[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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            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

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                                                                   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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                         QUESTIONS AND ANSWERS

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