeans in the previous 
two years is being offset this year by flooding, heat, and dry 
conditions that can be typical of Kansas summers.
    Kansas soybean producers believe that one of the most 
important areas of the current Farm Bill that needs to be 
continued is the Federal support for crop insurance. The ACRE 
program has the potential to be an important risk management 
tool with some modifications. The variability of production in 
Kansas has led to a slow adoption of the program for revenue 
assurance.
    Use of the state production average does not work in many 
areas of Kansas. The additional requirements for participation 
throughout the length of the current 2008 Farm Bill and the 
required reduction in the direct payments contribute to 
Kansas's low sign-up.
    International trade plays an important role in the current 
price that soybean producers receive. Six of ten rows of 
soybeans are exported out of the country. Continued funding of 
the Foreign Market Development Program and the Market Access 
Program at its current levels is vital. For each one public-
private dollar spent, exports increase by $35. Agriculture is 
one of the few areas that enjoys a trade surplus. Each billion 
dollars of agriculture exports equals 8,000 jobs.
    We support the provisions in the Energy Title including the 
bio-based market program and bio-energy program for advanced 
bio-fuels. Bio-diesel is the only currently recognized advanced 
bio-fuel.
    Madam Chairman and Mr. Roberts, this concludes my statement 
regarding the Kansas Soybean Association's position on 
development of the 2012 Farm Bill. We will be pleased to 
respond to any questions that you and other members of the 
Committee might have. Thank you for holding this hearing in 
Kansas. We look forward to working with you in crafting the 
2012 Farm Bill.
    [The prepared statement of Mr. Henry can be found on page 
111 in the appendix.]
    Senator Roberts. Thank you, Bob. And now representing the 
Kansas Corn Growers from White Cloud, Kansas, Mr. Ken McCauley.

       STATEMENT OF KENNETH McCAULEY, KANSAS CORN GROWERS

    Mr. McCauley. Madam Chairwoman, Ranking Member Roberts, it 
is a pleasure to be here representing the Kansas Corn Farmers 
and farmers, really, all over the state. My name is Ken 
McCauley and I am past President of the National Corn Growers, 
currently belong to the Kansas Corn Commission and very active 
in the Kansas Corn Growers Association.
    I last stood before your Committee in 2007 testifying on 
the 2008 Farm Bill and much has changed since then, but much 
has stayed the same. For example, in 2008, loan deficiency in 
counter-cyclical portions of the current Farm Bill were 
relevant. Today you would be broke before you reached the loan 
rate or the NLDP was taken.
    But as I said, we still have a severe need for risk 
management and this is vital for the communities of Kansas. I 
farm near White Cloud, Kansas, in the northeast corner. My wife 
and I produce corn and soybeans. My son and his wife also have 
a family farm in conjunction with our farm. We share labor and 
management and machinery, so to help him get started.
    My need for risk management is different than my son's, and 
I think it is a vital tool for all farmers, but especially our 
young farmers. We need to continue crop insurance for that main 
reason.
    Kansas corn is a strong and growing commodity that provides 
a great economic benefit to our state. In fact, with a value 
over $3 billion, the 2010 Kansas corn crop was the highest 
valued grain crop in the history of our state.
    Advancements in technology and farming practices have been 
vital to corn success in Kansas. This year our Kansas corn 
growers planted 5.1 million acres with about 80 percent covered 
by crop insurance. This summer's extreme weather conditions 
will lower our yield, but I believe the resilience of our crop 
and the efforts of our farmers we will ensure that we continue 
to meet the needs of our customers.
    To say that Kansas is a diverse state is an understatement, 
especially this year. This summer, some of the farmland very 
close to my home is under water from the Missouri River. But, 
however, we have enjoyed a relatively good crop with ample 
rains. This is contrasted with a large part of Kansas that is 
suffering through extreme drought. Even in a normal year, 
difference in climate, elevation, weather patterns from east to 
west are extreme.
    But what works for the McCauley farm probably will not work 
for a farmer in western Kansas. When you look at things like 
multi-year losses, especially in a state like Kansas where the 
western half can experience extreme drought while the eastern 
half can experience ample rainfall, statewide triggers just do 
not work.
    While the western half needs different things, we think 
that we need to look at opportunities to strengthen the crop 
insurance program. Risk management is not the only important 
thing to farmers. It is important for rural communities. When 
you talk to the banker about an operating loan, he will want to 
know what crop insurance coverage you have. It is an integral 
part of the way we do business in agriculture.
    That is why farmers need effective risk management, a 
combination of crop insurance revenue-based programs. We 
strongly support crop insurance tools as the most important 
foundation of a farmer's safety net. Let us also strengthen the 
revenue-based program that we have today, fix the holes in the 
safety net while maintaining strong and viable Federal crop 
insurance program.
    Triggering a counter-cyclical revenue program closer to the 
farm level, for example, Crop Reporting District, will provide 
more realistic risk management for growers. I have a friend who 
farms in west Kansas at an elevation of 3,800 and my elevation 
is 883. It is impossible to assume that we have the same 
issues.
    As NCGA President, I was involved in some of these revenue 
products and I am very proud to have done that. But we 
continually are told to brace for cuts to the farm programs as 
our Government works to be more efficient. I believe farmers 
will understand the fiscal responsibility and we simply ask 
that the cuts to farm programs be proportionate to other 
programs.
    Even though direct payments are under fire, they do provide 
a valuable safety net for a farmer who is under extreme 
conditions and does not always qualify for enough risk 
management tools that we have today. For example, when you are 
in an extreme severe drought, or even a shallow loss, there is 
never enough risk management or money to go around. If direct 
payments are cut, please understand Kansas farmers will incur 
more risk.
    Beyond that, we are supportive of any free trade, the trade 
agreements that we have, the Korea, Colombia, and Panama trade 
agreements, and I would like to say agriculture is one of the 
few bright spots in the American economy today. Our farmers are 
continuing to work hard to meet the needs of their customers. 
Flash floods, drought, et cetera, but with a strong safety net 
and strong open markets, agriculture and America can continue 
to thrive and can continue to bolster our economies. Thank you 
very much.
    [The prepared statement of Mr. McCauley can be found on 
page 116 in the appendix.]
    Senator Roberts. Ken, thank you very much. Our next witness 
is from Sharon Springs, Kansas, out by Mount Sunflower. Madam 
Chairwoman, the real trick to Mount Sunflower is not especially 
to climate, it is to find it. I have been out there three or 
four times and one time ended up in Colorado with a driver that 
insisted that he was on the right road. I told him he was not, 
but that is beside the point. Anyway, from Sharon Springs, 
representing the Kansas Association of Wheat Growers, we are 
pleased to welcome Mr. David Schemm.

 STATEMENT OF DAVID SCHEMM, KANSAS ASSOCIATION OF WHEAT GROWERS

    Mr. Schemm. Madam Chairwoman, Ranking Member Roberts, thank 
you for the opportunity to address you today. My name is David 
Schemm. I am the third generation to farm on the far western 
edge of Kansas near Mount Sunflower and Sharon Springs. I 
produce wheat, sorghum, corn on my farm, along with my wife, 
Lisa, and two teenage sons. I serve as President of the Kansas 
Association of Wheat Growers and I am honored to have this 
opportunity to submit comments regarding the future of our 
country's farm policy.
    First, I would like to thank you for finding a path forward 
in the recent deficit reduction debate that will involve your 
Committee. We hear all too often that the general public is 
becoming more removed from the farm, and to put our future in 
the hands of those who do not understand agricultural's unique 
vulnerabilities is a big concern for our producers.
    Wheat is an important crop for Kansas. Last year, farmers 
planted just under 9 million acres with hopes of being able to 
take advantage of near record prices. Unfortunately, Mother 
Nature had different ideas than producers did and some areas of 
our state received less rain over the past 12 months than they 
did in the dust bowls of the Great Depression.
    While some of our producers are struggling with record 
dryness, others have seen record rainfall and flooding. I can 
think of no other year in my 18 years as a producer that 
highlights the importance of the Federal Government as a 
partner in my operation.
    We count on the Federal Government for research and 
development to address production challenges we face, or an 
aggressive free trade agenda to allow access to world markets 
for our products. And in years like this for a functioning 
safety net to be able to address the risks that are out of our 
control.
    The farm safety net has protected not only our country's 
family farms, but it has also helped our rural communities. As 
President of my local school board, having served on that board 
for the last nine years, I have watched our enrollment drop 
almost 20 percent and our local business has suffered during 
the seven years of drought.
    However, since 2008, I have seen our enrollment stabilize 
and actually have increased by almost 10 percent this year. 
Local businesses are expanding and adding employees. Without a 
safety net, my operation, and many other family operations in 
our state would no longer exist and our rural communities would 
be much smaller or even no longer exist. With a farm safety 
net, farms have survived, new businesses have come into our 
area, and a new generation is coming back to the farm.
    We know that the challenges you face in Washington are 
startling and we producers share your concern about a large 
Federal deficit and a weak economy. We recognize the 
probability that the 2012 Farm Bill will be smaller in dollars 
than the 2008 Bill, but while many challenges lie ahead in 
crafting the next Farm Bill and while it may seem that we as 
farmers have many complaints about the 2008 Bill, I am often 
reminded by our members that right now we have the best farm 
safety net we have had in history.
    It is my hope that we do not lose track of that thought as 
we begin work on the 2012 Farm Bill. Can changes be made to 
make programs more efficient and more functional? Yes. Should 
we take a hard look at all the programs in the Bill to ensure 
the public that their tax dollars are well-spent? Absolutely.
    But I also hope that we can remember that our agriculture 
success of today was built on the safety net of yesterday. I 
would like to thank you for coming to our state to hold this 
Farm Bill field hearing. Field hearings show your commitment to 
hearing first-hand from farmers and ranchers about the effect 
of farm legislation on individuals across this country. It has 
been an honor to submit my testimony and speak on behalf of 
wheat producers, and I look forward to any questions you may 
have.
    [The prepared statement of Mr. Schemm can be found on page 
120 in the appendix.]
    Senator Roberts. I want to thank you very much, David, for 
that very fine statement. Our next witness representing the 
Kansas Grain Sorghum Producers from Minneola, Kansas, not too 
far from Dodge City, Kansas, America, is Mr. Greg Shelor. Greg, 
I think your dad was a dean, right?
    Mr. Shelor. Yes.
    Senator Roberts. I miss those occasions in public service 
when he served in public service with what I call meaningful 
dialogue.
    Mr. Shelor. Meaningful. Well put.

  STATEMENT OF GREGORY SHELOR, KANSAS GRAIN SORGHUM PRODUCERS

    Mr. Shelor. Thank you, Madam Chairman, Senator Roberts for 
having giving us an opportunity to testify. As you said, I am 
Greg Shelor. I represent the Kansas Grain Sorghum Producers 
Association. I serve as President for that organization. I am 
past President of the national organization some five years ago 
and also serve on the United Sorghum Check-Off Program. It is a 
newly started check-off program that we are looking at doing 
some of the research that Senator Brownback and Dr. Schulz was 
commenting on earlier.
    I farm some 140 miles west of here. As Pat said, it is 
south of Dodge City. Grain sorghum, I rotate that in with wheat 
on dry land no-till. Raise corn and soybeans in partnership 
with my oldest son on some [inaudible] so I have tried to keep 
it diversified out there.
    If you had went on a little farther west yesterday, you 
would have seen things just keep getting progressively worse as 
the farther west you go. There are areas on past Tim's area 
that there was sorghum that was planted that did not even come 
out of the ground. It was still laying there just as seeded as 
the day they put it in. So we have got a large area from 
western Kansas through Oklahoma through Texas that is pretty 
devastated in crops.
    It does not look like anything in the horizon for moisture 
to help us out. This is going to go on into the winter, long-
range forecasts, and even it is going to affect next spring a 
lot of crops, so as we go on looking at this Farm Bill, crop 
insurance, as most of them have alluded to, is going to be 
really important for a lot of producers out there. It is going 
to need to be kept strong and viable so that a lot of these 
producers will have some income to be able to stay on their 
farm.
    It has been kind of hard to justify the direct payments in 
the past when you have good crops and good prices, and as you 
look out there now with the disaster coming on and stuff, that 
is another safety tool that helps producers make up the void 
that crop insurance does not cover, because crop insurance does 
not cover all of your expenses.
    It does a large portion of it, but as the direct payments 
cover more of that, that helps them go to the bankers and get 
their financing for the next coming year, and it is really 
important to them that they can put that down on their 
financial statements and cash flows that they actually have 
some money that is coming in, that the bankers can look at that 
and say, Yeah, you have got crop insurance to cover it and you 
also have these direct payments coming in.
    So as we go on forward with that, that is two main issues 
that are really important to producers out there, especially in 
these dry areas. They alluded to the research.
    We have had some really good appropriations in the past for 
sorghum research and it has been cut, but as an industry that 
does not get a lot of support from the private companies in 
research for sorghum where we are looking for any areas where 
we can get some money to put into that and appropriations 
through the ARS and et cetera helps do a lot of good research 
for us, along with what we are doing with our national check-
off.
    So if you have any other questions or anything I can 
answer, be glad to help.
    [The prepared statement of Mr. Shelor can be found on page 
131 in the appendix.]
    Senator Roberts. Well, we want to thank you, Greg, and we 
turn now to the Chairwoman to ask the questions that she has 
for the panel. Madam Chairwoman?
    Chairwoman Stabenow. Well, thank you very much, and, 
Senator Roberts, I first want to say that I think this panel 
deserves the award for having the most people that stayed right 
on time. I am very impressed. In Kansas. You are right, we only 
had one person a little bit over. We will not mention his name.
    [Laughter.]
    Chairwoman Stabenow. But I will tell you that this is 
impressive. I do not think we could quite say that when we did 
our panels in Michigan.
    So let me ask all of you. Almost all of you have spoken 
about the critical nature of crop insurance. I think all of you 
mentioned that and we understand the important role that direct 
payments play for many of you as well. But is it fair to say--
and I guess I would open this up to any of you--because several 
of you said that the most important tool at the moment, the 
thing you would be most concerned about losing would be crop 
insurance.
    Is that a fair statement? I mean, anybody disagree with 
that? Okay. So if we are looking at that and how we could 
strengthen that for you, because of the concern about shallow 
loss and so on and what happens from that gap with the crop 
insurance and so on, what can we do if we are looking at crop 
insurance to make that better for you or maybe, in your 
particular instance, it works fine. Or to cover more?
    I know that we have a number of crops that are not covered 
or are not covered well and that is one of the issues we have 
to look at, also. I know in my state we have had a lot of areas 
where we have crop insurance that is very effective, other 
areas where--and we need to work on it.
    But if you are focused on crop insurance, what would you 
suggest, any of you, as to the way to strengthen that as a risk 
management tool for you? Yes?
    Mr. McCauley. Madam Chairwoman, thank you for not 
mentioning his name. I have two suggestions and most of my 
points were about maintaining the affordability of it as it is 
today. We talk about less subsidy to the companies. I think it 
is important that companies are there for us. But the 
affordability today is reasonable.
    The shallow loss and the declining APH's of these drought-
stricken areas is very important. Dr. Barnaby told me earlier 
that he has a paper, and I think those things are being 
studied, but I think that is very important to the concerns 
that I have.
    Chairwoman Stabenow. So you are talking about the 
difference between the coverage on the crop insurance and what 
your actual loss is?
    Mr. McCauley. Well, no. As your crop declines from these 
severe droughts, extended droughts of Texas and western Kansas 
and all over, those decline your insured acreage and that is 
the APH.
    Chairwoman Stabenow. Yes, absolutely. Anyone else? Yes.
    Mr. Baccus. I think it is important that we simply stop 
cutting from the program. We have cut $6 million out of the 
crop insurance program each of the last two years and that is a 
huge hit. Any more is going to hamper product development as 
well as increase premiums to the producers and I do not think 
we can afford that.
    I would like to see us take a look at RMA and the 
requirements they have on claims. We are dealing with 
[inaudible] right now in corn harvest in Kansas and the rules 
that they have for their claims agent are totally unrealistic. 
They are wanting them to go out into the fields, walk every 
field, and collect samples from every field. There physically 
are not enough crop adjusters on this planet to do that, and 
yet, that is what RMA is requiring. So there are some 
ridiculous regulations like that that need to be looked at.
    Chairwoman Stabenow. Yes?
    Mr. Baccus. As Ken alluded to, the concern that I hear from 
our producers is multi-year droughts and a declining APH. I 
would allude to a situation with a man in the ocean with lead 
weights being tied to his feet. He can stay afloat for a year 
or maybe two, but eventually he ends up drowning.
    While the program was complex and was slow to implement, 
the SURE Program was actually like throwing a float to that 
person to allow them to survive better to the next year, and 
that is one thing I have definitely have heard from our 
members.
    Chairwoman Stabenow. So SURE, we have had a lot of concern 
that not many people signed up, it was complicated in the 
beginning and so on. But do you think that kind of approach 
makes sense if we were bringing it closer to the farm and 
making it a little less complicated?
    Mr. Schemm. Yes, very much. What we have heard from our 
producers is that the SURE Program did help to give them true 
relief from a multi-year drought. Like I say, they were just 
slowly, with the declining APH's, we saw even on our operation 
a shrinking operation until the SURE Program, if we can make it 
quicker and less complex.
    Chairwoman Stabenow. Thank you very much. Yes?
    Mr. Goyen. I would echo the thoughts and ideas. It has to 
remain fundable. It has to remain to where the farmer can 
afford it. It has to remain affordable to the local farmer. In 
the cotton industry, it is a little bit different and it will 
throw another kink in things, but we are paid on the quality of 
what we raise, too, and there is no provisions in that for--in 
this year's crop, they were probably going to see a decline in 
quality as well as yield.
    If there were some provisions somewhat to where we could 
insure against the quality and the yield, it would surely be 
beneficial to us, also.
    Chairwoman Stabenow. Okay. Thank you.
    Mr. Henry. I just want to comment about, especially 
addressing soybeans, there is some real disparity in how 
soybeans are covered in different parts of the country, and 
speaking for the growers in the south, many of them do not 
participate in crop insurance on soybeans because of the 
complexity of the program and the coverage is just not there.
    So there are, especially in soybeans, there is lot of 
disparity throughout the country in different regions about how 
soybeans are covered. So we need to address those problems to 
make that a viable option for them.
    Chairwoman Stabenow. Thank you. One other quick question 
and I will turn it to Senator Roberts. Mr. Grecian, I wanted to 
first congratulate you. I understand you received the Grassland 
Award for conservation practices back in 2008. Congratulations. 
I wonder if you might just speak for a moment about the role of 
conservation from your perspective in agriculture. How do you 
use the conservation programs and practices in your operation 
to put yourself in a better position?
    Mr. Grecian. As alluded to, western Kansas suffered through 
five years of drought starting in about 2002, and it could have 
been devastating to our native rangeland. The EQIP Program 
allowed us to cross-fence. We drilled some wells, put in 
pipelines, spread our water supply, and did a more efficient 
job of grazing.
    It was an educational process to me, as well as benefitting 
my bottom line, and also sustaining our cow herd. To go hand in 
hand with that, the release of CRP acres to be grazed has 
basically saved our operation's cow herd about five times in 
the last 25 years.
    But as far as conservation programs, they are--other things 
that we have done, we have put in a lagoon in our feeding 
operation to help enhance water quality. At the size we are, it 
probably would not have been necessary, but I saw it as a way 
of making sure that we were not going to contaminate any 
groundwater in the area.
    So the programs that we cannot justify an entire cost of 
have been very beneficial. The cost shares from the EQIP 
Program have been very, very beneficial to the livestock 
industry.
    Chairwoman Stabenow. Thank you very much. Senator Roberts.
    Senator Roberts. Let me just say that both the Chairwoman 
and I are very strong supporters of EQIP. I have some questions 
for each of the witnesses. I will try to rip through these 
because I know Panel 3 is waiting.
    Steve, as you know, young farmers and ranchers face an 
uphill road just to get into agriculture. I remember cutting a 
30-second spot in an even-numbered year some time back saying 
the most important question we face in agriculture is not all 
of the details in the Farm Bill. It is, where is the next 
generation of farmers going to come from.
    By the way, I filmed that spot up on Highway 36 between 
Norton and Peaburg at that old stone house up there with the 
windmill. It was the fastest take that we ever took because 
right in the middle of the spot, we discovered there was a 
rattlesnake in that stone building, so we got out of there 
pretty fast.
    [Laughter.]
    Senator Roberts. First take Roberts. That is what that was 
about.
    But you work with these young farmers every day, so you 
can--you mentioned your son is a partner with you. Just talk a 
little bit about the challenges that a young farmer faces in 
building a successful operation. What do you do if you are a 
young farmer and you go into your lending institution, your 
banker, and they come in to apply for a loan, and how are these 
requirements different than they would have been for you? I 
will go to Steve and Ken and anybody else who wants to say 
something.
    Mr. Baccus. The longer you are in agriculture, the more 
equity you build up, assuming you have a successful operation, 
I guess. If you do not, you are not in agriculture any longer. 
The beginning farmer or rancher does not have that choice. He 
does not have the equity to fall back on.
    But I can tell you, through the Kansas Farm Bureau Young 
Farmer/Rancher Program, we do not need to ask the question, Who 
is going to farm this land? We have a multitude of young 
farmers and ranchers out there that are extremely optimistic, 
that are extremely upbeat, that are looking forward to doing 
their role to take over the farm operations in the future.
    It is contingent upon us to develop the financing tools to 
help these people get the money they need for their operating 
notes, to buy the machinery. It is contingent upon us to help 
design risk management programs, like everyone on this panel 
has been talking about today, so they can go into their lenders 
and say, Here is my insurance program, here is my risk 
management program. If I do not raise a crop, this is still 
what I stand to receive. And that is absolutely critical to the 
success of our next generation of farmers.
    Mr. McCauley. I totally agree with Steve, totally agree 
with Steve. It is very important, and I will add one important 
thing. When I started farming in 1972, it was a very good time. 
We had prices--it was before all the inflation hit. We grew 
equity.
    And as a young person, and I think today, these prices are 
actually growing equity for the small and younger farmer, and I 
think it is just really important that we do everything we can 
so they can preserve that equity and move into the positions 
that we are in, and actually become next generation's leaders. 
I think it is just vitally important.
    And one of the reasons that I am doing the things that I am 
doing today and have one is to help that generation succeed.
    Chairwoman Stabenow. Great.
    Senator Roberts. Karl, we have already gone over this. If 
you can pop up with any new ideas, why it would be good. Given 
the tight budget environment that we are looking forward to 
streamlining programs and try to increase the efficiencies, are 
there areas within the farm programs that you utilize where you 
think there might be opportunities for some streamlining or 
even changes in the programs?
    Mr. Esping. Ideas, yes. I am sitting here thinking. The RMA 
thing, the crop insurance side there is a considerable amount 
of work going on in western Kansas now. We have been in contact 
with Rebecca some----
    Senator Roberts. Speak into the mic.
    Mr. Esping. Sorry, okay. Very good. Some of the-- within 
crop insurance and the RMA, there is a potential or study going 
on not allowing producers with a crop following sunflowers to 
be insured. And we have been in contact with Rebecca several 
times in the Topeka office, and of course, national office, 
also. But that is a concern.
    If you are a western Kansas grower or west of 183 and you 
are growing flowers this year, you will be exempt from having 
any crop insurance coverage for next year, a restriction that I 
strongly question.
    But as far as streamlining, making it simple. That is a 
difficult thing for everybody involved, but the red tape 
reductions, that would help.
    Senator Roberts. I just might add that the SURE Disaster 
Program is part of the package that is available to producers 
in a drought. The only problem is that not many farmers I know, 
even in dry land operations, are going into the business of 
insuring their pastures starting out. Maybe after five years of 
this, that is the case, and then you only get paid 18 months 
after you apply. And there is a 10 percent cut in regards to 
the program and there are about 23 pages you have to wade 
through to sign up for the damn thing.
    So we might want to consider a different kind of disaster 
program. I know that is very popular up in the north. Why they 
have to wait for 18 months for it is a little bit beyond me. 
But they have a disaster every year. So pardon that editorial.
    Chad Bassinger and his wife, Cassandra, took us on that 
tour yesterday of the drought during the early '30s, a lot of 
dry land wheat, a lot of pasture land, or what is left of it, 
and he knows the area. He is just as smart as a whip and he is 
a perfect example of the kind of young farmer you are talking 
about, Steve and Ken. So they are out there. They just want a 
chance.
    Ken, the Kansas Livestock Association, since the debate 
about the GIPSA rule first began, and you have talked about it, 
I have been concerned that the Department did not have a proper 
grasp of the rule's economic impact on both producers and 
consumers.
    We pushed on that and the USDA finally acknowledged this as 
an economically-significant rule, so did the Chairwoman, and 
they have ordered a cost benefit analysis. What a surprise. 
Unfortunately, some have suggested that the Department split 
its proposed GIPSA regulation on how livestock are marketed in 
this country into two parts as an attempt to bifurcate the 
enormous cost of this rule. What is your view of that?
    Mr. Grecian. Well, I think I answered that when I said we 
do not need a Livestock Title, but from KLA's perspective, and 
we realize that there is a difference between species and 
perceived marketing problems. But I guess our concern is we 
would want to see the whole thing before we would support it.
    And myself, as an individual producer, when we look at the 
fact that Congress basically stripped most of the provisions 
out of the Livestock Title in the writing of the last Farm 
Bill, would those--if it were split by species, would it soon 
be melded into one policy or regulation that would affect us, 
just like the one that we have today?
    Senator Roberts. Unfortunately, we do not have an 
endangered species to work on a constant basis with all of 
these regulatory agencies. And in this particular case, the 
agency did go outside of the intent, the specific intent of 
Congress.
    And that is one thing that I know the Chairwoman and I are 
very concerned about, is when an agency just takes it upon 
themselves to say, Well, we are going to accomplish whatever 
agenda that they have and work toward that agenda regardless of 
Congress. That is why the Chairwoman hauled in--well, asked the 
people to come in to testify and say, Now, can we work this 
out? Look at the intent of Congress, you are outside the intent 
of Congress. As she plays the good cop. I obviously play the 
bad cop. But at any rate-- and that is how it works. But thank 
you for your comments.
    Bob Henry, you have outlined several ways the current farm 
programs could be improved, all the work the Soybean 
Association is doing to look into these ideas. We want to 
certainly provide the best safety net possible, but we have 
recognized that we have the budget deficit. So personally on 
your own farm, can you tell me which or what program is the 
most important one to you?
    Mr. Henry. Well, I think, as probably I would speak for 
most farmers here, the risk management, how to protect 
yourselves in times of short crops or low prices. Being a 
highly capital-intensive industry and business that we are all 
involved in, the amount of capital it takes to operate that 
business has been commented on previously.
    As you go into the bank to borrow money, to take loans, to 
get operating loans, to buy machinery, whatever your need is, 
and it does not really matter what age group you are in, 
whether it is young or older farmers, the capital investment is 
tremendous, the capital requirements.
    Some way to create that safety net. In good times, in good 
crops we do not need it. It is the extremes of low prices or 
low yields that put us all in a real crunch as far as finances 
and the future to go on for the next year. So I think that is 
probably--risk management, from an individual standpoint, is 
probably the number one priority.
    In talking with other members on the board from all over 
the country, that seems to come to the forefront in every 
conversation you have.
    Senator Roberts. Kent, I skipped you. I did not mean to do 
it. We have got very few cotton farmers who participate in the 
ACRE Program nationwide. Do you utilize the program on your 
cotton acres, and if so, has it worked for you? If not, can you 
talk a little bit about some of the reasons you chose not to 
sign up?
    Mr. Goyen. Personally, no, I am not involved in the ACRE 
Program. Very few in our area are signed up for that.
    Senator Roberts. Two percent of the farmers in Kansas 
signed up.
    Mr. Goyen. It encompasses too wide an area before 
[inaudible] are pulled, and it is just a complicated thing. It 
was a hit to direct payments that nobody really wanted to give 
up, give up a known for an unknown. They did not want to do 
that when they first started. The area statewide would not work 
for cotton especially, but that you had to sign up for all the 
crops and then there was no recourse. If you signed up once, 
you could not get out of the thing. So basically, that is why 
most people did not sign up for it and were not too excited 
about it.
    It is a complicated thing. Even the FSA office, they have a 
hard time explaining that one, how it is going to affect you 
and what is going to happen. I think basically it could be a 
good program, but it has got to be fine-tuned a little bit. The 
areas, either they have come down to a county-wide or a small 
district of some sort to where maybe that would--the yield 
monitors would kick off then.
    But it is going to take a lot of fine-tuning, but I think 
basically it could be a good safety net and a good program if 
the revenue and the yields and everything else were implemented 
into it.
    Senator Roberts. Ken, is your bank pretty interested in 
which farm programs you utilize? Are there some specific 
programs that are more important to banks than other programs? 
Do banks ask what level of crop insurance you purchase, how 
much you will receive in direct payments?
    Mr. McCauley. I have not had that talk with my banker. I 
know he knows that I carry crop insurance. One of the things 
that is going on in this year is farming is very profitable. No 
matter whether you are borrowing money or not, bankers are 
interested in what level your coverage is, and they want to 
know everything about a young person.
    When you talk about crop insurance, most of them may even 
ask for the receipt to show--and the reporting of it. So, you 
know, your crop insurance goes across now to cross-check with 
the FSA office. The banker is asking both those people those 
things. So yes, they are asking those questions.
    Senator Roberts. I appreciate that. David, 18 years of 
farming. You do not look that old. You have never seen a year 
that highlights the importance of the farm safety net more in 
this year in a year where devastation seems to be more the norm 
than the exception, what farm programs do you really rely on? 
What program do you know will absolutely be there for you at 
the end of the day by helping keep you afloat?
    Mr. Schemm. As has already been alluded to, the crop 
insurance program has been vital for our operation. And again, 
when I go into the banker, he wants to know what my coverage 
level is, what crops I am going to be growing, and what my 
insurance level is going to be on them. So the crop insurance 
program has been very vital to us.
    When we were going through those drought years and, 
unfortunately, it looks like we may be facing another one in 
our area again this year, the SURE program, once it finally did 
manage to come through, it actually did throw that float out to 
us to help us to try to more effectively survive, because we 
were watching our coverage level just shrink.
    But the insurance has been the key program. The direct 
payment has also been vital, though, because it has helped to 
offset the higher insurance premiums that we have been dealing 
with. I mean, we have seen record high prices and it just takes 
more money to insure that crop with those record high prices. 
And unfortunately, when you do not have a crop to sell, it does 
not matter what the price is.
    Senator Roberts. How long did it take you to sign up for 
the SURE Program and then how long did it take for you to get a 
payment?
    Mr. Schemm. Months.
    Senator Roberts. Months?
    Mr. Schemm. We had a situation on my own farm where because 
of the issue between RMA and the local FSA, we were actually 
2.1 percent off on acres on one field that we actually 
overpaid. We paid more to RMA, to the insurance, than what we 
should have. And as a result of that, that delayed our SURE 
Program for a SURE payment by approximately three months.
    Senator Roberts. What did you do? Pay it back or what?
    Mr. Schemm. It got lost somewhere in there, but----
    Senator Roberts. All right. Thank you for that. That is 
very helpful. Greg, you are extremely diversified right in the 
heart of the drought. Can you talk about how the drought has 
impacted your operation? I cannot remember all the things you 
are into now, but you are very diversified for obvious reasons, 
but what decisions have you had to make in order to cope?
    Mr. Shelor. Well, it is just kind of onset. We actually had 
a fair wheat crop this spring, but with the drought coming on 
now, it is going to affect our fall crops. We are 30 to 40 days 
from putting fall wheat in again, and it does not look 
promising for that. And that is going to affect next year's 
production and even next year's summer crops because we rely on 
a lot of water retention in our soil, our subsoil. That is what 
makes it through the summer growing, and we have depleted all 
that. So that is going to take a lot of moisture to replenish 
that.
    So the crop insurance is going to be extremely important to 
be able to keep some payments coming and keep some cash flow 
going through the farm. And as it was alluded to earlier, the 
direct payments help make up that difference that the crop 
insurance does not cover, because, you know, you can only 
insure 65 or 70 percent of it. So you still have a void in 
there that you have got to make up the difference.
    And just one little comment I would like to make on the 
young farmers. They have got this TIP Program with the CRP. 
That has worked real well, getting some young producers in our 
area to be able to pick up some farm grant. It allows two years 
extension of the present land owner on his CRP payments if they 
give it over to a young person.
    I know of three just in our area that has utilized that. So 
that is one arena that is really helping maybe get some young 
farmers back involved in production agriculture.
    Senator Roberts. Well, thank you--pardon the pun-- thank 
you for that tip. I am way over time here, 13 minutes, 46 
seconds. I stand chastised, Madam Chairwoman, but I would yield 
to you for any further questions you might have.
    Chairwoman Stabenow. Well, at this point, I just want to 
thank all of you for being here. It is very important 
information and testimony. We look forward to working with you 
as we put the pieces together for the Farm Bill and 
recommendations and how we focus on risk management. We know it 
is extremely important in farm safety net. So we look forward 
to working with all of you. We would excuse you and ask that 
our third panel come forward.
    We are going to call the meeting back to order and ask that 
all of our panelists join us and I will turn this over to 
Senator Roberts to make the introductions. Thank you.
    Senator Roberts. From Jetmore, Kansas, representing the 
High Plains Farm Credit folks, he is the Director out there, 
Mr. Ron Bach. From Axtell, Kansas, the General Manager of the 
Nemaha-Marshall Electric Cooperative Association, Ms. Kathleen 
Brinker. From Fort Scott, Kansas, the President of the Kansas 
Association of Conservation Districts, Mr. Ron Brown.
    And from Salina, Kansas--yeah Salina, not Salina--the 
Conservation Policy Director of the Playa Lakes Joint Venture, 
Mr. Barth Crouch. Then from Garden City, we have the General 
Manager of the WindRiver Grain LLC, Mr. Robert Tempel. And 
Garden City again, the CEO and Chairman of Western State Bank--
good, we have a banker--Mr. Jeff Whitham. Jeff, good to see you
    And then we have the Director of Science and Regulatory 
Affairs and Chief Nutritionist for the Schwan Food Company in 
Salina Kansas, Karen Wilder. That is a big outfit that is 
producing a lot of pizza and making a lot of young school 
children very happy. I know they are supposed to eat great big 
plates full of broccoli--you put the broccoli on the pizza. 
Maybe we can do that.
    But at any rate, we will start off with Mr. Ron Bach. Ron?
    Chairwoman Stabenow. Welcome.

    STATEMENT OF RON BACH, DIRECTOR, HIGH PLAINS FARM CREDIT

    Mr. Bach. Thank you, Madam Chair, Senator Roberts. Thank 
you for the opportunity to testify here today. My name is Ron 
Bach and I am a first generation farmer from Jetmore, Kansas. I 
am also an elected member of the High Plains Board of 
Directors, Farm Credit.
    High Plains Farm Credit is located in Larned, Kansas, and 
is part of a nationwide farm credit system. High Plains is 
owned by over 1,000 farmers that borrow from us here in Kansas. 
I serve with seven other elected directors and one appointed.
    I am pleased to say that Farm Credit is one of those 
entities under the jurisdiction of your Committee that costs 
taxpayers nothing in Federal resources. In fact, in addition to 
paying taxes, we pay for the cost of our regulatory oversight, 
we pay insurance premiums that are counted as Federal revenues 
as well.
    Further, by returning earnings in the form of patronage 
payments to the farmers and cooperatives that own the system, 
we make sure the capital is flowing to rural areas. Last year, 
those patronage distributions came to almost $800 million 
across the country of which High Plains Farm Credit returned 
approximately $725,000 to our farmers. That is not a bad rural 
development program in itself.
    We are not coming to you today with a specific request for 
any Federal spending. However, included in my written 
statement, underscores several actions that the Committee might 
take that will have a positive impact on those we finance.
    At this time when many commodities are experiencing price 
levels that allow farmers to realize profits in their 
operations, it is important to remember the simple adage that 
what does go up tends to go down. My point is that just because 
some commodity prices may be high now, do not abandon the 
safety net that will ultimately protect farmers when prices 
fall.
    The drought in southwest Kansas has left many farmers 
without a crop this year. My experience has left me with half a 
wheat crop and a well-below my expected model crop. The lack of 
rainfall has left my cow-calf operation in jeopardy. I sold off 
some of the cows and the remaining pairs, some of which are on 
CRP grass, will be split and sold earlier than usual, leaving 
me with a down-sized herd.
    As I stated, I grow wheat. A very important part of the 
safety net is an effective, well-managed crop insurance 
program. I am grateful to have crop insurance as I have already 
collected a wheat claim check and I will be filing for a grain 
sorghum loss.
    As you know, crop insurance already has shouldered 
significant cuts. We in Farm Credit continue to work hard to 
ensure that our customers and others have access to crop 
insurance policies they need to protect their investment in 
crop and farming operations. We urge that should the need to 
achieve savings from any of these programs, that the industry 
and those that are experienced in the day-to-day delivery of 
these be provided the opportunity to comment on proposed 
changes.
    Lastly, it is important for the Agriculture Committee to 
recognize that you have done a good job in overseeing the Farm 
Credit system. As you look for opportunities to assist 
agriculture without the need for direct Federal outlays, we 
stand ready to work with you if there are any areas that Farm 
Credit might utilize its experience and proven success to help 
so that we can continue to efficiently and effectively meet our 
mission.
    Thank you for the opportunity to provide you some 
background on how Farm Credit is meeting the needs of Kansas 
farmers and some thoughts about the next Farm Bill. We 
appreciate your commitment to agriculture and look forward to 
working with you as you move forward in developing the next 
Farm Bill. I would be pleased to respond to your questions. 
Thank you.
    [The prepared statement of Mr. Bach can be found on page 62 
in the appendix.]
    Senator Roberts. Ms. Brinker.

STATEMENT OF KATHLEEN BRINKER, GENERAL MANAGER, NEMAHA-MARSHALL 
                ELECTRIC COOPERATIVE ASSOCIATION

    Ms. Brinker. I missed the purple memo, I think, today. 
Thank you, Chairwoman Stabenow, and Ranking Member Roberts for 
this opportunity to testify before this Committee. Electric 
cooperatives utilize several programs authorized in the Farm 
Bill and we appreciate this opportunity to share with you how 
those programs strengthen rural America.
    I am Kathy Brinker and I am the General Manager of Nemaha-
Marshall Electric Cooperative in Axtell, Kansas. Our 
cooperative provides affordable, reliable electricity to over 
3,000 homes, farms, and businesses in northeast Kansas. We are 
governed by a democratically-elected Board of Trustees who, 
like our 21 employees, live and work with our members.
    Our employees volunteer their time on local boards and 
organizations in the small communities where they live. In the 
case of Nemaha-Marshall and other cooperatives, this commitment 
to community is not a coincidence. It is the way we are.
    Nemaha-Marshall is one of 30 electric cooperatives in 
Kansas and is among 900 not-for-profit member-owned systems 
that serve 42 million in 47 states. Providing electric service 
in sparsely populated states like Kansas is a challenge. Today, 
cooperatives in Kansas average just three customers per mile of 
distribution line compared to 19 customers statewide.
    In Michigan, the co-op averages eight customers per mile 
compared to a statewide average of 38. Still, even under those 
challenging conditions, Kansas co-ops brought electric service 
to families in every corner of the state and today we continue 
to do so, keeping the lights and air conditioning on every 
single day.
    Co-op service areas are often large and their population 
small, so the not-for-profit electric co-op model is very 
important. With fewer people to share high fixed costs, 
affordable credit through the RUS loan program is key to our 
operation. In the last five years alone, RUS has approved more 
than $400 million in loans to Kansas electric cooperatives.
    Nemaha-Marshall recently applied for an RUS loan to upgrade 
our facilities to meet the changing needs of our consumers. The 
loan levels are authorized by Congress every year in the Ag 
Appropriations Bill. The loan level of the largest program, 
Federal financing bank loans, has been set at $6.5 billion in 
recent years, and we urge you to keep that financing in the 
2012 budget.
    We ask for your help in removing restrictions and ensuring 
RUS loans can be used to address all our needs, whether the 
loans are for renewable generation, new caseload generation, or 
making environment upgrades to existing generation.
    Another program we use regularly is the REDL&G Program, or 
the Rural Economic Development Loan and Grant Program. USDA 
provides zero interest loans to electric co-ops which then pass 
the funds through to create jobs and services in rural areas.
    One example of how the REDL&G Program works in my hometown 
of Seneca, Kansas, a local employer, Koch and Company, received 
a $450,000 REDL&G loan in 2004 for a cabinet plant expansion. 
Nemaha-Marshall was proud to sponsor this project which created 
55 new jobs and retained 185 jobs at that time.
    Since then, Koch and Company has expanded twice more and 
last year had an annual revenue of $40 million. They employ a 
total of 300 employees with an annual payroll that exceeds $8 
million.
    Electric cooperatives have been leaders in energy 
efficiency because of our mission to provide reliable electric 
service at the lowest possible cost, not to make a profit for 
shareholders. An example of a successful energy efficiency 
program is the How$mart Program created and implemented by 
Midwest Energy in Hays, Kansas.
    The cooperative funds approved efficiency projects and the 
consumer repays the co-op on their electric bill. Midwest 
Energy has completed over 400 projects. As a locally based 
electric utility, Nemaha-Marshall's goal is, and always has 
been, providing the best possible electric service at the 
lowest possible price to our members. Just as importantly, we 
are also here to support our communities and the people who 
live in them.
    Thank you for your continued support of the electric 
programs and the REDL&G program. They have been vital for 
protecting affordable financing and in helping co-ops grow in 
our communities. We look forward to working with you to develop 
a rural energy savings program. Thank you for the opportunity 
to share my experiences. I will be happy to address any 
questions.
    [The prepared statement of Ms. Brinker can be found on page 
66 in the appendix.]
    Senator Roberts. Thank you, Kathleen. Ron Brown.

   STATEMENT OF RON BROWN, PRESIDENT, KANSAS ASSOCIATION OF 
                     CONSERVATION DISTRICTS

    Mr. Brown. Madam Chairman, Senator Roberts, I am Ronald 
Brown, current President of the Kansas Association of 
Conservation Districts and I am pleased to have the opportunity 
to provide testimony on the 2012 Farm Bill on behalf of our 
organization. And I do have soil under my fingernails.
    Kansas is currently facing a significant drought in 66 of 
our 105 counties, and that was moved up to 70 last week, and 
one of those counties is mine. With the southwest part of the 
state being ranked as an exceptional drought area, the U.S. 
Drought Monitor, the highest ranking on the scale. Kansas 
farmers and ranchers now face the worst conditions in decades, 
understand all too well the frustration and sense of futility 
that predecessors felt when the lack of rainfall in the '30s 
turned the Great Plains into a giant dust bowl.
    But the key difference between the dirty '30s and today is 
the improved farming and soil conservation practices that 
prevent wind erosion and keep the Great Plains from 
experiencing the dust storms that plagued the area back then.
    It is critically important not only to the state's economy, 
but also to our quality of life that effective farming and soil 
conservation practices remain a high priority. Partnerships on 
the local, state, and Federal level are essential for 
coordinating and streamlining these efforts.
    The 2012 Farm Bill should be developed to ensure that these 
partnerships and coordination of effort to that end. KACB urges 
consideration of the following: Encourage landowners and 
operators to apply conservation practices appropriate for their 
operations that will permit them to maintain economic viability 
while maintaining and improving their natural resources.
    Farm Bill conservation programs be resource-driven, locally 
led with sufficient flexibility to allow funding to be directed 
to local priorities and concerns. Provide technical assistance 
funding to generate a broad range of soil, water, air, and 
habitat benefits. The conservation technical assistance program 
and each of the Farm Bill conservation programs are necessary 
to implement conservation practices and achieve proper land and 
water management.
    CTA funding allows NRCS to provide the local assistance and 
planning efforts conservation districts need to promote 
conservation to their local producers. Fully fund NRCS to meet 
the growing need for technical assistance, deliver Farm Bill 
conservation programs, coordinating with conservation 
districts, technical service providers, and other partners.
    Fund the 2012 Farm Bill conservation programs at or above 
2008 Farm Bill's levels, and identify opportunities to 
streamline and improve efficiency within the program options. 
Ensure that the delivery system for conservation programs is 
easily accessible for conservation program customers. The sign-
up process must be simple, easy to understand, completed with 
reasonable effort, and reach a broad customer audience.
    We support the continued sign-up for USDA conservation 
programs as well as consolidating NRCS Farm Bill conservation 
programs to improve efficiency, simplify the application 
process, and better utilize available program funding. 
Conservation programs must provide a balance of sorts for those 
that set land aside for conservation priorities and those that 
provide incentives and cost-share for working lands.
    Given the projected increase in world population, programs 
must provide assistance to implement or maintain conservation 
practices on working lands that produce much needed food, feed, 
fuel, and fiber.
    Farm Bill Conservation Title funds should supplement 
conservation district efforts to provide education and outreach 
to landowners, producers, and the general public. Again, CDA 
funding is critical to allowing NRCS to provide locally-
targeted and needed assistance.
    Reducing on-the-farm energy consumption and developing a 
renewable energy production is critically important for 
American agriculture and forestry. Technology such as wind, 
solar, anaerobic digestion, biomass, cellulosic, biofuels, 
ethanol, bio-diesel, and yet to be developed technologies are 
key features of sustainable agriculture and forestry.
    Incentives should be provided to encourage implementation 
of new sustainable energy production. Much work remains to be 
done to complete PL-566 small watershed district projects. Fund 
all phases of the program to plan, install, and rehabilitate 
structures that protect our fragile farmlands.
    This is not the time to ignore the devastating impacts of 
floods and the associated cost to our Nation's agriculture 
economy.
    In closing, we would urge Congress, at a minimum, to 
maintain mandatory conservation funding levels as agreed in the 
2008 Farm Bill so that conservation programs aimed at providing 
critical assistance to farmers, ranchers, and other landowners 
to address local resource issues will continue to benefit us 
all with improved air and water quality and soil health. Let us 
honor the memory of our past to build a better future. Thank 
you for your time.
    [The prepared statement of Mr. Brown can be found on page 
81 in the appendix.]
    Chairwoman Stabenow. Thank you.
    Senator Roberts. We thank you, Ron, and we go now to Barth 
Crouch. Mr. Crouch.

STATEMENT OF BARTH CROUCH, CONSERVATION POLICY DIRECTOR, PLAYA 
                      LAKES JOINT VENTURE

    Mr. Crouch. Madam Chairwoman, Senator Roberts, I am glad 
that we got this opportunity to be here. I am a transplanted 
South Dakotan that moved to Kansas permanently in 1994, and one 
of the first duties I had was to work with then-Chairman of the 
House Ag Committee, Mr. Roberts, on the '96 Farm Bill.
    It has been an interesting relationship over the years. It 
is always fun to be around Senator Roberts.
    Senator Roberts. It took us about a year-and-a-half to get 
the damn thing done, but we got it done. Thank you for you 
help.
    Mr. Crouch. Hopefully it will not take that long this time.
    Senator Roberts. No, we cannot do that again.
    Mr. Crouch. Playa Lakes Joint Venture, it is one of those 
things that when you work for them, you have to explain 
constantly to other people who are you and where are you and 
what you do. We are a conservation organization that I like to 
think of as we are either the glue or the grief that is needed 
to get conservation done across six states with a partnership 
with 17 state, Federal, and local conservation organizations 
and agencies.
    As such, our primary mission is working on, as our name 
states, is trying to find ways to conserve and restore the 
Playa Lakes. And I want to publicly thank Senator Roberts at 
this time because of his unwavering support for the Rodney 
Dangerfield of wetlands, the Playa Lakes. And I think without 
his support, we would not have the one practice that 
specifically is for Playa Lakes, CP-23(a), for all of you 
jargon folks from the USDA world.
    And the fact that he has consistently supported 
conservation throughout his time has led to, inadvertently, 
Playa is being conserved by CRP and through now recent efforts 
with the Wetland Reserve Program.
    If only 40 percent of the Playa's across the southern High 
Plains were conserved, we would see something that we need to 
have happen very dramatically and that is the major source of 
recharge for the Ogallala Aquifer are Playa Lakes. Now, it is a 
slow recharge. It is three inches per year, at the maximum, but 
if 40 percent of them were conserved, that would lead to around 
50 to 100 billion gallons of water each year going back into 
the aquifer.
    And so, it is very important to us to have that 
conservation go on for the Playa Lakes and for our whole region 
out here in the southern High Plains.
    I had a set of talking points to go through. My good 
friend, Ronnie Brown, covered 90 percent of them, so I will get 
to the chase. The things we need in the Conservation Title are 
the tools that help the landowners who are the stewards of 
conservation in this country do the right thing and avoid the 
regulatory problems that come when we have changes. I think 
that the more tools in the toolbox we can have and the better 
funding for those we can have the better.
    The other thing that he brought up as well that we fully 
support, and that is why I sent you the map that showed where 
the conservation positions that are part NRCS and part partners 
out in the land that go door to door and talk to landowners and 
work with them on which conservation program would work for 
them. Those are vitally important and those kind of programs 
and the flexibility to do them are what we need in the Farm 
Bill.
    And with that, I am glad to be here. I am glad to see you. 
And I wish I had more connection with Michigan, but my good 
friend, Gordon Geyer, keeps trying to get me to come back 
there, because he has got a bear hunting spot that is really 
awesome.
    Chairwoman Stabenow. He is a very good friend of mine. You 
ought to take him up on it.
    Mr. Crouch. I will.
    [The prepared statement of Mr. Crouch can be found on page 
89 in the appendix.]
    Senator Roberts. Thank you, Barth. Our next witness, 
wearing a green and white tie on behalf of the Michigan State 
Spartans, Mr. Robert Tempel from Garden City.

 STATEMENT OF ROBERT TEMPEL, GENERAL MANAGER, WINDRIVER GRAIN 
                              LLC

    Mr. Tempel. Thank you. Madam Chairwoman and Senator 
Roberts, we would like to thank you for inviting us to come to 
talk to you a little bit about the Farm Bill and a little bit 
about our business. It is our honor to serve the producers of 
southwest Kansas, an honor to speak with you today.
    WindRiver Grain LLC is a commercial grain facility which 
loads and unloads 110-car units in Garden City, Kansas. Our 
company was established in 1997 as a joint venture with a 
cooperative system, independent grain companies, and a 
multinational grain company. The mission of our company was to 
bring world markets to southwest Kansas.
    Initially, our main focus was shipping 110-car units to the 
Texas Gulf on the BNSF railroad. Quickly we saw additional 
opportunities into Mexico, California, and the Northwest. None 
of these opportunities would have been possible without the 
commitment of origination customers, destination customers, and 
railroads wanting to develop a long-term relationship that 
developed into a long-term partnership.
    In 2007, Bonanza Energy chose to build a 55-million gallon 
ethanol plant next to our facility in Garden City. Again, the 
relationship we developed with the BNSF railroad was one of the 
biggest reasons Bonanza decided to build next to our facility.
    Overnight, this growth doubled the size of our company, as 
well as adding 39 good-paying jobs to Kansans. This has also 
created economic growth in our surrounding communities as well 
as creating opportunities to encourage young people to come 
back to rural America.
    The policies put into place in past Farm Bills were the 
catalyst which allowed us to see this economic growth in rural 
America. We feel it is important to communicate in how biofuels 
and industry has created commerce, jobs, and opportunities in 
our communities. This tied production and culture to the energy 
market, thus creating positive economic growth which has 
rippled throughout southwest Kansas and in other rural 
communities.
    This ripple effect has also been seen in other service 
businesses such as the 90-plus independent trucking firms who 
buy fuel, tires, repairs, and food in our local community. 
Production ag culture has been energized by ethanol demand. A 
few decades ago, U.S. produced roughly 8 million bushels of 
corn.
    One decade ago, we were seeing over-production in the corn 
market. Today, U.S. farmers produce around 13 billion bushels 
of corn due to ethanol demand increasing in the middle of this 
decade. Today, ethanol demand uses this additional 5 million 
bushels of corn.
    The corn production pie has increased due to this 
marketplace providing incentives for increased seed research, 
fertilizer efficiencies, increased water and land and 
conservation efforts. Looking towards the next Farm Bill, we 
believe crop insurance programs is vital to production 
agriculture and needs to be a priority in funding. If there are 
choices to be made, crop insurance is one that needs to 
continue to be reviewed and strengthened.
    With the current conditions, we would also encourage USDA 
to fully support efforts to achieve approval defining grain 
sorghum as an advanced biofuel. This promotes sorghum 
production as a means of reducing the demand on our precious 
water supply in southwest Kansas.
    American farmers can meet this demand if given the proper 
market signals and common-sense Government policies. In order 
to meet the future global food and feed demand, we cannot 
afford over-regulation that stifles production agriculture. We 
are going to need research coming from land grant universities, 
working with the industry in production agriculture to meet the 
food and fiber needs of this growing world.
    Thank you for giving us the opportunity to share with this 
Committee a little bit about our business in rural America and 
how the past Farm Bills have impacted our own families and 
communities. We feel blessed to work with these hard-working 
Americans. We realize there are going to be reductions in all 
areas of Government spending. We understand and commend you on 
taking these necessary actions.
    In closing, I will leave you with this thought. America was 
founded on principles of hard work, freedom, liberty, and the 
faith that God will guide and protect those who seek His 
wisdom. May He guide and bless you as you lead this great 
country. Thank you.
    [The prepared statement of Mr. Tempel can be found on page 
134 in the appendix.]
    Senator Roberts. Thank you so much, Robert. Those were 
certainly pertinent words indeed. Jeff Whitham, we had to have 
a banker. Western State Bank, Garden City. Could not have a 
finer one.

STATEMENT OF JEFF WHITHAM, CEO AND CHAIRMAN, WESTERN STATE BANK

    Mr. Whitham. Chairwoman Stabenow, thank you and welcome to 
Kansas. Senator Roberts, good morning. I am a banker from 
Garden City, Kansas. To locate that for you, Madam Chair, our 
high school football team's success depends upon our hatchet 
game with Dodge City and we have been in a rebuilding mode 
lately.
    [Laughter.]
    Mr. Whitham. You know, as I think about talking about farm 
support programs at the USDA and where we are in terms of 
needing to balance this Federal budget that we all recognize, 
and I am glad to see a large enough percent of American voters 
have focused on it, that it is important and probably going to 
get done, as we talk about these programs, we have to focus on 
which ones are more effective and that is what I would like to 
try to address this morning.
    From our perspective, the most effective program is the 
multi-purpose Crop Insurance Program, and for a couple of 
reasons, Madam Chair. First, our producers pay about 41 percent 
of that premium, so the Federal Government, the taxpayer, gets 
some leverage.
    Secondly, our producers are compensated, usually largely, 
when they have a problem, either a yield problem or a price 
problem. So that is pretty effective. As you talk about these 
programs in 2011, you have to think about the SURE Program. It 
is an effective program. It is going to fill out a lot of lost 
revenue for our producers out in southwest Kansas because of 
this drought. And I should have mentioned, we run banking 
centers, about eight banking centers from southwest to 
northwest Kansas and we see a fair bit of that difference in 
yields every year.
    The direct payment program, I would tell you, is a little 
less effective simply because our producers receive those 
payments whether they have a good year or a poor year. It may 
not be all that effective for the taxpayer.
    We have--maybe switching over to the EQIP Program or to the 
Conservation Titles in the Farm Bill, the EQIP Program in our 
country is a good program. We generally see it being used for 
terracing ground, and as you know, in our country, it is a soil 
conservation and a water conservation tool largely.
    We see it used for terracing, which again our producers 
help lever by paying part of the cost. And we also see it being 
used by something that our Governor talked about this morning. 
We are going to be slowly abandoning irrigation wells in 
western Kansas as we do not have enough volume to be effective 
with those crops, and that has already started and the EQIP 
Program has a portion of the program that helps those 
irrigators discontinue irrigating, and it is useful actually on 
the family farm that I am a part of. We have used that part of 
the program.
    Another thing you might be interested in as you spend a lot 
of time reading the paper and thinking about the capacity of 
banks to cover the needs of farmers, credit needs of farmers, I 
notice that some folks kind of lump us in with money center 
banks and banks that have had significant problems, and still 
are, with residential real estate and commercial real estate 
loans and are having problems actually getting their loan 
volume up.
    I would tell you, other than maybe a few banks in the 
Kansas City-Lawrence area, that would not be a problem in 
Kansas. These rural banks have plenty of capacity, largely 
because for the last four years, our customers have had--our 
farm customers have had good years. That means that being the 
good money managers they are, they have paid down debt.
    To give you a little bit of a feel for that, we could 
probably make--we have $234 million in loans and we could make 
a $50 million increase in that pretty easily, and with this 
drought, we probably will start doing that.
    Again, thanks for coming to Kansas.
    [The prepared statement of Mr. Whitham can be found on page 
138 in the appendix.]
    Senator Roberts. We thank you very much, Jeff. And last but 
not least, Ms. Karen Wilder, who is the Director of Science and 
Regulatory Affairs--note Regulatory Affairs-- and Chief 
Nutritionist for the Schwan Food Company up in Salina.

 STATEMENT OF KAREN WILDER, SCIENTIFIC AND REGULATORY AFFAIRS 
               DIRECTOR, THE SCHWAN FOOD COMPANY

    Ms. Wilder. Thank you, Chairwoman Stabenow and Ranking 
Member Roberts. I appreciate the opportunity to testify here 
today. My name is Karen Wilder. I am the Director of Finance 
and Regulatory Affairs for the Schwan Food Company and Chief 
Nutritionist.
    The Schwan Food Company is a leading branded frozen food 
company, one of the largest frozen food companies in the world 
employing more than 17,000 people in the processing, 
manufacturing, transportation, distribution and sales of frozen 
foods. I oversee all aspects of the nutrition initiatives at 
Schwan and its wholly-owned subsidiaries, including Schwan's 
Food Service, Inc.
    Schwan's Food Service develops, markets, and distributes 
frozen food products to schools and many other institutional 
channels throughout the United States. Feeding America's 
children began with the company more than 36 years ago.
    Schwan's Food Service is one of the leading and most 
innovative school food service companies providing products to 
approximately 72,000 of the more than 96,000 private and public 
schools throughout the United States. About 70 percent of the 
products distributed to schools are produced and manufactured 
at the facility in Salina, Kansas. Thank you, Senator Roberts, 
for making note of that.
    Over th years, Schwan's Food Service has played a 
significant role in helping to convert USDA commodities into 
food products that met school needs in terms of nutrition, 
student acceptance, as well as cost. And we respectfully urge 
you to keep the USDA Commodity Food Program, including 
commodity processing, strong and well-oriented to meet the 
nutrition and budget objectives of schools.
    To meet the demands of the school food service markets, 
Schwan's Food Service has spent millions of dollars in research 
and development to make our products healthier and more 
nutritious while at the same time making foods that kids will 
actually eat.
    Some of the items worth noting is that Schwan's has 
introduced a line of products that carry the LiveSmart Schools. 
They meet the dietary guidelines of 2010. They provide 51 
percent whole grains, less than 35 percent calories from fat, 
less than 10 percent calories from saturated fat, and less than 
600 milligrams of sodium per serving.
    By the fall of 2012, at least 60 percent of our school 
products will meet the LiveSmart School criteria. We also 
participate in the HealthierUS School challenge, a component of 
the First Lady's Let's Move campaign. We are proud that the 
Schwan's product innovation has enabled many schools to 
affordable meet the ambitious nutrition criteria of this 
campaign.
    Our goal is to support school food service directors across 
the Nation as they strive to provide even more nutritious foods 
that are affordable and acceptable to students. We believe 
strongly in the wisdom of school food service directors to 
strike a balance between nutritional improvement, student 
acceptance, and budgetary limits.
    We commend the USDA in food nutrition service for its 
thoughtful consideration of policy and guidance aimed at 
enhancing the National School Lunch and School Breakfast 
Program. We believe that many of the recommendations made by 
the Institute of Medicine in its report, School Meals, Building 
Blocks for Healthy Children, can serve to ground the proposed 
rule in science.
    That said, the Schwan's Food Company recommends certain 
revisions to help ensure student acceptance and expand 
accessibility, while meeting the nutritional needs of today's 
students. Our recommendations echo the recommendations of 
school food service directors across the nation, as presented 
by comments submitted by the School Nutrition Association, 
including the Kansas State School Nutrition Association, the 
voice of school nutrition.
    We recommend refinements in the proposed rules to support 
the legitimate concerns of America's school food service 
directors to balance nutrition objectives with considerations 
of cost and student taste preferences.
    In addition to our substantive recommendations regarding 
meal patterns, sodium reduction, whole grains, tomato paste 
crediting, saturated fat, we also echo the very important 
recommendation of SNA regarding implementation of these rules. 
Even if all the recommendations that are made regarding the 
proposed rules were accepted, it will force dramatic changes in 
the school meal program.
    The risk of unintended consequences is substantial. The 
responsible way to implement these changes would be to publish 
an interim final rule with implementation optional for school 
year 2012-2013.
    The enhancement reimbursement rates recently enacted by the 
Healthy Hunger-Free Act, provide a powerful incentive to 
schools to implement the new standards. Those who cannot would 
have an opportunity to adjust. Importantly, any problematic 
provisions of the meal standards could be revised before the 
rules are made final.
    We respectfully submit that the implementation schedule is 
best because it protects our children and schools from 
unintended consequences. Thank you for considering my 
testimony.
    [The prepared statement of Ms. Wilder can be found on page 
141 in the appendix.]
    Chairwoman Stabenow. Well, thank you very much to each of 
you, and I think this panel is particularly important to be 
able to expand upon the areas of the Farm Bill because it is so 
comprehensive. It certainly is about commodities, producers of 
all types, but we are also talking about Farm Credit and 
financing and nutrition and elec co-ops, and certainly 
conservation and all of our grain operations and agri-business 
and how we are able to move.
    And when you are speaking about all the jobs that come from 
farm equipment and transportation and so on, it just reinforces 
for me how critical the agricultural economy is to America's 
overall economy. And so, we thank you for all of your comments.
    I would start first talking a little bit more about 
conservation, and appreciate, Mr. Ron, you giving me the book, 
A History of Natural Resource Conservation in Kansas. 
Appreciate that. I chaired a county board of commissioners in 
Michigan and worked closely with our Conservation District at 
the time and learned a lot and gained tremendous respect for 
the work that is done in our conservation districts.
    But I wonder if you might talk a little bit more about 
conservation programs, Mr. Brown, and what is most attractive. 
I know CRP, I know from working with Senator Roberts that 
Kansans love the CRP Program and we do in Michigan as well, but 
I wonder if you might talk about the benefits of that as well, 
but more broadly, what you think is most important and most 
effective in conservation.
    Mr. Brown. Okay. Firstly, I would like to maybe elaborate a 
little bit on what Senator Roberts said earlier about doubling 
our food production in the future. I have heard it a little 
different way, but we will have to produce as much food in the 
next 40 years as we have in all of previous history in this 
country, which I do not know how those two would correlate, but 
I am sure it will be similar.
    With that in mind, we do need a sustainable agriculture, 
and by sustainable, we would have conservation as the bottom 
line of that. We have endorsed and talked a lot about EQIP 
already this morning and the CRP, which is very fine, but one 
of our base problems, and we have already talked about the 
aquifer out west and I am in the eastern part where we have 
surface water, sediment being a big problem with our water 
supply lakes and all that.
    And what we are dealing with now that is a big ticket item 
that is really hard to deal with is stream bank erosion and 
stream bed degradation. I would submit that probably the 
greater part of the sediment in the Mississippi Epoxy 
[phonetic] area could be from stream bank erosion rather than 
field and farm erosion because we have done a great job of 
retaining soil erosion on our farmland over the years.
    We are not done, we are not finished, but we have went a 
long way. But we are in a big ticket item on stream bank 
erosion, and how we are going to cope with that I do not know. 
But it is a serious problem. We have many Corps of Engineers 
lakes in eastern Kansas that are filling with sediment. Some 
are nearly half full of sediment at this point.
    And there has been some experimenting with dredging. They 
have been experimenting with many things, and they are so 
costly, and it is hard to build new lakes now, and our 
population increase is still expanding in parts of eastern 
Kansas around the metropolitan areas, and the demand for 
domestic water is growing every day. So I think we need to 
maybe elaborate a little bit more.
    EQIP has worked wonders and we do not want to discontinue 
that, and I would think--and I mentioned in my statement--that 
we would like to see the consolidation of most of these farm 
conservation programs where they will be easier to access to 
the farmers.
    Chairwoman Stabenow. Well, Mr. Crouch, you talked about the 
Wetland Reserve Program. This is something that has been 
particularly important to us in Michigan as well. But I wonder 
if you might talk a little bit more about the importance of 
that program and any suggestions that you have related to that.
    Mr. Crouch. Well, thank you for asking about the Wetland 
Reserve Program. It is probably--there are some changes coming 
to it that we really like, that we have seen pilots done. 
Nebraska has a pilot right now where if you are doing center 
pivot irrigation and you have a wetland in your field, you can 
enroll it in WRP and the center pivot continues to roll. I 
think that is a wonderful opportunity that should be offered to 
the rest of the country to do that.
    Since it does not have a baseline, I am very much afraid 
that it will get lumped with other easement programs and be 
much reduced, and we would hope that that does not happen. If 
there is a way to find the money, and I know you have not asked 
me yet to point out a program that we could cut and I will not 
do that until----
    Chairwoman Stabenow. No, I will ask you. Please do, yes.
    Mr. Crouch. There is one that we feel does not seem to--and 
I have talked to a lot of my farmer and rancher friends about 
as well. It is a program that a former Chairman of the Senate 
Ag Committee's private program and much loved by him and is not 
loved by us and that is the CSP Program. I think there is money 
there that could be moved to other places and used in a more 
useful manner.
    Chairwoman Stabenow. Thank you very much. Did anyone else 
want to respond on conservation? Yes, and we have talked about 
this. I guess I would just ask if anyone else--I do not know, 
Mr. Bach--first of all, I was very interested that you are a 
first generation farmer.
    You know, so many times we are hearing from folks that are 
second, third, and fourth generation, and getting into farming 
as a first generation farmer, I am wondering, from your 
perspective, why did you do that?
    Mr. Bach. Well, it is a little unique. My father actually 
worked for the railroad. But it was an exciting venture to me. 
I mean, it was--it really came about that through my high 
schools years and such working for a producer that was of 
retirement age.
    And then coming back, he was ready to retire, so I bought 
him out, and through a series of buying him out for a share of 
the crops, and it put me in a position to then rent his ground 
and then later bought it and expanded it beyond that pretty 
well.
    Chairwoman Stabenow. Recently, the Secretary was in 
Michigan and we were talking about some ideas that he has about 
supporting the kind of efforts you are talking about where it 
is passing on the farm, not to someone within the family, which 
is the most traditional way and we certainly want to make sure 
we are protecting that opportunity, but maybe some other 
options that would support a farmer to be able to mentor 
someone that wants to get into farming and be able to move and 
turn their operation over.
    I do not know if you would have any suggestions on any 
incentives that we might focus on to be able to make that 
easier.
    Mr. Bach. Well, Farm Credit currently has a Young and 
Beginning Farmer Programs.
    Chairwoman Stabenow. Absolutely.
    Mr. Bach. Each association has their own--a little bit 
differently among associations, I mean, whether they relax the 
credit standards a little bit or with a non-family member being 
eligible to co-sign for a loan or what might be the standards 
now. That is usually the biggest hurdle to get around, is the 
capital needs that a young beginner farmer would need.
    And that is where I would maybe--I want to reiterate anyway 
the direct payments are necessary to a young farmer beginning. 
I mean, as we get more established in farming, they may not be 
a big part of the dollars as crop insurance, and crop 
insurance, you have got to have that safety net, but the direct 
payment is something a young farmer does rely on. He needs 
every dollar he can get anyway. Thank you.
    Chairwoman Stabenow. Absolutely. Thank you. Ms. Brinker, we 
have done a hearing in the Agriculture Committee, as you know, 
on the great work that rural electric co-ops are doing now and 
how to expand. There are a lot of efforts around energy 
efficiency, the REAP Program as well as the new Rural Energy 
Savings Program that we have been talking about.
    So I was very interested in your testimony about Midwest 
Energy. You said they have 400 projects right now that are 
going. But could you talk about the Rural Energy Savings 
Program a little bit more, how it would encourage more co-ops 
to be able to implement these types of programs? Because I 
think there is a lot of interest around the question of energy 
efficiency, to be able to do more incentivizing of those kinds 
of programs.
    Ms. Brinker. Well, the up-front costs have always been kind 
of a barrier from encouraging people to spend on energy 
efficiency. In the example we have here in the state, Midwest 
Energy up-fronts those costs and creating a loan then to the 
member who then repays it over a period of time with their 
utility bill.
    With the Rural Energy Savings Program, we think that the 
Government could be more involved in encouraging that 
nationwide for people to be energy efficient in their homes and 
remove the barrier of those homeowners' up-front costs.
    Chairwoman Stabenow. Thank you. Let me talk about research 
for a second, and, Ms. Wilder, you did not specifically talk 
about that, but I am wondering to what extent working with the 
USDA that you are involved or with the universities and so on. 
I am sure you are very involved in that as a company, 
certainly. But if you have any comments on the research 
programs or suggestions as it relates to the USDA?
    Ms. Wilder. Absolutely. We are involved with a number of 
universities including Kansas State. We are happy about our 
relationship with Kansas State. We have looked at a new 
cultivars of wheat.
    Whole grains has become a mainstay in the proposed rule for 
the school meals, and the one thing that we know is that whole 
grains have evolved so that they are not bitter, grainy, or 
rejected by children, because if products are not going to be 
eaten by the children in the school meal program, whether it is 
school breakfast or school lunch, then we have failed at 
delivering nutrition to children to help them be and do the 
best they can in a school day.
    Other areas of research are around dairy, looking at 
cheese, trying to address issues related to sodium reduction, 
fat reduction while still retaining flavor. And then certainly 
with regards to assessing student acceptance, we do a lot of 
testing with universities. They basically manage an assessment 
of intake of different kinds of foods, different combinations 
of food to determine plate waste.
    At the end of the day, the school food service director 
needs to meet the guidelines that are set by the Food and 
Nutrition Service of USDA, but if those particular food items 
are not accepted by children, if children do not have enough 
time to eat the items and they are thrown again, it really 
imparts significant costs to the manufacturer as well as to the 
school itself.
    Chairwoman Stabenow. Great. Well, thank you. And I have one 
other question and then I will turn it over to Senator Roberts. 
I am wondering, Mr. Tempel, as well as Mr. Whitham, crop 
insurance. You mentioned the importance of crop insurance. Any 
suggestions for us as we look to the future as to areas we 
should focus on for improvement?
    Mr. Tempel. I guess from our side, it is just continuing to 
make sure we support that because it looks like it is the best 
safety net. From our standpoint in our business, it is the main 
thing we want to make sure that we suggest to your board.
    Mr. Whitham. You know, it is the primary--it is the primary 
program that at the bank we focus on our producers 
participating in and need to know what their coverage levels 
are, and it is a program--you are asking questions about how it 
might be changed. Thinking of it a little bit more from a 
taxpayer's point of view, there probably could be some means 
testing as to size of operations.
    Chairwoman Stabenow. Well, thank you very much. I am going 
to turn it over to Senator Roberts.
    Senator Roberts. Thank you very much, Madam Chairwoman. 
Ron, obvious question. Crop insurance. We have heard crop 
insurance about a hundred times. I hope we have the message and 
I hope we can bring that message to Washington. Are there 
certain farm programs that are absolutely critical to your 
ability to lend to producers with some degree of confidence? 
And what is it about these programs in particular that make 
them important to you as a lender over a several year period, 
over the longer term?
    Mr. Bach. Well, now, I will reiterate that I am a director, 
not a lender. I mean, I set policy and such and you did take 
that steam away. As you stated, the crop insurance are the 
underlying standards, I mean, to know what your fallback 
position is and such.
    You asked--what was your question on the programs?
    Senator Roberts. Well, which programs you really depend on 
and what is it about those programs or the program or whatever 
that makes it unique to you so you have confidence to make that 
loan to that young farmer, or for that matter, any farmer over 
a period of years? What is it about the program?
    Mr. Bach. Well, the reliability of it. I mean, it is about 
the program, I mean, the fact that you can take the dollars 
right to it, if you are talking about the Farm Bill program, I 
mean, and what----
    Senator Roberts. I guess what I am driving at is for you to 
tell us what has been both of our concerns is the degree of 
stability, the degree of predictability of these kinds of 
programs so that you can look down the road, not only next crop 
year, but hopefully five, hopefully ten on down the road, and 
that that message should be delivered to the Congress in 
regards to the budget deliberations we have.
    I am not talking about any particular program increasing 
whatever, but at least look at the stability and the 
predictability of our lending institutions in this country, 
which is why I think there is a lot of money sitting on the 
sidelines as opposed to wandering into the economy or being 
invested in the economy.
    Mr. Bach. Well, I think it would be great if we could have 
a longer Farm Bill than five or seven years. I mean, they would 
have to do it continually. But there is the stability of having 
what we use as knowing that the program is going to be there 
year after year. I mean, I do not know if that answers your 
question or not.
    Senator Roberts. We are going to keep it simple and that is 
exactly te answer I was looking for. Kathleen, can you describe 
to us the investments you will make using the RUS loan, and 
further, how does RUS secure the loan to ensure that Nemaha-
Marshall makes the payments?
    Ms. Brinker. Well, yes, Senator. Just as our first loan did 
back in the late '30s and early '40s, our current loan, which 
was $7.6 million, will be used to build infrastructure, poles 
and wires, substations, such as that, to provide reliable 
energy to our consumers. I want to reiterate, too, that this is 
kind of a zero cost thing, too, because it is a loan. It gets 
repaid back. Just as our first loan did in the late '30s and 
early '40s, that loan has been paid back 100 percent.
    The co-operatives have an exemplary record of repaying 
those loans. So our investment we use for that will also be 
going from a self-read, self-calculate method of members 
figuring their own bill, reading their own meter, to a system 
where the meter is read remotely and the bill calculated for 
them.
    And how do they secure the loan? RUS provides a lien, takes 
a lien on all of our plants and our investment. So they have a 
lien on our assets so they have some sort of guarantee.
    Senator Roberts. Well, then conversely, if that loan was 
not available, how would a change of financing costs and your 
co-ops' ability to even make those improvements?
    Ms. Brinker. Well, we would be forced to go to private 
financing, which would then be higher costs. Many times our 
local banks and stuff do not have the funding available to fund 
such large loans as $7.6 million. With those higher costs, too, 
it is a shorter term. These facilities, many of ours, have been 
out there for 70 years already.
    So with a shorter term loan and higher costs, it does not 
fit well with the electric co-operatives. These facilities are 
designed to last 30 or 40 years and that is how the RUS loan 
program is.
    Senator Roberts. Axtell is over by Seneca, right?
    Ms. Brinker. I live in Seneca.
    Senator Roberts. You live in Seneca. Sixth grade, Holt 
Junior High. That is what they called it then. Actually it was 
sixth grade. We went up to Seneca to play basketball and there 
were holes in the gym, in the wall, and the snow came through 
the holes on the basketball court. We just had fifth and sixth 
graders. I feel sure that Seneca has seventh and eighth graders 
on that team.
    [Laughter.]
    Ms. Brinker. Crops are not the only thing we grow there.
    Senator Roberts. Did your dad have anything to do with 
that? He probably played against us. Well, at any rate.
    Ron, you have got to come back with me to Washington one 
time. When you come back, drop in. We will try to find out who 
is in charge of the rural fugitive dust program.
    [Laughter.]
    Senator Roberts. And that we had Chad Bassinger and his 
wife, Cassandra, we had that big bus. We did not cause hardly 
any dust. There are still the lakers out there. I am sure out 
west there is some blowing, but not nearly as much in Kingman 
and Reno County. We are now blowing away. We do not need to 
post an EPA inspector at every county road to find a grain 
truck if it is tearing up dust.
    Back in the '70s when this came about at first, I finally 
located, as a Congressman, after three days of trying, the 
young lady in charge of rural fugitive dust. Her suggestion was 
to send water trucks out at ten in the morning and three 
o'clock in the afternoon and tamp down all those dusts on the 
county roads. Did I realize how much dust we have in Kansas? 
And I said, Yes, ma'am, I do.
    But with the CRP Program and everything else that is 
involved that you have already mentioned, conservation. So can 
you help me come back and find who the heck ever it was that 
opened up that file and decided to start that up again?
    Mr. Brown. I don't have an idea. I do not even want to 
know, I don't think.
    Senator Roberts. All right. Let me go on here. Barth, thank 
you for your comments about the CRP and all your work in making 
it successful. Can you tell us a little bit about what you 
envision down the road between the relationship between the 
wildlife habitat and livestock operations we have been 
successful in opening up and raising on some land that had been 
reserved for a very critical habitat, but when you get into a 
situation like we are into, why it still remains a good 
partnership. Can you talk about that a little bit?
    Mr. Crouch. Absolutely, Senator. One of the things that the 
Kansas Conservation Partnership has advocated for some time is 
that the rules on the Conservation Reserve Program should 
allow, at no cost to the landowner, a way to turn lands that 
want to be grazing lands again into grazing lands while they 
are in CRP Program.
    The easiest way to make sure that that land turns into 
grazing land is to graze it while it is in the CRP. That makes 
it more possible for the land to become what it needs to be. I 
had that lesson brought home to me. Two years ago we had a 
Greater Prairie Chicken tour that goes into Lincoln County, and 
a gentleman there named Bill Donnelly, we were out looking at 
his pasture and he showed me, he said, What do you see there?
    You know, ever since I have been in school and all my life, 
people have been saying, What do you see on the land? And it 
was a low ridge. And he said, Can you tell the difference 
between that ground and this ground? This was native prairie, 
never been broken. He said, What is that? I said, I do not 
know.
    And he said, Well, that is where my dad did his first on 
his own CRP, planted it back through native grasses, because he 
said it was not worth farming it and he was tired of watching 
it not produce a crop, and so he put it back. And immediately 
grazed it the first year. And it does not look like, unless 
with that little ridge where the dirt had blown in and settled 
in the fence line, except for that you would not know that it 
was any different.
    What we are hoping for with the Lesser Prairie Chicken 
Initiative is to get folks that want to come out of CRP and go 
into grazing to allow them to do that with using EQIP, using 
even the Grasslands Reserve Program to get there. And that is 
where I see the changes that we need.
    And some of these--the one that drives us crazy and I have 
got a friend that would shoot me if I did not say it now. CP-
25, the Rare and Endangered Habitat, in Kansas and a lot of 
those areas, it needs grazing to become the kind of habitat we 
really need for the wildlife. In the long run, those wildlife 
species and that grassland all worked with grazing before.
    Senator Roberts. We just got that done after considerable 
discussion. I would add that the lesser or the greater prairie 
chicken seems to thrive pretty good on the acreage that is 
grazed as opposed to the other acreage where you get invasive 
species coming in and really causing problems. So it is not an 
either/or situation and it is a partnership situation which I 
want to thank you for that.
    So Robert, you are a business manager. I was going to ask 
what your biggest challenges are. Let me just rephrase it. Are 
you facing increased regulatory burdens? Answer, yes.
    [Laughter.]
    Senator Roberts. Or do you have concerns about paperwork 
for compliance? Answer yes.
    [Laughter.]
    Senator Roberts. I wonder who majors in this stuff. How can 
you attract young people who could do the software to keep up 
with all the regs coming out. Can you talk a little bit about 
that? I mean, where do you find people to keep up with this 
stuff? I have a staff. I have 16 people. I should not have said 
that. I have 12 people. You did not know about the other four.
    [Laughter.]
    Senator Roberts. We have the darnedst time. We have the 
darnedst time and I know that your staff does, too, just 
keeping up with the dang fool regulations and the cost. It is 
just killing us. So have at it.
    Mr. Tempel. Well, from our standpoint, you know, the 
regulations, just like the sweet boggers we cannot get bends 
now. So in a lot of these flat-bottomed bends and things like 
that, they will not allow us, which we have all had flat-
bottomed bends for a long time, and so the sweet boggers, we 
are not allowed to get in those at this point, so we are having 
to come up with different ways to do that.
    Senator Roberts. Why?
    Mr. Tempel. Because they are saying that the risk of 
somebody getting hurt in a bend with an auger in there that 
allows one side, and that is the biggest thing.
    Senator Roberts. Okay.
    Mr. Tempel. And then the other thing, you talk about dust 
emissions. I mean, just another thing for us, the ethanol 
plant. We are next to each other within basically 50 years of 
each other and we cannot have a conveyer going to the ethanol 
plant because of dust emissions. So we run a truck around to 
that ethanol plant, create more dust than we would going into 
the ethanol plant directly. But if we tie them together----
    Senator Roberts. You had better water it down at ten in the 
morning and at three in the afternoon.
    [Laughter.]
    Mr. Tempel. You had better have a big water truck.
    Senator Roberts. First we have to find the water.
    Mr. Tempel. One other thing we talked about in crop 
insurance, I guess I wanted to mention, we think we should keep 
that in private hands, not to go into some other program, but 
to keep that in private hands as well.
    Senator Roberts. Jeff, what should the Committee consider 
to address the credit needs of producers?
    Mr. Whitham. Yes, sir. You asked the last panel some 
questions about young farmers or young men and women trying to 
get into farming. And first of all, USDA has some good programs 
for young and beginning farmers. They have some real estate 
programs that are fixed rate and go out to 40 years. They have 
some programs for equipment and operating that will handle 
young farmers up to a certain size and then they have to 
graduate.
    So we have worked with a number of young farmers as they 
have come out of that graduation program, I call it, and I am 
sure the Farm Credit System folks have done the same thing. We 
look for ways to work with these young sons and son-in-laws of 
producers and their wives. They are our next crop of customers. 
They have more risk initially, just because it just is so 
capital intensive.
    These farms programs--that crop insurance and that disaster 
payment program help a lot. That disaster payment program that 
I criticized a bit because--well, it does provide benefits to 
smaller farms and younger farmers. They just do not have as 
much equity and liquidity to withstand a couple of years of 
poor prices or poor yields.
    So we work at it pretty hard. It is still a bit of a chore. 
If there is not a family member helping out a lot, it is a 
pretty tough chore to get done.
    Senator Roberts. What is the average size farm in Finney 
County? I know that it varies from all the----
    Mr. Whitham. You know, it probably is six to eight quarters 
of ground. Most of these producers own some ground and rent 
some ground. Most of these producers irrigate some ground, 
probably a third irrigation and two-thirds dry land, about that 
size. Probably a couple sections.
    Senator Roberts. My staff is going to criticize me and beat 
me about the head and shoulders for me even bringing this up, 
but we do have a tremendous--I do not know what to call it--it 
is a misunderstanding on the part of an awful lot of people who 
want to shape the farm program to help small family farmers. 
And that is somebody five-foot-two in Vermont as opposed to 
somebody six-foot-four in Finney County.
    Now, I am not going to get into all that I get into on that 
because it just gets me riled up and the Chairwoman does not 
want me to do that and take the time to do it. But you said 
capital intensive. And to be a farmer in Finney County, Kansas, 
America, and produce what you do produce in the good years to 
help our country, this country and a very troubled and hungry 
world, you cannot do that.
    Small farmers, God bless them, and all the niche markets 
and I love specialty crops. I eat a Bing cherry every morning 
with a glass of ethanol.
    [Laughter.]
    Chairwoman Stabenow. Add some blueberries and apples.
    Senator Roberts. Add some blueberries. Well, I do all this 
with Chair Grassley. I do not know if he wants to do that or 
not.
    But it is so capital intensive. And bless your heart for 
really focusing on these young farmer issues. I have said 
enough on that.
    Karen, I really share your concern with the USDA Food and 
Nutrition Service. You talked about science-based, science-
based. We need more one-armed scientists so they cannot say on 
the other hand.
    [Laughter.]
    Senator Roberts. Science-based nutrition standards for 
foods, one, improve the nutritional profile of school foods. 
Everybody wants to do that. Two, do it in a way that schools 
and communities can forward. Certainly you want to do that. And 
three, stop and think about it, provide foods that school 
children actually want to eat.
    Now, you have got school meal rules that are proposed 
without making the changes that you have recommended. And the 
Child Nutrition Bill gives specific instructions to school meal 
rules. They are contrary to the new rule on national 
nutritional guidelines. And you are stuck in the middle. You 
are in purgatory. You are in regulatory purgatory.
    The other thing I want to get upset about is, is that I, 
from time to time, go to elementary schools and eat the school 
lunch program that the kids eat, share with them. And we talk a 
lot and basically, started the Reading is Fundamental Program 
and I am trying to get them excited about reading. Big ticket 
item.
    But then we have school lunch. The president in Garden 
City, by the way, I cannot remember what elementary school it 
was, the young man greeted me. He was student body president, 
and we all file in and he had his tray first and then whatever 
and then he left several little openings there on the tray, 
pockets, whatever you want to call them.
    At any rate, they were empty and the food minder at the end 
of the check-off saying, you know, told him to go back and fill 
what he had not filled, which he did. And so, then we went to 
the table and I, of course, behaved and I took everything.
    So at any rate, while we were sitting there eating, all of 
a sudden I noticed him glancing around and by that time, there 
were quite a few people emptying their trays and whatever, I 
looked and he had not eaten any of the three that he had not 
chosen and it went into the ash can and came back.
    I said, I thought they told you to eat that or that you 
were supposed to eat that. He said, Oh, they do all the time. 
And I said, And you do not eat it? He says, No, I do not like 
it. I said, Well, do you not get a little hungry at the end of 
the day? He said, I do. I go straight to Taco Bell.
    Now, there is a lesson there. I understand that the people 
are trying--the Federal Government now, not 4-H, not what you 
see on television, not any number of entities that tell you to 
do what grandmother told you to do in the first place, 
moderation of all things, but the Federal Government now is in 
the business of less salt and maybe taxing jelly rolls--I am 
not making this up. That was an idea that popped up in the 
Finance Committee, no pun intended.
    Holy cow. We are getting into a big nanny government that 
tells us what to eat, how to eat, when to eat it and everything 
else, and I am all for a nutritious diet. Goodness knows, we 
have a real problem with obesity. As a matter of fact, if we 
could put a program next to obesity, it would be funded.
    But what do you do? How do you operate with this 
indecision? Are you the one that they drafted to get up to 
speed, all this, and keep up with the regulations and know what 
you are doing and everything else?
    Ms. Wilder. Absolutely.
    Senator Roberts. Bless your heart. You need a purple heart 
or something.
    Ms. Wilder. Unlike you, I have more than actually 12 behind 
me and my staff that help to interpret. I also visit with 
hundreds of school food service directors and I will tell you 
that there is a lot of fear and concern in the hearts of food 
service directors who do the best they can to pull together a 
nutritious meal for the children that they serve.
    They listen to the children. They have them come in and 
taste foods. They actually get students to do a thumbs up/
thumbs down on foods. This particular regulation that was 
issued as a proposal by the Food and Nutrition Service is 
unprecedented, not only in terms of the number of changes and 
regulations built into it, and the fact that it is unfunded to 
the level that food service directors need, but the fact that 
food service directors were never asked for their opinion. They 
were never asked.
    How is this going to work in your school? They were never 
asked to even pilot or test, which frankly, has happened in the 
past with the Food and Nutrition Service. So lo and behold, we 
are faced with a whole host of changes in the menu plans. Now 
we are feeding children at different ages, different grades, 
different foods, different calorie levels.
    The sodium restrictions are exceedingly difficult and while 
we all need to cut back on sodium, the reality is, salt is in a 
number of foods, not only for functional purposes--think about 
dough development for those of you that make bread. Take salt 
out. What happens to it?
    But also preservation. Think about meats. Food standards. 
Many of the food standards are going to run counter to the 
proposed rules. So again, this has not really been thought 
through.
    From a science standpoint, the school breakfast and school 
lunch program are there for the purpose of helping to arm 
children with the food and the nutrition that they need to 
think, to act, if it is in athletic programs, if it is playing 
a musical instrument. It is to help a student do the best they 
can.
    We know from research and research that we funded that 
hungry children do not learn. They act up in school. They do 
not feel well. They are going to the school nurse. So if we 
have got a program that is funded, but the children do not eat 
the foods, then we have failed them.
    And all I can say is, again, we need to kind of hold back 
on some of the regulations, the way they have been proposed. 
The time lines are exceedingly aggressive. It is going to cost 
food companies, including us, a lot to try and manufacture a 
process and a product that delivers products that schools want. 
And then the question is, will children eat the food?
    So we are very concerned and we know a lot of other members 
of industry are also concerned.
    Senator Roberts. I thank you for your comments and it is a 
subject matter I know the Chairwoman and I care very deeply 
about. And I am not going to go into any more rants on big 
nanny government. I think that that closes my questions, Madam 
Chairwoman. If you would like to ask additional questions or 
make some concluding remarks, I would certainly applaud those 
at this time.
    Chairwoman Stabenow. Thank you very much. And thank you, 
each and every one of you, and to everyone who has been with us 
today. This has been very helpful and very important. I want to 
thank you, Kansas, for sending an extremely thoughtful and 
knowledgeable Senator, one that keeps us entertained at every 
meeting. So I thank you for that as well.
    But in all seriousness, we know we have a lot of challenges 
in front of us, probably the toughest Farm Bill to write since 
the first one was written. But we all know it is an opportunity 
for us to take a tough look and to do our best to make sure 
that everything we are doing, every dollar we are spending is 
spent and stretched as effectively and as far as possible, and 
that is what we are doing.
    Agriculture has and will continue to be a part of solving 
problems in our country, including our deficit, and we will all 
work together to do our very best job on that. But let me just 
close by saying that really supporting American agriculture and 
rural communities is a lot more than about funding levels or 
even policies.
    In my judgment, it is about our way of life in America. It 
is about communities, it is about values, it is about a sense 
of responsibility. We have a large number of our men and women 
in the armed services coming from rural America. Why? Because 
there is a sense of giving back. And I think that is worth 
fighting for. Our way of life is worth fighting for.
    To me, in addition to everything else we talk about, that 
is an important reason to have a strong rural America with a 
strong agricultural background. And that is what we are focused 
on doing and I very much appreciate your being here.
    We would just indicate again that we need to have any 
comments you would like to make given to us in the next five 
business days, which would end at 5:00 p.m. on September 1st.
    With that, thank you so much for having me. It is great to 
be in Wichita, Kansas, and the meeting is adjourned.
    [Applause.] [Whereupon, at 12:18 p.m., the hearing was 
adjourned.]
      
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