    [Senate Hearing 113-558]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 113-558

                                2014 FARM BILL:
                         IMPLEMENTATION AND NEXT STEPS

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

                                    HEARING

                                   before the

                           COMMITTEE ON AGRICULTURE,
                             NUTRITION AND FORESTRY

                              UNITED STATES SENATE

                        ONE HUNDRED THIRTEENTH CONGRESS

                                 SECOND SESSION

                                   __________

                                  MAY 7, 2014

                                   __________

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

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            Available via the World Wide Web: http://www.fdsys.gov/
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                COMMITTEE ON AGRICULTURE, NUTRITION AND FORESTRY

                     DEBBIE STABENOW, Michigan, Chairwoman

    PATRICK J. LEAHY, Vermont            THAD COCHRAN, Mississippi
    TOM HARKIN, Iowa                     MITCH McCONNELL, Kentucky
    SHERROD BROWN, OHIO                  PAT ROBERTS, Kansas
    AMY KLOBUCHAR, MINNESOTA             SAXBY CHAMBLISS, Georgia
    MICHAEL BENNET, COLORADO             JOHN BOOZMAN, Arkansas
    KIRSTEN GILLIBRAND, NEW YORK         JOHN HOEVEN, North Dakota
    JOE DONNELLY, INDIANA                MIKE JOHANNS, Nebraska
    HEIDI HEITKAMP, NORTH DAKOTA         CHARLES E. GRASSLEY, Iowa
    ROBERT P. CASEY, Jr., PENNSYLVANIA   JOHN THUNE, South Dakota
    JOHN WALSH, MONTANA

                 Christopher J. Adamo, Majority Staff Director

                  Jonathan J. Cordone, Majority Chief Counsel

                        Jessica L. Williams, Chief Clerk

                  Thomas Allen Hawks, Minority Staff Director

           Anne C. Hazlett, Minority Chief Counsel and Senior Advisor

                                      (ii)

                                C O N T E N T S

                                  ----------
                                                                       Page

    Hearing(s):

    2014 Farm Bill: Implementation and Next Steps....................     1

                                  ----------

                             Wednesday, May 7, 2014
                        STATEMENTS PRESENTED BY SENATORS

    Stabenow, Hon. Debbie, U.S. Senator from the State of Michigan,
      Chairwoman, Committee on Agriculture, Nutrition and Forestry...     1
    Cochran, Hon. Thad, U.S. Senator from the State of Mississippi...     5

                                    Witness

    Vilsack, Hon. Tom, Secretary, United States Department of
      Agriculture, Washington, DC....................................     3
                                  ----------

                                    APPENDIX

    Prepared Statements:
        Casey, Hon. Robert, Jr.......................................    44
        Cochran, Hon. Thad...........................................    45
        Vilsack, Hon. Tom............................................    46
    Document(s) Submitted for the Record:
    Bennet, Hon. Michael:
        ``Colorado River Basin as Critical Conservation Area'',
          Colorado River District....................................    60
        Republican River Water Conservation District Water Activity
          Enterprise, prepared statement.............................    61
    Question and Answer:
    Vilsack, Hon. Tom:
        Written response to questions from Hon. Debbie Stabenow......    64
        Written response to questions from Hon. Pat Roberts..........   114
        Written response to questions from Hon. Sherrod Brown........    89
        Written response to questions from Hon. Robert P. Casey, Jr..    97
        Written response to questions from Hon. Thad Cochran.........   101
        Written response to questions from Hon. Joe Donnelly.........    92
        Written response to questions from Hon. Kirsten Gillibrand...    91
        Written response to questions from Hon. Tom Harkin...........    87
        Written response to questions from Hon. Heidi Heitkamp.......    93
        Written response to questions from Hon. Mitch McConnell......   114

                                2014 FARM BILL:
                         IMPLEMENTATION AND NEXT STEPS

                                  ----------

                             Wednesday, May 7, 2014

                                  United States Senate,
              Committee on Agriculture, Nutrition and Forestry,
                                                         Washington, DC
        The Committee met, pursuant to notice, at 9:12 a.m., room
    328A, Russell Senate Office Building, Hon. Debbie Stabenow,
    Chairwoman of the Committee, presiding.
        Present or submitting a statement: Senators Stabenow,
    Leahy, Harkin, Klobuchar, Bennet, Gillibrand, Donnelly,
    Heitkamp, Casey, Walsh, Cochran, Roberts, Chambliss, Hoeven,
    Johanns, Grassley, and Thune.

    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. I will call to
    order the Senate Committee on Agriculture, Nutrition and
    Forestry; and welcome, Secretary Vilsack. We thank you very
    much for being a compelling advocate for passage of the Farm
    Bill and we also greatly appreciate your excellent staff
    providing critical technical assistance throughout the entire
    process, and your personal help in developing a Dairy Title as
    we came to an end to be able to put this all together, having a
    title that was both politically workable and, most importantly
    from a policy perspective, workable for our farmers. Thank you
    very much.
        I continue to be very, very proud of this Committee and the
    fact that at a time when it is tough to get things done,
    everybody on both sides of the aisle really came together to do
    what needed to be done; and we will see a stronger rural
    economy and economy in general as a result of it.
        Over the last three years, this Committee worked to put
    together a Farm Bill that reforms agricultural programs, cuts
    spending, and supports the 16 million people whose jobs rely on
    the strength of American agriculture. In many senses, the Farm
    Bill is a bit of a misnomer as we all know because this bill
    affects every American in many different ways.
        This is a bill that takes critical steps toward changing
    the paradigm of farm and food policy. We worked hard to make
    sure the Farm Bill represents the diversity of American
    agriculture from row crops, to specialty crops, to livestock,
    to organics, to local food systems.
        We passed a very strong permanent livestock disaster
    assistance Program that, unfortunately, had to be used almost
    immediately after passage. We eliminated direct payments in
    favor of strengthening risk management tools and expanding
    opportunities for crop insurance, the number one request of
    farmers across America.
        We increased support for several organic programs which is
    one of the fastest-growing segments in American agriculture. We
    once again provided a strong Specialty Crop Title supporting
    nursery and a floriculture as well as fruits, vegetables, nuts,
    and other products you find in the produce aisle in the
    supermarket.
        I am particularly proud of the Conservation Title and the
    new Regional Conservation Program which will bring together
    public-private funds to better assist farmers conserve our land
    and resources. I am also very excited about the new Foundations
    for Food and Agricultural Research that we created which will
    combine public-private dollars to make sure we have the funding
    streams necessary to continue to solve problems and to create
    opportunities to do research and do new innovation.
        This new Foundation is really about the future, and I look
    forward, Mr. Secretary, to be working with you as the
    distinguished board members are appointed and the foundation
    begins its work. This Farm Bill is also a rural development
    bill that will help small communities build safe drinking water
    systems, access affordable broadband internet service, and it
    also encourages World leaders to work together on a regional
    economic level for regional economic strategies which will not
    only make the most of federal dollars but also help small towns
    attract business investments and jobs.
        I am also very excited about the opportunities we have
    created through the Energy Title that will support job creation
    and in the growing sector of bio-based manufacturing as well as
    the next generation of bio-fuels to continue building America's
    energy independence.
        I am proud of our Nutrition Title, which expands food
    access for families in need and provides incentives and
    education related to health food choices in both urban and
    rural communities.
        Food assistance is a critical lifeline for families in need
    giving them temporary help to put food on the table, and I am
    very pleased to see the most recent Congressional Budget Office
    estimates say that SNAP spending is continuing to decline the
    right way, now saving an additional $24 billion more than
    previously estimated. I have always said the best way to reduce
    nutrition health spending is by improving the economy and
    helping people get good paying jobs, and that is what is
    happening.
        I am very proud this Committee and our colleagues in the
    House worked together to give our farmers and ranchers the
    support they need to continue producing the safest, most
    abundant, most affordable food supply in the world.
        Our farmers are truly feeding the world which is why the
    Farm Bill expands export opportunities for producers and, in
    fact, creates the first ever Undersecretary of Agriculture for
    Trade; and I am looking forward, Mr. Secretary, to make sure
    that this new position is structured in a way to be an advocate
    for your department and U.S. producers.
        It has been a long road, a long road to get here to this
    implementation hearing; and I want to say thank you to everyone
    on our Committee, thank you to Mr. Secretary. Thank you to my
    Ranking Member who I know will be joining us shortly and you
    will hear from the senior senator from Mississippi when he
    arrives.
        But I think at this point, we will proceed, Mr. Secretary,
    with your testimony and then we will hear from Senator Cochran
    as well. It is always a pleasure to have you with us and again,
    thank you for not only your leadership in helping us get to
    this point but frankly we put a lot on your plate, and we
    appreciate that you and your team has stepped up and are
    working very hard to implement the Farm Bill.
        Secretary Vilsack.

      STATEMENT OF THE HON. TOM VILSACK, SECRETARY, UNITED STATES
               DEPARTMENT OF AGRICULTURE, WASHINGTON, DC

        Secretary Vilsack. Thank you very much, Madam Chair, and I
    simply want to echo the comments of many people around the
    country thanking you for your leadership and Senator Cochran
    for his leadership and this Committee leadership in getting a
    progressive, transformative, and positive Farm Bill passed. It
    sent, I think, a message of hope throughout the countryside and
    obviously would not have happened without the great work of
    this Committee and without your leadership.
        I want to thank you personally for the work that you did.
    It was not an easy lift. It did require bipartisan support, and
    I think it represents the best of the kind of work that can
    occur in this democracy. Thank you.
        It seems as if I need to give you an update on where we are
    relative to implementation of this Farm Bill; and I can tell
    you in the first 90 days, I am confident that we have made
    progress in every title of the Farm Bill.
        We focused initially on putting the disaster assistance
    programs in place. Over 33,000 applications have been received.
    $16 million has already been distributed to producers who have
    suffered disasters after October 1, 2011. We would anticipate
    and expect that those disaster assistance payments will
    continue for the course of the next several months for sure.
        In conservation, we just set up the Conservation Easement
    Program that you established as part of the reforms of
    conservation.
        I see Senator Cochran is here, Madam Chair. If you want, I
    would be happy to stop and allow the Ranking Member the
    opportunity to make his comments.
        Senator Cochran. I would rather that you continue.
        Secretary Vilsack. All right.
        Chairwoman Stabenow. We will let you continue and then we
    will turn to Senator Cochran at that point.
        Secretary Vilsack. Yes. You mentioned trade. One of the
    great things about getting the Farm Bill done was that we were
    able to resume our trade promotion programs. We are on track
    for yet another record year of agricultural trade. It will be
    the fifth record in the last six years.
        The Nutrition Title, as you indicated, is a strong one. We
    are excited about the pilot employment and training
    opportunities to help put people that are on SNAP or looking
    for work to work. We have received a lot of interest from a
    number of states who are willing to participate in those pilots
    and we look forward to getting those started this fall.
        In the credit area, we have reduced the interest rate on
    the Joint Direct Farm Ownership Loan, cutting it in half which
    will make that much more feasible. In rural development, the
    water resources that you provided to deal with the backlog of
    water projects has been distributed. We are reducing that
    backlog.
        We are announcing our Business and Industry Loan Program,
    the set aside for local and regional food opportunities and
    food hubs is being set up.
        You mentioned the Foundation which we are all so excited
    about. We received over 275 nominations for the 15-person
    board. It is in the process of being incorporated, and we
    anticipate and expect the first board meeting of the ex officio
    board members will take place in July with the passage of
    bylaws, and hopefully we will be able to begin the process of
    getting the matching resources that are required for the
    Foundation to continue its work.
        In the Forestry Title, we have had 36 states contact us to
    take advantage of the streamlined NEPA process in terms of
    areas that have been stricken by disease and pests. We are
    anxious to get that program up and going.
        The Energy Title, we just announced the notice of funds
    availability, $70 million. We are working on the additional
    roles in terms of the bio-product manufacturing opportunities
    which will take place this summer and next year.
        In horticulture, the specialty crop block grant has been
    advised. The farmer and rancher promotion and local food
    promotion programs are being advised of the availability of
    funds this week. We have initiated the organic research
    initiative as instructed.
        In crop insurance, the whole farm policy pilot will be
    potentially available this summer. For the benefit of Senator
    Cochran in particular, the catfish MOU has been signed with the
    FDA, and we anticipate and expect that the catfish rule will go
    to OMB by the end of this month.
        We have plenty on our plate. The regional conservation
    partnership program, we look forward to making announcements
    about the critical conservation areas. At the tail end of this
    month, the Foundation work will continue and we will be
    focusing on getting the educational materials out for the ARC
    and PLC program so that producers will have a number of months
    to be able to evaluate the appropriateness of either one of
    those programs for their operation.
        The Supplemental Crop Insurance Option and the STAX program
    should be operational, we believe, by the end of this year.
        The dairy program will be set up and functional by
    September, and we are looking forward to instituting the food
    insecurity pilots that I know are of interest to you, Madam
    Chair, sometime this fall.
        We are focused on this. We understand the importance of it,
    and we look forward to answering the questions of the
    Committee.
        Thank you.
        [The prepared statement of Secretary Vilsack can be found
    on page 46 in the appendix.]
        Chairwoman Stabenow. Thank you very much. It is easy to see
    that you are moving on all fronts, and we greatly appreciate
    that.
        My Ranking Member and partner, Senator Cochran.

    STATEMENT OF HON. THAD COCHRAN, U.S. SENATOR FROM THE STATE OF
                              MISSISSIPPI

        Senator Cochran. Madam Chairman, I thank you for convening
    this hearing and providing the leadership that you do to this
    Committee.
        Mr. Secretary, welcome. We appreciate your service at the
    Department of Agriculture and particularly appreciate your
    comments and your efforts to find ways in which the Federal
    Government can provide assistance to those who lost property
    and flocks of birds in Mississippi due to the devastating
    tornadoes that really caused an awful lot of damage in our
    State. Right now we are still in the cleanup, straightening up
    and assessing the damages mode.
        But with the assistance of your department, we will make
    good progress I am sure in trying to get these people restored
    so that they can continue to provide important foodstuffs and
    economic benefits throughout not only our State but the entire
    country.
        Could you give us some indication about what your reaction
    to the situation is in Mississippi as a result of these
    disasters and whether or not provisions in the Farm Bill are
    sufficient to give you the authorities you need to be helpful
    to our State and the producers?
        Chairwoman Stabenow. I think, Mr. Secretary, it would be
    appropriate if you wanted to respond to that.
        Secretary Vilsack. Okay. Senator, we have set up the
    disaster assistance programs. The Livestock Indemnity Program
    is really designed to provide assistance and help to those who
    have lost livestock as a result of disasters. I certainly
    encourage the producers to make sure that they have adequate
    records, and we will be happy to work with them to process
    applications as quickly as possible.
        We already have in place the programs. The resources are
    there, and folks are anxious to help. We also will use our
    resources at USDA to provide for appropriate disposal. That is
    also an issue in a disaster situation.
        Our folks at APHIS will be willing to work with producers
    in Mississippi to make sure that all the rules and regulations
    relative to disposal are followed as well.
        We will be more than happy to help. If there are specific
    issues that your staff wants to contact our staff about, we
    would be more than happy to help you in any way we can.
        Senator Cochran. Thank you very much for permitting that
    question.
        Chairwoman Stabenow. Absolutely. Thank you. We will proceed
    with questions. We are going to do a seven-minute round of
    questions; and if there is interest from the Committee, we will
    do additional rounds to make sure everyone's questions are
    answered, given the time that it is allowable.
        Mr. Secretary, first let me ask a little bit more about the
    regional conservation partnership program and I have to come,
    at this point, say that we have great confidence in the moving
    forward and implementation of this since you stole the main
    person from our Committee who wrote this, Tina May. We are
    sorry to lose Tina from the Committee staff as well as Karla
    Thieman. I do not know if I see her here but Tina, the
    confidence knowing that she is part of overseeing this I think
    is something that we cannot underestimate.
        We are happy to have the person that was helping to really
    lead this as the architect with you. But this is probably one
    of the most understated new policies in the 2014 Farm Bill. It
    has the potential to transform the face and the future of
    agricultural stewardship.
        When we look at the innovative possibilities in the Great
    Lakes or Chesapeake Bay or certainly we could name many things
    around the country, it is really about partnerships and
    leveraging public-private sector partnerships in creating new
    models.
        Given that this is a new program and the notion of both
    regions and partnerships is new to a lot of groups, what type
    of outreach and education is NRCS and USDA doing to ensure that
    participants are informed and are able to submit competitive
    applications, because this really only works if people are
    coming together on the ground and the planning and submitting
    the kind of applications that we certainly hope we see.
        Secretary Vilsack. Well, Madam Chair, first of all, I think
    I need to correct the record. I think you stole Tina May from
    us before we stole her back.
        [Laughter.]
        Secretary Vilsack. We are happy to have her back.
        We understand and appreciate the transformative opportunity
    that this regional conservation partnership program presents.
    We have done a series of listening sessions which we will
    continue to do to make sure that folks are fully aware of this
    opportunity.
        In the past, what we have done is we have got a program and
    we give people very little time to actually put projects and
    proposals together. This time we are going to reverse that
    process. We expect and anticipate sort of laying out the
    critical conservation areas that are critical to this
    partnership effort by the end of this month; and then we want
    to give folks several months to basically put proposals and
    projects together for consideration; and so, we are going to
    give people plenty of time to do what they need to do to get
    this done right.
        We also want to get it done in time for it to take
    advantage of an opportunity that we are trying to create at
    USDA and through the rural council to encourage more capital
    investment in rural America.
        You can rest assured there is going to be plenty of
    outreach and plenty of opportunity for people to be very
    creative, and we are going to try to get sort of the framework
    of this program out as quickly as we can so people can respond.
        Chairwoman Stabenow. Great. Another priority in the Farm
    Bill that I mentioned was in the Energy Title focusing on bio-
    based manufacturing. We all talk about how biofuels are very
    important to energy independence and jobs. But we have added to
    the USDA's toolkit the ability to support more broadly the bio-
    based economy.
        For example, we authorized renewable chemical production
    and bio-based manufacturing as eligible projects under the
    program. I am wondering how you intend to coordinate all of
    this from the new opportunities that we authorized in the
    Energy Title to financing options that are in rural development
    to the support that we have through the research programs.
        How do you see that coming together?
        Secretary Vilsack. Well, first of all, we are going to make
    sure that the opportunities for bio-chemicals are available as
    quickly as possible. We think our current rules and structure
    will allow grants and loans to be made relative to bio-chemical
    processing.
        In terms of other manufacturing processing in terms of our
    bio-products, it may take a slight change to the rule and that
    may take a little bit of time for us to get through the
    regulatory process. We are essentially in business in terms of
    the bio-chemicals.
        We have made a concerted effort to integrate this effort
    with our research folks focusing in part on bio-processing and
    setting that up as a priority in terms of the National
    Institute of Food and Agriculture.
        Everybody I think in the building understands and
    appreciates how important this is to the survival of rural
    America in terms of creating jobs and creating additional
    income opportunities.
        We are very much focused on this. Our crop insurance folks
    are also working on trying to develop new crop insurance
    products for energy products. It is essentially a coordinated
    and integrated effort, and I think you will see progress in
    this year.
        Chairwoman Stabenow. Right. I think this is really
    important in terms of, as you said, jobs and the economy.
        Then finally from me in this round, we would like you to
    speak about conservation compliance because, as you know, we
    included a landmark agreement fostered by agriculture and
    conservation groups to link conservation compliance to our crop
    insurance program and both helping us to protect farmland and
    the insurance program for the future.
        Can you give the Committee an outline of where you are in
    the process of that, the expected time line? Can you discuss
    what, if anything, farmers should or should not be doing to
    prepare for the implementation of conservation compliance?
        Secretary Vilsack. Well, first of all, it is important to
    note that this is in a sense effective the day the President
    signed the Farm Bill; and so, farmers are under this obligation
    and responsibility if they want to continue to receive the
    government subsidy for crop insurance as of February 7 I
    believe of this year.
        We expect and anticipate to have sometime this summer the
    basic structure of conservation compliance and then folks will
    have, those who are not currently compliant because most
    producers are. In order to get disaster assistance, in order to
    get some of the other benefits under the 2008 Farm Bill, you
    had this responsibility anyway so that does not change.
        We expect and anticipate the roughly 6000 producers who may
    be impacted by this will have until the mid-part of next year
    to be able to produce their compliance plans, to make sure that
    it is certified, to ensure that they do not lose the benefits
    of the government subsidy and crop insurance.
        If they fail to do that, then crop insurance, obviously
    they will still be able to buy crop insurance but it will not
    be with a government subsidy. But it is effective as of
    February 2014.
        The advice is it will probably be not a good idea for you
    to be breaking up land that has not been broken up for a while.
    It is a good idea for you to get your conservation plan
    together if you are one of those 6000 producers that has not
    had it before.
        Chairwoman Stabenow. Thank you very much. Senator Roberts,
    you are next.
        Senator Cochran. I yield.
        Senator Roberts. Madam Chairwoman and Ranking Member
    Cochran, thank you for holding this hearing today.
        Madam Chairperson, I know that you are very proud of
    receiving the 2013 perseverance of the year award with all of
    the commodity groups and farm organizations and broadcasters
    that are here. They voted. I just do not know where we are
    going to put the statue but we will figure that out.
        Chairwoman Stabenow. Okay.
        Senator Roberts. Anyway, thank you.
        Secretary Vilsack, I am glad you are here and I appreciate
    your update on the department's implementation of the Farm
    Bill. It has been about two years since you were last in front
    of the Ag Committee. I think you look younger. But at any rate
    welcome back.
        Since that time, I know everybody is concerned about the
    dates when the Farm Bill implementation will take place. We
    were talking about that earlier, sometime in the fall with the
    new programs. I hope more toward October when Kansas State
    plays Iowa State as opposed to Thanksgiving.
        But the Kansans that I visit with--I am about 103 counties
    done of 105--they are really concerned about the various
    agencies regulatory efforts or what I call over regulation, and
    I share their concerns, and I would hope now with the Farm Bill
    signed into law that at least, and I know you are extremely
    busy, but if the department could focus on delivering farm and
    food programs, not new regulations, I think that would be the
    number one issue that I have heard out in farm country.
        Madam Chairperson, I think at an appropriate time, and I
    know time is our most valuable commodity here, but the full
    Committee should have the opportunity to have a more in-depth
    discussion and review of the new USDA climate change hubs, more
    especially with the President's announcement as of yesterday.
        The department's role in the recently proposed waters of
    the United States regulation and last but not least, the
    listing of the lesser prairie chicken as a threatened and
    endangered species that farmers believe in 35 counties of my
    state that are also threatening them.
        But we are here to discuss the Farm Bill. So to that task,
    the recent wheat quality tour in Kansas has forecasted the
    lowest crop in the State since 1996.
        Crop insurance will once again be critical to our producers
    suffering from a hard freeze and the ongoing drought. Again, I
    appreciate all the efforts and the staunch support from our
    Chairperson with regard to crop insurance.
        The RMA is a very data-driven process to offer new crop
    insurance products as the right figures are necessary to ensure
    proper ratings and to protect the integrity of the overall
    program.
        Wheat, corn, soy, and other commodity growers across Kansas
    are worried that their county crops, their county and crops may
    not have quick access to the supplemental coverage option of
    the new SCO or other new products due to a lack of data.
        My question is: Does the RMA currently have enough yield
    and production history information to get the SCO off the
    ground and available to all producers quickly and, if not, how
    is the coordination effort with the Farm Service Agency and the
    National Agriculture Statistics Service going?
        Secretary Vilsack. Senator, we believe we will have the
    supplemental crop insurance option available this fall. One of
    the challenges with wheat producers is that we probably will
    not have it available before wheat producers are in a position
    to determine whether ARC or PLC is most beneficial to their
    operation.
        We will give the wheat producers additional time to sort of
    rethink their crop insurance decision because if they choose
    the ARC program, then they will not qualify for the
    supplemental crop insurance option.
        If they start off by saying yes, we want SCO, then they
    decide ARC is better for them than PLC, we will allow them the
    opportunity without penalty to reverse that SCO decision.
        Senator Roberts. I appreciate that very much.
        Recently, the department and the U.S. Fish and Wildlife
    Service released predictability agreements for the lesser
    prairie chicken habitat that is enrolled in working lands and
    the conservation reserve program.
        I know those agreements are necessary and they are
    appreciated but they have not ended the farmers' and ranchers'
    fear that future decisions could have the Federal Government
    driving land out of agriculture production. It is a very real
    concern among farmers and ranchers. I would change that from
    concern and frustration and possibly even fear.
        How would you respond to farmers and ranchers in western
    Kansas right now that are concerned about being forced to idle
    agricultural land for a bird that we cannot find?
        Secretary Vilsack. Senator, I think that we would suggest
    to your producers to work with their local NRCS conservation
    specialist to put together a conservation plan, because if they
    are able to do that with the cost share assistance that we
    provided at USDA, we can provide them 30 years of regulatory
    certainty that the rules will not change and that they will be
    deemed in compliance regardless of what the determination is
    relative to the lesser prairie chicken.
        We have been working on this with seven different
    endangered species. The sage grouse was the first one that we
    started with. I would strongly encourage them to look at the
    voluntary conservation opportunities, the cost share
    opportunities that NRCS presents; and if they are able to do
    that and we are able to certify that they have complied with
    our structure, we are now working to get them 30 years of
    regulatory certainty which I think is a good way to approach
    the lesser prairie chicken.
        Senator Roberts. Well, I appreciate your response, and I am
    going to be in touch with you as this goes along. We have a May
    12 announcement and we are just going to have to see how this
    is working, and I appreciate that.
        I do not have any further questions now. I yield back.
        Thank you, Mr. Secretary.
        Chairwoman Stabenow. Thank you very much.
        Senator Klobuchar.
        Senator Klobuchar. Mr. Secretary, thank you for your good
    work and your help in passing the Farm Bill. I think we all
    know it was not an easy task and I thank the Chairwoman and our
    Ranking Member and everyone that was involved in. But you were
    always there with a steady hand, ideas when we were having some
    sticking points; and we really appreciate that.
        First of all, I want to ask something that is on the mind
    of a lot of our farmers in Minnesota, and that is
    transportation rail costs.
        With the increased use of rail for oil and the increased
    use of rail nationwide and the picking up of the economy, we
    have had some major issues not only about rail safety which we
    talked about but also about the costs, the scheduling of rail
    shipments, the cost of that last leg with captive customers.
        I actually got a provision in the Farm Bill for a joint
    study with USDA and the Department of Transportation to examine
    rural transportation issues including captive shipping issues.
        Can you prioritize this study, especially given that we are
    continuing to see more and more use of rail, so we can get a
    sense of what we could do policy wise?
        Secretary Vilsack. I had an opportunity to meet with Chief
    Economist Joe Glauber about the transportation study. He
    assured me that this is something that his team is working on
    and it is of value, and we believe that it ought to be expanded
    beyond the effort under the 2008 Farm Bill to include not just
    rail but also issues relative to our waterways. We think there
    is a tremendous----
        Senator Klobuchar. At the locks and dams.
        Secretary Vilsack. Yes.
        There is tremendous opportunity there for us to study this.
    We are working with the Department of Transportation to try to
    identify the resources that would pay for this study. DOT is a
    little strapped right now so we are going to continue to work
    with them.
        We have also had an opportunity to visit with the folks at
    Burlington Northern to express the same concerns that I am sure
    you have expressed emphatically to them, received assurances
    from them that they have a plan to invest $5 billion this year
    in additional rail, in additional locomotives, and in
    additional staff.
        We will obviously keep an eye and hold them to that
    commitment and promise. That will help alleviate the concern.
    It is unfortunate that this was not done before but better late
    than never.
        Senator Klobuchar. Okay. If you could just check back with
    your people on the time line for the study, I would appreciate
    it.
        Second, one of the provisions I worked on was for young
    farmers and ranchers. The average age of a farmer in Minnesota
    is now 56 years old, and what we did here was reduced the cost
    of insurance by 10 percent for young farmers and ranchers in
    the first five years.
        What is going on with the work to implement that provision?
        Secretary Vilsack. That is going to be implemented before
    the end of this year. In addition, we will be working with the
    FSA offices to ensure that the credit opportunities I had
    mentioned, the reduction of the interest rate which is of some
    assistance.
        We also have recently announced the availability of the
    beginning farmer-rancher resources to help third parties assist
    beginning farmers and ranchers putting together plans. We are
    working very closely with veterans groups as well to create
    this opportunity.
        There are a number of steps that we have taken to assist
    beginning farmers. There are conservation benefits that they
    now have, advanced payments of conservation benefits. All of
    that is in the works.
        Senator Klobuchar. Okay. I am going to put a few questions
    on the record about the importance that we have talked about
    many times about the renewable fuel standard, the PEDV
    outbreak. I that is something the USDA has been working on. and
    then some questions on EPA regulations.
        But I did want to turn to forestry for a minute. My State,
    like the State of Michigan, has a strong forest products
    industry, and I am pleased that it is now clear that forest
    products are eligible to fully participate in the bio-based
    programs.
        How is USDA moving to implement the changes needed to
    ensure that forest products can participate in these programs
    and what is the time frame?
        Secretary Vilsack. We have instructed folks to get this
    established this year. We anticipate it gets done this year. In
    addition, we have also announced a recent competition to take a
    look at a new opportunity in forestry with cross laminated
    timber.
        It is a building material that is being used in other parts
    of the world to build multi-story buildings. We think there is
    a tremendous opportunity for particularly diseased wood that we
    see in the western part of the United States to be used to
    create this new industry, and we are hopeful that this contest
    will spur additional forest product opportunities.
        We are focused on basically putting it in the BioPreferred
    Program this year but also looking at additional ways to grow
    new industries.
        Senator Klobuchar. Okay. Very good. The Farm Bill, as you
    know, included a significant compromise between Ag
    organizations and wildlife organizations that extends
    conservation protections to the crop insurance program.
        The Farm Bill also includes a sodsaver provision that I
    worked on with Senator Thune to protect native prairie in
    certain states. I understand that implementing the conservation
    compliance rules is very complicated and that there are some
    questions about how they will impact.
        I think these both provisions, I know Senator Chambliss
    worked on one of these very important. What are you doing to
    get the information out to producers about the conservation
    compliance and sodsaver provisions, and how are you working to
    make sure the rules are enforced consistently?
        Secretary Vilsack. We have had a series of listening
    sessions and meetings with interest groups in Washington, DC,
    and around the country to review with them certain conditions
    and provisions of the Farm Bill.
        I think we are emphasizing the importance of understanding
    that these responsibilities begin the day and the minute the
    President signed the bill, and I think there is a general
    understanding. We will continue to work as well with
    conservation groups to make sure that this message is amplified
    and reinforced.
        Senator Klobuchar. All right. Then last, I do not think I
    need to tell you. I know you know what a hard time diary
    producers have had over the last few years with the high feed
    prices, the volatile export market.
        The new dairy program will help producers manage some of
    the risk by protecting against wild swings in a producers
    margin.
        One issue I have heard from dairy producers in my State
    about is the need to ensure that there is a gap between when a
    producer purchases margin insurance and when the insurance goes
    into effect to prevent producers from trying to game the
    system.
        What is the USDA doing to ensure that the margin insurance
    rules reward farmers for taking prudent risk management steps?
        Secretary Vilsack. Senator, I will have to get you specific
    information about that specific question. I can tell you that
    we are very focused on getting this program up and running in
    September as instructed by the Congress and that we obviously
    got the MILC program in place in the meantime. But I will get
    you a specific answer to the question.
        Senator Klobuchar. Okay. I appreciate it.
        Secretary Vilsack. I am sure these folks are focused on
    this. I am just focused on making sure the program is up and
    running in September.
        Senator Klobuchar. Right. I appreciate that and thank you
    for your good work on it.
        Chairwoman Stabenow. Thank you very much.
        I understand Senator Grassley was next but he had to step
    out to meet with a group and I know, Senator Harkin, you need
    to leave and had asked everyone if you might have the
    opportunity. So, without objection I understand that has been
    agreed to.
        Senator Harkin, we know that you have to be at another
    meeting as well so please proceed.
        Senator Harkin. Thank you, Madam Chairwoman and Ranking
    Member Cochran. It has been a great pleasure to work with you
    for all of these years and thank you for your hard work
    together to get this Farm Bill through.
        I thank the indulgence of the Committee.
        I have known Secretary Vilsack now for probably, oh, gosh,
    almost 30 years when he first became mayor of Mount Pleasant
    and then as a State Senator and then as governor and now has
    Secretary of Agriculture; and I have been a great fan and
    admirer of his through all these years.
        I think if there is one thing that I would characterize
    your service as through all these years is one of being
    responsible, responsible and results oriented. Mr. Secretary,
    Tom, if I can call you that as an old friend, everything I have
    watched you do from that time when you had that tragedy in
    Mount Pleasant and you took over as mayor to your service in
    the State Senate, as governor, and now has Secretary of
    Agriculture that the one thing that has always impressed me is
    that everything you do whether it was legislatively or in the
    executive branch either federal or state executive, you always
    had an understanding that everything we do, no matter how we
    talked about it, no matter how small we get into the weeds on
    it, it affects people. The end result all we do affects people
    and affects families. You have never lost sight of that. I just
    want to thank you for that.
        I appreciate your great service to our State, your service
    to our Nation and as Secretary of Agriculture, and if I just
    might add just a personal interest of mine, I thank you for all
    you have done for conservation and the conservation programs in
    America.
        I have some questions on that. I do not have time. I have
    to chair a health hearing now in another room but thank you for
    that and also your great leadership on rural energy and the and
    the wheat program, all of those things we are doing out there
    to help farmers make sure they get the kind of energy that they
    need and to produce that we need in America.
        Madam Chairwoman, I just thank you for that and thank you,
    Mr. Secretary, for that. Your great leadership on nutrition
    programs that you have done has just been outstanding, and I
    just want to thank you for that and thank you for your
    leadership, your friendship through all these years.
        Madam Chairwoman, thank you for recognizing me. I am sorry.
    I have to go chair another hearing. Thank you.
        Chairwoman Stabenow. We certainly understand that.
        Secretary Vilsack. Madam Chair, before the Senator leaves.
        Chairwoman Stabenow. Yes.
        Secretary Vilsack. Senator, I appreciate those kind words
    but I think everyone in the State of Iowa and everyone in this
    country owes you an extraordinary debt of gratitude. If you
    want to talk about conservation, you cannot talk about
    conservation and not talk about Tom Harkin in the same
    sentence.
        You have been a leader, the CSP program that you helped to
    craft is leading the effort along with the EQIP program so that
    now we have a record number of acres enrolled in conservation,
    and it is working and it would not have but for your
    leadership, and no one cares more deeply about folks who work
    and are struggling than you do.
        I really appreciate those kind words.
        Senator Harkin. Thank you, sir.
        Chairwoman Stabenow. I would just say amen to that, Senator
    Harkin.
        Senator Chambliss, you are up next.
        Senator Chambliss. Thank you very much, Madam Chair.
        Secretary Vilsack, welcome back. I want to commend you and
    your staff over at USDA for committing to implement this Farm
    Bill in a very quick manner and a very professional manner.
        I truly believe we passed a good, solid bill that will work
    for the people of this Nation. It is a bill that reforms
    critical farm programs, strengthens the Nation's food security,
    protects the livelihood of our farmers and ranchers, and
    preserves our efforts to remain good stewards of the
    environment.
        I would urge that USDA continue to implement the policies
    as we intended in the bill and where you have doubts that you
    will come back and ask us for guidance if there is any question
    about as I know you will.
        I want to ask you very quickly about the Brazil cotton
    case. In an effort to provide every opportunity to resolve that
    long-standing WTO case, cotton is not eligible for the new PLC
    and the ARC programs.
        The calculation of the cotton loan rates has been modified.
    The department has broad authority to make administrative
    changes to the GSM export guarantee program, all of which you
    are familiar with.
        Has the Administration had an opportunity to consult with
    Brazilian officials since the enactment of the farm law, and
    assuming you have, what has been the reaction of Brazil to the
    implementation of these provisions?
        Secretary Vilsack. Senator, I think no one wants Brazil to
    take the next step in this process to convene the Committee to
    take a look at what next steps could occur as a result of the
    adverse decision that we suffered.
        We have been negotiating and discussing with the Brazilians
    an effort to resolve this. I think that there has been headway
    in terms of the GSM program. We are doing an effort to try to
    educate the Brazilians on the precise nature of the steps that
    we are taking in this Farm Bill. It is very complex. It is very
    difficult.
        We are in the education process to make sure that they
    understand that the Congress made a good-faith effort to
    respond to the concerns that were expressed in the WTO case.
    Those conversations are ongoing, and it is my sincere hope and
    belief that we will continue to work with the Brazilians until
    we get to a resolution, and we are hopeful that gets done soon.
        Senator Chambliss. Obviously, all of us are hopeful that a
    resolution to this will be forth coming in the short term.
    Assuming Brazil takes a drastic step to ask for a review panel,
    I am assuming that the department is well-prepared to defend
    the cotton industry on this.
        Secretary Vilsack. We are and we will.
        Senator Chambliss. Let me ask you for just a minute about
    TEFAP. Obviously, we have seen a decrease in TEFAP of about 24
    percent over the last several years and we have put some very
    positive provisions in the Farm Bill relative to additional
    funding for TEFAP.
        America's farmers are deeply committed to helping their
    local communities and obviously serving those in need and
    particularly through the food banks.
        In Georgia, for example, farmers have donated more than two
    million pounds of produce and many more are in place to donate
    additional loads of produce.
        I know that food waste is an issue that USDA is focusing
    on, and I would just like to ask you about grants and other
    programs that can help food banks capture more nutritious
    produce and get it to the people that need it.
        Secretary Vilsack. Senator, we are working on that. You
    know, we have over 2000 people's gardens that we have helped
    generate at USDA facilities, donating over 3 million pounds of
    produce to food banks across the country. We are working on
    trying to create additional applications that could be used by
    those who are delivering fruits and vegetables, say, to a
    restaurant for whatever reason, if it does not meet the
    standard of the restaurant, we would like them to have an
    application that they can click on to see where the nearest
    food bank would be that would be willing to accept that produce
    that was not grade A for the restaurant but it was perfectly
    fine for other uses.
        That is part of our food waste effort. We are lining up
    partners in the private sector. We have over 200 that have
    already agreed to work with us on reducing food waste on
    portion sizes, on reusing food, and on recycling food.
        There is a major focus on this.
        Senator Chambliss. Great. Well, again, thanks very much for
    your quick implementation of the Farm Bill. It is not going to
    be easy. They never are easy, but I will say that I have seen
    more activity out of the FSA offices at the local level over
    the past three or four months than I had seen in a long time,
    and they have really done a good job of working with commodity
    groups to bring our farmers together to explain the Farm Bill
    in advance of sign-up deadlines, and that is the type of
    professional implementation that we needed, and it looks like
    it happen.
        Thanks to you and your staff.
        Secretary Vilsack. It may be because we put a Georgian in
    charge of it the oversight.
        Senator Chambliss. I did not want to get to that, Mr.
    Secretary, but obviously she is doing one hell of a job and I
    am glad.
        Secretary Vilsack. No doubt about it.
        Senator Chambliss. I am glad that you have her there with
    you. Thanks to both of you.
        Chairwoman Stabenow. I thought that is where you were
    headed, Senator Chambliss, and I could not agree more.
        Senator Bennet.
        Senator Bennet. Thank you, Madam Chair, and I would like to
    thank you and the Ranking Member and the Secretary, all of you,
    for your leadership in this incredibly dysfunctional town. It
    is wonderful to be on this Committee and to legislate in the
    way the American people expect to legislate, Democrats and
    Republicans working together, in passing not a 10-minute bill
    or a two-month bill or keeping the lights on in this land of
    flickering lights that actually passing a five-year Farm Bill.
        We are very grateful in Colorado for your leadership and
    for your leadership, Mr. Secretary, too.
        One of the, as you know because we have talked about it a
    lot, of vital interest to us was the Conservation Title in the
    Farm Bill; and you and the Chair talked a little bit about the
    regional conservation partnerships program. That is very
    important to us.
        The Colorado River District is looking for USDA to
    designate the Colorado River basin as a critical conservation
    area under the RCPP. The Republican River District wants the
    Ogallala aquifer designated.
        I would like, Madam Chair, to enter their letters of
    support into the record if that is okay with you.
        Chairwoman Stabenow. Without objection.
        [The documents follow:]
        Senator Bennet. I am out of time but I think I have only
    gone for one minute.
        [Laughter.]
        Chairwoman Stabenow. Actually, I think we need to reboot
    the time line. I think you started with some of Senator
    Chambliss's time. We will boot up another.
        Senator Bennet. One minute, quality not quantity.
        Chairwoman Stabenow. Yes.
        Senator Bennet. But I would like to enter their letters of
    support into the record, Madam Chair.
        I hope you will, Mr. Secretary, give them strong
    consideration both to meet the programs criteria. They are
    water-stressed regions of the country facing regulatory
    challenges; and as you know, Colorado really is the headwaters
    State in this country with the headwaters for 19 other states
    that are downstream of us.
        I do not know whether you would like to say anything else
    about the RCPP program what you are looking for. You said you
    were having listening sessions. Has anything come out of that
    yet?
        Secretary Vilsack. Well, Senator, I think we are going to
    try to designate these areas by the end of this month. Then we
    want to give folks the opportunity to put their projects
    together.
        There are three tranches of resources. $100 million that
    came with the Farm Bill, seven percent of the EQIP money and
    seven percent of CSP acres. We estimate that is roughly $200
    million give or take and that money is going to be divided
    based on some competitive efforts nationally, 40 percent of it
    a national competition, 25 percent of it within states.
        Colorado will have an opportunity to determine within the
    State resource where money goes, and then 35 percent will go
    into these critical care areas, and that will also be a
    competitive circumstance.
        The key here is to try to leverage these resources, and the
    key is also to look at this from a larger conservation
    landscape-scale, size effort. We started this several years
    ago. We think this, as the Chairwoman indicated, could
    transform the way in which we think about conservation and the
    effectiveness of conservation.
        We are excited about this, and we are looking for as many
    partners as we possibly can find. We also want to incorporate
    this in an effort that we will be doing this summer to
    encourage others who may not be aware of what is going on in
    rural America to be willing to invest more capital and create
    more credit opportunities, and conservation will be part of
    what we will focus on in that effort this summer.
        Senator Bennet. Well, we are excited about it too, and we
    would love to be one of your partners so let us know.
        Actually, another question along those lines with respect
    to partnerships. The application of the Endangered Species Act
    has become a top of mind issue for a lot of people in Colorado.
    Let me say for the record that I am a strong supporter of the
    ESA. It is a statute that has protected a lot of wildlife and a
    lot of habitat that makes the West such a special place to
    live, and we have appreciate it be NRCS's efforts to facilitate
    habitat conservation for the greater sage grouse.
        Can you talk about the agency's ongoing work in this area
    in light of the certainty that is brought about by the five-
    year farm bill? I wonder in particular whether NRCS would
    consider investing additional resources into the Gunnison sage
    grouse, a species whose habitat lies mostly in Colorado. It is
    arguably in at least as tough shape or rougher shape than the
    greater.
        Secretary Vilsack. Senator, we started this effort focusing
    on seven species throughout the United States, trying to create
    geographic diversity in terms of this effort.
        The theory is that if we are asking folks to take steps to
    protect these endangered species that they have to have some
    degree of certainty that once they take the steps the rules are
    not going to change; and once they invest money, the rules are
    not going to change.
        Our theory is that if we can put together a conservation
    plan that we know will help increase and protect the habitat,
    that we would work with the Department of the Interior and
    obtain from them a commitment that if landowners follow certain
    procedures, they would get up to 30 years of regulatory
    certainty.
        We would be more than happy to take a look at specific
    species, but our goal right now is to try to focus on the seven
    which includes the sage grouse, which includes the lesser
    prairie chicken, and a number of other species.
        Senator Bennet. Well, I would love to work with you on
    that. My concern is that the local counties have done a
    tremendous amount of work. This is not a case where you have
    got people of ill will. You have actually got people that are
    really trying to do the right thing.
        My concern is that if we see a listing, all of those
    efforts have been for naught, and people are going to feel like
    the folks in D.C. once again are not paying any attention to
    what is going on at ground level.
        The cooperation is enormously important.
        Secretary Vilsack. Well, I am more than happy to have Chief
    Weller get in touch with your staff and we can set up an
    opportunity to have a conversation about that.
        Senator Bennet. Great. Good.
        Finally, another provision in the 2014 Farm Bill allows for
    expedited treatment of our national forest suffering from
    insect or disease epidemics. We have talked about this before.
    It is a huge problem as a warming climate and persistent
    drought has allowed the bark beetle and now the spruce beetle
    to kill millions of acres of national forests. I want to thank
    you because very early on in the first Administration you
    actually came out to see this for yourself.
        I enjoyed partnering with Senator Thune to shape the
    provision that gives the agency knew flexibility to treat these
    forests while still respecting environmental laws and community
    involvement.
        As you now suggested on which acreage to treat from 36
    governors, including Colorado, Governor Hickenlooper, could you
    talk about the next steps for the Forest Service and can you
    discuss how you will ensure the treatments are properly
    targeted so we do not trigger litigation objections from local
    communities?
        Secretary Vilsack. These areas in terms of the expedited
    NEPA process are limited to 3000 acres in size. We have
    received from the governors their recommendations. The Forest
    Chief Tidwell will be able to amplify or expand those
    recommendations with his own recommendations.
        The key here I think is to have the resources to be able to
    do the treatment necessary, and that gets back to this whole
    issue of how we pay for forest fires that have become more
    intense and longer and much more expensive.
        The reality is not long ago, roughly 15, 17 percent of our
    budget was on fire suppression. Today it is 40 percent and that
    creates uncertainty. This is why we have proposed and suggested
    a different way of funding fire suppression that would provide
    greater certainty in our forest budget which would allow us to
    make commitments, specific commitments, that we could guarantee
    and follow through with on the stewardship responsibilities.
        We are prepared to work with governors. We are prepared to
    move forward on these designated areas, but it will be much
    more difficult if we do not get a handle on how we pay for fire
    suppression. If we continue to do what we have been doing,
    treating it differently than other natural disasters, we are
    going to continue to squeeze the rest of the Forest Service
    budget, and the progress will be much slower than you would
    like.
        But if we could get a new system that is not about spending
    necessarily more money but spending it a little bit
    differently, creating greater certainty within that Forest
    Service budget, I think you would see accelerated efforts in
    these areas.
        Senator Bennet. Thank you, Mr. Secretary.
        Thank you, Madam Chair.
        Chairwoman Stabenow. Thank you very much.
        Now in the nature again as being the bipartisan Committee
    that we are, we are making a slight change. I thank my
    Republican colleagues for allowing Senator Leahy, who I know
    has to chair a Committee, to move ahead and then we will go
    back since Senator Grassley was here before and then Senator
    Hoeven. We will have two Republican colleagues and then we will
    go back to Senator Donnelly and get ourselves back going on
    track.
        But one of the wonderful things about the Committee is
    having a number of Committee chairs on the Committee, but that
    means that we need to be flexible.
        Senator Leahy, one of our distinguished former chairs.
        Senator Leahy. Thank you, Madam Chairwoman. I thank
    Governor Hoeven and I thank Senator Grassley too for their
    courtesy.
        I want to echo also what Senator Bennet said as praise of
    you, Madam Chairwoman, that you kept us all together in getting
    this Farm Bill out. You had several former Chairman, former
    Chairs, former Ranking Members. I look around the room's
    gallery on the wall of several of us.
        We came in here under your guidance. You said let us do
    legislation. Let's not do talking points. Let's do legislation.
        Secretary Vilsack, I have to compliment you on that because
    you and your staff worked so hard. We talked to each other in
    the evenings and weekends. Adrienne Wojciechowski here on my
    staff. We sent photographs of her to her husband so he could
    remember what she looked like because she was practically
    living down here.
        But everybody worked together and I think what a thrill it
    was when you and I and the Chairwoman went out for the signing
    of this bill in Michigan, and it is important to me.
        I obviously had an interest in the mid-sized dairy farms
    which are important in my State of Vermont. How the department
    interprets the premium rates for coverage in the new dairy
    margin protection program for a farm for the first four million
    pounds of milk, is going to have a major impact on the rule
    about midsize dairy farms. These midsize dairy farms often
    support multi-generations of farm families.
        I think it is critical that we encourage these farms to
    choose higher coverage levels in order to combat the erosion in
    the middle. This is something the census of agriculture
    referred to.
        There is going to be a steep learning curve because you go
    from a monumental shift from the milk MILC program where a farm
    is either in or out. Now, it is no longer a yes or no decision.
    They must have strategic thinking, consideration of farm's
    aversion to risk, margin coverage levels, coverage protection,
    all of the things you were aware of.
        A lot of these small and midsize farms just do not have the
    expertise within them to determine all of that themselves. Are
    you going to be able to have adequate resources directed to
    help these dairy farmers as they transition to this new margin
    protection program? I say this knowing you have had huge cuts
    in your own budget.
        Secretary Vilsack. Fortunately, Senator, you and the
    Committee and the Congress had the foresight to put together
    resources for education and for modeling; and those resources,
    we plan on announcing the distribution of those resources
    sometime this month; and when we do, that will begin the
    process of engaging our universities and other constituent
    groups to give them the tools and the invitation to be able to
    help us amplify and educate and provide the modeling that folks
    will be able to use to determine what is best for their
    operations.
        I am confident that getting this money out the door quickly
    is the best remedy to the concerns that you have which is
    making sure that people have adequate time and adequate
    information to make these important decisions.
        Senator Leahy. One of my top conservation priorities in
    this was the Regional Equity provisions. I want to make sure
    that the conservation programs benefit all states as required
    by the 2002, 2008, and the 2014 Farm Bill.
        But we have seen in a lot of years when regional equity
    states did not receive the minimum funding allocations even
    when there was a proven demand and need.
        We have this with Vermont's Lake Champlain, a new EPA TMDL
    for phosphorus, a lot of complex things that they need. Lake
    Champlain is the largest body of fresh water in this country
    outside of the Great Lakes.
        Are you going to be able to assure that regional equity
    states have greater certainty about the minimum conservation
    funds they are going to get so that all states can benefit from
    these important conservation programs?
        Secretary Vilsack. Senator, you might be surprised to know
    that you are not the first Vermonter that has talked to me
    about this. Your governor called me I think before the ink was
    dry on the bill.
        Senator Leahy. I had a feeling he might.
        Secretary Vilsack. Yes, he did, and spoke at great length.
    We obviously understand the responsibility that this is the
    United States Department of Agriculture which represents all 50
    states and we have to be very conscious of making sure that the
    resources are distributed appropriately and equitably. That
    ought to be a goal, and it is a goal, and we will do our best
    to comply with the directive.
        Senator Leahy. Then lastly the REAP Zones, the Rural
    Economic Area Partnership Programs, these are extremely
    important. We have what we call the Northeast Kingdom of
    Vermont. It is a very rural area.
        In the past, many people, leaders in our State, have said
    how beautiful it is but have not really worked hard to do much
    for it. Now, we are doing a lot. The REAP Zone has helped.
        It has helped fire departments. It has helped people buy
    their first homes. It has helped businesses open doors, and I
    just wanted to encourage continuation of that. I spent a lot of
    time up there. I go through there. My wife was born in that
    part. My mother was born in that part of Vermont.
        To see the huge return on investment that you made in the
    REAP Zones up there, the taxpayer is going to get their money
    back in greater jobs and investment and all but the effect on
    the people and encouragement. Please keep an eye out for the
    REAP Zone.
        Secretary Vilsack. Well, both the zone in Vermont and the
    zone in North Dakota were extended in this Farm Bill to 2018.
    Candidly, I think the REAP Zones and its focus on regional
    economic development helped to spur our efforts at looking at
    how this could be done regionally in other parts of the country
    successfully.
        Senator Leahy. Thank you my much. Madam Chair, I thank you.
    I thank my colleagues. I should also add to the knowledge that
    we have former Chairs of this Committee, we even have a former
    Secretary of Agriculture on the Committee.
        Chairwoman Stabenow. That is right.
        Senator Leahy. I wish all Committees were this easy to put
    together complex legislations.
        Chairwoman Stabenow. Well, thank you so much, Senator
    Leahy, for your essential leadership as we were able to get
    this done.
        Senator Grassley.
        Senator Grassley. If I could stand up, I would like to call
    my Committee members to attention to something that I tried to
    accomplish in the last Farm Bill, and the Chairwoman was very
    helpful but we did not succeed in the end even though the House
    passed this, the Senate passed, or the House passed it and the
    Senate passed it the same way.
        The Conference Committee changed it so it makes it pretty
    impossible for the Secretary of Agriculture to do what I
    originally wanted it to accomplish to do.
        But this is an example of a general, the legal structure of
    a farming operation organizes the general partnership in
    Louisiana. The general partnership was highlighted in a
    Government Accountability Office report from last fall.
        There are 17 different owners of 22 LLCs that make up his
    general partnership. Sixteen of the 17 owners claim eligibility
    for farm subsidies based upon active personal management only,
    according to the GAO report.
        According to the last available records that we could find,
    these managers lived in seven different cities. The chart you
    give will say nine different cities. That has got to be
    corrected. It is seven different cities across three different
    states.
        I said that the Chairwoman tried to help us very much to
    preserve this in conference. You remember you reported to me
    that you were told, well, you really do not understand
    agriculture very well.
        It is pretty simple to understand the abuse of the farm
    program with an operation like this for 16 out of 17 people
    able to collect farm subsidies as the result of this.
        As I indicated to both the Secretary before and just now,
    it is difficult for him to write rules but he was given that
    responsibility. I wanted to ask him some questions along this
    line.
        This is Section 1604 of the Farm Bill which requires the
    Secretary to promote, promulgate a rule to better define,
    quote, ``a significant contribution of active personal
    management,'' end of quote.
        Congress previously approved, as I indicated, a much
    simpler fix by eliminating this to just one additional person.
    Of course, you can see with manipulation of the farm program
    like this you can see that it is pretty difficult for young
    people to get started farming when you have got abuse of the
    farm program like that.
        Mr. Secretary, I think the first question, I am just going
    to make a statement, unless you disagree with it. I think this
    entity that is organized here is just one example that we have
    from the report to maximize management efficiency is really
    some things that is organized to maximize farm subsidies.
        That is my opinion. Maybe I better ask you if that is too
    much for you to accept.
        Secretary Vilsack. Senator, I think people have been very,
    very creative with the law.
        Senator Grassley. Okay. Then this is a question I would
    like to have you answer. I think it is simple.
        The GAO report cited farm service agency officials who
    essentially said the definition, quote-unquote, of actively
    engaged was so broad that--and I am talking about previous to
    this Farm Bill--was so broad that they could not enforce it
    even if they wanted to.
        Is that something you could agree as something that we
    heard testimony from some of your people, I mean, before you
    were even there?
        Secretary Vilsack. Yes, I have no doubt that there was some
    confusion about precisely what this definition is and is not.
        Senator Grassley. So then another question. Since the
    current definition of actively engaged stems from rulemaking,
    the U.S. Department of Agriculture had authority, even prior to
    this bill, I mean, our new law, to make changes to the
    definition before this Farm Bill was signed into law.
        That is not an accusation against you. That could be an
    accusation against any of the previous Secretaries of
    Agriculture. Would you say that is right?
        Secretary Vilsack. I think that is correct, Senator.
        Senator Grassley. Okay.
        Secretary Vilsack. I think there was an opportunity to
    define it, and efforts were made. Not an easy task.
        Senator Grassley. Okay. Then a follow-up. Does this new
    Section 1604 limit any of the existing authority--you heard my
    premise. You have a difficult job. I understand that.
        Does Section 1604 limit any of the existing authority you
    had, meaning prior to the legislation, had to change the
    definition of actively engaged before the Farm Bill passed? I
    hope the answer is no.
        Secretary Vilsack. Well, I am not sure about that, Senator.
        Senator Grassley. Okay.
        Secretary Vilsack. The way I understand it the modification
    and the restriction that was then placed by virtue of the 2014
    Farm Bill really, really narrows the capacity of the Secretary
    in this particular space. As I understand it, you essentially
    said, in essence, if it is a family farm, with a very broad
    definition of family farm, you cannot be focusing on actively
    engaged within the context of a family farm.
        Senator Grassley. You are right. I agree with that.
        Secretary Vilsack. That creates a very, very narrow lane in
    which the Secretary can act. I have asked our team to educate
    me fully on all of the examples that people have raised about
    the concerns, because at the end of the day it is not really
    about credibility, it is not just about all that you mentioned,
    it is about the credibility of the farm programs to the 99
    percent of America that does not farm. I think it is important.
        It is also recognizing that farming is different. Farmers
    in Iowa, the way they farm is a little bit different than the
    way they farm in Mississippi and probably different than the
    way they farm in Michigan.
        You have to understand and appreciate that. But you also
    have to take a look at ways in which people have been quite
    creative and ask yourself is this consistent with what the
    purpose of these programs are and I think the purpose is to
    reduce the risk of farming so people can stay in the business
    when mother nature does not cooperate.
        Senator Grassley. I think basically I agree with you but
    let us go down that narrow lane then that you are talking
    about.
        Since it does not say anything about your existing
    authority that you had prior to this legislation, you can still
    fix this problem for all farms consistent with the single extra
    manager approach that Congress approved.
        Secretary Vilsack. I am not sure about that, Senator. I
    would be happy to look at that.
        Senator Grassley. Could you look at that?
        Secretary Vilsack. Sure. I would be happy to look at it.
        Senator Grassley. Communicate with me.
        Secretary Vilsack. Sure.
        Senator Grassley. Okay. Then my last question. The
    Government Accountability Office report also outlined that the
    FSA was not doing its compliance reviews in a timely manner.
    Has the Farm Service Agency taken any steps to fix that problem
    at the state level?
        Secretary Vilsack. Well, I think we are trying to adjust to
    the fact that the workforce has been reduced by 20 percent
    because of budget reductions, and we are trying to create a
    little better structure to our Farm Service Agency offices that
    would enable them to do all the work that they need to do.
        I can assure you that we are going to take compliance and
    the integrity of these programs very seriously.
        Senator Grassley. Let me explain or just supplement what I
    said. We seemed like we had a lot of examples in the GAO report
    where at the local level there were a lot of decisions made
    that certain farming operations were not being actively engaged
    say, and later on an appeal at the state or the national level,
    except in one or two instances, they were overridden.
        Secretary Vilsack. I think our goal is to provide enough
    certainty and clarity that we do not have a whole series of
    appeals, that everybody knows what the rules are.
        Chairwoman Stabenow. I would ask you to wrap up, Senator
    Grassley.
        Senator Grassley. I have no more. You bet. This will be the
    wrap up then.
        Going back to what you said you would look at and discuss
    with me, it is in that narrow area of things that are not
    defined as family farmers.
        Secretary Vilsack. Yes.
        Senator Grassley. Okay. Thank you.
        Chairwoman Stabenow. Mr. Secretary, I just want to
    associate myself with Senator Grassley and I believe we have
    given you authority to address abuses and am confident that you
    will be able to proceed to do that.
        Secretary Vilsack. Some authority, Madam Chair.
        Chairwoman Stabenow. Well, we are looking forward to you
    using the authority you have. Thank you very much.
        Senator Grassley. Very much as you can.
        Chairwoman Stabenow. Yes.
        Senator Hoeven.
        Senator Hoeven. Thank you Madam Chairman.
        Secretary Vilsack, Governor Vilsack, good to be with you
    and working with you in your capacity as Ag Secretary. Thanks
    for your work on the Farm Bill.
        I also want to thank the Chairman and the Ranking Member
    again for their work on the Farm Bill, and I also want to thank
    you for your rapid implementation of the Livestock Indemnity
    Program, very important in the western part of our State and in
    South Dakota; and I have to say you really did jump on that and
    it is much appreciated.
        I think this is a good Farm Bill. The implementation is
    going to take a lot of work to do as well. I know your people
    are working on it very diligently. I think it also would be
    quite useful for you to hear from farmers and ranchers on the
    ground. You have been out to our State before, and I would like
    to extend an invitation for you to come out, and I hope during
    implementation that you would be willing to do that, to come
    out and visit with some of our farmers and ranchers in our part
    of the country and get their input as you engage in the
    implementation.
        Secretary Vilsack. Senator, fortunately, they do not let me
    guarantee my schedule but I will do everything I can to make
    sure I am available to folks.
        Senator Hoeven. Good. Well, if you would work with us, we
    will see if that is a possibility, and I think it would be
    useful for you. We have a very diversified Ag base both on the
    farming and ranching side, and I think that would help.
        Secretary Vilsack. Not as diversified as Michigan, but,
    yes, I know it is diverse.
        [Laughter.]
        Chairwoman Stabenow. That is true. I am so pleased, Mr.
    Secretary, that you remembered that.
        Senator Hoeven. I would be willing to kind of debate that
    one anytime.
        [Laughter.]
        Senator Hoeven. What I do want to talk about for a minute
    though is the wetlands mitigation bank that we included in the
    Farm Bill to help our farmers deal with their conservation
    compliance costs.
        That is one of the issues I think you can hear from our
    producers on, but just your thoughts now is you work to make
    sure that as you implement conservation compliance that you are
    doing it in a way that is farmer friendly and does not impose
    undue burdens or costs on our producers.
        Secretary Vilsack. Well, in terms of the mitigation bank,
    it is our intention to get this up and going by early 2015. We
    understand and appreciate especially in your neck of the woods
    that there have been a lot of issues that needed attention. We
    are doing our best to try to play catch-up on some of the
    things that may have gotten a little bit out of hand in terms
    of wetlands.
        I know that the approval process and the certification
    process, it created a huge backlog, and we have tried to
    address that. We have cut it in half. We have got a new
    initiative to put more people on the ground to help.
        We are going to do everything we can to make sure that we
    are farmer friendly and to try to get these determinations made
    as quickly as we can.
        Senator Hoeven. That would be much appreciated. This is an
    area where the Chairman and I actually disagreed in terms of
    the tying crop insurance and conservation compliance together.
        Of course, that is why we included language on acre for
    acre mitigation, and also this wetlands mitigation makes it
    very important that as you move forward with implementation of
    this Farm Bill that you are talking to our farmers about how
    that is done to provide them with the certainty that they need
    so that, like I say, it does not create undue costs and burdens
    for them.
        Secretary Vilsack. Well, NRCS is working to figure out ways
    to best communicate the option that producers have, and we will
    continue to do everything we can to make sure they have the
    information they need to make the right decision for their
    operation.
        Senator Hoeven. Along that line, I want to go to a new
    regulation that the EPA has put out, Waters of the U.S. This is
    one that I am absolutely opposed to, that our farmers and
    ranchers are terribly concerned about not only because of the
    potential complexity and difficulty it creates for them but
    also the potential legal liability.
        Now, I think it was in front of our Energy Committee or
    maybe one of the Appropriations Committees. Gina McCarthy,
    Administrator of the EPA, came and testified in front of us and
    indicated that she was going to work with you I think and also
    with the Corps of Engineers on that implementation.
        This concept of significant nexus I do not agree with and I
    think is absolutely going down the wrong road. What assurances
    can you give me that this is not a good big-time problem for
    our farmers and our ranchers?
        Secretary Vilsack. Well, I think it is important to note
    that the Waters of the U.S. essentially says very clearly
    normal farming practices are not going to be impacted and
    affected.
        The Administrator has assured that this is not designed to
    provide more regulations in terms of ditches, and what we did
    was that we suggested the need for greater certainty and
    clarity which is why they have identified 56 conservation
    practices that will not require notification or permitting.
        That list can be expanded over time through an MOU that we
    have entered into and will enter into with EPA and the Corps.
    As situations arise, as folks confront challenges, I would
    fully expect that list is going to continue to grow and that
    list basically does provide farmers and ranchers a great deal
    more certainty than they had before because they can now be
    assured that if whatever they are doing is on that list, they
    do not have to notify anybody, they do not have to ask
    permission. They can proceed forward.
        We will continue to work with folks. I think the key here,
    Senator, really is for people to really understand what this
    covers and what it does not cover, and they are making an
    effort to try to make sure people understand, normal farming
    practices not impacted. Additional regulation of ditches, not
    the case. Conservation practices, 56 do not require
    notification. No notice, no permit.
        We will continue to work with you. If there are certain
    circumstances and situations where your farmers are proposing
    certain things and saying, well, what about this, get them to
    us and we will try to help say what the answer is for each
    individual situation. We are working with them.
        Senator Hoeven. In asking EPA some of the same questions
    from the perspective of the farmer, if you have got a farmer
    and rancher who is engaging in his operations under this
    significant nexus, it appears to me they are at risk downstream
    to any group based on what occurs in the, quote, navigable
    bodies of water.
        That is why we are adamantly opposed to this, and I think
    if you talk to farmers and ranchers you will understand that
    they are very concerned because EPA is not telling them that
    they are protected from liability downstream in the navigable
    bodies based on whatever farming or ranching activities that
    they may be undertaking. This is a big problem for our
    producers.
        Secretary Vilsack. Well, Senator, we are visiting with
    producers on a regular basis and they are expressing concerns;
    and as these concerns are expressed, we are working with our
    colleagues at EPA to make sure they fully understand and
    appreciate.
        This is, as you know, not the final. There is an
    opportunity I think for additional education and comments, and
    I think EPA is taking that into consideration, and I think they
    are hearing the concerns, and I would not be surprised if they
    are not addressing and trying to respond to those concerns.
        Senator Hoeven. Well, and this is why I think it is very
    important that some of our farmers and ranchers have a chance
    to visit with you on this and other important issues.
        Thank you.
        Chairwoman Stabenow. Thank you very much.
        Senator Walsh.
        Senator Walsh. Thank you, Madam Chairwoman.
        Mr. Secretary, thank you for coming and thank you for your
    service.
        The Farm Bill is Montana's Jobs Bill. The programs in the
    bill support jobs across the State, both on and off the farm.
    From risk management tools for farmers and ranchers to
    investment in rural economies to conserving our outdoor
    heritage, the Farm Bill is a one-stop shop for supporting rural
    America. It took too long to pass a new Farm Bill but thanks to
    support across the country and the leadership on this
    Committee, we have a chance to rebuild public trust by making
    sure it is quickly and fairly implemented.
        I commend your efforts in moving quickly to roll out the
    livestock disaster programs. Montana ranchers need that support
    from past losses from drought and blizzards.
        I am also happy to see the roll out of the Voluntary Public
    Access Program. This program holds incredible promise to
    continue opening up access to prime fish and wildlife habitat
    in Montana for hunting and fishing, building on Montana's
    success with block management, and it will help sportsmen and
    land owners alike to continue to grow our 2.5 billion outdoor
    industry.
        But for the new Farm Bill programs in particular, it will
    take dedication and resources to get these right. I am deeply
    concerned that the cuts and office closures in the budget
    proposal will make it more difficult to get these programs out
    quickly and educate farmers.
        I sent a letter to your office on this very issue recently
    and I am still waiting on a response. We cannot shut the door
    on farmers and ranchers. They are the backbone of our rural
    economy, and closing even more offices would have a devastating
    impact in Montana where each office already covers many more
    acres than other states.
        Related to that, USDA is not utilizing the community-based
    grassroots organization of the FSA. FSA folks on the ground
    across Montana are unable to start answering questions about
    the new programs from producers in their counties. I know they
    do not have the answers yet, but it is important that they feel
    free to talk to farmers about the new programs. This will help
    identify local problems and solutions before it is too late.
        On a more personal note, I was happy to see the provision
    that created the Military Veteran Agricultural Liaison. I know
    it can be hard adjusting to civilian life after active duty,
    and this position will allow USDA to have a central resource
    for veterans seeking opportunity in agriculture, creating jobs
    across Montana and across the country. I encourage you to act
    quickly to fill this position.
        Now, there are a few Montana priorities I would like to
    discuss. My first question, Mr. Secretary, is that the Farm
    Bill provides the opportunity to update payment yields which
    will be used in calculating a payment under PLC.
        This update for those who choose it will allow productive
    Montana farmers who enroll in the PLC to have a program that
    better aligns with their good farming practices.
        The bill also allows a voluntary base reallocation.
    Planning patterns have shifted quite a bit in parts of Montana.
    Some farmers want their base acres updated to reflect that
    transition. As you know, farm policies change over time, and it
    is common to use pieces of previous programs such as base acres
    and program yields; and for that reason, it is critical that
    the opportunity to update yields and reallocate base be offered
    to all farmers regardless of which program they choose. It is
    also important that FSA start the process as quickly as
    possible.
        My question is. Will all farmers be provided these
    opportunities and what steps have been taken to implement these
    two provisions?
        Secretary Vilsack. It is our hope that by the fall folks
    will be able to make appropriate adjustments to their acres and
    production. Our goal, Senator, is to try to get information out
    to folks so that they can begin the process of evaluating
    precisely how these programs would operate.
        That is why it is important for us to focus on getting the
    education money and the modeling money out which we are going
    to try to do this month. So, they will have that opportunity
    and they will also have, I think, adequate time to be able to
    evaluate the impact of these programs.
        I will tell you that we will continue to work with our
    local folks at the FSA offices. I am happy to visit with you
    about the issue of FSA offices because I am not sure that we
    have done a good enough job of explaining to you that this is
    not really about cuts, it is about restructuring the way FSA
    works so it can be better at its work, better at its job.
        Senator Walsh. Okay. The Ag land easement program
    administered by the NRCS has potential in Montana to serve our
    working lands. Montana land trust used the previous easement
    program to conserve 111,000 acres of our most productive land.
        Unfortunately, the usefulness of the easement program has
    been threatened by moving the decision-making from Montana to
    Washington. This has made it harder to get waivers for
    requirements that do not make sense on the ground in Montana.
        The result is that thousands of acres in Montana could be
    locked out all due to restrictions that do not advance the
    goals of the program on those particular properties.
        Also the success of the new easement program depends on
    Montana's NRCS staff's ability to accommodate Montana's
    agriculture practices. State offices should have the
    flexibility to waive regulations that reduce the Ag viability
    of the land while bringing no conservation benefits.
        How much flexibility will be given to state
    conservationists in the new Ag land easement program?
        Secretary Vilsack. It is my understanding that they are,
    that we look upon them as the principal decision-makers. One of
    the things that we attempted to do was, rather than being
    prescriptive in terms of how much money could be used for
    easements and how much money could be for wetland restoration,
    that we are giving state conservationists the ability to sort
    of gauge what their need is in individual states and then they
    can essentially appropriate and allocate the resources
    according to the needs.
        It is not going to be siloed. It is not going to be
    dictated to them. They are going to have some flexibility to be
    able to say, for our state more easements are important; for
    other states, more wetland restoration would be important.
        Senator Walsh. Okay. Thank you.
        Finally, the bark beetle infestation in the West has killed
    trees on millions of acres of forest land in Montana and across
    the West.
        Beatle kill hurts our rural economy by increasing risk of
    wildfire, reducing marketable saw logs, and discouraging
    tourism. Addressing the issue up front will save money in the
    long run.
        Governors across the country are awaiting your decision
    about the proposed designations for priority landscapes for
    treatment under the Farm Bill. In this critical period of
    planning ahead of seasonal vegetation management, are you
    confident the Forest Service can get work completed on the
    ground this year, using the insect and disease language in the
    Farm Bill?
        Secretary Vilsack. Well, I am confident that our Forest
    Service will do everything they possibly can to do the work
    that is necessary, Senator.
        I would say that the long-term capacity for us to do the
    job that you want us to do and that we want to do is dependent
    on us getting a different way of funding fire suppression. The
    fire suppression budget eats up a substantial amount of the
    Forest Service budget and creates the need for us to take money
    from restoration and rehabilitation resources to be able to
    fight fire suppression.
        It is replaced the following year but the problem is there
    is never any certainty about those resources. I think it's
    extraordinarily important that the Congress addressed this,
    create a new and better way of fighting the fires and funding
    the firefighting which gives you greater certainty in the
    restoration and rehabilitation portion of the Forest Service
    budget.
        If you had that, if we had that, we would see accelerated
    activity in this area. We totally agree with you there needs to
    be a tension.
        Senator Walsh. All right. Thank you, Mr. Secretary.
        Madam Chairwoman, thank you.
        Chairwoman Stabenow. Thank you very much.
        Senator Thune.
        Senator Thune. Thank you, Madam Chairwoman.
        Mr. Secretary, thank you for being here and I want to take
    this opportunity to thank you too for prioritizing livestock
    disaster program implementation and for beginning to take those
    applications on April 15 of this year, and I also want to thank
    you for sending Undersecretary Scuse to South Dakota a couple
    of different times since the October blizzard that we had out
    there.
        There were several hundred livestock producers in South
    Dakota who lost tens of thousands of head of livestock during
    that blizzard and the Livestock Indemnity Program is really
    their only lifeline to sustain their operations.
        I am wondering if you can provide an update with how many
    LIP and LFP Livestock Forage Program applications you have
    received in South Dakota and the status of payments that have
    been issued for these programs.
        Secretary Vilsack. Senator, roughly twenty-five hundred
    applications between the two programs have been submitted from
    South Dakota. I can get you the specific dollar amount that has
    been distributed. It has been $16 million nationally. That
    number is probably dated. I get a report every Friday
    nationally in terms of all four of the disaster programs. I can
    tell you 33,000 applications nationwide.
        Primarily in the forage program is where a lot of the
    payments have been made. A handful of payments have been made
    but we are processing them as quickly as we can.
        In South Dakota, 2260 livestock forage applications and 535
    LIP applications. It does not tell me how much money has been
    spent but we will get those numbers to you.
        Senator Thune. Thank you. I want to ask a question too
    about the Commodity Title included in the Farm Bill because it
    is significantly different from and much more complicated than
    the direct payments that title replaces.
        The new Commodity Title includes ARC with this calendar
    year or farm level option. PLC within SCO option. There are one
    time choices that will last the duration of the Farm Bill or
    through the 2018 crop year.
        With commodity crop margins expected to continue to be much
    tighter over the next few years, adequately educating farm
    program participants is going to be extremely critical.
        My primary interest in the issue is to ensure that USDA
    recognizes and supports the need to select a lead institution
    that will ensure programs of interest to producers in the
    Midwest and the northern plains including county and farm-level
    ARC as well as the PLC options are fairly represented in
    development of a web-based decision tools that are going to be
    available to producers.
        Since there are regional differences and differences in
    crop production methodologies and marketing, would you agree
    that if USDA would utilize multiple universities that are
    geographically diverse, more superior web-based decision aids
    would be developed?
        Secretary Vilsack. Yes, I think there is a recognition,
    Senator, that we have to be very careful about these selections
    for the very reason that you have addressed. If the modeling is
    skewed to one commodity or another, you will end up maybe
    making the wrong decision in some parts of the country.
        We are going to do everything we possibly can to make sure
    that these resources are distributed to folks who are capable
    of establishing models that will be of most help and that will
    reflect the diversity of American agriculture.
        That is the goal. I cannot tell you today whether it is one
    or multiple but I can tell you that the goal for certain is
    making sure that there is no regional bias one way or the
    other, and I think that is important.
        I think folks are going to need information to be able to
    make. This is a very important decision. It is not a decision
    that they can reverse year-to-year. It is a once, this is it
    for five years.
        We want to make sure we give them adequate information. We
    want to give them time to be able to evaluate. We want to give
    correct information. That is the focus, and that is why we are
    trying to get these resources out by the end of this month.
        Senator Thune. Great. Well, if you could, I think it would
    be really helpful to have one or more mid-western universities
    involved in that process if you could do that.
        Could you give us an update on CRP and implementation,
    general time line for sign up for general and continuous CRP?
        Secretary Vilsack. We expect and anticipate that the
    continuous sign-up will resume sometime this spring. I have not
    yet made a specific decision relative to the general sign-up.
        There are some complexities. We have changed the program a
    bit and I want to make sure that, as we look at these changes,
    that we do the very best we can to maintain this program but
    the continuous program will be resumed very, very shortly.
        We expect and anticipate continued interest in the
    continuous program, and I think the fact that we are going to
    see constrained acreage in CRP really forces us to be very
    focused on how we use these acres most effectively, and the
    continuous program gives us that flexibility to really focus on
    habitat or on pollinators or whatever it might be and on highly
    erodible lands.
        Producers are going to be given the right potentially to
    make a decision to opt out.
        Senator Thune. Right.
        Secretary Vilsack. That is what I sort of want to be able
    to evaluate in terms of its impact on the general sign-up and
    how that opt-out procedure will work. We are in the process of
    finishing that. I think very shortly we will be making an
    announcement on where CRP is, but in my own mind I am not quite
    there yet.
        Senator Thune. I just want to point out one thing. This is
    something that has to do with midterm management practices
    which I think needs to be addressed when that new CRP
    regulation is drafted.
        I have heard from far too many producers in South Dakota
    who have been told that the only midterm management practice
    approved for them is to either burn the permanent vegetative
    cover or to cut and bale it and then burn the bales.
        It seems to me that a much more reasonable alternative
    would be for all CRP practices that are subject to midterm
    management to allow the cover to be harvested, donate it to a
    third-party with either a minimal reduction in the payment or
    no reduction at all, and discontinuing payment for midterm
    management practices.
        Everyone wins if this occurs, and the CRP contract holder,
    the taxpayer, and you get no reduction in wildlife or habitat
    benefits. I am wondering if you might consider making a change
    in CRP midterm management.
        Secretary Vilsack. Well, I think we recognize, we have
    heard the same concerns that you have and I think we recognize
    the need for more flexibility and the utilization of common
    sense.
        In fact, we just sent a bulletin out to our field offices
    in the last week or so on this issue. I think you will see more
    flexibility. I think you will see more common sense on this. I
    think we learned a lot during the drought in terms of the need
    for flexibility.
        I would expect you will be more satisfied than you have
    been.
        Senator Thune. Good. That would be great. I mean, this is
    something that consistently is raised by producers is they look
    at this, this program and the way that it gets managed and it
    just makes no sense, particularly when you look at all the loss
    of cover. In our State wildlife habitat is a very important
    issue as well.
        Secretary Vilsack. I think that one of the things that I
    have learned in this process is that we really do need to be
    sensitive to how we make decisions about CRP because they are
    subject to being questioned in litigation which basically slows
    the whole process down.
        So, to the extent that we can be collaborative, to the
    extent that we can reach out to folks who have an interest and
    a stake in this and learn from them and attempt to be somewhat
    flexible and somewhat understanding of the various interests at
    stake here, I think we could do a better job of avoiding
    confusion, a better job of providing flexibility and perhaps
    reduce the amount of litigation involved.
        Senator Thune. Good. It would be great if you could reduce
    litigation. I hear what you are saying and I understand that is
    something that you have got to prioritize but people look at
    burning bales or burning vegetative cover, they are just going
    why are we doing this.
        Thank you, Madam Chairwoman.
        Chairwoman Stabenow. Thank you very much. Before turning to
    Senator Casey, I just want to underscore, Mr. Secretary, one
    thing that Senator Thune was talking about on education
    outreach. Actually, it was our intent in writing the language
    more broadly that we would not have just one institution or one
    region doing this but that we would have multiple institutions
    throughout the region.
        Senator Thune. Even if it is Michigan State.
        Chairwoman Stabenow. That would be good, that would be a
    great place to start, but we certainly do not want to see all
    of it going to one institution. I know you understand that.
        Senator Casey.
        Senator Casey. Madam Chair, thank you.
        Mr. Secretary, thank you for being here this morning. I am
    sorry I had to run in and out. We are doing some juggling this
    morning.
        But before I get to questions, I wanted to try to maybe
    explore three issues. Dairy, an issue you and I have talked
    about over many years and I have always been grateful for your
    help and for your understanding and the knowledge, of course.
    Dairy, microloans, and maybe healthy food financing initiative.
        But let me say first, I am grateful for your leadership at
    this department at a very tough time in our Nation's history.
    It is a very difficult time to be running any substantial
    agency with all of the rancor and partisanship in this place
    but also with the sometimes limited funding that is available
    to do the things that we hope to do, and we are grateful for
    your public service all these years in a tough job.
        I am remembering. I do not know if you remember this, but I
    think it was maybe August of 2012 or September of 2012. We were
    together at a meeting. You were writing down all of the various
    programs that were directly impacting Pennsylvania with dollar
    amounts.
        I do not think I saved that but I should carry that card
    around because we need to remind folks about what is working
    and what is positive and constructive. I am remembering that as
    an indication of good progress.
        On dairy, we have had, in all the discussions that you and
    I have had about Pennsylvania, you have roots in our State. You
    know it well. We are second only to Wisconsin in terms of the
    number of dairy farms, and a lot of that story as you have
    heard me talk to you about and as you understand has been a
    difficult and a sad story.
        Families, one-or two-or sometimes three-generation family
    when they get to the current or the next generation, people in
    their 20s or 30s or 40s turning to their parents and saying I
    cannot do this or their parents saying to them you probably
    cannot do this.
        It has been a difficult story but we have got a little bit
    of good news to report in more recent time frames. Milk
    production in Pennsylvania is up nearly half a percent from a
    year ago; and with milk quality, reproduction, and herd
    management benchmarks improving, dairy exports are at an all-
    time high.
        Some good news there. The first question I had for you was
    on the dairy margin protection program. Talk a little bit about
    the implementation of that.
        Secretary Vilsack. Senator, we are on track to get this
    implemented by the September deadline that you all established
    in the bill. We obviously have work to do and that is part of
    why we are trying to get the education materials out and the
    web-based tools out so folks can make appropriate decisions.
        I certainly sympathize with the concern that you expressed
    about the small and midsize operators. It is not just about the
    dairy margin program. It is also about creating additional
    market opportunities which is why we have been focusing on
    local and regional food opportunities because often times you
    have the midsize producer competing against a very, very large
    producer who has, by the nature of their facility, greater
    efficiency, greater ability to provide quality and quantity.
        What we are trying to do is create alternative market
    opportunities where those small to midsize operators are not
    competing against the big guy in a commodity-based market but
    are directly relating to a consumer and a customer that they
    personally engage in.
        Our hope is that it creates more opportunities for folks in
    the middle to stay in business but it is no question it is
    tough. We are going to get this program up and going in
    September. Hopefully, that will provide some help and
    assistance as well.
        Senator Casey. That is great, and I am glad you mentioned
    those smaller dairy farms and the margin protection program as
    it relates to them.
        I wanted to ask you about microloans. We know that the Farm
    Bill established cooperative lending pilot projects to aid in
    the administration of microloans. I just wanted to get your
    sense.
        I guess this is section 5106 implementing those cooperative
    lending microloans programs. Can you talk about the
    implementation of that section of the bill?
        Secretary Vilsack. Let me just check. My focus frankly,
    Senator, has been on getting us in a place where we can
    increase the loan amount on the microloans from 35,000 to
    50,000, and we expect and anticipate to be able to do that
    sometime this fall.
        We are still evaluating the pilots to try to figure out
    precisely how that could happen and in what circumstance. But
    with your question, we will go back and take a closer look at
    that issue.
        Senator Casey. I am grateful. What I have tried to do over
    several years now is to try to create some opportunities where
    committees can have the benefit of those microloans where it is
    not only targeted but it is also in the context of
    incentivizing the growth in local markets, kind of home-grown
    food, and using microloans to stimulate that kind of activity.
        Finally before we wrap up, the Healthy Food Financing
    Initiative, another positive story to tell. We are seeing in
    Pennsylvania that the program right now is supporting
    renovation and expansion of existing stores in our State--I am
    sure this is true in other states as well--so they can provide
    healthy foods that communities want. Something like 88 stores
    and 5000 jobs.
        There is a $30 million investment of State dollars that has
    resulted in projects totaling $190 million. A great synergy
    between what the State was doing and what now the USDA is doing
    to help with that.
        I know part of that implementation is not just USDA but it
    is also HHS and Treasury. Anything you wanted to tell us that
    or any kind of an update?
        Secretary Vilsack. The fiscal year 2015 budget that we
    proposed includes money for the implementation of that healthy
    financing initiative at USDA. It is authorized but resources
    have not been appropriated so it would require an appropriation
    in 2015.
        Senator Casey. Okay.
        Secretary Vilsack. We have been working with the Health and
    Human Services folks and with the Treasury Department in the
    use of credits in their grant program to try to encourage more
    focus on food deserts and food areas where there is a need for
    full-scale grocery stores or smaller operations that provide
    greater selection than a convenience store.
        Our focus I think at USDA has been primarily, initially in
    this space is to create new market opportunities for those
    small to midsized producers.
        We have been working on expanding farmers' markets, working
    on food hubs which will allow for an aggregation of locally and
    regionally produced food.
        Today we are announcing the farmers' market promotion
    resources and the local food promotion resources that will be
    available under this Farm Bill, roughly $30 million. That is
    going to be potentially of some help and assistance as well.
        Senator Casey. Thank you very much. Thank you for your
    service.
        Secretary Vilsack. My staff just provided me a note that
    there is a listening session on this issue on the 30th of this
    month in case your staff is interested.
        Chairwoman Stabenow. Thank you. Very exciting. The Healthy
    Food Financing Initiative was a very, very important issue.
    Thank you, Senator Casey, for raising that as well.
        Senator Johanns, we were talking before you arrived about
    having a former Secretary of Agriculture on the Committee. We
    will certainly miss you as you leave us at the end of the year,
    but we were glad as always to have your voice.
        Senator Johanns.
        Senator Johanns. Well, thank you very much. I have to say I
    think this is the best Committee in the United States Senate.
    In your leadership both the Ranking Member and Chair could not
    be better. So, I thank you. I will miss you.
        Mr. Secretary, it is good to have you here and I am going
    to give you a compliment. Every time we have asked you to show
    up and explain your budget or explain something that was going
    on, you have done it, and I want to tell you how much we
    appreciate that because it helps us do our job, and it makes
    the USDA more accountable which in the end we both agree is a
    good thing.
        I applaud you and your team at USDA for recognizing the
    important role that we play in on these Committees. I thank you
    for that.
        Secretary Vilsack. Thank you.
        Senator Johanns. Let me, if I might, focus on a very
    specific provision of the Farm Bill. I offered an amendment to
    establish an Undersecretary for Trade in Foreign Agriculture
    Affairs.
        Almost immediately then Senator Max Baucus spoke up and
    embraced the idea, and so it became bipartisan from the moment
    I offered it. It got substantial support here. It got
    substantial support in the United States Senate and became a
    part of them Bill.
        Part of the provision there provides that by August 6 you
    will report to us on the implementation of that. I just was
    curious, want to know, where are you at in terms of the
    discussions about that? Where are you at in terms of thinking
    about reorganization plans and how that is going to fit in and
    do you believe you will meet that August deadline?
        Secretary Vilsack. Senator, this is a lot more complex than
    I initially recognized. I can tell you that we had a meeting in
    my office where folks began to explain the various subparts of
    USDA that have some either direct or indirect connection to
    trade as you well know from your previous experience.
        There are obviously equities and passions and concerns that
    people have expressed. So, we are in the process of evaluating
    all of those equities and making sure that we do a good job of
    identifying every aspect of USDA that may have involvement in
    this decision so that the report that we provide you is as
    complete as it can be.
        I do not want a situation where we report to you and then
    someone says, well, what about APHIS' role in trade and why did
    you not include that and if you are going to include how do you
    include it.
        I want you to know that we are talking about this, and I
    recognize the need for a thorough and comprehensive review of
    it. We will do everything we can to meet the August 6 deadline.
        I do not know whether we will meet that or not to be
    candid. We will not meet it if, in order to meet it, I am going
    to sacrifice the quality of what I give you, but we will do
    everything we possibly can to get there by August 6th.
        There is a lot going on at USDA as you well know. We have
    had reduced workforce. We are continuing to stress budget
    constraints. So, we will do our best and we are taking this
    seriously and we are looking at it and we will do the best we
    can to give you as good a report as we can.
        I will tell you this. I do recognize the importance of
    trade generally to agriculture. I mean, we have had five or six
    good years in trade and that has certainly helped to stabilize
    farm prices across the board. We want to continue that and we
    also recognize how complex this issue is.
        Senator Johanns. Let me offer a thought because I think you
    are enormously diplomatic. I can only imagine sitting in your
    office----
        Secretary Vilsack. You do not have to imagine it. You were
    there.
        [Laughter.]
        Senator Johanns. --and the people coming in and the various
    turfs and I can just feel the pressure of that weighing down on
    you because we have said to you we want to hear from you by
    August 6.
        Thirty farm groups supported this. This had substantial
    support. Let me use this opportunity just to say to USDA this
    is really important. This is one you cannot outlast me because
    there are other advocates who want this to happen.
        There are 30 farm groups that want it to happen, and it
    just makes sense. You know, I look back at my time at USDA and
    so much of what I did was trade related. I would have given
    anything to have this position in place, and I get the
    complexities, I do, and I get the turf, I get the battles that
    are going on.
        Secretary Vilsack. If I can just say one other thing,
    Senator. It is further complex because our deputy, Darci
    Vetter, who has been so heavily engaged in trade discussions is
    now being proposed to move over to USTR.
        It is timely but there are a lot of moving parts here and I
    do not want to suggest to you that my answer should indicate to
    you that I do not think it is important or that I do not think
    it is something that we should do. I just want to make sure we
    do it right.
        Senator Johanns. Yes, we want it done right and we want it
    done. So, that is two things they need to do. It is very
    straightforward.
        Let me, if I might, turn to trade. I have been offered the
    opportunity many times, as all of us have on this Committee, to
    talk about TPP, TTIP; and I have offered the opinion that I do
    not see a pathway to success with either one of those without
    trade promotion authority.
        I just do not think a trading partner is going to negotiate
    and give back and forth when they know that 535 people, after
    the agreement is reached, can hit it, amended it or whatever.
        I would like your comments on that. The President mentioned
    it in his State of the Union address. How important is it for
    us here in Congress to support the President on this one, and I
    do support him and I will help him in any way to get this, but
    how important is it to get those trade agreements done?
        Secretary Vilsack. Well, there is enormous opportunity for
    expanded agricultural trade with these two trade agreements.
    There are hundreds of millions of new customers that we could
    appeal to and that we would basically win a significant
    percentage of because of the quality and quantity and the price
    that we can provide.
        Having said that, I do not think we should underestimate
    the difficulty of these negotiations whether you had TPA or
    not, whether you had trade promotion or not, they are still
    going to be extraordinarily difficult because there is
    resistance on the part of some of our trading partners to open
    up their markets as open as our markets have been.
        I think there are two ways to approach trade promotion
    authority. You pass it and then you get the agreements or you
    get a decent agreement, a good agreement, you go to Congress
    and say, look, you got this opportunity. Trade promotion
    authority would fast track this. A great opportunity. Let us
    take advantage of it.
        I think either way you could get to where you need to be.
    But I do not want to underestimate the difficulties of these
    negotiations under any scenario. The Japanese are very
    difficult. I think there is a pathway to potential progress
    there but there is a lot of work left.
        Senator Johanns. Thanks. Thanks, Madam Chair.
        Chairwoman Stabenow. Thank you very much.
        Senator Gillibrand.
        Senator Gillibrand. Thank you, Madam Chairwoman. Thank you,
    Ranking Member. I so enjoy the work that we do on this
    Committee and I am grateful that you brought our Ag Secretary
    here to begin to discuss the Farm Bill.
        Mr. Secretary, it has been an honor and privilege to work
    with you. I think you have done an extraordinary job in meeting
    the needs of farmers all across America, and I want to thank
    you for your service.
        I would like to talk a little bit today about dairy if that
    is all right. In the 2014 Farm Bill, we required a number of
    changes that will impact dairy farmers across the country.
        Now, in New York, we have lost a lot of cows. We lost about
    65,000 cows between 2002 and 2012 and nationally dairy farmers
    have lost about $20 billion in debt equity between just 2007
    and 2009.
        2009 was a horrible year for dairy pricing. The average
    dairy farm in New York State are small dairies. They are 150
    cows and they typically have received MILC for free.
        Now we have a new program and my question is. How will the
    USDA conduct outreach to the smaller farmers to help them at
    enroll them in the new margin insurance program to ensure that
    they are still covered in the event of another bad year like
    2009 and how will your USDA field offices help farmers decide
    what level of coverage to purchase?
        Secretary Vilsack. Well, the first step in the process is
    to get the educational materials and the decision-making
    materials which is why you all have had the foresight to
    provide up to $6 million to be able to do that. Those resources
    are going to go out the door very, very soon.
        That will allow us to engage our university partners in
    getting information out and in an appropriate way. It will also
    equip interest groups that have an interest in all of this to
    be able to begin the process of educating their members or
    constituents, their customers.
        Our FSA offices obviously will have information and will be
    in a position to be able to respond. Our goal here is to
    provide producers, whether it is dairy or any other producer,
    sufficient and adequate information and the time to make
    appropriate decisions.
        I think getting the educational resources out the door by
    the end of this month is clearly important to accomplish both
    of those.
        Senator Gillibrand. Do you think the margin protection
    program will be ready for September 1?
        Secretary Vilsack. Yes.
        Senator Gillibrand. That is great. Do you think FSA has all
    the stuff they need to do for what they need to do?
        Secretary Vilsack. Not today but they will.
        Senator Gillibrand. By then. Okay.
        Also related, the new Farm Bill stipulates that you cannot
    have both livestock gross margin and a margin protection
    program at the same time but a lot of our farmers have been
    using LGM since the good risk pool.
        The problem is that farmers purchase contracts at various
    increments in time but usually for a period that covers several
    months. So, these are farmers who are beginning to purchase
    contracts that are going to the fall. These farmers want the
    opportunity to evaluate MPP when the rules come out and decide
    if it is right for them but do not want to give up their LGM.
        The question is. How will the Secretary work to provide
    clarity on LGM dairy transition given that the new margin
    protection rules are still pending?
        Secretary Vilsack. Senator, I want to give you a correct
    answer on that so if you will let me get back to you.
        Senator Gillibrand. Okay.
        Secretary Vilsack. Because, as I sit here, I do not know
    the precise answer to that. I do know while that program is
    important, it is so inadequately funded it takes hardly
    anything in to get the resources used up.
        Senator Gillibrand. Okay. Maybe just give that to the
    package of the FSA folks as you are training them for September
    1, just that one piece, make sure they can advise the farmers
    accurately what to do.
        Secretary Vilsack. Good point.
        Senator Gillibrand. Second topic I would like to bring up
    is the healthy food financing initiative. This was really
    important for me because a lot of our communities do not have
    access to affordable fruits and vegetables and whole foods.
        I was really excited that we authorized it. It provides
    loan and grant financing to attract grocery stores and other
    fresh food retailers to underserved areas, urban, suburban,
    rural.
        You would be surprised, in New York State, we are one of
    the bountiful states but we have food deserts in the north
    country. We have food deserts in the Bronx.
        It does not matter if you are a big city or highly rural or
    mountainous, just access to healthy foods is sometimes very
    difficult. So, the question is. Can you assure us that the
    healthy food financing initiative will be administered in such
    a way that can get to all of these communities and recognize
    that even though it seems crazy that a state that is so
    bountiful like New York still has food deserts?
        Are they going to be able to implement that in a way that
    reaches all the communities that need it?
        Secretary Vilsack. We will be able to satisfy that we will
    pay attention to wherever the deserts are regardless of what
    state they may be located in.
        It is important, however, that we are able to receive an
    appropriations in the fiscal year 2015 budget to fund this
    program. It was authorized but not funded in the Farm Bill. So,
    we need and we have asked for millions of dollars in this
    fiscal year 2015 budget. If we get those resources, we will
    make sure that we do.
        Senator Gillibrand. Madam Chair, will you work with me to
    make sure we fund that because it is really vital for our
    State?
        Chairwoman Stabenow. Absolutely. I will just add that I
    have talked to Secretary of the Treasury because new markets
    tax credits had also been used for this and I have encouraged
    them to continue to identify new markets tax credits.
        Secretary Vilsack. HHS has had grant programs in the past
    that they have also used. We are collaborating with them even
    though we have not had a specific tool. There are ways in which
    we can use some of our rural development resources that are not
    quite as attractive as a grant but we are using them.
        Senator Gillibrand. To incentivize folks to invest, yes.
    That is helpful.
        Related, I have been working with the community development
    financial incentives program to really good affect. For
    example, with the support of an HFFI grant, we had teenagers in
    Brooklyn, the Cypress Hills neighborhood.
        We were able to start a youth-run urban farm stand, and
    these farm stands are great because these intercity youth who
    do not know anything about farming get a chance to learn where
    their food is grown, how it is grown. They tried vegetables
    they have never had before. They learn about small businesses.
    They learn how to manage a business operation.
        They are extremely effective. So, the question is. How do
    you see HFFI complementing other programs like the farmers'
    market promotion program or value-added producer grants?
        Secretary Vilsack. Well, it is all part of an effort to try
    to reconnect people with their food supply and have a greater
    appreciation for producers everywhere.
        It is all part of an effort to try to create additional
    market opportunities, whether it is urban, suburban, or rural.
    The reason why these become important is the shrinking middle
    of agriculture that I have deep concerns about.
        The folks at the top of agriculture are doing pretty well
    and they will continue to do well because they are
    extraordinary, they are efficient, they are productive, they
    have amazing export market opportunities.
        The folks who are small--they are doing okay because they
    have off farm income. It is the folks in the middle that have
    small-sized, middle-sized operations where farming is their
    principal employment and they are just having a hard time
    competing in a commodity market.
        Our goal is to try to create diverse market opportunities
    for them. So, all of this, it is an overall package to
    revitalize the rural economy. Production agriculture and
    exports, local and regional food systems, conservation,
    ecosystem markets and outdoor integration, and the bio-economy
    are the four cornerstones that you all have put in place in
    this Farm Bill to revitalize and rebuild a rural economy that
    will help some of these small and midsized operators.
        Senator Gillibrand. Thank you, Mr. Secretary.
        I just want to end with I also look forward to working with
    you on some food safety initiatives which are not in the Farm
    Bill but are not necessarily getting the attention from USDA
    that they need and a particularly different bacteria that
    affect poultry, making sure we focus on Campylobacter and other
    types of bacteria that we need to protract for our food supply.
        Secretary Vilsack. We are very focused on that. We are the
    first Administration to propose performance standards on
    Campylobacter. It is a tough word to say.
        Senator Gillibrand. I would love to work with you on that
    and also, when we processed meats, ground beef, there is so
    much work to be done. It is not a Farm Bill issue but I really
    want to move the ball on that issue.
        Secretary Vilsack. Okay.
        Senator Gillibrand. Thank you, Mr. Secretary.
        Thank you, Madam Chairwoman.
        Chairwoman Stabenow. Thank you very much. I know as we wrap
    up, Senator Cochran had another question. I have just a couple
    of comments and then I will turn to Senator Cochran.
        Mr. Secretary, on crop insurance I would be remiss if I did
    not indicate that when we look at all of the ways in which we
    have expanded the supplemental coverage option and new
    opportunities for the young farmers and so on, I want to make
    sure that specialty crop coverage which is so critical does not
    get lost or put at the bottom there.
        It is very, very important that we create those
    opportunities for farmers that have not traditionally had
    direct payments or asked for any kind of direct subsidies.
        I know that Senator Gillibrand cares about this as well
    that we make sure those dollars are there and that crop
    insurance plans are getting out the door.
        Then finally, and I will follow-up with questions for the
    record but I am very excited about our Food Insecurity
    Nutrition Incentive Program. We had a very successful program
    called Double Up Bucks in Michigan.
        There have been programs in other places. I hope you will
    be looking to these successes in our country as you put
    together the best practices for the incentive programs.
        I am looking very much forward to working with you on these
    new opportunities for people who are using food assistance
    programs have the opportunity for healthy food purchases
    through farmers markets and so on. Very, very important.
        So Senator Cochran.
        Senator Cochran. Madam Chairman, thank you.
        Mr. Secretary, as you are aware, cotton producers are
    transitioning to a safety net known as the Stacked Income
    Protection Plan. It is based on crop insurance.
        Because this plan will not be available to producers before
    the 2015 crop year, the Farm Bill provides transition
    assistance for upland cotton producers using their 2013 cotton
    base acres.
        When do you expect the department to hold sign-ups for
    cotton transition assistance?
        Secretary Vilsack. This summer, Senator, with payments this
    fall.
        Senator Cochran. Any specific dates in there? Summer is a
    big season in Mississippi.
        Secretary Vilsack. Senator, I do not have a specific date
    but we will do our best to get you specific information, but
    obviously we understand the importance of these transition
    payments and we want to make sure we get them out.
        Senator Cochran. The timeliness is important because of our
    observations about the weather.
        Mr. Secretary, conservation programs underwent significant
    changes during consideration of the Farm Bill. Programs such as
    the Wildlife Habitat Incentive Program and the Wetlands Reserve
    Program are maintained but consolidated into programs with
    similar functions and purposes.
        It has come to my attention that the Natural Resources
    Conservation Service has incurred a significant backlog in
    restoration costs from prior-year enrollments of the Wetlands
    Reserve Program.
        How will the department address this specific situation as
    it implements a new consolidated easement program, and what
    impacts do you expect from merging the Wildlife Habitat
    Incentive Program into the Environmental Quality Incentives
    Program? How do you envision USDA implementing the funding
    allocation for wildlife practices?
        Secretary Vilsack. Senator, that is a number of questions
    that I want to make sure that we get you a full and detailed
    answer to. Let me give you sort of a 50,000-foot answer.
        We did recently announce the easement program and the
    wetlands restoration effort, and I think one of the things that
    will do in terms of processing is it is going to equip the
    state folks with a little bit more flexibility and power to
    make decisions which should make it easier and less time-
    consuming than in the past.
        They can now evaluate what they think their needs are
    relative to easements and wetland restoration and be able to
    allocate resources accordingly. So, that should shorten the
    amount of time it takes to get decisions made and resources to
    producers.
        In terms of the overall relationship of various programs, I
    think it is important to point out that this Farm Bill is
    historic in terms of conservation.
        For the first time I believe in the history of Farm Bills,
    the amount of money allocated to conservation programs
    generally currently exceeds the amount that will likely be
    spent on some of the safety net programs. That is a change.
        I think what we are now seeing is conservation in essence
    being part of that safety net, and I think it is important that
    we be as thoughtful and as strategic with these conservation
    dollars as we possibly can, and I like the balance you all
    struck in this bill with the regional partnerships that gives
    us leverage opportunity. With the remaining EQIP resources and
    the CSP resources we can individualize.
        We can focus on efforts as we have with endangered species
    to provide greater certainty and use tools in conservation to
    encourage sister agencies to provide regulatory certainty. We
    can use conservation resources to create new opportunities for
    private sector investment in conservation.
        We are going to see over time the ability to quantify,
    measure, and verify conservation results which will allow
    regulated industries that need those environmental results to
    be able to obtain them not by building great infrastructure,
    but by investing in private land conservation which creates a
    whole new vista of income opportunities.
        Utilizing the resources of conservation is all about soil,
    water, and air but it is also about how we leverage, how we
    multiply the economic impact of conservation so that it becomes
    a tool of rebuilding a rural economy.
        That is the instruction and direction I had given to our
    NRCS folks is to be creative about this and I think the tools
    that you all have given us, I think it is a great day for
    conservation, I really do.
        Senator Cochran. Madam Chair, I appreciate very much the
    candor and the full explanation the Secretary has given us on
    these subjects. I admire and praise you for your initiatives in
    the environmental area and conservation. These topics are very
    important to many of our states, mine included. So thank you.
        We look forward to working with you to help ensure that
    funding is available to do these things that we had hoped the
    Farm Bill authorized.
        Thank you.
        Chairwoman Stabenow. Well, thank you, Senator Cochran. I
    know how important conservation is and what a key role you have
    played in this.
        Mr. Secretary, thank you very much. You can tell from the
    attendance this morning and the questions our top priority is
    implementation of the Farm Bill. We spent way too long getting
    to this point and are very, very pleased with the work you are
    doing. We know you have all hands on deck as you are moving
    forward and we commit to work with you as well.
        Getting this implemented in it's entirety is the top
    priority for me and for all of our Committee doing this the
    right way under the legislative intent of the Farm Bill
    obviously is something we are committed to and we know you are
    as well.
        Secretary Vilsack. Madam Chair, if I could just thank you
    for the opportunity today to report. We will continue obviously
    to do that but you mentioned the Food Insecurity Pilot Program
    which is of importance to you.
        Our food and nutrition consumer services will be working
    with the National Institute of Food and Agriculture that is in
    the business of providing grants, to work collaboratively.
        We expect the initial solicitation to be in the fall. We
    fully understand and appreciate those who have had experience
    in this area before need to be drawn on.
        But we also want them to maybe bring on some new
    participants in this area so that this effort can grow. We are
    excited about the opportunity. We are going to try to use these
    resources that you provided creatively.
        Chairwoman Stabenow. That is terrific, and I know there is
    interest in partnering or mentoring between those who have done
    this before and those who want to do it. There is really some
    opportunity I think to be creative in this space. I appreciate
    your doing that.
        Secretary Vilsack. Absolutely.
        Chairwoman Stabenow. For the Committee members, any
    additional questions for the record should be submitted to the
    Committee clerk five business days from today. That is by five
    p.m. on Wednesday, May 14.
        Without any further questions, the meeting is adjourned.
        [Whereupon, at 11:24 a.m., the Committee was adjourned.]

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                                A P P E N D I X

                                  MAY 7, 2014

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                       DOCUMENTS SUBMITTED FOR THE RECORD

                                  MAY 7, 2014

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                             QUESTIONS AND ANSWERS

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