[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]




 
                    OPPORTUNITIES AND CHALLENGES IN
                     DIRECT MARKETING--A VIEW FROM
                               THE FIELD

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

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
               BIOTECHNOLOGY, HORTICULTURE, AND RESEARCH

                                 OF THE

                        COMMITTEE ON AGRICULTURE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             SECOND SESSION

                               __________

                            FEBRUARY 2, 2016

                               __________

                           Serial No. 114-38
                           
                           
                           
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                        COMMITTEE ON AGRICULTURE

                  K. MICHAEL CONAWAY, Texas, Chairman

RANDY NEUGEBAUER, Texas,             COLLIN C. PETERSON, Minnesota, 
    Vice Chairman                    Ranking Minority Member
BOB GOODLATTE, Virginia              DAVID SCOTT, Georgia
FRANK D. LUCAS, Oklahoma             JIM COSTA, California
STEVE KING, Iowa                     TIMOTHY J. WALZ, Minnesota
MIKE ROGERS, Alabama                 MARCIA L. FUDGE, Ohio
GLENN THOMPSON, Pennsylvania         JAMES P. McGOVERN, Massachusetts
BOB GIBBS, Ohio                      SUZAN K. DelBENE, Washington
AUSTIN SCOTT, Georgia                FILEMON VELA, Texas
ERIC A. ``RICK'' CRAWFORD, Arkansas  MICHELLE LUJAN GRISHAM, New Mexico
SCOTT DesJARLAIS, Tennessee          ANN M. KUSTER, New Hampshire
CHRISTOPHER P. GIBSON, New York      RICHARD M. NOLAN, Minnesota
VICKY HARTZLER, Missouri             CHERI BUSTOS, Illinois
DAN BENISHEK, Michigan               SEAN PATRICK MALONEY, New York
JEFF DENHAM, California              ANN KIRKPATRICK, Arizona
DOUG LaMALFA, California             PETE AGUILAR, California
RODNEY DAVIS, Illinois               STACEY E. PLASKETT, Virgin Islands
TED S. YOHO, Florida                 ALMA S. ADAMS, North Carolina
JACKIE WALORSKI, Indiana             GWEN GRAHAM, Florida
RICK W. ALLEN, Georgia               BRAD ASHFORD, Nebraska
MIKE BOST, Illinois
DAVID ROUZER, North Carolina
RALPH LEE ABRAHAM, Louisiana
JOHN R. MOOLENAAR, Michigan
DAN NEWHOUSE, Washington
TRENT KELLY, Mississippi

                                 ______

                    Scott C. Graves, Staff Director

                Robert L. Larew, Minority Staff Director

                                 ______

       Subcommittee on Biotechnology, Horticulture, and Research

                    RODNEY DAVIS, Illinois, Chairman

GLENN THOMPSON, Pennsylvania         SUZAN K. DelBENE, Washington, 
AUSTIN SCOTT, Georgia                Ranking Minority Member
CHRISTOPHER P. GIBSON, New York      MARCIA L. FUDGE, Ohio
JEFF DENHAM, California              JAMES P. McGOVERN, Massachusetts
TED S. YOHO, Florida                 ANN M. KUSTER, New Hampshire
JOHN R. MOOLENAAR, Michigan          GWEN GRAHAM, Florida
DAN NEWHOUSE, Washington

                                  (ii)
                                  
                                  
                                  
                             C O N T E N T S

                              ----------                              
                                                                   Page
Davis, Hon. Rodney, a Representative in Congress from Illinois, 
  opening statement..............................................     1
    Prepared statement...........................................     3
DelBene, Hon. Suzan K., a Representative in Congress from 
  Washington, opening statement..................................     4

                               Witnesses

Tonnemaker, Kurt Edward, Co-Owner, Tonnemaker Farms, Bellevue, WA     5
    Prepared statement...........................................     7
    Supplementary material.......................................    61
Heck, Andrew, Garden Educator, Generation Healthy Kids Coalition, 
  Springfield, IL................................................    18
    Prepared statement...........................................    20
Coffin, J.D., Clarissa ``Cris'', Policy Director, Land for Good, 
  Keene, NH......................................................    24
    Prepared statement...........................................    25
McCloskey, D.V.M., Michael J., Co-Founder, Fair Oaks Farms; Chief 
  Executive Officer, Select Milk Producers, Fair Oaks, IN........    29
    Prepared statement...........................................    31
McMicken, John, Chief Executive Officer, Evergreen Cooperative 
  Corporation, Cleveland, OH.....................................    32
    Prepared statement...........................................    34
Eilers, Joshua W., Owner, Ranger Cattle LLC, Austin, TX..........    36
    Prepared statement...........................................    38


                    OPPORTUNITIES AND CHALLENGES IN
                     DIRECT MARKETING--A VIEW FROM



                               THE FIELD

                              ----------                              


                       TUESDAY, FEBRUARY 2, 2016

                  House of Representatives,
 Subcommittee on Biotechnology, Horticulture, and Research,
                                  Committee on Agriculture,
                                                   Washington, D.C.
    The Subcommittee met, pursuant to other business, at 10:00 
a.m., in Room 1300 of the Longworth House Office Building, Hon. 
Rodney Davis [Chairman of the Subcommittee] presiding.
    Members present: Representatives Davis, Yoho, Newhouse, 
DelBene, McGovern, Kuster, Graham, and Peterson (ex officio).
    Staff present: John Goldberg, Mary Nowak, Patricia 
Straughn, Faisal Siddiqui, John Konya, Keith Jones, Mary 
Knigge, and Nicole Scott.

  OPENING STATEMENT OF HON. RODNEY DAVIS, A REPRESENTATIVE IN 
                     CONGRESS FROM ILLINOIS

    The Chairman. This hearing of the Subcommittee on 
Biotechnology, Horticulture, and Research on opportunities and 
challenges in direct marketing: a view from the field, will 
come to order.
    I really appreciate the witnesses being here today. We will 
go ahead and offer our opening statements, and move into your 
testimony.
    So good morning and welcome. Today, we will hear from 
producers involved in direct marketing ventures, such as local 
farmers' markets, direct to restaurant or grocery store sales, 
value-added sales, and community supported agriculture.
    Entrepreneurial efforts of individual producers certainly 
drives success in direct marketing ventures. Nevertheless, as 
producers seek to develop new marketing channels for their 
products, it is important for the Subcommittee to get their 
perspective on the opportunities they see, the challenges they 
encounter, and what programs can help facilitate further 
development of these alternative marketing channels.
    As many of you are aware, the Agriculture Committee has 
engaged in considerable oversight and legislative effort 
regarding issues pertaining to marketing agricultural products. 
Direct marketing is enjoying a resurgence, driven both by 
economic considerations, as well as the desire among consumers 
for better relationships with those involved in food 
production. An evaluation of Census data comparing 2007 to 2012 
figures shows steady increase in producer participation in each 
type of alternative marketing channels.
    Clearly, consumer demand is driving market development. 
What is also clear is that direct marketing creates 
opportunities not only for agricultural economic development, 
but can also serve as a primary mechanism for reconnecting 
producers and consumers.
    While much of today's discussion will focus on the economic 
factors that drive participation in direct marketing ventures, 
I do want to take a moment to comment on how essential the 
direct connection our witnesses have with consumers is in 
bridging the gap between urban and rural constituencies. 
Facilitation of these business relationships can aid in a 
larger challenge that the Committee has been focusing on 
related to the perceived disconnect between consumers and food 
producers.
    Early on in this Congress, several of us had the 
opportunity to hear from Mr. Charlie Arnot, who is the CEO of 
the Center for Food Integrity. Mr. Arnot and his team have done 
considerable work to better understand consumer expectations 
regarding transparency in our food systems, and their research 
responds to consumer demand for factual, easy to understand, 
and relevant information. A central objective throughout his 
team's research is to evaluate what steps can be taken to build 
consumer trust and confidence in today's food systems. With the 
average individual being at least three generations removed 
from production agriculture, strengthening ties between 
producers and consumers is a particularly worthy goal as we 
attempt to enact policies that maintain and enhance food 
security.
    According to Mr. Arnot's research, when evaluating whom 
consumers hold responsible for trust-building and transparency, 
consumers view farmers second only to food companies in all 
aspects of food production. Though many opportunities exist to 
enhance transparency, I think it would be helpful to hear from 
producers who have familiarity in direct marketing, and about 
their experiences engaging consumers in an open dialogue.
    Among our witnesses, I am pleased to welcome one of my 
constituents, Mr. Andy Heck. Mr. Heck currently works as a 
farm-to-school educator for genHkids, a not-for-profit based in 
Springfield, Illinois, that works with schools, community 
organizations, and families to improve the health of children, 
and a former teacher at the Buffalo Tri-City School District, 
with my former classmate, Mr. Steve Dilley, so I won't hold 
that against you.
    Just a few months ago, my district staff had the 
opportunity to volunteer at one of genHkids' community gardens 
in Springfield, and see firsthand the fresh produce that is 
provided to the community and donated to local charities. I am 
thankful for the good work that genHkids does day in and day 
out to provide healthy food to families in central Illinois.
    Prior to joining the genHkids team, Andy not only taught 
but farmed full time for over 10 years, growing a diversity of 
vegetables and fruits in the Springfield area, marketing 
produce directly to local restaurants through a community-
supported ag program to local retail outlets, and at the Old 
Capital Farmers' Market in downtown Springfield. Andy was named 
the Illinois Sustainable Agriculture Farmer of the Year in 2012 
by the Illinois Department of Agriculture.
    [The prepared statement of Mr. Davis follows:]

 Prepared Statement of Hon. Rodney Davis, a Representative in Congress 
                             from Illinois
    Good morning and welcome. Today, we will hear from producers 
involved in direct marketing ventures, such as local farmers' markets, 
direct to restaurant or grocery store sales, value-added sales, and 
community supported agriculture. Entrepreneurial efforts of individual 
producers certainly drive success in direct marketing ventures. 
Nevertheless, as producers seek to develop new marketing channels for 
their products, it is important for the Subcommittee to get their 
perspective on the opportunities they see, the challenges they 
encounter, and what programs can help facilitate further development of 
these alternative marketing channels.
    As many of you are aware, the Agriculture Committee has engaged in 
considerable oversight and legislative effort regarding issues 
pertaining to marketing agricultural products.
    Direct marketing is enjoying a resurgence driven both by economic 
considerations, as well as the desire among consumers for better 
relationships with those involved in food production. An evaluation of 
Census data comparing 2007 to 2012 figures shows steady increase in 
producer participation in each type of alternative marketing channel. 
Clearly, consumer demand is driving market development. What is also 
clear is that direct marketing creates opportunities not only for 
agricultural economic development, but can also serve as a primary 
mechanism for reconnecting producers and consumers.
    While much of today's discussion will focus on the economic factors 
that drive participation in direct marketing ventures, I do want to 
take a moment to comment on how essential the direct connection our 
witnesses have with consumers can aid us in bridging the gap between 
urban and rural constituencies. Facilitation of these business 
relationships can aid in a larger challenge the Committee has been 
focusing on related to the perceived disconnect between consumers and 
food producers.
    Early on in this Congress, several of us had the opportunity to 
hear from Mr. Charlie Arnot who is the CEO of the Center for Food 
Integrity. Mr. Arnot and his team have done considerable work to better 
understand consumer expectations regarding transparency in our food 
systems. Their research responds to consumer demand for factual, easy 
to understand and relevant information. A central objective throughout 
his team's research is to evaluate what steps can be taken to build 
consumer trust and confidence in today's food systems.
    With the average individual being at least three generations 
removed from production agriculture, strengthening ties between 
producers and consumers is a particularly worthy goal as we attempt to 
enact policies that maintain and enhance food security.
    According to Mr. Arnot's research, when evaluating whom consumers 
hold responsible for trust-building and transparency, consumers view 
farmers second only to food companies in all aspects of food 
production.
    Though many opportunities exist to enhance transparency, I think it 
would be helpful to hear from producers who have familiarity in direct 
marketing and about their experiences engaging consumers in an open 
dialogue.
    Among our witnesses, I am pleased to welcome one of my 
constituents, Mr. Andy Heck. Mr. Heck currently works as a farm-to-
school educator for genHkids, not-for-profit based in Springfield, 
Illinois that works with schools, community organizations and families 
to improve the health of children.

    Just a few months ago, my district staff had the opportunity to 
volunteer at one of genHkids community gardens in Springfield and see 
firsthand the fresh produce that is provided to the community and 
donated to local charities. I am thankful for the good work that 
genHkids does day in and day out to provide healthy food to families in 
central Illinois.

    Prior to joining the genHkids team, Andy farmed full-time for over 
10 years, growing a diversity of vegetables and fruits in the 
Springfield area; marketing produce directly to local restaurants, 
through a community supported agriculture program, to local retail 
outlets and at the Old Capitol Farmers' Market in Downtown Springfield. 
Andy was named the Illinois Sustainable Agriculture Farmer of the year 
in 2012 by the Illinois Department of Agriculture.
    I now yield to the Subcommittee Ranking Member, Ms. DelBene, for 
her opening remarks.

    The Chairman. I now yield to the Subcommittee Ranking 
Member, Ms. DelBene, for her opening remarks.

OPENING STATEMENT OF HON. SUZAN K. DelBENE, A REPRESENTATIVE IN 
                    CONGRESS FROM WASHINGTON

    Ms. DelBene. Thank you, Mr. Chairman, and thank you for 
holding this hearing today. Thanks to all the witnesses for 
being here today. It is great to have such a diverse groups of 
producers here, including Kurt Tonnemaker from my area in 
Washington State, to talk about this issue.
    The consumers I talk to are increasingly interested in a 
food system where sales occur the shortest possible distance 
from the field to the fork. And they know that food traveling a 
short distance from farm to plate is more likely to be fresh, 
and just as important, chefs are discovering that they can do 
better things with food if their raw materials; the fruits, the 
vegetables, meats, and dairy products, are fresh and of higher 
quality.
    This trend has opened up new markets for food raised by 
producers who take pride in not only growing a quality product, 
but also telling a compelling story. Urban and rural residents 
are learning that they like to have direct connections to 
farmers and farm life, they like knowing where their food comes 
from, and knowing that it is grown by producers who take good 
care of their farmland and their animals. These consumers like 
knowing that their purchases not only sustains the producer, 
but also builds their community as well. These consumer 
preferences are opening up more opportunities for farmers to 
directly market or sell their products through channels that 
keep their identity as producers closely connected to their 
products.
    I am biased, and so is Congressman Newhouse, my colleague, 
but I believe in Washington State we grow some of the best food 
you can find. In my district, farmers are also incredibly 
innovative in marketing to a diverse set of customers. One 
example is the Puget Sound Food Hub, borne with the help of 
USDA local food promotion and value-added producer grants, as 
well as assistance from private entities. This is a group of 
roughly 40 farms and partners operating cooperatively to market 
and distribute locally produced food to restaurants, hospitals, 
preschools, the cafeteria at Amazon, and grocery stores, to 
name a few. Instead of buying costly equipment, or having to 
drive long distances, these farmers have pooled their resources 
to be more competitive and reach more customers. As a result, 
sales directly to farmers are growing, and some farms have even 
been able to hire additional employees.
    I appreciate the energy and creativity of the producers 
before us here today. They are, each in their own way, engaged 
in highly focused, relationship-oriented marketing. This 
approach is so needed in agriculture today, and many times is 
absent.
    But this is also a great example of what the Agriculture 
Committee does so well. There is no partisan agenda here today. 
Instead, we are hearing straight from producers about their 
relationship with consumers, so we are better informed on how 
to craft agriculture policy.
    So thank you, everyone, for being here today. And with that 
I yield back.
    The Chairman. Thank you. And I would echo the comments 
about Washington's products. I find your cherries, when in 
season, at my local stores are much better than the Chilean 
ones right now, so thank you.
    The chair would request that other Members submit their 
opening statements for the record so the witnesses may begin 
their testimony, and to ensure that there is ample time for 
questions.
    The chair would like to remind Members that they will be 
recognized for questioning in order of seniority for Members 
who were present at the start of the hearing. After that, 
Members will be recognized in the order of their arrival. I 
appreciate Members' understanding.
    Witnesses are reminded to limit their oral presentations to 
5 minutes, or you will get the gavel tap from me. And all 
written statements will be included in the record.
    I would like to welcome our witnesses to the table. And I 
recognize Ranking Member, Ms. DelBene, to introduce our first 
witness.
    Ms. DelBene. Thank you, Mr. Chairman. It is my pleasure to 
introduce Kurt Tonnemaker today. Kurt and his brother Kole are 
fourth generation farmers in Washington State. Their great-
grandfather moved there in 1903 and started an orchard. Then in 
1962, the family expanded the farm into a full-time operation, 
growing alfalfa, alternating with wheat, clover, and corn. Kurt 
and Kole are co-owners of the family farm. In 1992, they 
started selling at farmers' markets, at the same time when they 
started transitioning the farmland to certified organic.
    Today, they grow nearly 400 different varieties of organic 
fruits and vegetables, including cherries, I have to point that 
out. And they sell throughout Washington at farmers' markets, 
direct to restaurants and grocery stores, through a CSA, at 
farm stands and wholesale, as well as tending to their 126 acre 
farm in central Washington, and also a 16 acre farm in western 
Washington.
    So it is a great pleasure to have Mr. Tonnemaker here with 
us today, and thank you for being here.
    The Chairman. Mr. Tonnemaker, welcome, and you are 
recognized for your opening testimony.

   STATEMENT OF KURT EDWARD TONNEMAKER, CO-OWNER, TONNEMAKER 
                      FARMS, BELLEVUE, WA

    Mr. Tonnemaker. Well, hello. My name is Kurt Tonnemaker. 
And as she said, I am a fourth-generation farmer from the great 
State of Washington, where my great-grandparents homesteaded in 
1903.
    For those of us who grow the food that is the foundation of 
America's prosperity can feel a little out of place today in 
modern society. So I wanted to thank the Committee Members for 
your service to agriculture and, therefore, the entire American 
public.
    We grow hundreds of varieties of tree fruit, vegetables, 
and melons. We started direct marketing in 1984 when it became 
apparent that indirect marketing through a wholesale 
distribution system was no longer able to offer fair prices. 
That year, after waiting for 10 months for the final wholesale 
apple payment, we received a check so small that the hired man 
joked; the paperboy could cash it for us when he came by on his 
bicycle.
    In recent years, direct marketing has generated as much as 
90 percent of our income from less than 30 percent of our 
tonnage. Said another way, selling 70 percent of our production 
wholesale produced only ten percent of our income.
    My family has witnessed the spectacular pace of 
consolidation of both farmland and markets. My family realized 
30 years ago to market our own product directly or else become 
extinct, just another pioneer family farm engulfed by another 
absentee corporate entity. Direct marketing saved our farm.
    Supporting farms like ours is our generation's opportunity 
to encourage the small, independent, family farms that for 
generations were the backbone of American prosperity in rural 
America. Today, our farm provides a living for several families 
year-round, and for many summer employees, mainly students 
earning money for school. These family farmers who choose to 
stay on the land for the love of the land, and for the love of 
contributing something worthwhile are the people we want to 
entrust the future of our agricultural resources to.
    On our farm, we truly believe that we are just temporary 
caregivers of these resources. We do not really own the land, 
but have borrowed it from our grandchildren. The future status 
of our food supply and the agricultural resources depends on 
our actions, or our failure to act, in our time.
    With the remarkable success of the recent revival of direct 
marketing, the burdens and barriers for direct market farmers 
are increasing. Food safety records is an increasing burden for 
the small farm. Food safety has always been important to us 
because our business is built on providing safe, fresh food 
directly to our customers. We know our customers as individuals 
we care about. These binders, the 2014 food safety records for 
our farm, will not protect the public from outbreak or protect 
the farmer from responsibility. Thousands of farms, including 
ours, have produced safe food for decades without 6" of 
paperwork yearly. We have lost sight of what really matters in 
food safety: safe food.
    If we are serious about safe food, why not educate the 
public in the same way that Smokey the Bear educated us all 
about forest fires?
    While certainly there are obstacles, there are plenty of 
initiatives currently helping to support direct market farmers. 
One of the successful programs was a partnership between the 
King County Department of Health and the Columbia City Farmers' 
Market. Together, these groups obtained the funds and staff and 
authorization necessary to redeem SNAP, WIC, and Senior WIC 
nutrition benefits at the market. The partnership attracted a 
diverse group of new low-income customers who were excited to 
be able to access good-tasting, healthy food at the same place, 
as their benefits were able to be redeemed.
    I encourage you policymakers to support the programs as 
well as the Farmers' Market Promotion Program, and the 
Specialty Crop Block Grants. In Washington State, agriculture 
research has been instrumental in the success of our fruit 
crops, and more recently improvements in organic and 
sustainable production methods. Direct contact with customers 
profoundly and permanently changed the way we farm and why we 
farm. If this Committee could spend one market Saturday with 
us, Committee Members would never again be able to think the 
same about small direct market farms. For us, it has been an 
incredible experience to interact with the public that is very 
grateful to have good-tasting, fresh produce at reasonable 
prices.
    Our customers are able to see the chance to support a 
family farm, and to see multiple generations working together. 
Possibly the brightest indications of the success of direct 
marketing is our son and daughter-in-law are working with us on 
the farm, instead of fleeing to the city. Apparently, the fifth 
generation of Tonnemakers farming in Washington believes in the 
future of direct market farming. There is something so American 
about the whole situation. Many independent, self-reliant 
individuals creating a better life for their families and 
future generations.
    Thank you.
    [The prepared statement of Mr. Tonnemaker follows:]

  Prepared Statement of Kurt Edward Tonnemaker, Co-Owner, Tonnemaker 
                          Farms, Bellevue, WA
    Basic Goals of Food and Agriculture (from statement by Senator John 
F. Kennedy, ``Agricultural Policy for the New Frontier,'' October 9, 
1960).

          There are, it seems to me, two basic goals for food and 
        agriculture. These are not my goals, nor the goals of any 
        particular individual or group; they are the generally accepted 
        goals of society--goals on which there is general agreement in 
        our country.

    (1)  We must assure, for the present and the future, an abundant 
            production
              of food and fiber products, sufficient (a) to meet the 
            needs of all Americans,
              and (b) to implement a positive foreign policy which will 
            combat famine,
              contribute to the economic development of the 
            underdeveloped world, and
              lay the foundations of world peace.

    (2)  We must assure to the American farm family, which produces 
            this abun-
              dance, an economic climate in which farmers can earn a 
            fair income--an
              income which yields farmers a return to their labor, 
            management, and cap-
              ital equal to that earned by similar resources in non-
            farm employments.

          These are admittedly broad goals. For example, the assurance 
        of abundance for the future, as well as the present, requires 
        conservation programs that will maintain and enhance the 
        fertility of the soil, and will encourage the wise utilization 
        of land resources--whether it be to produce field crops, 
        forests, or a better natural habitat for game and fish.
          * * * * *
          Likewise, the assurance of a fair return to farmers must 
        include a recognition of the importance of the family farm as 
        an efficient unit of agricultural production, as an 
        indispensable social unit of American rural life, and as the 
        economic base for towns and cities in rural areas.

    It was quite a surprise to be asked to testify before a 
Subcommittee of the U.S. House of Representatives. My brother, Kole, 
and I earn our living from a 126 acre family farm in central Washington 
and are attempting to revive an abandoned 16 acre farm in the Sammamish 
Valley of Western Washington. Kole has operated the central Washington 
farm for 35 years since our grandfather's death. The farm has been his 
family's sole source of income for that time. I have supported my 
family by direct marketing the produce from our farm for the last 23 
years. Both Kole and I worked on the farm since we were old enough to 
pick rock, lift a shovel or fill a picking bag. The Tonnemaker family 
is the type of family that soon to be President, Senator Kennedy, was 
speaking about.
    We produce tree fruit, vegetables, table grapes, melons and hay. 
The tree fruit includes apples, pears, sweet cherries, apricots, 
peaches, plums and nectarines. The vegetables include tomatoes, summer 
and winter squash, eggplant, cucumbers and peppers. In order to provide 
produce all season, our production includes over 100 varieties of the 
tree fruits, 30 varieties of tomatoes, 15 varieties of melons and over 
300 varieties of peppers as well as other direct market crops.
Our Beginning in Direct Marketing
    Kole and I have been asked to provide testimony about our 
involvement in direct marketing. Beyond question, direct marketing 
saved our farm from extinction and has actually allowed us to flourish 
even during some very difficult times for the fruit industry in 
Washington. Through these difficult years, including the Great 
Recession, we have increased gross revenue by 400% due to direct 
marketing. Farmers' markets are the foundation of our direct marketing, 
accounting for 50% of all farm revenue. We began selling our produce at 
farmers' markets in 1984, steadily increasing both the number of 
markets attended and the volume sold at these markets. As the dire 
destiny of small farms like ours, reliant on the Washington fruit 
industry's current indirect marketing system, became apparent nearly 30 
years ago, our goal has been to reduce reliance on wholesale sales and 
instead base our business on direct marketing with farmers' markets 
being of primary importance.
    We began a serious effort to market fruit directly to consumers in 
1984. We grew a sweet cherry variety, ``Van'', as a pollinator for Bing 
cherries, the main wholesale sweet cherry in Washington. In a 
particularly glaring example of the weakness of the traditional 
indirect wholesale marketing system, typical returns to the farm for 
the pollinator variety barely paid harvesting costs let alone 
production costs. Since the pollinator variety was actually a very nice 
dessert cherry we decided to sell these cherries directly to the public 
any way we could. Since our farm is distant from any major population 
center, direct marketing required considerable travel. In the first 
year our pollinator cherry returns jumped from the 6/lb wholesalers 
paid to the 50/lb consumers were willing to pay.
    In 1985 returns for our indirectly marketed wholesale apples and 
pears became so low that the hired man joked that the paperboy could 
cash our checks when he came by on his bicycle. We were jolted to the 
realization that leaving the marketing of our fruit to marketing 
companies that had no financial incentive to obtain favorable prices 
was becoming disastrous and would bankrupt us. From that year forward 
every planting decision on our farm, whether annual or perennial crop, 
has focused on direct marketing. We were lucky to have several family 
members committed to the continued viability of our farm. Kole and his 
wife, Sonia, concentrated on production while I, along with our 
parents, marketed the fruit.
    Involvement in farmers' markets has changed nearly everything about 
how and why we farm. Through the 1960's, 1970's and into the 1980's 
almost all produce from our farm was loaded on trucks and disappeared 
into the distance to unseen and unknown consumers at the distant end of 
a long distribution chain. On our somewhat remote farm, the ultimate 
consumer was almost an afterthought as, in practicality, our real 
direct customer was the broker who sat at the beginning of a complex 
distribution system. Brokers are not consumers and care little for the 
actual eating quality of the fruit. Brokers interests are primarily the 
ability of the fruit to endure handling through a long distribution 
system and the eye appeal to satisfy store produce managers and entice 
customers. Unfortunately, durability and eye appeal have little to do 
with eating quality. This intuitive fact was given scientific credence 
recently when Dr. John Feldman at Washington State University was able 
to show a genetic and physiological link between increased red skin 
color and decreased sugar content in Red Delicious apples.
New Perspective Required of Direct Market Farmers
    At a farmers' market, we stand face to face with the person who 
will eat our fruit. We are personally responsible for that fruit. For 
farmers' markets, the imperativeness of customer satisfaction 
relegates, to marginal importance, all other concerns in fruit 
production and marketing. To succeed in direct marketing, ease and 
simplicity of growing, harvesting and transporting our produce cannot 
control our decision making process. One well-known example is the 
Honeycrisp apple, bred at the University of Minnesota and patented in 
1991. In 1996, in response to sending a Honeycrisp sample to our 
wholesale broker (one of the largest in Washington to this day), we 
were told that, although it tasted good, Honeycrisp had no commercial 
future because of poor appearance. In spite of that expert industry 
insider prediction, Honeycrisp, with its' unique and outstanding eating 
quality, has become, by far, the most sought after apple we grow. 
Honeycrisp is also widely regarded as possibly the least ``grower 
friendly'' variety grown commercially and presents many major problems 
for growers, packers and shippers. In our operation, ``grower 
friendly'' or ``good shipper'' hold far less importance in variety 
selection across all types of fruit and produce than do outstanding and 
unique taste. We search for and have found unique varieties with 
``Honeycrisp'' appeal in melons, tomatoes, sweet cherries and many 
other produce types. Today, people routinely drive more than 100 miles 
to obtain our unique and hard to find direct market fruit and produce.
How We Came To Be Direct Market Farmers
    We farm in the U.S. Bureau of Reclamation's Quincy, Columbia Basin 
Irrigation District. Grand Coulee Dam supplies our irrigation water. 
This water first became available in our area in the mid 1950's. Our 
grandparents, Orland and Pearl Tonnemaker purchased the farm as virgin 
land in 1962. Originally, the irrigation district was divided into farm 
units each unit designed to support a family. Through the 1960's and 
1970's, our farm was surrounded by small family farms similar to ours. 
By the late 1980's, single-unit family farms were rapidly disappearing. 
Those that survive today have, like us, involved multiple family 
members or generations in direct marketing their farm produce.
    Our Great Grandparents Henry and Cora Tonnemaker homesteaded in the 
Yakima Valley in 1903. In those days the farmers apple marketing system 
was simple. Family members packed the apples from their orchard in 
standardized wooden boxes they made and labeled themselves. Empty 
freight trains stopped at neighborhood rail stops and buyers paid cash 
for the packed apples on the spot. From tree to train was usually only 
a couple miles and from crop on the tree to cash in hand was only a day 
or so. That simple system and a favorable climate encouraged expanded 
fruit production in Washington. In time, a Federal Marketing Order was 
established which created, among other things, color and size 
standards. With standards came the necessity to build packing lines to 
make sorting and packing more efficient. Our Grandmother, Pearl 
Tonnemaker packed apples for years on just such a line. All size and 
color sorting was done by human eye and human hand. With these packing 
lines, came the packing companies that individual growers paid to sort 
and pack fruit because every farm couldn't build its' own packing line. 
Over time, the grading standards became more and more precise and human 
eyes and hands just couldn't sort as accurately or as fast as machines. 
Today, instead of hundreds of individual farms packing fruit on site, 
we have less than 100 apple packing warehouses in Washington. The 
proliferation of very narrow color grades used to pack apples today 
requires multimillion dollar color sorters. Modern packing lines sort 
defects, assign color grades and assign size grades for each individual 
apple in a fraction of a second. The cost of machinery used to sort and 
pack apples today has rocketed well beyond the reach of family farms. 
Along with paying fruit companies to sort and pack apples, farmers 
eventually began relying on the fruit companies to store and market 
apples. Thus we have the origins of today's indirect marketing system 
used to market almost all tree fruits in Washington State. In the 100 
years since our Great Grandfather planted apples, individual growers 
have incrementally ceded control of handling and marketing to 
incrementally larger packing companies. Today, once the fruit is placed 
on a truck in the orchard, the grower has absolutely no control over 
the fruit's destiny.
    Ironically, growers technically own the fruit all the way to the 
consumer's hands, therefore absolving the packing company of any 
responsibility for the fruit. The grower has all the responsibility but 
no control. The packing company has all the control but no 
responsibility. Gee, I wonder how that works out? Wonder no more. Over 
the last 30 years fruit companies have flourished routinely keeping 
well over \1/2\ the selling price of the fruit. It is commonplace for 
the fruit company to keep 90% of the selling price and at times packing 
companies actually bill the farmer instead of paying. The 2014 apple 
crop was a recent glaring example of this practice that has become the 
standard operating procedure in the Washington fruit industry. Since 
the fruit companies never actually own the fruit they have little 
incentive to market small client farmer's fruit for more than just 
enough to cover fruit company costs. Growers get what is left over 
after all those along the marketing and distribution chain have taken 
their cuts. By ceding control but not ownership of their fruit, growers 
allow their income to be determined by others who have no real 
incentive to return good prices. It absolutely beggars belief that, 
after producing and harvesting an apple crop from which the whole 
supply chain derives income, farmers can be left with very little or 
even a bill. It is hardly surprising that smaller family orchards, 
relying solely on indirect marketing, have disappeared rapidly over the 
last 30 years. Not surprisingly, the fruit packing companies have 
absorbed farm after farm from the very people they paid poor returns. 
Today, many of the largest fruit producers (acreage holders) in 
Washington are vertically integrated companies (fruit packing 
companies) that can afford to farm with returns below production costs.
Colonization of Our Agricultural Land
    Basic Goals of Food and Agriculture (from statement by Senator John 
F. Kennedy, ``Agricultural Policy for the New Frontier,'' October 9, 
1960).

          Likewise, the assurance of a fair return to farmers must 
        include a recognition of the importance of the family farm as 
        an efficient unit of agricultural production, as an 
        indispensable social unit of American rural life, and as the 
        economic base for towns and cities in rural areas.

    In our area of central Washington, within the U.S. Bureau of 
Reclamation's Quincy Colombia Basin Irrigation District, family farms, 
even large family farms, are in direct competition with outside 
corporate interests for sufficient land to remain economically viable. 
The outstanding agricultural resources of central Washington has drawn 
many outside entities. A large percentage of available land within the 
Federal irrigation district has been and continues to be purchased by 
fruit companies based in distant cities. The produce of these farms is 
trucked to distant cities for packing and marketing. Since packing and 
marketing are the main profit centers for wholesale fruit, nearly all 
of the profits stay in the cities. The laborers live and work in the 
small towns near the farms and the bulk of the profits stay in the 
cities. The small towns of Central Washington are towns of laborers and 
few managers and owners. In the not too distant past, this was called 
colonization. Legal limits on use of Federal irrigation water by any 
one entity are overcome by use of loopholes or just ignored.
    Direct market farms have the potential to help small agricultural 
communities to once again become populated by owner-operators. If 
farmers can direct market their produce at retail prices, they can 
afford to purchase land and other capital inputs. The hurdle of finding 
available land and of competing to purchase the land with outside 
interests that don't need to profit from production remains a huge 
barrier. Direct market farmers can make a small farm profitable. How 
different people think of the land and communities when they have 
ownership in part of it. The United States was built by individuals 
coming to a new world and having the initiative and opportunity to 
build a new independent life. That independence became the American 
Spirit that transformed former colonies into the greatest nation the 
world has ever seen.
Indirect Wholesale Marketing Has Become a Buyers Market
    Though the number of fruit wholesalers (packing companies) in 
Washington has dwindled, the Washington Apple Commission still lists at 
least 70 fruit packers. Because of retail consolidation, these 70 or so 
packing companies all compete to sell to a rapidly diminishing and thus 
powerful and demanding set of buyers. This classic buyers market has 
been compared to a high school dance with 100 boys and ten girls. What 
does a boy have to do to get a dance? In this buyers market, fruit 
packers have had little ability or incentive to sell produce for more 
than the packing company needs to cover its' costs. The recent 
imposition of a tariff on Washington apples exported to Mexico 
exemplifies this point. The Mexican Government study of industry 
records concluded that Washington fruit warehouses were guilty of 
dumping apples in Mexico at below the cost of production. Regardless of 
the validity or propriety of claims about dumping agricultural 
products, this case shows that the Washington fruit industries own 
figures demonstrate the widespread marketing of apples at below 
production costs.
    Additionally, fruit packers apparently no longer have the ability 
or will to enforce the Perishable Commodities Act (PCA) that was 
enacted to give Federal Government backing to farmers, guaranteeing 
prompt payment for perishable crops that cannot be recovered for non-
payment. Large buyers routinely take months to pay. Progress from my 
great grandparents day 100 years ago to today apparently means waiting 
5 months or more instead of cash on the spot at purchase.
Breakdown of Income Sources for Our Farm
    While we still sell some fruit through the traditional wholesale 
warehouse system, direct marketing has saved our farm. In 2015, working 
together, Kole and I produced over 80% of our total gross income by 
direct marketing less than 50% of our total fruit and produce tonnage. 
In other recent years, direct marketing has generated as much as 90% of 
our income from less than 30% of the tonnage produced. Stating that a 
different way, selling 70% of fruit produced on our farm by traditional 
indirect marketing produced only 10% of our income. That 70% of our 
tonnage enriched everyone along the marketing and distribution chain 
except the farmer.
Indirect Wholesale Marketing Returns At Or Below Cost of Production
    Farmers whose sole occupation is production of food and fiber, have 
been a vital foundation of the incredible success story that is the 
United States of America. Overproduction of commodities and the 
reliance on indirect marketing systems over the last generation have 
led to the demise of the family farm and the rise of corporate 
agriculture. The actual production of food has become occasionally and 
marginally profitable, mostly even downright unprofitable. In the 
Washington fruit industry over the last generation, profits have mainly 
come from handling and marketing fruit for the farmers. Those 
vertically integrated companies handling and marketing other farmer's 
fruit have thrived and accumulated farms from farmers forced out by low 
returns. That makes one wonder what incentive an aggressive vertically 
integrated fruit company would have to create good returns for farmer 
clients when bankrupt and struggling client farmers have been easy 
pickings for these corporate giants.
Are Family Sized Farms Important?
    Why should anyone care? Why should our government care? Many might 
say that the elimination of family farms or farm operations that exist 
solely as producers is inevitable and even desirable progress. Many 
might say that these small operations must give way to large vertically 
integrated corporations that can produce farm products year after year 
with break even or lower returns. Farms able to produce farm crops 
consistently at break even or a loss may now be considered the most 
efficient farms.

    Senator John F. Kennedy Statement, ``Agricultural Policy for the 
New Frontier,'' October 9, 1960.

          One of the great issues confronting agriculture and the 
        nation is the economic survival of the family farm pattern of 
        agriculture. The owner-operated family farm, where managerial 
        skills, capital investment and labor are combined in the 
        productive enterprise, is at stake. The problem is not one of 
        efficiency; the family farm is an efficient, productive unit. 
        The problem is one of the acquisition of sufficient capital and 
        the necessary management skills by enterprising young families 
        to successfully enter farming, where the average farm is 
        becoming bigger and bigger in terms of land and capital, and 
        more and more complex in terms of organizational structure. We 
        are reaching that point in farming where an enterprising family 
        can operate a modern farm efficiently, but it cannot buy one. 
        non-farm capital is taking over the managerial function, 
        reducing the members of independent farm families to the status 
        of laborers.
          Further, family farmers need the technical and bargaining 
        help in the sale of their products and the purchase of their 
        production supplies that a successful cooperative association 
        can provide. With such assistance they can remain independent 
        decision units--free of the control of the processor, the feed 
        dealer and the local buyer.
          The family farm should remain the backbone of American 
        agriculture. We must take positive action to promote and 
        strengthen this form of farm enterprise. This I believe with 
        all my heart, we should do.
                                                (JFK, October 9, 1960).
Short-Term Profit Taking from a Vital Long-Term Asset
    The public and it's representative, the government, needs to care 
because, in our economic system, corporations are responsible for 
short-term profits for their stockholders. At this time, corporations 
are not responsible to the next generation for depletion or degradation 
of vital resources needed to produce food for future generations. So, 
who is responsible? I think that all of us are responsible to coming 
generations. One definition of the responsibility of government is to 
do for people what they cannot do for themselves. If, as individuals, 
we cannot make corporations responsible stewards of our resources then 
we need our government to encourage the sustainable use of our 
resources to ensure that future generations are as blessed with 
abundant natural resources as we have been.
    Corporations are not inherently evil. They just have objectives 
often at odds with the long-term sustainable use of our agricultural 
resources. Family farms often have the expressed goal of keeping the 
farm productive and profitable for succeeding generations. The ability 
to direct market products at retail prices can help preserve these 
family farms. Restricting direct market access for family farms will 
secure the demise of the family farm and turn the remainder of our 
agricultural resources over to large corporate farms.
    All of us should care because the history of corporate enterprise 
in our culture is the pursuit of short-term profits with little regard 
the degradation of vital long-term public resources. As a nation we 
cannot allow short-term corporate profits of large scale agriculture to 
degrade resources that following generations will need for food 
production in the future. The idea ``this is private land and we will 
do what we want with it'' cannot be used as justification for degrading 
resources vital to future generations. A capitalistic economic system 
requires enterprises to be profitable in the short-term. For much of 
the economy that is as it should be. If a McDonalds location is 
unprofitable then it should be closed. If a manufacturing plant 
produces obsolete equipment then it should change or close. Possibly, 
the most significant shortcoming of our mostly successful capitalist 
system is our inability to quantify the cost of natural resource 
degradation or the ability to include the cost of this resource 
degradation as a cost of production.
    In our area large farming corporations have mined ancestral 
aquifers, such as the Odessa Aquifer, to enrich the shareholders of 
this generation at the expense of all those that follow. Massive wind 
erosion occurs every year from the largely corporate owned or leased 
area of the Black Sands as if we haven't learned anything from the Dust 
Bowl years.
Have We Learned Anything Or Is Degradation of Agricultural Resources 
        Just the Next Generation's Problem
    Like many farming families, our family has had largely different 
views between generations on resource use. I have a great deal of 
respect for the generations I have known. My parents, grandparents and 
great-grandparents persevered through conditions and obstacles that I 
can only imagine. We cannot ever put ourselves today in the same 
circumstances with the same life experiences and knowledge as our 
predecessors. Therefore, I feel we must not sit in judgment over them, 
we are not their peers. That being said, today, when we look back, we 
can see plenty of actions or inactions now perceived as mistakes. How 
could our society have allowed the disappearance of the small family 
farm which was a presidential campaign issue at least as far back as 
1960 when John Kennedy and Richard Nixon debated? How could we have 
allowed the Odessa Aquifer to become so depleted when examples like the 
Ogallala Aquifer already existed? How could we have allowed such 
erosion as the Dust Bowl when soil scientists had warned about it for 
years? How could we abandon proven technology like the tens of 
thousands of windmills used in remote farm country for more than a 
generation and burn coal instead? How could we abandon cultural 
techniques learned over generations to rely instead on monoculture 
combined with a chemical for whatever ails you? How could we have taxed 
farmers out of the fertile Kent Valley, just a stones throw from 
Seattle and paved it over for warehouses and strip malls? How could we 
in a generation acidify the soil of the Palouse--possibly the most 
productive dryland wheat producing area on Earth? The answer is that 
short-term profits were better and long range consequences unknown or 
ignored. Today we have no excuse for ignoring lessons gleaned from the 
experiences good and bad of our predecessors. Failing to acknowledge 
the limits of the natural bounty of our blessed country, failing to 
acknowledge the limitation of our mostly successful economy to account 
for long-term effects of short-term profit taking, failure to encourage 
and support the initiative of individuals in a farm economy more and 
more dominated by huge corporate interests cannot and will not be 
acceptable to future generations. Many of us dread the world we appear 
to be leaving our children and grandchildren. Supporting small-scale 
direct market based agriculture is one good thing we can do for the 
future. Exponentially increasing regulatory compliance burdens along 
with other actions that close access and opportunities to small-scale 
direct market farmers threaten this grass roots farming movement. Are 
we going to crush small-scale direct market farming just as small-scale 
dairies were crushed a generation ago? Have we learned anything? 
Whether small family farmers or city dwellers, many of us feel helpless 
when confronted by the relentless and remorseless onrush of what is 
labeled progress. Along with the wonders of advances in knowledge and 
technology are the potential pitfalls of poor planning and 
consideration of affects on the future. Those of us, who routinely feel 
powerless, elect you representatives to help us do what we cannot do 
individually.
Where Does The Government Fit in All This?
    Senator John F. Kennedy speech Sioux Falls SD, September 22, 1960.

          . . . the individual farmer is too small to maintain prices 
        or control production on his own or even with his neighbors. He 
        lacks bargaining power in the markets. He needs the help and 
        support of his Government . . .

    Elected officials have a great responsibility and a great 
opportunity to leave a legacy. Maybe many Americans, cruising through 
supermarkets crammed with abundant and affordable food, don't worry 
about the food supply of the future. However, very likely, decisions 
will be made, by those entrusted with safeguarding our agriculture 
resources, natural and human, that will affect the long-term viability 
of our food supply. All of us will be judged by our children, 
grandchildren and generations beyond that on what kind of world we 
leave for them. Are we going to leave a country whose natural resources 
and food supply are controlled by a handful of ``too big to fail'' 
entities enslaved by the pursuit of short-term profits for the few 
select shareholders? Are we going to leave a world similar in some ways 
to the origin of the United States with a multitude of individual 
farmers intent on building a better world for those yet to come by 
sustainable use of our natural resources?
Direct Market Farmers Today Are Reviving the Family Farm Model and Come 
        to Farming Because They Want To Farm the Land--Not As a Path To 
        Riches
    Who is the typical direct market farmer today? I would say there 
are two types. The Tonnemaker family belongs to the first type, a 
farmer from a farm family who transitioned from wholesale sales to 
direct marketing to make a small farm viable as wholesale prices shrank 
to well below production costs over the last generation. Because of low 
small-farm income and far more lucrative jobs off farm, this farmer 
certainly made the choice to work the land because of a desire to farm.

    Senator John F. Kennedy speech, London, Ohio, October 17, 1960.

          I believe that the decline in agricultural income is the most 
        difficult and important domestic problem facing the United 
        States, both because of its' effect on farmers and because of 
        its' effect on industry.

    Senator John F. Kennedy speech, Sioux Falls, SD September 22, 1960.

          For the farmer, is the only man in our economy who has to buy 
        everything he buys at retail--sell everything he sells at 
        wholesale--and pay the freight both ways.

    The second type of today's direct market farmer comes from a non 
farm background. These people often walked away from less demanding and 
far more lucrative career opportunities because of love of the land or 
farming. If short-term profit was a primary concern for these farmers 
they wouldn't be farming at all. These small farms, direct market 
farmers are far more likely to be concerned with the long-term effects 
of what we do to the land than corporate farming entities consumed with 
the pursuit of extracting as much short-term profit as possible. To 
whom do we entrust the long-term health of our natural resources?
Challenges of Small Scale Direct Market Farming--Food Safety 
        Regulations
    Over the last 25 years, public interest in purchasing food directly 
from farmers has increased dramatically. Most direct market farms are 
small family run operations. Most of these operations have few if any 
employees aside from family. As such, the owner(s) physical involvement 
in the field during the growing season, at harvest and for marketing is 
critical to the operation. Record keeping for food safety programs has 
in recent years become a huge burden. When Kole attended the first 
meetings to learn about food safety compliance record keeping, he 
returned feeling that adding this massive load of paperwork would be 
the end of our farm's ability to market any fruit wholesale. Hundreds 
of hours of paperwork were required leaving less time to actually 
produce a crop. In time, the company wholesaling our fruit simplified 
the paper work to a pair of 3" binders. Last year we spent over 100 
hours filling out forms and ensuring compliance for the food safety 
program. It must be pointed out that 6" of signed and dated forms do 
nothing to guarantee that fruit on the grocery store shelf is free of 
harmful bacteria. At some point all of us need to realize that filling 
out more and more papers does not guarantee anything. Instead, on small 
direct marketing operations, those who should be in the field end up 
tied to a desk. Successful farming is about production and small direct 
market farms have little manpower available.
Weaknesses in GAP Regulations
    Following current food safety requirements (GAP or Good 
Agricultural Practices) does not remove liability or help a farmer 
financially in the event of a recall/outbreak. GAP were developed using 
very little if any on farm evidence based on research, but rather 
applied rules from food processing facilities. Direct market farms are 
not factories and should not be treated as such.
    Thousands of dollars spent on record keeping do not protect the 
public from outbreaks or protect the farmer financially in case of an 
outbreak. Additionally, onerous amounts of paperwork do nothing to 
protect produce from contamination once it leaves the field. The only 
thing that really matters is that the fruit is free of harmful bacteria 
when the consumer puts the food it his or her mouth. A 6" pile of 
papers does nothing to guarantee that. The record keeping is just yet 
another obstacle for the small farm operation. Thousands of farms 
including ours successfully produced safe food for decades without 6" 
of paperwork every year. In the headlong rush to attempt to prove with 
a raft of paperwork that we are not to blame when outbreaks occur, we 
have lost sight of what really matters in food safety--safe food.
    Having face-to-face contact with those who eat our produce 
influences many on farm decisions. The American public has become 
increasingly concerned with how their food is produced. In response to 
customer concerns we began organic certification of our crops in 1997. 
A prevailing theme of sustainable agriculture has been to use a 
combination of all available natural resources to produce crops rather 
than to rely entirely on artificial inputs such as synthetic chemicals. 
Certainly on our farm 25 years ago and throughout agriculture, it has 
become apparent that problems in crop production cannot be solved by 
chemicals alone. Even conventional agriculture has returned to using as 
many natural controls as possible so that synthetic inputs remain 
effective when needed. Somehow those writing GAP missed all that as 
field food safety rules imply that total elimination of birds, rodents 
and other critters native to the environment is necessary. In addition, 
to reduce the potential public peril, any non-crop areas (erosion 
control windbreaks for example) that might harbor such dangerous 
creatures as robins and finches should be eliminated. Sustainable 
agriculture techniques enlist these very animals and others to control 
crop pests. If we cannot keep hospitals free from MRSA, there is no 
hope of sanitizing a natural system.
Lack of Connection to Agriculture and the Fear of Food
    Imbedded in the recent proliferation of food safety regulations is 
the fear of the unknown. A generation ago, the majority of Americans 
had some family connection with agriculture. Even distant connections 
helped make Americans more comfortable with both farms and farmers. 
Today, few Americans have that connection to where and how their food 
is grown. With health and environmental concerns rising during the last 
generation, Americans have become more concerned about food production 
and its' affect on health and the environment.
    Perhaps, some the resources that may be devoted to making the 6" 
binder each year could instead be used to educate the public about how 
food is produced, putting health risks in perspective, learning about 
how to reduce food safety hazards post harvest, learning about food 
safety hazards in the home, learning about how food safety problems 
occur. Encouraging everyone to be aware and better stewards of the food 
supply. An advertising campaign like ``Smokey the Bear'' for forest 
fires but instead one for food safety could do more for food safety 
than a football field of 6" binders.
    Direct market farmers sell their produce face to face with those 
who actually eat it. Accordingly direct market farmers take great care 
in providing top quality produce. With the shortest possible 
distribution system, direct market produce has far less exposure to 
potential contamination.
Direct Market Farmers Help Consumers Feel Connected to Agriculture and 
        Our Agricultural Resources, Natural and Human
    If our experience in Washington State is any indication, direct 
marketing of produce has increased tremendously in the last 25 years. 
This has happened as a grass roots movement where the interests of 
consumers wanting a first hand relationship with food producers and the 
interests of small acreage farmers hoping to sell produce at retail 
prices coincide. Incredibly, this has happened in a time of 
unprecedented farm and retail consolidation. Government entities from 
the USDA to city councils have supported the creation of farmers' 
markets. In Washington State we have programs to allow and encourage 
low-income aid recipients to purchase nutritious food directly from 
farmers. Undeniably, however, the recent direct market boom has, at 
its' root, the desire of large numbers of American's to buy their food 
directly from the farmer. The Federal Government snuffed small dairies 
out of existence a generation ago with regulations that mystified 
dairymen who had provided safe, affordable fresh milk directly to 
consumers for generations. With that history in mind, we encourage you, 
our elected representatives to realize the government's ability to 
squash this popular direct market phenomena. Please be mindful of the 
effects of the multitude of programs and rules on small operations. 
You, as our elected representatives have the ability to encourage 
rather than disable this movement and in so doing contribute to the 
future food security of our country.
Continued Agricultural Research Is Vital To Make the Best Use of Our 
        Limited Agricultural Resources
    The future viability of direct market farms relies on continuing 
agricultural research. Too frequently we hear that spending on 
agricultural research needs to be cut or even eliminated. Considering 
that the goal of agricultural research is to help us make better use of 
our nations limited resources to ensure a safe and stable food supply 
for the future, I can hardly believe people seriously think that. 
Direct market farmers are already cut off from access to most new 
cultivars from breeding programs--even those at land grant 
universities. Large entities tie up the propagation, production and 
marketing rights to promising new varieties. Often research programs 
are geared toward commodity crops, not direct market crops. Research 
into cultural methods for animal pest, insect pest, weed and disease 
control as well as soil enrichment and conservation practices really 
come only from land grant universities' research and extension 
programs. In Washington, these programs are considered essential parts 
to the entire horticulture industry and agriculture in general.
Crop Insurance Limitations for Direct Market Farmers
    We have purchased crop insurance for asset protection in case of 
crop failures. Any agricultural crop can be risky to grow and tree 
fruits particularly so. With our diverse crop mix we are now purchasing 
an Adjusted Gross Revenue policy that seems like the type of insurance 
most helpful to us. Over the last 20 years we have rarely had a claim 
but the issue of direct marketing receipts always comes up. Most of our 
income and all income on many small direct market farms comes from cash 
sales at farmers' markets or roadside stands. Since these transactions 
are small and numerous compared to a single weight ticket from a 
warehouse company, insurance companies have great difficulty accepting 
direct marketers figures. This difficulty leaves us wondering if we 
will be able to satisfy insurance company questions if the need arises 
to file a claim. I am certain that this issue is a deterrent for many 
direct market farmers.
Technology Barriers to the Use of Government Assistance
    As more people prefer to make purchases using credit or debit cards 
and more government assistance is available through electronic benefit 
transfers, a technology barrier has emerged for direct market farmers. 
Often farmers' markets locations lack Internet access. Card readers may 
not interface with the available phone connections. Some locations, 
especially farmstands, may lack a reliable phone connection. Currently 
both the inability to access the Internet or even phone service and the 
limited compatibility of phones and card readers create significant 
barriers limiting a direct market farmer's ability to serve potential 
customers.
    We marketed our fruit at eight farmers' markets in the greater 
Seattle area last summer. Three of those markets remain open year-
round. All of these markets are approved by the state for redemption of 
Women, Infants and Children (WIC) coupons. We have participated in the 
Farmers' Market Nutrition Program (FMNPWIC) and the Senior Nutrition 
program for a number of years now. We are also approved to accept these 
coupons at our farmstand. These programs have helped us generate many 
new customers and have helped low-income families obtain fresh 
nutritious food. I have testified at the Washington State capital in 
Olympia several times about the positive impacts of the FMNPWIC program 
for both farmers and low-income families. Because of these positive 
impacts, the Washington State Government has continued to fund the 
programs in spite of, at times, severe budget constraints.
    While the FMNPWIC and Senior Nutrition programs are most definitely 
beneficial to both the farmer and recipient, the system for completing 
transactions is still under refinement. Each check must be stamped with 
numbers identifying the market or location and the farmer and then a 
bank deposit stamp. If any of these stamps are unreadable, the check is 
returned creating bank fees well beyond the value of the individual 
check.
    We started direct marketing in the Seattle area in the summer of 
1992. At that time, we could accept paper Food Stamps and redeem them 
at the bank. A couple years later when the Food Stamp program 
transitioned to Electronic Benefit Transfer (EBT) cards we could not 
accept the cards directly. This resulted in the loss of EBT sales to 
large grocery chains. Some farmers' markets have been able to purchase 
EBT card readers and the necessary equipment to complete the 
transaction through Internet connections. EBT customers received tokens 
to use for purchases from farmers' market vendors. These vendors, in 
turn, redeem the tokens with market management.
    In 2013, we participated in the South King County Food Access 
Program that supplied individual farmers' market vendors with EBT card 
readers at a reduced price and discounted transaction fees to evaluate 
how individual farmers would deal with EBT sales. I was on the advisory 
board charged with collecting vendor feedback concerning the additional 
time required to complete individual EBT transactions at farmers' 
markets. Among the advisory board conclusions was that an affordable 
single card reader system that could deal with all of the different 
forms of benefit programs and could be used at the farmers' market 
needs to be the ultimate goal.
    We have also used both hardwired and mobile Point of Sale (POS) 
card reading systems. Recently we have used the Square (Square is a 
company name) card reading system and a TSYS (TSYS is a company name) 
reader. Neither of these systems currently accept WIC or SNAP 
(Supplemental Nutrition Assistance Program--formerly Food Stamps). The 
current absence of any system that accepts SNAP and allows for multiple 
phone types and carriers denies farmers' market vendors the ability to 
directly accept SNAP payments.
The Role of Direct Market Farmer in Healthy Eating
    Certainly, one of the wonders of our American way of life is the 
grocery store. Americans access to diverse, plentiful and affordable 
food every day of the year has got to be something extraordinary and 
unique in human history. That being said, supplying fruit and produce 
to distant markets year round has had the unfortunate consequence of 
elevating storage, handling and shipping characteristics way beyond 
taste and consumer satisfaction considerations. For example, in a 
stinging indictment, our father's business associates from Far Eastern 
Siberia complained that our supermarket strawberries were tasteless 
compared to strawberries offered for sale in sub-arctic Siberia. After 
traveling throughout Far Eastern Siberia, our father reluctantly had to 
agree. We have many customers at our farmstand and at farmers' markets 
that recently immigrated to the United States or are foreign students. 
They routinely drive several hours to obtain fresh fruit and produce 
from our farm. These customers complain that typical United States 
supermarket produce is far inferior in taste to the produce they were 
accustomed to prior to coming to the United States. These immigrants 
come from all over the world, Eastern Europe, Far East and the Middle 
East commonly. As patriotic Americans these complaints bother us all 
the more so because the complaints are often disturbingly valid. The 
high school and college students we employ often remark that they will 
not eat supermarket produce after a summer of eating fruit and produce 
fresh from our farm. The experience of these student employees and 
these immigrants stems not from some underlying superiority of us as 
farmers but from the direct farm to consumer contact. Our tomatoes may 
travel only 200 from plant to farmstand customer's hands and often 
have been picked within hours of sale to consumers. Our peaches may 
travel over 100 miles to a farmers' market but have been picked ready 
to eat mere hours before. Grocery store chains cannot do that and, in 
our experience, have been unwilling to even try. Such lunacy to have a 
grocery store in Wenatchee or Yakima, Washington surrounded by orchards 
that sells tasteless and soft apples that were grown thousands of miles 
away.
    Is it really any wonder that Americans consume far less fruit and 
produce than people in almost every other developed nation? Is it 
really any wonder that America has a serious problem with child 
obesity? Our supermarkets are full of poor eating quality produce and 
extremely enticing sugary, fatty and salty snacks. As a nation we need 
to encourage healthy eating by providing healthy food that people will 
seek out and eat because it tastes good. We need to raise children who 
realize how good fresh fruit and vegetables can taste. Just saying 
``eat your vegetables!'' hasn't been enough.
    If we believe medical research, a healthy diet can reduce medical 
problems. Accordingly, it seems we should do what we can to encourage 
healthy eating habits. Healthy eating habits should be so much easier 
to develop with an abundance of good tasting healthy fruits and 
vegetables. As growers we know that good tasting fruits and vegetables 
are so much easier to grow when the primary consideration is taste and 
not storage life, cosmetic appeal, and the ability to withstand 
handling, shipping, and shelf life. A return to more direct marketing 
can continue to help Americans eat healthier.
Summary of Ideas
Benefits of Direct Market Agriculture
    What an opportunity for us all, farmers and customers. Direct 
marketing has many potential benefits.

  (1)  Make smaller acreage farms economically viable through access to 
            retail pricing of produce.

  (2)  Increase the availability of locally grown produce. This 
            increases long-term food security by retaining more 
            farmland in production instead of development.

  (3)  Aides in the sustainability of our food supply by encouraging 
            local production of fresh produce therefore reducing our 
            reliance on produce hauled hundreds or even thousands of 
            miles

  (4)  Aides in preserving the long-term productivity of our 
            agricultural resources. Small family farming operations are 
            far more likely to be concerned with the condition of 
            resources left to sons, daughters and grandchildren than 
            farming corporations willing to deplete our resources 
            chasing short-term profits for shareholders.

  (5)  Promotes better eating habits and therefore potentially a 
            healthier population by providing good tasting healthy 
            food.

  (6)  Access to retail pricing has the potential to offer enough 
            income to give new farmers and sons or daughters of present 
            farmers hope for a decent standard of living as farmers of 
            the future.
Barriers for Direct Market Farmers
    It must be noted that the recent rapid expansion of direct 
marketing has developed in spite of significant barriers. It is our 
hope that new potential barriers do not extinguish this exciting 
grassroots phenomena.

  (1)  Direct market farmers need years to develop a sufficient 
            customer base to support a farm

  (2)  Direct market farmers must learn to do all the tasks usually 
            done by a series of professional marketers in a 
            distribution system

  (3)  Direct market farmers must be able to handle all farming and 
            marketing tasks from basic farm work, mechanics, 
            bookkeeping, regulatory compliance, transportation, produce 
            quality control and customer relations.

  (4)  In many cases direct market farmers need to learn to grow new 
            crops or varieties. In many cases there is little 
            information available to these farmers unless given the 
            chance to learn from other farmers.

  (5)  Simple and universally available technology to help customers 
            access all government assistance coupons is still being 
            developed.

  (6)  Direct market farmers encounter difficulty satisfying crop 
            insurance adjustors because of the multitude of small cash 
            transactions inherent to the very nature of the business.

  (7)  Direct market farmers by nature grow crops on a scale small 
            enough that the crop can be marketed locally and directly. 
            Cultivation of these crops is often not the focus of 
            agricultural research. Therefore, direct market farmers 
            frequently lack knowledgeable assistance with problems in 
            crop production or handling.

  (8)  Direct market farms are often small operations where everyone 
            involved must be working on production or marketing. These 
            small operations do not have the human resources to keep up 
            to date with, ensure compliance with and document 
            compliance with a regulatory burden that could be handled 
            without significant human resource diversion in large 
            corporations.
How Can The Government Encourage and Enable the Direct Marketing Grass 
        Roots Phenomena?
  (1)  Continue USDA grants that help and support establishment of 
            farmers' markets.

  (2)  Continue progress on solving technological obstacles to 
            distribution of government assistance at farmers' markets 
            and farmstands.

  (3)  Continue and encourage agricultural research in non-commodity 
            crops.

  (4)  Continue to refine Federal crop insurance to account for small 
            direct market farms.

  (5)  Do not allow regulatory burdens to crush this vibrant new part 
            of the farm economy like the regulations that annihilated 
            small dairies a generation ago.

  (6)  Instead of continuing to allow proliferation of incrementally 
            less effective, less practical and more onerous 
            regulations, use resources to create an advertising 
            campaign to educate consumers about food production and how 
            they can help keep their food safe.
Concluding Thoughts and Food for Thought from the Debacle That Was 
        Soviet Agriculture in the Collective Farm Era
    There is no question that direct market farming is expanding 
rapidly with widespread public support. So far, these farms have 
overcome present obstacles because of the momentum generated by this 
great opportunity for farmers, consumers and the public in general. 
Though not identical by any means, the revival of so many productive 
and popular direct market farms shares a few similarities to 
agriculture just prior to the fall of the Soviet Union. While Leonid 
Brezhnev was running the Soviet Union he presided over one colossal 
crop failure after another as the doomed concept of huge collective 
farms failed miserably. Year after year the Soviet Government purchased 
large quantities of grain from foreign countries to feed its' citizens. 
In desperation, the Soviet Government decided to allow those operating 
the failing collective farms to individually cultivate small garden 
plots. Farmers were allowed to sell the produce of those plots at 
farmers' markets and keep the revenue. Quickly those plots became a 
vital part of the Soviet food supply as the small plots were incredibly 
productive ultimately producing up to 20% of the countries food from a 
minuscule percentage of farm acreage. A somewhat perturbed Soviet 
Government wanted to close the profitable garden plots as counter to 
communist principles but ultimately decided to continue the program so 
as not to risk losing 20% of the country's food and thus sparking 
popular revolt. The point is that small local farms with access to 
direct marketing can provide a significant amount of food. In addition, 
public support has created our local farmers' markets and the public 
has and will continue to support programs that keep these markets 
viable. Today's direct market farmers and farmers' markets can continue 
to thrive with minimal direct help from the Federal Government. 
Continuation and refinement of existing efforts to nurture this grass 
roots movement could ensure the future of the direct marketing of farm 
products. Perhaps the greatest fear of any small farmer today is being 
crushed under the burden of regulation. We have to hope that all of us 
farmers, consumers and government will not allow that to happen.
    Even though we always thought that the day could come when the 
public in general began to revalue a direct relationship with farmers 
and food production, the boom in direct marketing over the last 25 
years has been surprising and exciting. Direct contact with consumers 
has profoundly and permanently changed the way we farm and why we farm. 
If this Committee could spend one market Saturday with us, Committee 
Members would never be able to think the same again about small market 
farms. For us, it has been an incredible experience to interact with a 
public that is very grateful to have good fresh produce at a reasonable 
price. Our customers also seem grateful for the chance to support a 
family farm and to see multiple generations working together. Possibly 
the brightest indication of the success of direct marketing is that our 
sons and daughter-in-law are working with us on the farm instead of 
fleeing to the city. There is just something so American about that 
whole situation--many independent, self-reliant individuals creating a 
better life for their families and for future generations.
            Respectfully,

Kurt Tonnemaker, fourth generation Washington farmer.

    The Chairman. Well, let the record show that was 4 minutes 
and 59 seconds. Wow.
    I will not go through the intro of Mr. Heck again, but 
again, welcome from the great State of Illinois, and especially 
central Illinois where we both reside. I appreciate you being 
here. You are free to offer your opening testimony.

 STATEMENT OF ANDREW HECK, GARDEN EDUCATOR, GENERATION HEALTHY 
                KIDS COALITION, SPRINGFIELD, IL

    Mr. Heck. Thank you for this opportunity to speak to the 
Subcommittee today.
    I am honored by your invitation, and welcome the 
opportunity to share my experiences as a market farmer, 
Illinois Stewardship Alliance Board President, and as the 
Garden Educator for Generation Healthy Kids.
    I grew up in the small town of Mechanicsburg, a rural 
farming community in central Illinois. I attended the Tri-City 
School District from kindergarten until graduation. I graduated 
from Southern Illinois University with a Bachelor's of Science 
and Biological Sciences, and received a secondary teaching 
certificate. I taught high school and junior high biology, 
chemistry, and physics.
    During my first summer vacation, I began farming part-time 
on a small scale to supplement my beginning teacher's salary. 
As my knowledge of direct market farming grew, I realized this 
could be a viable and fulfilling career, and not just a hobby.
    The first season's crops were solely marketed at the 
farmers' market. I soon realized that market sales are directly 
proportional to the weather, and inclement weather equals poor 
sales. It was at this time I decided diversifying farm income 
was the only way to secure steady income as a direct market 
farmer.
    At first, I introduced myself to chefs in the area and 
started taking them samples of products. This proved 
advantageous because several chefs began ordering consistently 
each week. Sales to retail stores came next, followed by the 
formation of a community-supported agriculture program. In a 
CSA model, customers prepay in the winter for a weekly share of 
vegetables during the growing season. This model aids the 
farmer by creating a flow of income during the winter months, 
when income is traditionally scarce.
    Diversifying income can increase financial stability, but 
the reality is a successful operation requires arduous physical 
labor, and workdays that start at sunrise and easily end after 
the sun sets. Most direct market farmers are truly passionate 
about their livelihood, and sacrifice a steady paycheck with 
higher wages in exchange for the health benefits associated 
with growing and consuming fresh, nutrient-dense foods, and the 
amount of healthy physical activity associated with farming.
    Last November, I decided to combine my knowledge of farming 
and gardening, along with my formal education as a science 
teacher, by joining the staff of Generation Healthy Kids. 
genHkids is a nonprofit located in Springfield, Illinois. 
genHkids' Eat Real, Move More Programs teach children and 
parents the importance of nutrition and physical activity for a 
healthy life. Our genHkids' programs are visible in more than 
30 elementary, middle, and high schools throughout Sangamon 
County. In 2016, we will have over a dozen school and community 
gardens. The school gardens are used as hands-on tools for 
nutrition education. Through the gardens, I have seen firsthand 
that when children plant the seeds, water the plants, and 
handpick their own fresh fruits and vegetables, they are 
actually more likely to eat those fresh and nutritious 
vegetables. Last season, we saw neighborhood children like 
Mikey picking and eating whole peppers right off the plants at 
our community garden in downtown Springfield. It is now a 
pretty common occurrence to see Mikey grazing on a variety of 
fresh fruits and vegetables whenever he is at the community 
garden. The labor in the garden is shared by many members of 
the community. Last fall, Congressman Davis' staff even 
volunteered during the National Day of Service. Thank you.
    Out Eat Real at School Program is designed to provide 
nutrition education, skills training, menu planning, and daily 
menu lesson plans to food service personnel in schools. 
genHkids aids schools in the transition from a processed, heat-
and-serve fast-food menu to a nutritious, from-scratch menu. 
Ideally, the next step is to work with schools on procuring 
fresh, locally sourced ingredients. However, there are still 
many barriers to overcome, such as easing regulations on 
farmers to sell to schools, and creating incentives for farmers 
to diversify their crops. For schools, minimizing barriers such 
as the bidding process, increasing school lunch reimbursement 
rates, and providing incentives to schools that source locally.
    Through my work as a direct market farmer, as President of 
Illinois Stewardship Alliance, and now at genHkids, I have seen 
the demand for increased farm-to-school programs. As a result, 
I would urge all Members of Congress to support the passage of 
the Child Nutrition Act reauthorization, in time for it to take 
effect for the new school year this fall, and to support 
increased funding for the USDA Farm-to-School Grant Program as 
part of the reauthorization. With increased resources, 
organizations like genHkids will be able to work with local 
schools and farmers to increase the procurement of local 
produce in schools, which will in turn provide increased 
financial stability for direct market farmers, and create 
opportunities for new jobs in the field.
    Thank you.
    [The prepared statement of Mr. Heck follows:]

Prepared Statement of Andrew Heck, Garden Educator, Generation Healthy 
                    Kids Coalition, Springfield, IL
    Thank you for this opportunity to speak to the Subcommittee today. 
I am honored by your invitation and welcome the opportunity to share my 
experiences as a market farmer, Illinois Stewardship Alliance Board 
President, and from my position with Generation Healthy Kids where I am 
the Garden Educator.
    I grew up in the small town of Mechanicsburg, a rural farming 
community in central Illinois. I attended the Tri-City school district 
from kindergarten until graduation. I graduated from Southern Illinois 
University with a bachelors of science in biological sciences, and 
received a secondary teaching certificate. I taught high school and 
junior high biology, chemistry and physics, in addition to leading 
various extracurricular activities.
    During my first summer vacation, I began farming part time on a 
small scale to supplement my beginning teacher's salary. In 2004, I 
started selling produce at the Old Capitol Farmers' Market in 
Springfield, IL. As my knowledge of direct market farming grew, I 
realized this could be a viable and fulfilling career and not just a 
hobby. I eased into farming gradually, and diversified my farming 
income in the same manner. The first season's crops were solely 
marketed at the farmers' market. I soon realized that market sales are 
directly proportional to the weather, and inclement weather equals poor 
sales. It was at this time I decided diversifying farm income was the 
only way to secure steady income as a direct market vegetable farmer.
    At first, I introduced myself to chefs in the area and started 
taking them samples of products. This proved advantageous, because 
several chefs began ordering consistently each week. Sales to retail 
stores came next, and were also not dependent on unpredictable weather.
    The next marketing attempt came in the form of selling produce to 
schools. Unfortunately, the logistics of a direct market farm selling 
to a school district proved to be challenging. For example, many 
schools lack required refrigeration to store produce safely. Due to 
minimal resources available to schools, processing of fresh produce 
became cumbersome on cafeteria staff.
    Then I started a Community Supported Agriculture program. In a CSA 
model, customers prepay in the winter, for a weekly share of vegetables 
during the growing season. The duration of a CSA generally coincides 
with the growing season in a particular geographical region. When the 
growing season arrives, CSA customers pick up their weekly share of 
vegetables at the farm. This model aids the farmer by creating a flow 
of income during the winter months, when income is traditionally 
scarce. Diversifying income on a direct market vegetable operation can 
aid in its financial stability, but the reality is a successful 
operation requires arduous physical labor, and work days that start at 
sunrise and easily end after the sun sets on a daily basis.
    Most direct market farmers are truly passionate about their 
livelihood and sacrifice a steady paycheck with higher wages in 
exchange for the health benefits that are associated with growing and 
consuming fresh, nutrient dense foods, and the amount of healthy 
physical activity associated with farming.
    For the past 3 years, I have served as a board member for the 
Illinois Stewardship Alliance. Several weeks ago I was elected as the 
Board President. Illinois Stewardship Alliance is a statewide nonprofit 
organization, headquartered in Springfield Illinois whose mission is to 
promote environmentally sustainable, economically viable, socially 
just, local food systems through policy development, advocacy, and 
education. Illinois Stewardship Alliance envisions a system where soils 
are treated as a precious resource, local food producers earn a fair, 
living wage, local food education is integrated into all levels of 
education, and infrastructure is rebuilt to accommodate local food 
systems and good food is available for all.
    Illinois Stewardship Alliance's Buy Fresh Buy Local campaign was 
and is still integral in connecting new and existing farmers with 
potential marketing opportunities. This campaign enabled me to meet and 
create working relationships with several local chefs, retail outlets, 
and created an outlet to advertise our CSA which sold out surprisingly 
fast its first year. Fortunately the CSA members are quite loyal and 
many of the original families still participate in the program 8 years 
later.
    Last November, I decided to combine my knowledge of farming and 
gardening along with my formal education as a science teacher. I joined 
Generation Healthy Kids as the Garden Educator. genHkids is a nonprofit 
located in Springfield, IL. genHkids mission is to create a generation 
of healthy kids through education, empowerment, improved nourishment 
and increased physical activity. The genHkids Coalition was founded by 
Kemia Sarraf, M.D., M.P.H. in partnership with a wide array of local 
organizations, associations, public health institutions, businesses and 
educational establishments. Since its inception, the genHkids Coalition 
has generated tremendous excitement in the region with its hands-on, 
grassroots approach to improving child health. The genHkids Coalition 
is comprised of health professionals, educators, fitness experts, 
nutritionists, parents, and other concerned citizens, all dedicated to 
creating generation Healthy.
    Today, genHkids is a leading voice in Sangamon County with regards 
to the promotion of childhood wellness programs, having created and 
implemented more than a half-dozen early childhood education, physical 
activity, nutrition-based and community programs. Our genHkids programs 
are visible in more than 30 elementary, middle, and high schools 
throughout Sangamon County.
    As garden educator, I visit several schools on a weekly basis to 
implement the Grow Your Grub curriculum. In addition, I oversee the 
weekly activities and duties of our community gardens.
    Through genHkids' community gardens, we grow sustainable and 
beautiful gardens in Springfield in full partnership with families who 
live around the gardens. In 2015, we harvested over 2,000 pounds of 
food that was either used in our cooking programs or given back 
directly to the community. Community participation is a critical 
component in creating a garden that is maintained by surrounding 
residents. genHkids' farmers organize and encourage these community 
gardens, engage participant families and educate and empower garden 
participants. genHkids Educators and Chefs provide training in school 
kitchens on how to prepare meals from the harvest, and how to preserve 
surplus for the winter.
    In the long-term, genHkids envisions community garden locations 
throughout Sangamon County, including numerous additional sites on 
Springfield's east side, providing participants with increased access 
to fresh produce, nutrition and stewardship education, skills training 
and strengthened neighborhood social networks.
    In addition to community gardens, genHkids has built more than a 
dozen school gardens with our partner school districts. Schools benefit 
from genHkids' experience in garden creation, funding assistance, 
location selection, design, building, planting, education of students, 
harvesting and consumption of that harvest by students. Vegetable 
gardens connect children with the source of their food, introduce new 
flavors and textures, provide physical activity, and expand math, 
science and reading curriculum to real world situations. Our Grow Your 
Grub program teaches children to grow their own food, provides lessons 
in nutrition and stewardship, and allows them to harvest food and 
sample the fruits of their labors.
    I have seen first hand that when children plant the seeds, water 
the plants, and then hand-pick their own fruits and vegetables, they 
are much more likely to actually eat fresh and nutritious vegetables. 
Last season, we saw neighborhood children, like Mikey, picking and 
eating whole peppers right off the plant at our community garden in 
downtown Springfield. His mother was very surprised and exclaimed that 
she was pretty sure that was the first time he had ever eaten a fresh 
pepper. It is now a pretty common occurrence to see Mikey grazing on a 
variety of fresh fruits and vegetables whenever he is at the community 
garden. The labor in this garden is shared by many members of the 
community, including Representative Davis's staff, who volunteered at 
our community garden in downtown Springfield during last years' 
National Day of Service.
genHkids Eat Real at School Program
    We envision schools where children gather in the cafeteria twice 
daily to consume nutritious and delicious foods prepared from-scratch, 
and every calorie served the children is nutritive, nourishing their 
growing bodies and minds.
What is Eat Real at School?
    genHkids' Eat Real at School program is designed to provide 
nutrition education, skills training, menu planning and daily menu 
``lesson plans'' to food service personnel in schools. genHkids aids 
schools and districts in the transition from a processed, ``heat and 
serve'' fast food menu to a nutritious, fresh and seasonal from-scratch 
menu. The program also encourages schools to transform their cafeterias 
into additional classroom environments, educating children about the 
food on their trays and encouraging the consumption of fresh, new 
offerings. A logical next step for genHkids farm to school program is 
to incorporate local foods into these menus by substituting non-local 
items with products sourced from local farmers. Many of our schools 
also have salad bars which are the perfect opportunity to serve locally 
grown produce. With access to locally sourced ingredients, schools can 
develop new recipes and expand educational opportunities such as 
Harvest of the Month programs featuring local farmers.
    To educate the parents on the importance of supporting the from 
scratch lunch menu, genHkids implemented a program called Destination 
Dinner Table. Destination Dinner table is an evening cooking program 
with the parents and children incorporating fresh seasonal produce into 
recipes that they can prepare at home. genHkids' staff and volunteers 
work with the children, teaching them to set the table, working on 
basic etiquette, playing nutrition games and participating in Brain 
Breaks. When the meal is ready, all participants sit down to eat 
together family style. At the program's conclusion, parents leave with 
important nutritional information, a weekly menu and shopping guide, 
and a sense of accomplishment and increased confidence in their ability 
to cook at home.
    One of the most important steps families can take to improve their 
overall physical health is to begin preparing and eating from-scratch 
meals at home. The health community has become increasingly aware that 
the quality of calories we consume matter as much as the quantity of 
those calories. Cooking at home with fresh, real (unprocessed) 
ingredients is the best way to ensure your children are consuming high 
quality, nutrient-dense calories.
    Unfortunately, over the past 30 years the number of parents who 
feel secure and competent with basic food preparation has declined. 
Many parents feel they lack the skills necessary to cook a nutritious 
meal, in a timely fashion, within their budget--especially one that 
their children will eat!
    In the 2014-2015 school year genHkids saw an increase in the number 
of Eat Real at School programs. In its second year at Ball-Chatham 
Elementary, genHkids supported menu development and training for 
kitchen staff. The district served 252,654 made from-scratch lunches, 
an incredible increase of 45% over the prior year. At the same time, 
the district saved 10% in its food acquisition costs over the prior 
year.
    One of the most common concerns that parents and schools have with 
the implementation of new, healthier items on school lunch menus is the 
possibility of increased food waste due to the preferences of children 
for familiar, less healthy items. genHkids has undertaken several 
measures to combat plate waste in schools where we operate.
    Using grant funds, genHkids staff planned a plate waste study 
protocol measuring food waste before and after the implementation of 
new menu items and programs. Food items were weighed before and after 
food service, and the results gathered included several pieces of data 
around the amount of food served, the amounts wasted before and after 
interventions, and the factors impacting food waste.
    Interventions to promote healthier food include school gardening 
classes, cooking classes for children and parents, ``cafeteria 
coaching'' where adults eat alongside children, recess before lunch, 
elimination of food or treats as rewards during the day, and school 
staff training and education.
Conclusion
    Through genHkids Eat Real at School program, we aid schools in the 
transition from a processed, ``heat and serve'' fast food menu to a 
nutritious, from-scratch menu. Ideally, the next step is to work with 
the schools on procuring fresh, locally sourced ingredients.
    However, there are still many barriers to overcome such as easing 
regulations on farmers to sell to schools and creating incentives for 
farmers to diversify their crops; for schools, minimizing barriers such 
as the bidding process, increasing school lunch reimbursement rates, 
and providing incentives to schools that source locally.
    Through my work as a direct market farmer, as President of Illinois 
Stewardship Alliance, and now at genHkids, I have seen the demand for 
increased farm to school programs.
    As a result, I would urge all Members of Congress to support the 
passage of the Child Nutrition Act reauthorization in time for it take 
effect for the new school year this fall, and to support increased 
funding for the USDA Farm to School grant program as part of the 
reauthorization. With increased resources, organizations like genHkids 
will be able to work with local schools and farmers to increase the 
procurement of local produce in schools.
                               attachment
Hon. Rodney Davis,
Chairman,
Subcommittee on Biotechnology, Horticulture, and Research,
Committee on Agriculture,
U.S. House of Representatives,
Washington. D.C.
    Dear Chairman Davis:

    My name is Kayla Worker and I am a Family and Consumer Science 
teacher at Springfield Southeast High School in Springfield, Illinois. 
I first became involved with genHkids in June 2015. As a teacher, I'm 
privileged to have summers off to pursue personal interests and become 
more educated in my practice. I wanted to expand my knowledge of 
gardening for quite some time because of it's practical application in 
cooking and many nutritional benefits of fresh produce and herbs. I 
hoped to supplement my Nutrition and Culinary Arts I and II classes 
with this education. genHkids had developed an empty lot about a mile 
from my house into a community garden. It became the perfect 
opportunity for me to learn more about gardening, and fortunately for 
me, much more.
    Through volunteering at the community garden on 3rd Street and 
Canedy Street I was able to get to know the genHkids staff. The 
organization brought nutrition access and education to kids in 
Springfield area, just like I did as a Family and Consumer Science 
teacher. genHkids had something I didn't have--gardens. Gardening 
allowed kids to take ownership over the healthy foods they would 
eventually happily eat. Getting kids to eat healthy foods is hard. 
Every year I have a new recipe for my students to try to get them to 
try more vegetables. Some liked the foods but some refused to try them. 
The kids in the genHkids garden would pluck tomatoes, cucumbers, and 
peppers right off the plant and eat them! It was amazing.
    I asked the executive director, Jen Dillman, who I had become 
friends with through our biweekly gardening sessions, how a school 
could get a garden. Soon after, we were planning a garden at 
Springfield Southeast High School for my students to use in the 
Nutrition and Culinary Arts classes and for the rest of the school to 
utilize. When the word got out that there would be a school garden, 
teachers began planning ways to use it in their curriculum. The biology 
teacher asked me about using it for his photosynthesis unit, the 
chemistry teacher asked if she could get compost worms to do a unit on 
breaking down food, the art teacher asked if her students could paint 
and mosaic in the garden, and the list goes on.
    None of this would have happened without genHkids. They were there 
to help me plan the garden, build the beds, raise money for the garden 
(we've raised $3,200 so far!), and educate the students and me about 
gardening. The gardening education is beginning before the gardening 
season with the Grow Your Grub curriculum being taught to 20+ students 
an hour every week led by genHkids staff.
    I'm so excited for all of the good times, education, and exposure 
this garden will provide for students at my school. This organization 
has made such an incredible impact in my life, in my students' lives, 
and in the city of Springfield. I know with increased access to funds 
and resources this organization will continue impact the lives of many 
children and families in Sangamon County and beyond. Please feel free 
to stop by the Spartan Garden this spring to see the garden in action.
            Very Sincerely,

Kayla Worker.

    The Chairman. Thank you very much, Mr. Heck.
    I would like to now welcome Ms. Coffin to the witness 
stand. And thank you very much for being here. You are free to 
offer your opening testimony.

 STATEMENT OF CLARISSA ``CRIS'' COFFIN, J.D., POLICY DIRECTOR, 
                    LAND FOR GOOD, KEENE, NH

    Ms. Coffin. Thank you very much, Mr. Chairman.
    My name is Cris Coffin, and I am here today wearing three 
hats. I work for Land for Good, which is a New England-based 
land access organization. I also work with Farm to Institution 
New England, a network of organizations looking to source more 
local and regional food to New England institutions. And last, 
I am a part-time beginning farmer who direct markets pastured 
chickens and eggs in Massachusetts.
    New England, not surprisingly, is a leader in direct market 
sales. My testimony goes through some of those statistics. A 
quarter of farms in New England direct market.
    I want to talk a little bit about what we see as the 
benefits and opportunities in direct marketing. First, 
important in our region, direct market opportunities are 
fueling the growth in new farms and farmers. Over 25 percent of 
our farmers in the region are beginners, and gravitating to 
commodities that can be easily direct marketed. Forty-one 
percent of vegetable farms in the region are managed by 
beginning farmers, and 39 percent of those farms, beginners are 
marketing poultry and eggs.
    Second, direct marketing is really helping to expand 
healthy food access. You see it in the growth of mobile markets 
that are specifically serving low-income and senior 
communities. You see it in the growth of nutrition incentive 
programs around the region, and the new trend is CSA farms that 
are financing low-income and elder shares by getting donations 
from their CSA members and from community organizations.
    Third, the value of direct marketing to consumer education 
is really important in a region where farms are surrounded by 
non-farming neighbors. Every direct sale is an opportunity to 
educate a neighbor and a consumer about farming practices and 
farming challenges, and it is building support for agriculture.
    So looking forward, in the region for us, the demand 
particularly is in these kind of intermediated markets that are 
to restaurants and to institutions. The institutional demand 
and growth has been significant. New England institutions 
represent a $1 billion annual food buy. UMass has been doing 
terrific things in increasing its purchases of local produce. 
Colby-Sawyer in New Hampshire is purchasing 25 percent of its 
produce locally, and the University of Maine System has 
announced big plans to do so as well. So we see this as a 
continuing growth.
    When you look at the programs that have been hugely 
important to this market development in the region, Specialty 
Crop Block Grants, Value-Added Producer Grants, Farmers' Market 
and Local Food Procurement Program, Federal-State Marketing 
Improvement Program, and like Mr. Heck mentioned, the 
importance of the Farm-to-School Grant Program. I would say 
there are also additional opportunities in the Child Nutrition 
Act to make some tweaks on the geographic preference provision 
that would help encourage local procurement, and a tweak to the 
DOD Fresh Program that would do the same.
    Finally, let me just take a minute to talk about some of 
the challenges that we see in the direct marketing arena, and, 
in fact, this is in sort of farming generally in New England. 
One is access to land, we are a land-constrained part of the 
country anyway, but with \1/3\ of our farmers looking to retire 
in the next 20 years, that is a lot of land that is going to 
transition, and could transition out of agriculture, unless we 
take steps to offer a secure exit for those farmers and to 
provide new opportunities for beginning farmers. So programs on 
that front that are very important are the Beginning Farmer and 
Rancher Development Program. We hope that the new farm bill 
will increase funding for that, and the Agricultural 
Conservation Easement Program that is through the Ag Land 
Easement Subprogram, purchasing development rights from 
farmers.
    A couple of others: As was mentioned by Mr. Tonnemaker in 
terms of food safety, the Food Safety Modernization Act will be 
a lot of additional requirements for our mid-sized farms, and 
funding to support training for these farms on those 
requirements will be critical. Livestock slaughter and 
processing: biggest issue for us as a beginning poultry farmer, 
and getting USDA to be more of an advocate in working with some 
of the small and very small processing plants will be 
important. And last, in terms of climate change and risk 
management, as we see more extreme weather events, bringing 
greater production risk and new plant and disease issues around 
warming temperatures, the importance of a whole farm revenue 
protection product that works for our region will be important, 
and continued funding for conservation programs that help 
improve soil health and reduce risk.
    So thank you very much. It was great to have a chance to 
share my thoughts.
    [The prepared statement of Ms. Coffin follows:]

Prepared Statement of Clarissa ``Cris'' Coffin, J.D., Policy Director, 
                        Land for Good, Keene, NH
    Good morning! I appreciate the opportunity to testify before the 
Subcommittee on an issue of importance to farmers and farming in New 
England. My name is Cris Coffin, and I am here today wearing three 
hats: as Policy Director for Land For Good, a New England-based 
nonprofit whose mission is to ensure the future of farming in the 
region by putting more farmers more securely on more land; as a member 
of the Network Advisory Council for Farm to Institution New England, a 
regional network working to increase the amount of New England-grown 
and processed food served in our region's schools, hospitals, colleges 
and other institutions; and as a beginning farmer who markets pastured 
chicken and eggs to schools, restaurants and stores in Massachusetts.
Opportunities
    As a region with 14 million consumers and three of the four most 
densely populated states in the U.S., New England offers tremendous 
direct market potential, and farmers have been successful at tapping 
it. As the chart below shows, New England has a significantly higher 
percent of farms with direct sales than the U.S. has as a whole: in 
fact, New England states rank 2nd through 7th in states with the 
highest percent of farms with direct sales (New Hampshire is second, at 
31%; Massachusetts fourth, at 28%). Importantly, New England also has a 
higher percent of farms with wholesale direct to retail, or what the 
Economic Research Service calls ``intermediated sales''--meaning direct 
sales to retailers, restaurants, food service distributors, schools and 
other institutions. Thirteen percent of farms in New England market 
through this channel, compared to just 2% nationally. And New England 
has more than twice the number of farms selling value-added products 
than the U.S. has as a whole (11.3% compared to 4.5%).
Percentage of Farms with Direct Sales--New England States and U.S. 
        2002, 2007, and 2012 Census of Agriculture
        
        
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
        
Percentage of Total Market Value of Agriculture Sales from Direct 
        Sales, New England States and U.S. 2002, 2007, and 2012 Census 
        of Agriculture
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
        
    While direct market sales represent a relatively small portion of 
total sales across the region, these sales have been solidly growing in 
New England for more than a decade. And for some commodities, notably 
vegetables, direct sales are a significantly higher percent of total 
sales. In Massachusetts, for instance, 30% of all vegetable sales are 
from direct market sales. Perhaps not coincidentally, Massachusetts has 
the largest percent of Community Supported Agriculture (CSA) farms in 
the country and over 250 three-season farmers' markets. New Hampshire 
has over 23 winter farmers' markets.
    Direct market opportunities have helped attract new farmers, both 
regionally and nationally. Nationally, beginning farmers produced 15% 
of the value of agricultural products sold in 2012, but 22% of the 
value of direct to consumer sales. In New England, beginning farmers 
(with 10 years or less experience on any farm) now represent 25% of 
principal operators and are gravitating to commodities that are easily 
direct marketed. According to the 2012 Census of Agriculture, 41% of 
vegetable farms (identified as such through the North American Industry 
Classification System, or NAICS) in the region are operated by 
beginners, as are 39% of poultry and egg operations. Speaking as a 
beginning farmer, 100% of our sales are through direct or intermediary 
markets.
    Direct marketing has also expanded healthy food access while 
boosting farm sales. Nationwide, there are now 512 farmers' markets 
that now offer SNAP matching incentives, and four out of five markets 
double SNAP benefits. In Massachusetts, 180 farmers and farmers' 
markets, including mobile markets that specifically serve low-income 
and senior communities, accepted Electronic Benefit Transfer (EBT) for 
SNAP in 2014, up from just 24 in 2008. A new trend is CSA farms 
financing low-income and elder shares by seeking donations from their 
CSA members and from community organizations. In 2015, Community 
Involved in Sustaining Agriculture, or CISA, reported that 12 CSA farms 
worked with them to provide 400 farm shares during the summer to low 
income elders in three western Massachusetts counties.
    The value of direct marketing to consumer education cannot be 
overemphasized, especially in a region where most farms are surrounded 
by non-farming neighbors. In a society where consumers are largely 
disconnected from agriculture, every direct sale is an opportunity to 
educate a customer about farming practices and challenges, helping to 
improve consumer understanding and build support for farming and 
farmers. State and local branding programs and ``buy local'' 
organizations are helping to connect consumers with direct market 
farms; as importantly, many focus on helping consumers understand the 
benefits of buying local. For instance, CISA has developed a local food 
calculator that allows consumers to estimate the economic impact of 
their local food purchases. According to the calculator, if every 
household in Massachusetts spent $20 more on local food per month (and 
$20 less on non-local food), $234,768,540 more local income would be 
generated per year and 3,876 local jobs would be created in the 
Commonwealth.
    Looking ahead, demand for local, regional and source-identified 
food appears likely to continue. At the top of the National Restaurant 
Association's ``What's Hot: Top 20 Food Trends for 2016'' is locally-
sourced meat and seafood, followed by locally grown produce at number 
three, and hyper-local sourcing at number four. Creative efforts are 
underway around the region to capture this demand; New Hampshire, for 
instance, has created a ``Certified Local'' restaurant certification 
program.
    Institutional demand for local and regional food continues to grow 
as well. Accordingly to Farm to Institution New England, the region's 
schools, universities, hospitals, nursing homes and other institutions 
regularly feed 3.8 million people, or \1/4\ of the region's consumers, 
with an annual food buy of over $1 billion. The University of 
Massachusetts, with the country's largest dining service with over 
17,000 students on meal plans, has doubled its purchases of local 
produce since 2004, with local produce now representing 30% of its $2.6 
million annual produce budget. In 2012, Colby-Sawyer College in New 
Hampshire established a goal of having 20% of its food served on campus 
coming from farms within 100 miles. In 2014, the college exceeded that 
goal by sourcing over 25% of its food locally. And this summer, the 
University of Maine System announced plans to increase its purchases of 
local food to 20% by 2020, amounting to a likely $1.5 million local 
food buy.
    A number of farm bill programs have been instrumental in the growth 
of direct markets in New England, and robust funding for these programs 
continues to be critical. These include Specialty Crop Block Grants and 
Value-Added Producer Grants, the Farmers' Market and Local Food 
Promotion Program, and the Federal State Marketing Improvement Program. 
Similarly, the WIC Farmers' Market Nutrition Program and Senior 
Farmers' Market Nutrition Program are helping boost local food sales 
and bring healthy foods to low-income communities, and the Food 
Insecurity Nutrition Incentive Grant Program promises to do the same. 
In the institutional food arena, the Farm to School Grant Program and 
the geographic preference provision in the school lunch program have 
educated and enabled food school directors to buy and prepare more 
local and regionally-grown foods. The Child Nutrition Act 
Reauthorization offers an important opportunity to expand funding for 
Farm to School grants, and to make a couple of statutory tweaks to 
encourage local food procurement. These include changing the geographic 
preference provision to specifically allow ``local'' as a product 
specification for school food (provided that competitive bidding is 
maintained), and allowing minimally processed produce under the DOD 
Fresh Program. Anything Subcommittee Members could do to reach out to 
your colleagues on the Education and Work Force Committee to support 
these changes to Farm to School in the Child Nutrition bill would be a 
great help in promoting these important markets
Challenges
    Wearing my various hats, I'd like to speak to four challenges I see 
related to direct marketing in the region, and to the viability of 
farms generally. A significant number of New England farms rely still 
on wholesale markets, and the continued viability of these farms is 
essential to support the region's agricultural infrastructure. Many 
farms in fact sell through all three market channels--direct, 
intermediated, and wholesale. This market channel diversification is an 
important risk management strategy.
    Access to land: In a region with a limited land base and some of 
the highest land values in the country, access to land is already a 
major barrier for both farm entry and expansion. The growing 
demographic of senior farmers and non-farming landowners may make this 
barrier even higher. As the attached fact sheet from American Farmland 
Trust and Land For Good details, over the next 10-20 years 30% percent 
of principal farm operators in the region are likely to exit farming. 
The 1.4 million acres they manage and $6.45 billion in land and 
agricultural infrastructure they own will change hands in one way or 
another. Strategic investments and policy changes will be needed to 
help facilitate this transition in a way that keeps farmland in 
farming, offers seniors a secure exit from farming and provides 
opportunities for next generation farmers. In focus groups we conducted 
with older farmers without identified successors, we found that 
participants want to see their farms remain in agriculture but see a 
number of challenges to doing so. Many said that they need to extract 
equity from their land for retirement, are not sure how to find a farm 
successor, don't know about farm transfer options, and were concerned 
about the future viability of their operation for the next generation. 
The following strategies could help address their concerns and help 
next generation farmers gain access to land:

   Encourage secure tenure and paths to ownership for next 
        generation farmers, and foster land availability. The Beginning 
        and Rancher Development Farmer Program (BFRDP) has funded a 
        number of valuable land access initiatives, including Land For 
        Good's New England Land Access Project. This project is focused 
        both on providing this type of support for beginning farmers, 
        and on increasing outreach and assistance to older farmers 
        around succession planning, farm transfer strategies, and 
        identifying a suitable successor, transferee, or tenant. BFRDP, 
        however, is under-funded and needs to see a substantial 
        increase in the next farm bill to address the country's 
        critical need for a new generation of farmers.

   Increased funding for the  Agricultural Conservation 
        Easement Program (ACEP), especially the Agricultural Land 
        Easements (ALE) portion of ACEP. The purchase of agricultural 
        conservation easements is an important farm transition 
        strategy, offering exiting farmers equity for retirement while 
        reducing the cost of land for new or established farmers.

   Incentivizing succession planning through Federal farm 
        programs.

    Implementation of Food Safety Modernization Act: Many questions 
remain about how FSMA will be implemented and the affiliated costs to 
farmers and state agencies. Mid-sized farms marketing through direct 
and intermediated channels and those seeking to scale up to do so will 
likely need to implement new practices and add to existing farm 
infrastructure. Funding to support training for these farms in FSMA 
requirements will be essential.
    Livestock slaughter and processing: As a small-scale poultry grower 
seeking to scale up, the cost and availability of slaughter and 
processing are significant barriers. Last year, the closest USDA-
inspected poultry processor to us was over 100 miles away. While we 
could invest in our own facility, we would be unable to process 
anything but whole carcasses and unable to sell across the state line 
that sits 10 miles to the north. Solutions are complicated, but 
encouraging state meat and poultry inspection programs would help, and 
could enable more poultry and livestock producers to direct market 
their products across state lines. It would also help if the Food 
Safety Inspection Service would work directly with small and very small 
processing plants to address the specific issues they face.
    Climate change and risk management: According to USDA's Northeast 
Regional Climate Hub, the Northeast has seen a 73% increase in extreme 
weather events; Hurricanes Irene and Sandy are illustrative examples. 
While extreme weather brings greater production risk, rising 
temperatures are bringing new pest and disease pressures. To address 
these, the following will be important:

   Whole Farm Revenue Protection that provides a reliable and 
        affordable safety net for the type of diverse farm operations 
        in our region.

   Robust funding for Conservation Technical Assistance, 
        Conservation Stewardship Program, the Environmental Quality 
        Incentives Program, and full implementation of Regional Equity. 
        Conservation planning and practices will be needed to improve 
        soil health and resiliency to changing and extreme weather. 
        Regional equity remains important to ensure that conservation 
        dollars continue to flow to smaller states where demand for 
        conservation programs is strong; an analysis of the provision's 
        implementation since the statutory changes in the last farm 
        bill would help to understand how, if at all, conservation 
        funding levels have changed in Regional Equity states.

    I appreciate this opportunity to testify today, and am grateful to 
Members of the Subcommittee for their interest in understanding the 
opportunities and challenges around direct marketing.

    The Chairman. Thank you very much. I look forward to 
working with you and my colleague from your home state, Mr. 
McGovern, on some of those tweaks to the Child Nutrition Act, 
and also looking ahead to the next farm bill. Thanks for your 
comments.
    Mr. McGovern. I just hope you appreciate, we have 
agriculture in New England.
    Ms. DelBene. Yes.
    The Chairman. I did see the witness list and I was, 
frankly, shocked, but that is okay, we don't count grocery 
stores in Illinois as agriculture.
    Thank you for being here, and thank you for putting up with 
our banter back-and-forth too. It is actually a privilege to 
serve with these Members here on this Subcommittee, and I hope 
you get a chance to see that.
    Dr. McCloskey, the producer of one of the products that 
quickly gets into my refrigerator and quickly leaves, because I 
have two children who are freshmen in high school that like to 
drink a lot of your Fairlife milk. So I would like to give you 
the opportunity to give your opening statement now.

         STATEMENT OF MICHAEL J. McCLOSKEY, D.V.M., CO-
FOUNDER, FAIR OAKS FARMS; CHIEF EXECUTIVE OFFICER, SELECT MILK 
                    PRODUCERS, FAIR OAKS, IN

    Dr. McCloskey. Well, thank you. And thank you for having 
us, and this is just a fantastic opportunity for farmers and 
everyone on the Committee and the legislature to be able to 
have these type of discussions because of the importance of 
this interface more and more every day.
    I would like to share a little bit about my journey. It 
starts years ago in the 1980s with my wife and I. I come from a 
science background, I am a veterinarian, with a specialty in 
food animal production. I always have dedicated my career to 
food-animal production, medicine, and had a practice in 
southern California basically focused on dairy production.
    In the mid 1980s, my wife and I decided that we would like 
to get into our own dairy farming. We started with a very small 
farm of 200 cows, and basically applied the principles that I 
believe belong to every farmer, and we are hearing it here 
today as we listen to the presenters, and that is the core 
values of our concern of safety of our product, a very high 
quality in our product. In our case where we deal with animals, 
of animal care and welfare, and for sure of environmental care 
as well, and of the people who work with us, the importance of 
their well-being, together with our community. So these are the 
core values that I believe belong to all farmers in this 
country, and that are very important that we get an opportunity 
to share these values with the consumer.
    As you know, today, 98 percent of the population is 
isolated from farming, and there are a lot of things that are 
said out there that are misconceptions and, unfortunately, they 
are being used for competitive reasons and agendas that may be 
different than what particular farmers may be dedicating their 
life to. But those core values are there, and those core values 
were in the initial small farm that my wife and I started with. 
Because we were successful, and we have really focused on what 
we did, and we started with the core values, we have been able 
to grow the business substantially since that moment.
    Today, Fair Oaks Farms, which is our home dairy, is in 
Indiana, it is an operation that--there are 36,000 milking 
cows. We are open to the public. We have 28 million people 
within a 200 mile radius of our farm. We decided back in the 
early 2000s that it was very important to share what we do in 
farming with the community, and we have opened our farm to the 
public. Again, we have about 500,000 people visit our farm 
every year, and they get to see absolutely everything through 
the farms and what we are doing. It has been quite attractive 
to other people in agriculture, so we have opened a hog 
operation with 3,000 farrowing sows, which was very well 
accepted by the community, and the visitation we are adding now 
layers about 600,000 with a large company. Indiana is a very 
productive area in animal agriculture and farming, as you all 
know, and Fair Oaks Farms we are hoping is a center to be able 
to share with the community and the consumer what we are doing 
in agriculture.
    What is most important to me, as I sit with the other 
presenters here, is to share with you that all farming is good. 
Organic is important. Modern farming practices are important. 
Small is important. Local is important. Large is important. Far 
away is important. What is local and far is can be defined in 
many, many ways. We can't grow oranges in Indiana, but we can 
grow them in Florida. And we need to define what local and far 
away is and what the benefits are.
    We have a tremendous challenge as farmers. We have to be 
able to protect this environment. We have to take care of our 
animals. But at the same time, we have to be productive. We 
have a growing hungry world population, and we have to be able 
to feed them without cutting down one more tree, while cleaning 
up every one of our streams, while cutting our emissions 
dramatically, while caring for our animals, while creating a 
very safe, high-quality, and affordable-for-all food, and we 
have to do this in a short time-frame. We cannot fight against 
each other in the farming community. We cannot talk bad about 
each for marketing purposes. We cannot be saying that the true 
science that is safe, that is productive, that allows us to be 
sustainable, we cannot continue to drive those things down. We 
must continue to grow as an agriculture community together. It 
is going to take every single one of us as farmers, in the 
United States and worldwide, to meet the challenge that we 
have, while protecting the environment.
    We do some great things in large-scale at Fair Oaks Farms. 
We produce 100 percent of the fuel from manure that takes our 
milk to market. That is 12 million miles a year that we produce 
in our digesters, renewable, natural gas that runs 42 of our 
trucks to market. We produce our electricity for our farm from 
that. We capture the nutrients of nitrogen phosphorus to avoid 
them from being a run-off or leaching into our waterways, and 
manage them as a fertilizer in a more appropriate way. There 
are great things happening in agriculture, great technology 
that is occurring. We have to embrace technology but it has to 
be safe, science-proven technology. We have to learn how to 
convey these concepts to consumers because it is confusing to 
them. And we can't allow ourselves as agriculture people to be 
the people that are confusing the consumer because of 
competitive issues. We have to embrace, all of us together, to 
get to this end.
    Thank you.
    [The prepared statement of Dr. McCloskey follows:]

 Prepared Statement of Michael J. McCloskey, D.V.M., Co-Founder, Fair 
Oaks Farms; Chief Executive Officer, Select Milk Producers, Fair Oaks, 
                                   IN
    As an 8 year old boy whose father had just passed away and whose 
mother, through necessity of providing for her six children, uprooted 
her family from Pittsburgh back to her native Puerto Rico, I was lost. 
Fortunately, my veterinarian uncle took me under his wing and it was 
through the many days of accompanying him on farm visits and tending to 
our own small but diverse farm with everything from chickens to pigs to 
cows, that I learned to understand and appreciate the blessings that 
animals provide us. I understood that the better these animals were 
taken care of, the better they were able to provide for us.
    This fascination with animal agriculture continued throughout my 
life it culminating in having a successful and respected dairy centric 
practice in Southern California through the 1990s. It was here that I 
helped dairy farms grow milking a few hundred cows to a few thousand. 
And it was during this time that I partnered in my first dairy farm of 
300 cows.
    Today, my partner and I milk over 15,000 cows. What's particularly 
interesting is that even though we are considered by many to be a 
factory farm, our values, our principals and our knowledge of how to 
care for our animals, farm with environmental sensitivity and produce a 
safe and nutritious food has only grown by leaps and bounds since the 
days of being a ``small'' farmer.
    In this day and age in the U.S.A., less than 2% of the population 
is directly involved in agriculture. The vast majority of farms are 
family held and are multi-generational. Farmers, both large and small, 
are the ultimate environmentalists, the providers of our sustenance and 
the backbone of the civilized world. We used to be a respected lot but, 
today, we find ourselves at the scrutiny of every person with access to 
an ever growing body of information and communication.
    And, that's not a bad thing.
    It was because of this ability to broadcast information through 
modern media and the Internet that in the 2000s we farmers had to pull 
our heads out of the sand and realize that we had a responsibility to 
communicate with the consumer. We could no longer just assume that the 
consumer had faith in our practices and products. We need to speak as 
loud or louder than the large acronym organizations who, in many cases, 
screamed outright lies about our farms.
    So in 2004, I, along with my wife and fellow dairy farmers, founded 
Fair Oaks Farms, an agritourism attraction in Northwest Indiana. We 
started with a few exhibits, a movie and a bus ride through one of our 
dairy farms. We invited the public to come learn and see for themselves 
how we, as large, modern dairy farms, took care of our animals, our 
land and produced a safe and nutritious food for their families. We 
believed that by allowing the public to have access to our farms and by 
communicating our values to them directly from our mouths that we 
could, at the very least, provide some counter to the misperceptions 
and mistruths that are rampant and so easily embraced by today's 
consumer.
    Last year, we had nearly 500,000 people visit our campus. We have 
added attractions that include a modern 3,000 sow pig farm, a pork 
education center that is a fun, kid-centric experience, a state of the 
art egg laying barn, our own orchard and vegetable farm and a caf 
serving our own cheese and ice cream. Winfield Solutions, a subsidiary 
of Land O' Lakes, is set to open their Crop Adventure this year, a 
10,000\2\ experience highlighting the story of soil, seed and 
sustainability. And to finish your day, a true farm-to-table restaurant 
where most of the menu is sourced from less than a mile away on our own 
beef, dairy, pig, chicken and vegetable farms.
    What we have found over the last 12 years and millions of visitors 
is that the average consumer simply wants to know that we, as farmers, 
are doing our best and looking to be better everyday. Yes, they are 
amazed by our manure digesters that produce electricity and a renewable 
fuel that replaces 2 million gallons of diesel fuel annually. Yes, they 
smile and laugh at the antics of the baby pigs. Yes, they marvel at 
watching a dairy calf being born right in front of their eyes. But, in 
our minds, our biggest satisfaction and accomplishment is that our 
visitors walk away trusting that we are doing right by our animals, our 
land, our employees and by our communities. And, we couldn't be more 
proud.
    But while we, at Fair Oaks Farms, have been able to persuade the 
consumer that big is not bad (and can actually enact many progressive 
practices because of the scale of economy), we still promote that a 
farmer is a farmer is a farmer, whether they are milking 50 organic 
cows or 15,000 conventional cows. We believe that it will take all 
kinds of farming and farmers to feed our growing planet; from small to 
large, organic to conventional, from the wheat fields of Kansas to 
vertical farming in a warehouse in Chicago. We believe that modern 
farming provides us, the citizens of the United States with an 
abundance of choice, a luxury of affordability and a security of safety 
that no other country has. We as an industry need to speak this same 
message to consumers and to support each other's practices and 
products. It does no one any good to be divisive or to cast doubt about 
the safety of our food production and our regulatory bodies should act 
accordingly. There is enough misconception and misunderstanding coming 
at the consumer from all angles. It should be every organization's goal 
to foster a sense of security for the consumer while allowing them 
access to all the information they need in order to develop their own 
opinions.
    We have recently seen the benefits of this active transparency in 
our cooperative's health and wellness subsidiary, Fairlife, a company 
based on innovation that produces high protein, low sugar, lactose free 
milk products. The fact that the consumer has an open invitation to 
visiting one of the farms and directly speaking to the farmers that 
provides the milk for Fairlife is unheard of. It has been an incredible 
marketing tool that, we believe, has been so successful because it is 
so authentic and sincere. We also believe in bringing the consumer 
along on our journey, in sharing with them our knowledge and innovation 
and in providing them with everything that they need to feel confident 
that we have their family's health and wellness at the forefront of our 
endeavors.
    To conclude, we at Fair Oaks Farms and our sister company, 
Fairlife, believe that transparency and an authentic voice are the new 
tools that should be in every farmer's toolbox. We believe that all 
agencies, from our cooperatives to the USDA, should work together with 
the single intention of ensuring the consumer that all farmers and 
farming practices are safe and that there should be no divisiveness 
that would confuse the consumer in an already cluttered world of 
information.

    The Chairman. Thank you, Dr. McCloskey.
    Mr. McMicken, welcome. It was great to meet you. Feel free 
to give your opening testimony.

          STATEMENT OF JOHN McMICKEN, CHIEF EXECUTIVE
   OFFICER, EVERGREEN COOPERATIVE CORPORATION, CLEVELAND, OH

    Mr. McMicken. Okay, thank you.
    Good morning. My name is John McMicken. I am the CEO of the 
Evergreen Cooperative Corporation, and I also serve as the 
President of Green City Growers, which is a hydroponic, worker-
owned farm in downtown Cleveland, Ohio. I appreciate the 
opportunity to participate here today.
    I would like to start with a little bit of a background on 
Evergreen. Evergreen is a nonprofit organization. We have a 
wealth-building strategy that we started in 2009. This was 
started by a group of Cleveland's major, what we call, anchor 
institutions. So this is University Hospitals, the Cleveland 
Clinic, Case Western Reserve University, and the Cleveland 
Foundation. The City of Cleveland and its mayor have also 
strongly supported this initiative along the way, and all of 
our anchors continue to support these businesses as both 
customers and as board members.
    Our wealth-building strategy is to start new businesses in 
downtown Cleveland, which will create living wage jobs, along 
with health benefits and special programs like our unique Home 
Buying Program, and most importantly, this is an equity-
building strategy wherein the profits are shared with our 
employees. Eighty percent of our three companies are owned 
today by our employees.
    Along with our greenhouse, which I will talk about here in 
a moment, we have a commercial laundry operation, and a solar 
and LED lighting operation, which to date have created 110 
jobs. Ninety percent of our employees reside in the City of 
Cleveland, 85 percent are minority, nearly 40 percent are 
returning citizens formerly incarcerated for nonviolent 
offenses, and 21 of our employees, our worker-owners, have now 
purchased their own homes in the city of Cleveland, which they 
will own outright in 5 years or less.
    As an overview of our greenhouse, this is a 250,000\2\ 
facility, with close to 3\1/2\ acres of growing area under 
glass. At the time that we built this in 2012, it was the 
largest food production facility of its kinds in a core urban 
area. We have the capacity of about three million heads of 
lettuce per year, and about 300,000 pounds of herbs. We are 
situated on a 12 acre brownfield site in Cleveland's central 
neighborhood. This was the former location of a disinvested 
neighborhood with about 40 vacant homes, all of which we 
acquired, demolished, remediated the land, and built this 
greenhouse.
    Today at the greenhouse, we have 38 full-time employees. We 
are at about 75 percent capacity. We grow ten varieties of 
leafy greens and a variety of herbs. We have about 25 
commercial customers within about a 250 mile radius.
    So this is a hydroponic facility. We have horizontal 
growing pools of purified water. No soil involved, of course. 
We have about 1 million gallons of water in our facility that 
are constantly in motion, and constantly being monitored by our 
computerized growing equipment. Of the water that we need for 
growing, 85 percent of it we capture off of our rooftops. We 
get a lot of rain and snow in northeast Ohio, so we are 
fortunate to be able to utilize that water. We also use a lot 
less water to grow our leafy greens. It takes about 1 gallon of 
water from seed to harvest to grow our lettuce, as compared to 
our field-grown equivalents which use up to 40 gallons of water 
per head of lettuce.
    Operationally, our crops reach our customers within 24 
hours of harvest. So we are providing fresher produce that then 
has a longer shelf life.
    A couple of notes on food safety: In an indoor controlled 
environment, we are able to much more tightly control food 
safety. This comes at a cost, of course. Indoor growing also 
enables us to be pesticide-free. We use only ladybugs to combat 
the bad insects. And we use an industry-leading third party 
food safety auditor to make sure that we are truly walking the 
walk, and for 2 consecutive years we have had very high scores 
from our food safety auditors.
    A couple of notes on our customers: We sell primarily to 
three sectors. We sell to retail grocery store chains, we sell 
to wholesale distributors who deliver to area restaurants and 
institutions like the hospitals and the universities, and last, 
we sell to food processors who are using large volumes of our 
herbs in recipes for pesto and sauces and juices and the like.
    So in closing, why are we here to talk about urban 
hydroponic farming? Our team now sees a clear path toward 
viability, long-term financial viability, and we assert that 
every major city in the U.S. should be at least looking at this 
model. Why? As previously mentioned, we have the ability to 
maintain high levels of food safety practices. Pesticide-free 
is huge. The ability to control insect damage without harsh 
chemical sprays. We have opportunities that we create through 
the adaptive reuse of land, and now potentially buildings. 
There is no reason why we couldn't construct a facility like 
this in an old abandoned warehouse, with the advancements in 
LED lighting technologies that enable us to do that.
    In conclusion, after 3 years of operation, Evergreen and 
Green City Growers now see a path to consistent profitability 
in urban farming. As an industry, we need to focus on the 
expansion of this model throughout the country, and certainly 
the discussion around scale has already commenced in Cleveland. 
Our culture of social mission-based operation has always been 
one of collaboration, and this will be especially important as 
we stay the course to advance urban farming.
    Thank you.
    [The prepared statement of Mr. McMicken follows:]

Prepared Statement of John McMicken, Chief Executive Officer, Evergreen 
                 Cooperative Corporation, Cleveland, OH
Introduction
    Green City Growers, an Evergreen Cooperative, appreciates this 
opportunity to speak to the Subcommittee today. As CEO of Evergreen and 
the Interim President of Green City Growers, I am honored by this 
invitation and welcome the opportunity to share experiences from our 
inner-city, hydroponic farm in Cleveland, Ohio.
    In 2012, Green City Growers (GCG) constructed a 3.25 acre 
hydroponic, food production greenhouse in the heart of urban Cleveland, 
Ohio. The 11.5 acre plot of brownfield land in Cleveland's `Central' 
neighborhood was the former site of 40 abandoned homes. Today, GCG 
operates what has become one of the largest food production facilities 
in a core urban area, while providing 36 full-time jobs and wealth-
building opportunities for residents of Cleveland's Greater University 
Circle area. University Circle is home to the Cleveland Clinic, 
University Hospitals, Case Western Reserve University, and 
approximately forty cultural institutions.
    Despite University Circle businesses purchasing more than $3 
billion in goods and services annually, the surrounding neighborhoods 
have 43,000 residents with a median household income under $18,500. 
Green City Growers, as part of the network known as The Evergreen 
Cooperative Corporation (501(c)(3)), is a component of the 
comprehensive Greater University Circle Initiative dedicated to 
stabilizing these neighborhoods through the creation of for-profit, 
worker-owned companies. The companies provide living wage jobs, medical 
benefits, profit sharing, and home-buying programs for the worker-
owners.
    After a thorough analysis of markets, crops, input costs, and 
projected revenues, stakeholders determined that a commercial food 
production greenhouse located in urban Cleveland would be a profitable 
and viable business employing 40-50 full-time employees (at capacity). 
The $16 million hydroponic greenhouse facility was designed to grow 
three million heads of multiple lettuce varieties, and 300,000 pounds 
of herbs per year. These products are marketed to Greater University 
Circle (GUC) anchor institutions, supermarkets, and produce wholesale 
companies within a 150 mile radius around Cleveland, Ohio.
    Specifically, GCG relies on three distinct go-to-market strategies: 
a direct sales effort via its own sales team, major distributors (who 
staff their own sales teams), and brokers who represent multiple farms 
to aggregate major produce categories which ship to large buyers (a 
`one-stop shop' strategy). As of today, this marketing approach has 
resulted in a customer base consisting of: both small and large retail 
grocery chains (40%); wholesale distribution to area restaurants, 
hospitals, and schools (40%); and food processors who utilize herbs as 
an ingredient in large-batch recipes (20%). It is now evident that 
consumers, institutions, and businesses in the region have begun to 
support locally-grown food initiatives as part of the ongoing 
revitalization of our city.
Current Status
    As is the case for many startup companies, the first 2 years of 
operation for Green City Growers were turbulent. After the excitement 
of the ribbon-cutting of this ground-breaking venture, sales and 
marketing efforts were met with predominantly status quo buying habits. 
Other than a few early on adopters of this progressive solution to 
year-round, high quality produce, most buyers in the region stayed the 
course with their traditional buying habits (via long-distance 
hauling). This challenge, combined with our overly optimistic sales 
projections, created daily working capital hurdles--again, not uncommon 
among startups of any kind.
    Year-round hydroponic farming involves significant operational 
overhead, requiring production at nearly 100% capacity in order to 
achieve consistent profitability. This is especially true in the winter 
months in northeast Ohio. During 2015, GCG doubled its sales to get to 
75% capacity. The market has finally begun to support strong growth, 
but much work lies ahead to get this inner-city farm to consistent 
profitability.
Challenges
    The business challenges which GCG continues to face can be 
summarized in three broad categories:

  1.  Displacement of traditional buying habits and long-standing 
            buyer-supplier relationships--an urban agriculture solution 
            like ours is still new to many prospective commercial 
            buyers. While much progress has been made in this area as 
            of late, there are still a number of large regional players 
            who have yet to `come around.'

  2.  Market position and pricing--consumer education relative to the 
            high value of hydroponic growing is lacking, therefore many 
            individual and institutional buyers are unwilling to pay 
            more for this produce than similar field grown varieties. 
            On the other end of the spectrum, hydroponic growers also 
            compete with certified organic and other niche market 
            producers, even though controlled environment hydroponic 
            facilities provide advantages with respect to food safety 
            controls and reduced water consumption.

  3.  High energy costs--despite award-winning facility design in the 
            area of energy efficiency, there is no escaping the intense 
            demand on electric power to run effective grow lights. GCG 
            and others in the hydroponic industry will need to convert 
            some or all electricity generation to one or more renewable 
            sources. Incentives, tax credits and the like will be key 
            to making this costly conversion.
Opportunities
    Ongoing weather-related issues and inescapable drought problems in 
the western U.S. have begun to really drive commercial hydroponic 
growing. Added to this growing concern is the clear need for tighter 
food-safety controls, some of which can only be attained via the 
controlled indoor farming practices found in facilities like Green City 
Growers. Opportunities for this agricultural model include, but are not 
limited to the following market differentiators:

  1.  Consistent quality of product, year-round;

  2.  Reliable availability (no crop loss regardless of outside weather 
            conditions);

  3.  Pesticide-free produce;

  4.  Highest level of food-safety standards;

  5.  Sustainable growing (GCG uses only 1 gallon of water per mature 
            head of hydroponic lettuce, as compared to approximately 40 
            gallons used for a similar field grown variety--and at GCG, 
            over 80% of all water used in its growing ponds is captured 
            rain and snow);

  6.  Reduced transportation costs by growing primary crops closer to 
            dense population areas; and

  7.  A worker-friendly environment (90% of the company is owned by its 
            employees).
Outlook
    After almost 3 years in operation, Cleveland-based Green City 
Growers has emerged from a difficult startup by establishing itself as 
a reputable farm known for its consistency and industry-leading food 
safety practices. Discussions have now turned to scale: how will GCG 
and the hydroponic industry as a whole expand this hyper-local food 
production effort in order to have an even more significant impact? 
Among the many lessons learned since GCG's launch in 2012, priorities 
for the pathway to scale include:

  1.  Better financing options;

  2.  Better (lower-cost) land acquisition;

  3.  Tighter, more well-defined food safety regulations (to level the 
            playing field); and

  4.  Affordable access to renewable energy such as wind and solar.
Conclusion
    GCG is honored to be a part of this discussion and extends an open 
invitation to this Subcommittee to remain engaged with us along this 
important journey toward sustainable urban agriculture. Meanwhile, I 
would encourage the Subcommittee to give careful consideration to ways 
in which a future farm bill might address some of the issues 
confronting urban agriculture. I realize this is perhaps not a 
traditional area of agriculture for a farm bill to deal with, but it is 
in fact a burgeoning sector in numerous cities across the country that 
might benefit from a seat at the table. The commercial growing and 
marketing of fresh, nutritious food while creating living wage jobs and 
economic development in low income neighborhoods is a win-win-win that 
should be encouraged and well-supported as an emerging part of the U.S. 
food policy equation.

    The Chairman. Thank you, Mr. McMicken.
    Mr. Eilers, welcome, and feel free to offer your testimony.

   STATEMENT OF JOSHUA W. EILERS, OWNER, RANGER CATTLE LLC, 
                           AUSTIN, TX

    Mr. Eilers. Thank you. So I am Josh Eilers, and I am the 
founder of Ranger Cattle, and we specialize in the direct 
marketing of Wagyu Beef in Austin, Texas.
    I am pretty passionate about this topic, specifically 
because it is the only real job I have ever had. I went from 
the military as an Army Ranger, then transitioned right to 
college. And when I started at the University of Texas, I 
invested in cattle, mostly by accident. I didn't know any 
better. And then the more I learned, the more business classes 
I took at UT, then I got the idea that it doesn't take a whole 
lot to realize if you cut out the middleman, if you direct 
market that product, all of a sudden that carcass is worth a 
whole lot more, and your margins increase drastically.
    So Ranger Cattle started in a traditional approach. We were 
a cow/calf operation, and each year we would sell our calves 
off to a feedlot in Nebraska, and he would ship it off to a 
packer, and then those steaks would end up here in D.C. or in 
New York or Boston at some fancy steakhouse. Well, in Texas, we 
have a lot of pride; pride for our products, pride for our 
people, so I get the idea that, well, I am in college and I 
don't have real bills, what if we retained these carcasses, and 
we knew we were supplying a great product in the first place, 
so why not feed the great people of our Austin community, the 
great people of Texas.
    And with that said, direct marketing beef is no easy task. 
If you were to rank the challenges I have had in my life from 
being an Army Ranger, four combat deployments, wounded in 
Afghanistan, I probably would be about right here, but direct 
marketing beef might put you at, honestly, a whole different 
level.
    So first, I want to go over those challenges just to make 
sure we get those across, because my colleagues here, they hit 
the opportunity. The opportunity is there, it is just the 
challenges are pretty high and they are extensive.
    The largest one of those has been with the farmers' 
markets. I know the USDA has policies that stimulate growth of 
farmers' markets and the opening of new ones, but we need to be 
opening new good ones. And what I mean by that are ones that do 
not exclude vendors. For example, I raise beef cattle in 
Austin, Texas, and I am within city limits, yet I can't sell my 
beef in city limits because the Austin farmers' markets are 
controlled by an organization, and that organization only wants 
one beef vendor there. Well, that beef vendor is from west 
Texas. He is shipping in. But it excludes me from that market 
altogether. Now, I know the American populous doesn't 
understand that, and I am not sure that the USDA does either. 
So we need good farmers' markets and not just farmers' markets.
    And then additionally from the USDA, we do need more 
facilities that are inspected by them. I have to go over 100 
miles to kill or to harvest one of our carcasses, because those 
chefs at the restaurants that we supply right there in Austin, 
they want to see that USDA stamp of approval.
    The opportunities, like my colleagues mentioned, they are 
there. A couple of things we do to kind of set us apart is we 
are in that niche market with the Wagyu Beef, we can guarantee 
prime. And the people of Austin, they are fancy people and they 
like to eat fancy meat, and that is good for us. And 
additionally, we use the labels that we are pretty happy about, 
it is called Homegrown by Heroes, and what that is, it is a 
label that if your operation is run by veterans, then here is a 
label you can put on your product, because it is agreed upon 
that any red-blooded American, when they are presented with two 
products of equal value, would prefer to buy from a veteran and 
to further support his transition from the military.
    In the State of Texas, we have Go Texan labels, and those 
are great, but they are expensive and you have to pay to put 
them on your product. But everyone knows about them. Not too 
many people know about the Homegrown by Heroes labels. So if we 
could spread that word, or you could spread that word with your 
colleagues, I sure would appreciate that one on a personal 
level.
    Like Mr. McCloskey said that their ranch is open to 
visitors. We think that is important. Education: I probably 
spend most of my time educating people that are either at the 
farmers' markets or even the chefs that aren't really familiar 
with our product, just telling them about it. Instead of 
ranching being a 7 day job for me, now it is about a 3 or 4 
day, and I am a salesman the rest of the days. But that is okay 
because our operation at Ranger Cattle, although it is small 
for the time being, it is a net positive, a greater good for 
our community, and the best and the most positive direction we 
could send our operation in would be for the direct marketing 
of beef to our community.
    Thank you.
    [The prepared statement of Mr. Eilers follows:]

   Prepared Statement of Joshua W. Eilers, Owner, Ranger Cattle LLC, 
                               Austin, TX
    It is my pleasure to have been invited to speak in front of the 
Subcommittee on Biotechnology, Horticulture, and Research for the 
purposes of providing testimony as well as responding to your 
questions. I received this invitation only a few days ago, so I 
apologize in advance if my testimony is not as well developed as the 
testimony of my colleagues.
    As a relatively new, small rancher in the State of Texas, my 
testimony will likely be very different from that of my colleagues who 
are from larger operations. Hopefully my testimony will prove to be 
useful to other young operations, as well as to this Subcommittee. I 
have divided my testimony into five primary categories: (1) Challenges 
with direct marketing; (2) Opportunities for direct marketing; (3) 
Current marketing tactics; (4) What's working and ideas for the future; 
and (5) By the numbers: direct sales to consumer vs. distributors.
1. Challenges With Direct Marketing
a. Exclusionary Practices by Local Farmers' Markets
    i. There are several farmers' markets in Austin, mostly run through 
what's known as the Sustainable Food Center (``SFC''). This 
organization organizes multiple farmers' markets across the City of 
Austin on various days of the week, allowing farmers direct access to 
consumers on a daily basis throughout the city. This is an ideal setup 
for those of us in direct marketing; however, the SFC has already made 
a partnership with a single beef producer and they will not allow 
another beef vendor to compete because it will take away sales from an 
existing vendor. This exclusionary practice has been my single greatest 
challenge in direct marketing--I raise beef in Austin city limits and 
yet I am prohibited from selling in Austin farmers' markets because 
they have already allowed in a beef vender from west Texas. This 
practice forces me out of Austin, increases my operation costs (fuel, 
time, health documentation for various counties, etc.), undermines 
capitalism (competition is good!) and takes choice out of the 
consumer's hands--Austin buyers would absolutely prefer to buy local 
but they aren't given the choice.
b. Competing with Larger, Successful Companies for Direct Access
    i. As a new and relatively small operation, Ranger Cattle does not 
yet have the capacity or means to compete with other companies that 
participate in direct sales, such as Omaha Steaks. Ranger Cattle sells 
beef boxes, which is one container of about 25 lbs. of Wagyu beef. 
These sales are processed online and give me a great opportunity to 
reach those outside of the Austin area, but shipping is over $100 to 
overnight. Passing this cost directly to the consumer prices us out but 
absorbing the price makes selling beef boxes an unsustainable practice. 
Omaha Steaks has the ability to partner with UPS because of their size, 
and this provides consumer access to their product at a much more 
reasonable rate.
c. Lack of USDA Inspected Processing Facilities in Texas
    i. There are very few USDA inspected processing facilities in 
Texas. Most are in the Panhandle, where the largest ranches also exist. 
In order for me to harvest my animals for direct sales, I have to use a 
USDA inspected processing facility and the nearest option is over 100 
miles away. This particular facility also has no scheduling methods so 
wait times can be between 1 day and 3 months. Having limited to no 
control on when I will receive my product back from the processor 
raises obvious challenges for direct sales.
d. Obtaining Access to Decision-Makers at Farm-to-Table Restaurants
    i. Meeting chefs and owners at farm-to-table restaurants has been a 
challenge. They are extremely busy and are frequently approached for 
various products. Farm-to-table restaurants are by far the most likely 
to show interest in my product but I am still discovering what methods 
of contact are most efficient.
2. Opportunities for Direct Marketing
a. USDA Programs
    i. If the USDA does have opportunities for producers sourcing 
direct, I have never heard of them and I would question whether they 
are getting to the people that need them.
b. Opportunities in Austin
    i. We are in a great location as folks in Austin are very excited 
to see where their food comes from. This has given us a real boost 
because we regularly have visitors at the ranch who are interested in 
our ranching process. However, restaurants in Austin still have their 
bottom lines and buying local is not always a primary concern.
c. Veterans' Programs
    i. I am extremely involved in the VA and veterans' affairs in 
general, and while there are programs to assist veterans in farming and 
ranching in general, there are not any that I know of that relate to 
direct marketing.
3. Marketing
a. Food Labeling
    i. Homegrown by Heroes: This is a great organization that has 
helped many farmers and ranchers, but needs more governmental support 
because consumers do not seem to know what it is. I have never met 
anybody outside the veteran community that is familiar with the label. 
I thing that the majority of Americans would absolutely prefer to 
purchase products from veterans when presented with two products of 
equal quality and price, so this label absolutely needs more attention 
and support.
    ii. Go Texan: The Go Texan label is fantastic and well known within 
Texas. Unfortunately, it costs $100 each year and for those of us with 
tight operational budgets, that is a significant expenditure. I don't 
see this label as absolutely necessary given that we sell at farmers' 
markets in central Texas--it's a given that we operate in Texas. In 
stores, this label has a very real impact on consumers but we are not 
yet in stores.
    iii. Website, social media, flyers: These tools are how we market 
directly to the consumer. Being in Austin means we have gotten a great 
deal of local coverage (ranches within city limits are quite rare) and 
we are constantly updating our website and social media. There is 
definitely more to be done in this area, but there are only so many 
hours in a day!
4. What's Working and Ideas for the Future
a. Consumer Interest in Food at an All Time High
    i. The Austin market is saturated with folks who care about what 
they eat and where it comes from. It is no secret that there is 
mistrust between producers and consumers at this time, created by 
issues such as the ethical treatment of animals, antibiotics, and 
truthful labeling of products. We believe transparent operations are 
the only way to rebuild this trust and we constantly invite people from 
the community out to the ranch to witness our operation. We have had 
visits from local high school students, restaurant owners, chefs, 
journalists, and other ranchers. We agree that it is important to know 
where your food comes from and how it's made--it is only one part of 
establishing overall health.
b. Taking Pride in Our Product
    i. Our greatest marketing tool has been taking pride in our product 
and sharing that pride with consumers. Awareness regarding our animals, 
raising them ethically, taking the time to answer questions, and 
incorporating suggestions for better operations sets us apart from 
competition. Our ethical treatment of our animals has led consumers to 
support us where they wouldn't otherwise.
c. Isolated Market
    i. As direct sellers, we are outside of the major beef market, 
which means we are not as susceptible to its fluctuations.
d. Grants for Direct Marketing
    i. Grants in general are extremely beneficial, and if the USDA 
would provide more opportunities for grants in direct marketing I am 
sure we would see positive results.
5. By the Numbers: Direct Sales to Consumer vs. Selling at Weaning
    a. At today's market price, we could sell a weaned calf for 
approximately $825 ($1.65/lb @ 500 lbs). Instead of selling, we can 
feed the same calf for around $2 a day for a year. This comes out to an 
additional $730 to finish the animal. There is an additional $1,000 
invested into processing, marketing, and some help selling. You can 
sell that same animal ``by the steak'' for $10/lb at around 650 lbs. 
The math on paper appears clear--selling by the steak directly to the 
consumer is much more profitable. Even calculating with the time value 
of money involved in retaining an animal for future harvest vs. selling 
at weaning. The biggest drawback to selling ``by the steak'' is the 
time involved with educating the consumer and attempting to find places 
to sell. This takes me away from the ranch and puts me in a position of 
salesman. The profit of this approach may not be sustainable if it 
takes me away from the ranch because that will affect my product.
    These are a few issues that would benefit other people in my 
position as well as this Subcommittee. I have only had a few days to 
prepare these statements, but if requested I can provide additional or 
more detailed information.
            Most sincerely,
            
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
            
Joshua W. Eilers.

    The Chairman. Thank you, Mr. Eilers. Thank you for your 
service, and also for your entertaining testimony. I appreciate 
all of the witnesses being here today.
    We are now going to move into the question-and-answer part 
of our hearing. And since I am going to be here the entire 
hearing, I always defer my questions until later in the hearing 
so others may be able to get to another event they may have to 
go to. So I am going to recognize my colleague from Florida, 
Mr. Yoho, for his round of questions.
    Mr. Yoho. Thank you, Mr. Chairman. I appreciate it. And I 
appreciate all the testimony. You guys had some great 
testimony.
    I didn't realize you were a veterinarian there, Doc. I have 
done a lot of the same things you have. We have worked on a lot 
of dairy cattle. Yes, I got that too. Pulled a lot of calves C-
sections, and displaced abomasums, and all that good stuff. And 
I know the plight you are going through, and I loved your 
testimony. In fact, you don't need to farm, we need you up 
here. We need you running in Congress to help us fix some of 
this stuff. And all you guys, everybody, ma'am, you too, 
everybody had a great testimony.
    Dr. McCloskey, you were talking about what you do with the 
digester and the nitrogen, re-salvaging it, I guess. Did you do 
that because of a government regulation, or was that a need 
that you saw that you needed to fulfill to solve a problem?
    Dr. McCloskey. We do it because we truly like to try to get 
ahead of regulation.
    Mr. Yoho. Right.
    Dr. McCloskey. I think as an industry, as all farmers, we 
should have that approach where we look for ways to solve 
regulatory problems by getting ahead of them, creating a market 
value to what we are doing. So within what we are doing with 
the recovering of the nitrogen phosphorus, ammonia as well----
    Mr. Yoho. Right.
    Dr. McCloskey.--creating ammonium sulfate, our concept, and 
this is, I feel, really innovative and interesting, and we will 
be pushing this agenda hard, but our concept is that everyone 
in the watershed should participate in solving this problem. We 
have a very serious problem with eutrophication in this country 
and around the world, which are our dead zones, and agriculture 
is a part of that. I mean we can't deny that, but so are golf 
courses, septic tanks, and small industry, and many others. Our 
belief is that within a watershed, we need to get out of point 
sources versus non-point sources and allowing everyone to 
participate in a market-driven value, which will allow us all 
to become innovative with technology, like we have at Fair Oaks 
Farms. There should be a recognition of that, a monetary 
recognition, because now it takes a farm, with the technology 
we have, $5 a pound to extract nitrogen. If you go to a waste 
treatment municipality plant today and try to extract 1 pound 
of nitrogen, it will take you $50. It is always better to work 
at the source.
    The system is not incentivized to be able to get golf 
course people to think different, lawn people, design new 
septic tanks that don't have the leakage that they do. Why? 
Just like we do with windows and we do with refrigerators, 
where there is an incentive to be able to invest in that, there 
should be an incentivized system within a watershed to create a 
business case that creates innovation, allows all of us then to 
participate, and finds solutions.
    That is how innovation gets----
    Mr. Yoho. I am going to cut you off there. And those are 
great suggestions that we will look at. We have a digester down 
in my area that is phenomenal. I think they produce over a 
megawatt, and they run their whole dairy off, and they sell 
back.
    Mr. Tonnemaker, you brought up something, which I was glad 
to hear you say that. We need to get back to the basics about 
food safety, whose responsibility is it. We, as government, 
have certain regulations that people should meet, but over-
regulations, as you said, like with the Food Modernization Act 
or the Food Safety Act, that burdensome mandate that came out, 
I have farmers in my area that grow tobacco, corn, cotton, 
watermelons, blueberries, and they say that costs them $40,000 
extra a year just in regulations, but it really didn't add to 
the food safety. What you are saying is we need to go back to 
education and tell people. I find it hard to believe that we 
have advanced this far, but people don't know to wash their 
vegetables, or, a chicken egg, it comes out of the cloaca of a 
chicken, you have to wash it. There are certain basic things 
that we need to teach. That goes back to kindergarten, stop, 
look, and listen before you cross the road. And we need to go 
back and educate the public.
    And, Mr. Heck, it sounds like you are doing that. You said 
that young man was grazing on the vegetables. I have done that. 
You might pick up a nematode here and there but we can deworm 
you for that. That is just part of living.
    But, Mr. Tonnemaker, going back to you, what regulations do 
you see that are probably the most burdensome that you run 
across, that you would like to see us just stop or maybe check 
before we put them out with the industry like you?
    Mr. Tonnemaker. Well, the industry has kind of gotten away 
in allowing paperwork to take everyone's blame away. And the 
orchard is a natural environment, and in the past, people 
allowed birds and other predators to take care of some of the 
insect population like kestrels and owls would take care of a 
lot of the voles and the mice running around the orchard. And 
right now, they don't want anything living in your orchard or 
in your boundaries, or the windbreaks or anything around it. 
So, they want it to be a bird-free zone. And, we talk about not 
being able to take care of our hospitals, which is a very 
confined area, and keeping disease and things out of the 
hospital. How can you keep that out of an orchard? Like you 
said, you need to be able to wash stuff down the chain.
    [The information referred to is located on p. 61.]
    Mr. Yoho. I am out of time and I have to cut back, but you 
are right. I mean when the inspectors come out, have you seen 
any birds fly over your watermelon pasture? No, you haven't 
seen any.
    I am going to yield back. Thank you.
    Mr. Tonnemaker. Thank you.
    The Chairman. The gentleman's time has expired. And thank 
you for the educational opportunity here, Mr. Yoho. I 
appreciate that.
    Mr. Yoho. You bet you.
    The Chairman. Nematodes, right?
    Mr. Yoho. Nematodes.
    The Chairman. Nematodes.
    I recognize the Ranking Member, Ms. DelBene, for her 
questions. Please make them good.
    Ms. DelBene. Thank you. Thank you, Mr. Chairman. And thanks 
again to all of you for being here today.
    I was interested to read in Mr. Tonnemaker's testimony the 
statement that direct marketing drives every planting decision 
on the farm. I know that you started at farmers' markets, and 
as a result, started meeting chefs, got into restaurant sales, 
and CSA, expanded the number of farmers' markets significantly, 
and then rebalanced your sales strategy and cut back on the 
number of farmers' markets, and then got into value-added 
products. And so I want to, starting with you, Mr. Tonnemaker, 
discuss how your marketing strategies changed from the early 
1980s when you were first starting in this area, and through 
your transition to organic to where you are today. How has your 
marketing process evolved.
    Mr. Tonnemaker. Well, like we said in the testimony, the 
indirect wholesale system kind of failed us, and the fact that 
there was no real incentive for the wholesale distribution to 
provide good returns to the farmer. The farmer, as is right 
now, retains ownership of the fruit all the way to the grocery 
store when the person buys it; yet, the wholesalers get all of 
the money out first. So essentially, we send the fruit to the 
warehouse, and then they take all the money, the selling and 
the distribution, all those guys get their money out. Whatever 
is left over, the farmer gets.
    So we changed to go direct market to the restaurants so 
that we could keep part of the carcass back on the farm.
    We started the farmers' markets and we were able to meet 
the chefs and started developing our outreach, and realized 
that these guys wanted specific things they couldn't get on a 
regular basis, and then we expanded. Right now, we grow about 
300 varieties of peppers, we have 16 varieties of sweet 
cherries, we are adding a few more so we can extend our growing 
season, and that way we harvest cherries for about a month and 
a half. We grow about 48 kinds of peaches, so we start picking 
in early July, and pick all the way into late September, just 
to make it so we can direct market a longer period of time and 
keep our farm going.
    Ms. DelBene. Yes.
    Mr. Tonnemaker. We transitioned to organic starting in 
1997. We were fully organic in 2003 at our farm in eastern 
Washington. And we are hoping to certify organic in our farm in 
Woodinville this spring, with the idea that it was a good niche 
for us. My grandmother lived to be 100 years old, and we were a 
conventional farm, and she died in 2003, so like they said, we 
don't want to combat either time's farming methods, there is 
definitely pros and cons for each, but with us and our direct 
marketing, a lot of the chefs were looking for it and asking 
for it, and it has just worked out well in our situation with 
direct contact with the consumer to be able to certify organic. 
And that has helped us in our wholesale sales with selling to 
Tree Top, which is a major juice producer in Washington, they 
are a co-op, and routinely we get returns with juice quality or 
peeler apples, which essentially get cut up for apple pie 
fillings and have a higher return than we would for fresh 
market fruits. So being organic has really helped us in that 
aspect, in addition to the consumers.
    Ms. DelBene. Yes.
    Mr. Tonnemaker. As far as the farmers' markets, at one 
point we were doing 18 a week. Last summer we did eight. And 
this summer we will probably be down at six or seven. Just the 
success of the farmers' markets we go to, and being able to 
specialize and really emphasize on those, has helped a lot. We 
do a lot of weekly share boxes. Actually, a pretty small amount 
considering some of our local competitors, people that do 
hundreds, we do about 150. But we do a lot of restaurant sales, 
and we have the farm in Woodinville which we have a lot of 
direct sales going there to the people. And we are able to do 
some agritourism and some educational plantings coming up here. 
What we are striving for is to connect the community locally 
with their agricultural source.
    Ms. DelBene. Have others had similar experiences in terms 
of how things have evolved and they have transitioned from 
where they started in terms of direct marketing to where you 
are today?
    Mr. Tonnemaker. Go ahead.
    Ms. Coffin. Well, we started again in terms of we have a 
very pastured poultry business, and we have only been in 
business for 3 full years, so we are very short. But for us, 
the opportunity has been largely in restaurants and farm stores 
and institutions, and that is to us--again, we are in a part of 
the country where there is a huge number of farmers' markets. I 
would echo some of the challenges that Mr. Eilers has mentioned 
in terms of farmers' markets, and it has presented challenges 
and opportunities, but for us, we have seen the real growth in 
farm stores and in institutions.
    Ms. DelBene. Thank you. My time has expired. I yield back, 
Mr. Chairman.
    The Chairman. Thank you, Ms. DelBene.
    I now recognize the gentleman, also from the State of 
Washington, for his round of questions, Mr. Newhouse.
    Mr. Newhouse. Thank you, Mr. Chairman, and thanks for the 
compliments on our Washington cherries. You just want to make 
sure I bring you some again this year, don't you?
    The Chairman. I was a little disappointed we didn't see any 
taste-testing opportunities from the witnesses, but, obviously, 
we will work on that for the next time. Right, John? Thanks. I 
will not charge you that time.
    Mr. Newhouse. I appreciate that. Thank you.
    I want to thank everybody for their testimony this morning. 
You guys are saying some things that I have been trying to say 
for a long time. Somebody mentioned that we are about two 
percent of the population, the farm community, anymore in this 
country. And we have a huge job to do to communicate to the 
general public the importance of agriculture and the challenges 
that we face, and some of the things that are making it 
difficult for our industry to continue to thrive. So I 
appreciate you guys and your stories.
    The direct marketing, whether it be farmers' markets or 
other ways, as scary as this might be for some of us, you guys 
are truly the face of American agriculture to the U.S. public. 
And so your ability to interact with the public, to really 
connect with consumers is one of the most important things 
that, as a result of the direct marketing, aside from the 
economic successes that you have been certainly expressing 
today. So whether large or small, it is important. What did you 
say, there are 500,000 people visiting your farm every year. Is 
that what you said? That is an amazing thing. And I would guess 
that your connections at farmers' markets are large as well, 
even on a regular basis.
    And I want to personally welcome Mr. Tonnemaker to 
Washington, D.C. The farm happens to be in my district, so I am 
proud of our local farmers, absolutely.
    One of the things we are looking for ways--part of the 
reason for this hearing is to explore ways that the government 
can help. A novel concept, to actually help you do what you are 
doing. Several of you have mentioned some challenges, 
transitioning to the next generation and how do we get land in 
the hands of beginning farmers, or some of the regulations that 
you are facing. Could you expand on--from your perspective, Mr. 
Tonnemaker, a little bit about--you mentioned those binders in 
front of you. Certainly, food safety is at the top of a lot of 
peoples' idea of priority, but how do we help you get through 
that and also continue to provide a safe product to consumers?
    Mr. Tonnemaker. Well, I think that the binders are a huge 
problem because there are a lot of small farms out there that 
are trying to work with regulations that are more designed 
towards maybe the next step down the line in the processing, 
and that is where you see a lot of the problems is in the 
larger institutions. The farmer is held responsible for the 
product when it leaves the farm, yet they have no control over 
what goes on down the distribution chain. So when you direct 
market, it kind of circumvents a lot of that.
    And as Mr. Eilers mentioned, the opportunity to have good 
farmers' markets and support that, I know that when you were on 
the state legislature and you were in charge of the Agriculture 
Committee in Washington, you were pretty helpful, a good ear to 
the farmers' market, and we appreciate that and thank you for 
that support. And I just think that it would behoove, with the 
education, and can see the face, and they can greet people and 
talk to them, I think that is real important in the future is 
for people to understand that the growing practices and why 
people do what they do, and necessarily not being certified 
organic doesn't mean they are perfect or bad. There are reasons 
why people farm differently and they are important, and the 
distance that food travels is super important to how they eat 
and when they eat. We had a recent farmers' market just on 
Sunday and the lady asked, we told her we were running out of 
apples, and she said, well, why are you running out of apples, 
it is only January? Yes, it is only January. We picked the 
apples in October. We are trying to provide you a fresh 
product. And so it kind of defeats the purpose if we are 
providing a store-bought apple, I mean a refrigerated, stored 
apple for a period of time.
    Mr. Newhouse. Yes.
    Mr. Tonnemaker. So those are definitely obstacles, and 
education is the biggest factor we face in consumers 
understanding that milk doesn't come out of a carton, and 
apples don't come out of a shelf.
    Mr. Newhouse. Thank you.
    Ms. Coffin, you brought up some ideas of challenges. And 
how do we focus on getting new farmers into the business. How 
do we make that transition? I can't remember, you said 
something about the amount of farmers that are retiring in the 
next few years and the land that will become available, either 
for development or farming.
    Ms. Coffin. Right.
    Mr. Newhouse. Do you have any ideas how we can accomplish 
that?
    Ms. Coffin. Well, that is a good question, and thanks for 
asking. We did this research project, unfortunately, it was 
limited to New England so it was just our experience there, but 
we found that a huge number: first, that our region has 30 
percent of our farmers are over 65 years old, and that a large 
number of those farmers do not appear to have successors. And 
thinking about how that land will transition, that, to us, 
means the importance of those programs and strategies like the 
Beginning Farmers and Ranchers Development Program, which is 
funding some land access projects. For like us, it is funding 
land for good to do succession planning with older farmers----
    Mr. Newhouse. Okay.
    Ms. Coffin.--to help them find and identify who that next 
generation is, particularly as we are moving towards a 
situation where there are less kids coming up through farms, so 
that you have a lot more new farmers who are coming in from off 
the farm.
    Mr. Newhouse. Okay.
    Ms. Coffin. So continuing to fund programs like that, and 
particularly, in urban areas where there is a lot of 
development pressure, having the ability to purchase 
conservation easements through the Agriculture Conservation 
Easement Program has been really important.
    I think the next farm bill is going to be an opportunity to 
think more creatively on the beginning farmers and land access, 
and there is, through the National Sustainable Agriculture 
Coalition, a focus on developing some new ideas that might 
actually be tax incentives that could be important to help with 
that kind of transition.
    Mr. Newhouse. Okay, thank you very much. I appreciate that, 
and all of your testimony. Thanks for focusing on this very 
important issue.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Mr. Newhouse.
    I now recognize Mr. McGovern, for 5 minutes.
    Mr. McGovern. Thank you. And thank you all for being here. 
And it is great to see a familiar face in Ms. Coffin. I 
appreciate anybody who comes here and highlights the importance 
of agriculture in New England, because there are some 
incredible things going on. And I appreciate the comments on 
some of the concerns about the burdens of some regulations and 
the issues of food safety, some are needed. Food safety is a 
big issue, and my experience has been is that small and medium-
sized farms get it. They always have gotten it because when it 
comes to food safety if you directly sell products that are not 
safe and someone becomes sick, you are out of business. It is 
the bigger, in my opinion, industrial-type farms that are the 
problem. I do farm tours every year. Last summer I did 13 farms 
in 2 days, and I continue to be impressed at the innovation and 
the incredible things that are happening. There is an 
agricultural renaissance occurring, which is really exciting. 
Consumers want more locally grown food, and they want fresh 
produce and the unique products that are made right on the 
farms. I have been to farm stands and CSAs and talked directly 
with farmers. I have been impressed, as Ms. Coffin pointed out, 
with the colleges and universities, like UMass Amherst, as well 
as a lot of K through 12 schools, committed to buying local. It 
is an important part of our economy. And talk about variety and 
value-added products. I have had everything from corn ice cream 
to pickles to mocha milk. I have one farm in my district that 
is making maple vodka, which I will bring to the Committee next 
week for everybody. I have really been impressed with efforts 
to expand access to fresh, healthy produce amongst low-income 
populations receiving SNAP and other Federal food assistance 
programs like SNAP, EBT, the WIC Farmers' Market Nutrition 
Program, and the Seniors Farmers' Market Nutrition Program. In 
fact, we ought to have a Veterans Farmer Market Nutrition 
Program to better connect veterans and healthy foods at VA 
clinics.
    Do any of you participate in any of these programs, and 
what has your experience been like, and what improvements or 
enhancements would you suggest?
    Mr. Tonnemaker. Well, we participate in the SNAP and the 
WIC and the Senior FMN Programs at the farmers' market, and we 
actually are approved to accept WIC checks at our farm stand in 
Royal City. And we have really enjoyed the program. It brings a 
lot of people, new customers, out to the farm and out to the 
farmers' markets because the health clinics spend a lot of time 
educating people on where they can get it, and the money stays 
in the community, which is the important----
    Mr. McGovern. Right.
    Mr. Tonnemaker.--thing, for thinking about the farm and the 
health of the farm, and the longevity of the community.
    The SNAP, we did a program in 2013 where they had a South 
King County Access Program, and we were one of the members. In 
fact, I was on the advisory board that had to deal with farmer 
comments and suggestions, and there is a big technological gap 
between farmers, especially in really rural settings where 
there may or may not be Internet connection, cell phone 
connection, and to develop these technologies to make it 
easier, because EBT is transitioning to electronic and they 
have no EBT, excuse me, the SNAP is--and the WIC are going to 
be the same, without the EBT card. So there are new 
technologies out there, but it is just getting it to the 
farmers. So thank you, and I am sure Mr. Heck can speak to 
this.
    Mr. McGovern. Sure.
    Mr. Heck. I think that one thing that has been a problem 
with people redeeming those benefits is the ability to get to a 
place, just the transportation. Many times a market is located 
in a place where it is not a lower income neighborhood because 
the financial opportunities aren't there. So I think that one 
of those problems is people just simply cannot get to a place 
that they can buy fresh produce or fresh meats or anything. It 
is just hard for them to get there. Transportation or some sort 
of public transportation initiative that would get people to 
those places, or a mobile----
    Mr. McGovern. Right, mobile I was going to say----
    Mr. Heck.--would be great, yes.
    Mr. McGovern.--yes. Right.
    Mr. Heck. We actually have that opportunity now. We have 
the ability to move produce in the neighborhoods that are a 
little more impoverished or can't make it to those places, so 
we are excited about that.
    Mr. McGovern. That is very good. I appreciate everybody's 
comments here today, and again, I am in awe of the work that 
you all do. I would last about half a day on a farm if I had to 
do that for a living.
    I just have one other note. I speak to high schools, and 
usually at the end I always ask people what do you want to do? 
How many want to be in Congress? Nobody. Right? But the number 
of people in a lot of schools I visit who raise their hand and 
they say they want to go into farming is really increasing. So 
when I talk about this renaissance, it is not just people want 
to buy local produce and meats that are raised locally. There 
seems to be a growing appreciation about what farms are about, 
and more and more people seem to want to commit their lives to 
that. I think that that hopefully is an encouraging signal 
here. So thank you.
    The Chairman. Thank you, Mr. McGovern. I appreciate the 
offer for maple vodka too. Coming from corn country, I can tell 
you I have never had anybody say, boy, we ought to make some 
ice cream out of corn. So I would like to try that one too.
    Mr. McGovern. Come to Massachusetts.
    The Chairman. My passport doesn't work for Massachusetts.
    Dr. McCloskey, thank you again for being here. I am going 
to take my time to ask a couple of questions. I, again, 
appreciate your products. My family is a big fan. I know that 
you and I had a chance to talk about some of your other 
products that we see all throughout my area, not only in our 
grocery stores but our convenience stores. But my colleague, I 
wish he would have stayed, just mentioned something about 
larger facilities, larger farms. Can you let us know, how big 
is your facility in Indiana?
    Dr. McCloskey. So the Fair Oaks Farm is composed of 36,000 
cows, 12 different farm operations within a 4 mile radius.
    The Chairman. So a very small operation.
    Dr. McCloskey. Yes. It is considered a large farm, but it 
is all family farms. So, we as owners, my wife works there, I 
work there, my kids work there, our other partners' families 
work there, but also many families work there and those 
generations stay with us. The workers that have been with us 
for over 20 years, their children have grown up and have come 
back to the farm. And to the Member's point on education, the 
advancements on farm today are so tremendous, and there is so 
much demand for great knowledge coming back into the farm 
because the technology is improving at a level that is very 
attractive to young, up-and-coming professionals to come back 
to the farm, from a nutritional stand point of view, from 
biology, from chemistry, mechanical side of the business, 
because it continues to evolve technologically. So people tend 
to want to cubby us into corporate farming but we are not 
corporate farming. In the United States, I don't know, maybe 
one or two percent of the farming could be really considered 
corporate farming. We are just large farmers. We were 
successful at what we did, I started with 200 cows, and 
sometimes you feel that you are punished for being successful, 
and reinvesting in a business and growing it and making it more 
efficient. And I like to think of a concept that I would share 
with all of you, that is scale for good. When I shared about 
our digesters and the technology that we have been able to 
invest in, that is R&D money coming out of our dairy that 
unfortunately a small operation can't do, but as we developed 
that technology, two things happen with new technology. One is 
it becomes more efficient as we use it, and the other one is 
you drive cost out of it. Those two things combined make the 
technology more affordable for smaller and smaller farms. So 
you have to scale it up, because it will help the innovation 
system to raise all boats in the farming community.
    I keep on insisting that it is all of us together. There is 
no way we can get here. As a matter of fact, we have organic 
dairy farms besides the others. So I believe in organic 
farming, I believe in small, I believe in large, I believe that 
all of us together will create what I consider the true 
sustainable farming because it will be the confluence of the 
things that you are learning on your farm that I go by and talk 
to you. Why don't I do that on conventional farming because I 
could save money and it would be more appealing. It is that 
confluence of that knowledge that has always made America 
great, and will continue to allow us to be the leader in 
agriculture in the world. People come from all over the world 
to see who we are, and we have to have the mentality that we 
are all in this together, and we are focused on a movement 
forward together to create true sustainable farming. That 
definition has not been clear yet to the consumer or to even us 
as farmers because one important thought process is, I as a 
farmer, and I hope everyone on this table, will listen to the 
consumer because we want to deliver to the consumer what they 
want. But the consumer also needs to understand that that may 
come at a cost. If they want something such as GMO-free 
products, to take GMO away from farming is taking a tremendous 
advantage that truly is sustainable to farming, that increases 
productivity, decreases water use, decreases chemical use, 
decreases pesticides and herbicides. It increases all those 
things and decreases productivity by taking that tool away, a 
very safe, scientific proven tool that we have had over 
3,000,000,000 encounters in the last 25 years with GMOs without 
one single reported illness. We as a government, farmers, we 
have to be together with the message that is true and science-
based, and allow the consumer to decide. It is a choice, and we 
need the variety, but it can't be a confused choice. It has to 
be a choice that is dealing with the sincerity and the reality 
and the true science, so that the consumer knows if I want 
this, it costs more, but not only does it cost more, it has an 
environmental cost.
    So it is funny, what I find in my experience is, I find 
people that have a dichotomy going in their heads. Right? They 
believe that they are doing the right thing for the environment 
and that they are sustainable, and then they want GMO-free or 
they want something that takes away a very safe tool, that has 
a cost to the environment. They don't understand that, they 
just have been told through however they are getting their 
information that this is better. But better in what sense? So 
we have to have an informed consumer together. We can't be 
fighting against each other and creating things that aren't 
true out there----
    The Chairman. And thank you.
    Dr. McCloskey.--to make each other less of what we are 
trying to accomplish.
    The Chairman. I appreciate those comments. I am out of 
time. And I had just one quick question. Will you raise your 
hand if you want your operations to be expanded or grow within 
the next 5 years?
    Dr. McCloskey. Thank you.
    The Chairman. You want to get bigger. You want to get 
bigger. So thank you very much.
    I now yield to the gentlelady from Florida, Ms. Graham, for 
her questions.
    Ms. Graham. Thank you, Mr. Chairman.
    I will say this has been one of the more entertaining and 
enjoyable hearings that I have participated in, so I want to 
thank all of the witnesses.
    This is very timely because I just completed my first 
official north Florida farm tour. I have 14 counties in my 
district. It is the largest geographical district in Florida 
and the most rural, and has whole lot of agriculture. So this 
is a wonderful opportunity to follow up on that.
    Mr. Eilers, I specifically would like to ask you a 
question. We have a lot of veterans in our district, a lot, who 
are coming back from active duty and looking for ways to 
continue to contribute, and there is a lot of interest in 
farming. I was actually looking at your webpage, and I have 
liked your Facebook page already, and I was curious, in 
addition to the Homegrown by Heroes, what other marketing 
options and opportunities are there for veterans that I could 
let the veterans back in my district know about?
    Mr. Eilers. To tell you the truth, I don't know of them 
myself. The Homegrown by Heroes, the reason it is so exciting 
and so big is because it is the first one that really gives us 
an opportunity to set ourselves apart. So to answer your 
question, I don't know of other ones you could share with them. 
I would definitely encourage the transition into agriculture. I 
think it is a beautiful thing, especially if you are like I 
was, going straight from combat back to trying to make that 
successful transition, I don't think there is any better way to 
do it than through agriculture.
    Ms. Graham. Do any of the other witnesses know of specific 
direct marketing opportunities for veterans? Well, we need to 
work on that. In my district we have found that there is really 
an interest, and I have Florida A&M University and we are 
working on a program that will help train veterans in farming. 
There is a lot involved, and as you all pointed out, the age of 
the average farmer is in the sixties and there is not, 
unfortunately, the family continuation of the businesses that 
we have seen. So whatever we can do to encourage the next 
generation of farmers.
    Well, thank you. And thank you for your service. It is 
quite impressive what you have done in your life, so thank you 
for all you are doing.
    So I will turn to Mr. Tonnemaker, I want to make sure I 
pronounce your last name correctly, Tonnemaker. The point of my 
north Florida farm tour was to meet with the farmers across the 
district, and learn the challenges and opportunities that they 
were facing, particularly in the vulnerable populations. 
Seniors and veterans are included in that, as well as children 
and low-income populations. Can you provide any guidance on 
what would be some additional marketing opportunities for the 
more vulnerable populations that might like to go into farming, 
or are in farming already?
    Mr. Tonnemaker. Well, thank you. I think one of the really 
important things that we have kind of touched on today is the 
difficulty of a person entering the market now, with the cost 
of the land and the cost of the equipment. A lot of people can 
run their business and can farm. There is the need for 
education, with regulation and making sure that you comply with 
all the regulations. But one of the main ills is getting help 
for people to understand that there are programs out there 
maybe that can help them, meet retiring farmers and find land, 
and also to find ways, so they can develop their product and--
like driving 100 miles to get you beef slaughtered is a long 
way, and maybe help with education on how to run the facilities 
to reuse your byproducts that are left over from the dairy 
business. I think that kind of education, because it is 
intimidating, the laws out there, as far as where you can farm 
and how you can farm, and education is very, very important. 
And I wish I could be more specific, but I just think that 
focusing on education----
    [The information referred to is located on p. 61.]
    Ms. Graham. Education is key. Do any of you all have 
StrikeForce in your areas, the USDA program, StrikeForce? No? 
Not familiar with that? Okay. It was something I was 
surprised--Mr. Chairman, can I have--are you the acting 
Chairman now, Mr. Yoho? My fellow Floridian colleague.
    Mr. Yoho. [presiding.] Yes, ma'am, and I have no aversion--
--
    Ms. Graham. StrikeForce is something that I was surprised 
was not in Florida. I think some of the counties are in your 
district. So I am going to work with USDA to help the counties 
in north Florida utilize the StrikeForce Program. It might be 
something you want to look into. It might provide some options 
as well in your areas of the world.
    Well, thank you. I have no more time, so I yield back the 
time I do not have. Thank you very much.
    Mr. Yoho. We thank you for yielding back that non-time.
    And the chair will now recognize our colleague from the 
State of New Hampshire, Ms. Kuster.
    Ms. Kuster. Thank you very much, Mr. Chairman. And I did 
get a chance to thank Mr. Davis for holding this hearing.
    Welcome to all of you, and in particular, to Cris Coffin. 
Thank you for your work that you are doing in New Hampshire. I 
am very excited about growing agriculture. We are one of the 
very few states with the rising five percent increase year over 
year now with new farmers, young farmers, value-added, farm to 
table, farmers' markets. I could go on and on. I am excited to 
announce that we are number 2 in the United States for the 
percentage of farms where direct sales are at 31 percent. I was 
wondering if it was a neighboring state that was number 1. It 
turns out it was Hawaii. But we are hot on their heels. And I 
have done a number of events, in addition to visiting farms and 
I have a couple of shout-outs. One, the USDA Rural Development 
Program that you are probably all familiar with has been super 
helpful. We just did a renewable energy with installation of 
solar panels at a farm that does a lot of direct marketing. And 
you are absolutely right in terms of access to land. That is 
actually how I first got into this before I came into Congress 
was helping to save a local farm, Diamond Hill Farm, and doing 
the land conservation. It was a classic case, third generation, 
the brother wanted to sell it off to build McMansions, and the 
sister wanted to keep it. And we brought together everybody, 
Federal, Farmer and Rancher Program, state funding, local, the 
town, and at the end I helped to raise the money from just the 
community. And it has been a brilliant success. The best corn 
in the State of New Hampshire, everybody stops there to get 
fresh fruits and vegetables, and I am just a huge fan.
    My question, and this is directed, Cris, to you. From what 
you have been seeing on the ground working with New England 
farmers, what are some specific examples of how farmers are 
better utilizing direct sales to reach new customers and boost 
farm income? And then how can farmers outside of New England 
use some of these successful techniques to grow their direct 
sales?
    Ms. Coffin. Right. Well, thank you for the question. Around 
New England, it is just impressive at the diversity, as 
Congressman McGovern mentioned, in terms of opportunities. And 
in New Hampshire, one of the wonderful things is the state has 
done a public-private partnership with restaurants to have a 
certified local restaurant certification program, so the 
customers know that they can go to certain restaurants and know 
that there is going to be local food on the menu. So that helps 
in some ways.
    I would say on the institutional markets that what has been 
impressive in New England, and this would hold true for around 
the country, is that schools and universities and healthcare 
centers that have made an effort at buying local, and have 
worked to do consumer education about that local, that the 
results has been that more kids in public schools buy school 
lunches because there is this sort of combination of education 
and working with school food service directors to do more 
scratch cooking. It makes, in many cases, food is better. That 
is not to say, Mr. McCloskey, that food from far away is not 
fine, but there has been a sort of interest in moving away from 
prepared school food, and that helps generate excitement, and 
kids eating the food all helps to increase. And so schools that 
are doing well with their school lunch programs and breakfast 
programs, it is because there is a new excitement, and that 
helps to make it more cost-effective for schools. And the same 
thing with universities. UMass has had a significant increase 
in the number of students who have gone on the school meal 
plan, they are now number 1 in the country, because they have 
made a big effort to promote local and sustainable, and it has 
gotten students excited.
    So I would say that in terms of those opportunities, those 
are everywhere.
    Ms. Kuster. Yes. And I see that connection myself. The food 
tastes better and people are excited about it, and making that 
connection to help this generation, particularly in terms of 
their level of activity and concern around health.
    And then I--my time is up, but I just want to add, the 
State of New Hampshire has done a lot of marketing, and 
Washington State probably in this regard as well. We have a 
nice tourism brochure now about farmers' markets and direct 
marketing. I think in a state like ours where tourism is the 
number 2 sector of the economy, to be able to encourage 
people--and it spills over to the vodka and the homebrew--the 
brewed beer, we doubled overnight in terms of the availability, 
and real interest and excitement around that, and as you say, 
the money stays local.
    So thank you all. I appreciate your help. And thank you 
again for hosting this.
    The Chairman [presiding.] Thank you, Annie. It always goes 
back for the Northeasterners to the vodka and the homebrewed 
beer.
    Ms. Kuster. And the maple syrup.
    The Chairman. And the maple syrup, yes.
    Ms. Kuster. It is all about the maple syrup.
    The Chairman. I want to jump in here. Mr. Heck, thank you 
again for coming out from central Illinois. Following up on 
some of the questions Ms. Kuster asked and Ms. Coffin's 
comments on school nutrition, I know that you being a past 
teacher, you working with many school districts in my district, 
both larger, more urban school districts and now trying to 
reach out to the rural areas, we have a different issue that we 
face in Illinois than those in smaller geographical states face 
in a lot of the northeastern part of our country. We were 
talking earlier today about how do we impact more of my rural 
school districts? You taught in a rural school district that is 
really only about 20 minutes from a larger urban area.
    Mr. Heck. Yes.
    The Chairman. I represent areas in southwestern Illinois 
that are connected to the rest of the state by one bridge or 
two ferries, and their rural school district is the area of 
Illinois where we can actually grow more specialty crops, but 
there is that lack of ability to get those crops into the 
school system to begin to educate the children and the parents 
on what you are doing in some of the larger districts. So what 
is your suggestion on how we attack that problem within our 
school nutrition programs? Because those superintendents are 
the ones that come to me and tell me they have a problem 
meeting the standards, they have a problem losing students. We 
are not gaining students into the school nutrition program in 
Illinois, we are losing them. We are having schools drop out. 
Tell me what your thoughts are on how to fix it.
    Mr. Heck. Okay. Well, thank you. Ironically, rural children 
today are almost as detached from food as some urban children. 
There are fewer smaller family farms, I suppose, but one of the 
biggest problems: well, one is, in fact, getting the food to 
the school in a safe way, and second, most schools aren't even 
equipped anymore to hold food that is fresh. We no longer have 
ovens in schools in many places. We no longer have stoves, we 
just have a warmer that you push a button and you warm up 
processed food. So one of the biggest challenges is: we can get 
fresh food to the school, but how do we cook it now? So I think 
that we need to supply schools and get cooking equipment back 
in schools.
    I have been to school cafeterias where there are no knives. 
People don't even chop up anything anymore. So I mean it is a 
challenge. I think basic cooking equipment is one of those 
solutions.
    The Chairman. Is that what you are doing in Buffalo, Tri-
City?
    Mr. Heck. Yes. Our chef at genHkids works very closely with 
the staff of the kitchen at Tri-City, and we are doing 
scratch----
    The Chairman. Did you have to put cooking materials back 
in?
    Mr. Heck. Yes. When I was in elementary school at Tri-City, 
we had cafeteria staff that were very adept at cooking. They 
were skilled cooks. And we even took turns in the cafeteria and 
we learned how to cook, which was something I don't see 
anymore. We actually went to the cafeteria and helped the 
school cooks cook food. So, yes. But now we do, we have 
purchased equipment. The school now has ovens, they have 
stoves, they have knives, they have cutting boards. So, yes, we 
work closely with that school. I visited the school the other 
day, and we walked in the school lunchroom and it smelled 
amazing. They were cooking whole chickens and preparing, I 
believe it was chicken and noodles. So it is not something you 
smell in a school cafeteria often, like the great smell of 
chicken noodle soup. So the chef commented too, she was ready 
to eat, so we even shared a meal there.
    The Chairman. You are making us hungry.
    Mr. Heck. I know.
    The Chairman. Let the record show I have smelled some bad 
chicken noodle soup before too. Yes, they don't give us knives 
here either, Mr. Heck, or stoves, so maybe we have the same 
problem here.
    I appreciate your time. I may get back to you with a few 
more questions, but I am going to defer to my colleague, Mr. 
Yoho, for a second round of questions. And hopefully they are 
as entertaining as the first.
    Mr. Yoho. Thank you, Mr. Chairman.
    And I appreciated, Mr. Heck, what you are talking about is, 
we need a paradigm shift is what I see, and get back to some of 
the basics. And that is true in a lot of things. I know it is 
true in farming. You go back to the basics on so many things 
that we need to do.
    We are talking about direct marketing, and one of my 
biggest questions to all of you is what you have run into. We 
have large farms, we have small farms, and then you have 
specialized beef, with the Wagyu. When you go to direct 
marketing what is one of your biggest obstacles? Are you 
running into the box stores, the centralization? Like in our 
areas we have these mega grocery stores that, if I have to sell 
to that store, I have to go through a certain route. If I am a 
smaller farmer, I can't even qualify. What do you run into on 
that? We will start with you, Mr. Eilers.
    Mr. Eilers. So as far as trying to get into one of those 
large grocery stores like that, I just don't have the animals 
to be able to back up that order if they were to come to me. 
And then, you have always got to talk about the price point. It 
costs me more because I am under 100 head of cows.
    Mr. Yoho. Right.
    Mr. Eilers. And it costs me more to produce them, so I have 
to find that specialty chef who really appreciates it, who 
really appreciates the local--and the big warehouse stores, I 
don't think they do.
    Mr. Yoho. All right, so the goal is to start small with a 
couple of restaurants to feature your beef and brand it, and 
then grow from there. And that is the American way or the 
entrepreneurial spirit. But you were saying that you are trying 
to market at, it was Austin Farmers' Market. Is that a 
government subsidized one or--where they accept EBTs, or 
sanctioned by the USDA, or is it a private farmers' market?
    Mr. Eilers. I have the feeling it is private, but when I 
went and talked to them and I told them I was coming to do 
this, they wouldn't return my calls. So I wouldn't----
    Mr. Yoho. I get that often.
    Mr. Eilers. Yes.
    Ms. Kuster. It is not for the same reason.
    Mr. Eilers. It is so----
    Mr. Yoho. Your time has expired. I am sorry.
    Mr. Eilers. No, you are fine. So to tell you the truth, I 
don't know----
    Mr. Yoho. Okay. If----
    Mr. Eilers.--if it is one of those----
    Mr. Yoho. If you would check into that and let us know, 
because if it is a USDA-sponsored one, the way I understand it 
is I don't think they can exclude you. The other thing you are 
running into, you said the nearest slaughter facility is 100 
miles away?
    Mr. Eilers. No, the nearest USDA inspector----
    Mr. Yoho. Inspector.
    Mr. Eilers.--slaughter. Yes.
    Mr. Yoho. All right. Do you have one closer to you where 
you can hire the inspector to come in, because we have some 
customized facilities around us where they hire the inspector 
and----
    Mr. Eilers. Correct. They can but to speak on your 
regulation issues, for example, one of the regulations is the 
USDA inspector has to have his own restroom facility just for 
him. And so the processing plants aren't willing to take that 
additional burden to be able to have that inspector on-staff 
there.
    Mr. Yoho. Okay. And then, Dr. McCloskey, I just can't tell 
you how much I appreciate you bringing up the GMO issue. We 
hear that a lot. There is a lot of just misinformation out 
there, and it is something that we need to do a better job, it 
sounds like you are doing a great job on your farm too, to get 
that out there because we are going to nine billion people in 
this world and we can't feed them without GMOs. Like you said, 
the research has been there. Nobody can come up with a 
definitive disease, anything that has come from a GMO. And I 
agree with you, we all need to do that in the farming 
community. If somebody doesn't want to have a GMO, that is up 
to them, but like you said, it is going to drive the cost up.
    And then one of the other things was the organic--well, I 
lost my train of thought here, so I am going to defer back to 
the Chairman here. It is all those years on the south end of a 
northbound cow.
    The Chairman. And you wonder why we don't get knives. Do 
you need to put some gloves on, get you back to thinking again? 
Sorry. Inside ag joke. Dr. McCloskey gets it.
    I will defer to Mr. Newhouse for his questions. Do you need 
5 minutes or are you only going to take 3 like him?
    Mr. Newhouse. I will use his extra 2 minutes.
    The Chairman. Okay.
    Mr. Newhouse. That kind of confirms why they don't give us 
knives, probably.
    I just, again, thank you very much for your testimony. And, 
I have been working for a long time trying to bridge that gap 
between urban and rural, and reconnect people with agriculture, 
so all your efforts to do that is particularly interesting to 
me.
    And I just wanted to go back to Dr. McCloskey. You talked, 
essentially, that we can no longer afford to have this conflict 
between ourselves in the agricultural industry, one side can't 
be vilifying the other, and I totally agree with you. I have 
seen that happen and it doesn't help anybody really. So maybe 
expand on that a little bit. How are we doing there in your 
estimation? Are we making progress, and what are some things 
that maybe the industry could do to help all of us be more 
cooperatively--not necessarily--we are not always going to 
agree on things, but certainly how can we as an industry work 
better together?
    Dr. McCloskey. Right. I think that, unfortunately, we are 
not doing better on that. The consumer is more confused than 
ever. As social media and the areas where a consumer today gets 
their information, and who they trust and who they don't trust, 
we have to rebuild trust. So farmers are still very trusted 
within the consumers' eyes, and when us farmers are talking 
against each other is really where we are finally putting the 
nail in the coffin of being able to get there. So to me it is--
again, it just goes back to the basic principles of the core 
values that farmers have. If you go down this table, we all 
have those same core values.
    Mr. Newhouse. Yes.
    Dr. McCloskey. We care about safety, we care about quality, 
we care about the environment. We want to make sure that we 
produce what the consumer wants. And there is space for 
everyone.
    Mr. Newhouse. Yes.
    Dr. McCloskey. We just have to come together as an 
agriculture community and agree on those principles that we are 
not against each other, because all boats will rise, we just 
have to speak with the true science of what is out there 
because that is very important for the environment. We need to 
be able to embrace technology. We can't be anti-technology. 
What we need to make sure is that technology is safe, that is 
proven, that we understand it, and that we can communicate it 
to the consumer without the confusion that we are trying to do.
    And, unfortunately, a lot of this comes down to competitive 
marketing.
    Mr. Newhouse. Yes.
    Dr. McCloskey. And I think that is socially irresponsible. 
When we, as farmers, grab onto that, because we are ignoring 
the damage that that is causing at the confusion level. So to 
answer your question, unfortunately, we are not doing what we 
should be doing. I am a big advocate for all type of farming, 
and I hope that that message continues to get out there, and 
that we can----
    Mr. Newhouse. Yes.
    Dr. McCloskey. This confluence of knowledge, the ladybugs, 
what is happening in the trees, I mean there is so much I can 
learn from other farmers, the small poultry operation, how do 
we take that stuff into larger scale and make what we are doing 
better, and how can we create technologies in larger scales and 
make what other people are doing better. I mean we all are in 
the same boat, and we all need to rise together.
    Mr. Newhouse. Yes.
    Dr. McCloskey. I thank you for listening to what I said and 
considering it important because it is what Fair Oaks Farms is 
about. I open the doors to all that public. It is a lot of 
people going through our farms every day. And our message is 
exactly that, is that we want farmers to see everything we do, 
we want them to understand that it is going to take every 
farmer in this country and around the world to be able to have 
that safe, affordable food, while taking care of the 
environment and being able to feed the nine billion people that 
we are going to have to deal with in 2050. Thank you.
    Mr. Newhouse. Yes. That is great, and I appreciate it. Just 
being here this morning, helping to get that message out, goes 
a long way. So I appreciate you saying that, and again, 
everybody's testimony today. Thank you very much.
    I will give you back 35 seconds, Mr. Chairman.
    The Chairman. Well, thank you very much, Mr. Newhouse. I 
appreciate the opportunity to see you once again today. And I 
know everybody is busy. I have some more hearings I have to go 
attend myself. But before we end the hearing, is there anything 
that one of you wants to maybe comment on that we haven't asked 
you about? I would like to limit the comments to less--not 5 
minutes, but to a minute and a half, 2 minutes, if you have 
anything that you thought you might be able to bring up here 
that us on the Committee didn't get a chance to ask you.
    Mr. Tonnemaker?
    Mr. Tonnemaker. Thank you, Mr. Davis. First of all, I want 
to applaud Fair Oaks Farms with their being able to put 
nutrients back into the soil, and they are working on ways to 
be sustainable, because the big message that he was bringing 
across, and a lot of us are trying to say is, small farms, and 
I consider their farm a small farm from the standpoint of the 
mentality they are running their farm, they are trying to be 
sustainable, they want to have future generations work through 
it, they are not just a turn-it-and-burn-it, move onto the next 
piece of property. And that is something that we don't, as a 
society, put a price on resources and the lack thereof, they 
need to be sustainable, they need to be putting nutrients back 
in the soil when they are using them. They just can't devoid 
the land of nutrients, put a bunch of fertilizer in it that is 
going to acidify the soil, and then so the future generation 
can't farm there. They have to think smart, think sustainable, 
and that is something the government can maybe do with their 
education is labeling sustainability and how the farmer and the 
dairymen and the cattlemen are farming, is it sustainable, and 
then they can use that as maybe some sort of tax benefit or 
whatever to move the education that this farm is sustainable, 
and this farming practice is sustainable, and maybe lose some 
of the labels like he is talking about. And if we all move 
forward sustainable is the way of the future. Thank you.
    The Chairman. Thank you. Anyone else? Mr. Heck?
    Mr. Heck. Sure. I just wanted to maybe direct my next 
comment towards my previous experience with farming. And we 
have talked a lot about scaling up. I actually scaled down the 
last 2 years, and I feel that that is also an effective way to 
farm. We grew on less than an acre, and produced a substantial 
amount of food. So, through using organic compost and just 
really building our soils, we produced a significant amount of 
food. Went to 52 farmers' markets throughout the year and had a 
substantial product to show with just under an acre. So I just 
wanted to bring that up.
    The Chairman. Thank you very much. Anyone else?
    Ms. Coffin. Sure. Two comments: One, I have to say I never 
thought that I would find something in common, farming in 
Massachusetts and Texas, but we too have to travel----
    The Chairman. Neither did we.
    Ms. Coffin. We too find ourselves shipping our birds more 
than 100 miles to a USDA-inspected plant. So it is a problem 
not just in Texas, but around the country. And our second 
problem related to that is that we were certified, my husband 
is a Vietnam vet, and we are also able now to use the Homegrown 
by Heroes label, but there was a challenge with the 
slaughterhouse that we were using, trying to figure out how to 
do that, and just that sort of education and being able to work 
with the USDA inspector to be able to have the label that 
allowed that to happen, because it was a different size label. 
So that got very complicated.
    And I guess my only other point, sort of in closing and 
thinking for the Committee and for all of us, is that, around 
the country that direct marketing is just so important in terms 
of market diversification. And when you look at the numbers of 
direct sales from direct markets still being pretty small for 
agriculture around the country, but it is a very important risk 
management strategy, at least in our neck of the woods, for 
people who are still willing and able to market wholesale, but 
having that extra opportunity, back to what Mr. Tonnemaker said 
about the profit margin. So it is very important to think of it 
as part of that broader risk management strategy for 
agriculture.
    The Chairman. Thank you very much. No comment from Texas to 
Massachusetts, Dr. McCloskey?
    Dr. McCloskey. Yes. I would like to express a little more 
on what Ms. Coffin just addressed on direct marketing. We had 
the opportunity at one time when we started with many of our 
products, one of them the Fairlife Core Power products, that 
they were basically made in very small batches, and we went, 
ourselves as farmers, to different venues, be it farmers' 
markets, but more importantly, these were high protein 
products. So we were at every race we could be at and every 
spot we could be at. And that was a true direct marketing, and 
we shared the values that we have talked about today here with 
the consumer, and the taste and the quality of the product, and 
all these great things. That is how products really are going 
to get developed in the future, in my opinion. But that doesn't 
mean that you can't continue direct marketing as you get 
bigger. If you look at our Fairlife bottle today, which is 
distributed nationwide, but it started on what I just 
described, it has my wife's signature and my signature, with a 
promise of those same values that everyone here is delivering, 
and we are delivering that on a nationwide basis. There is 
great technology that allows us through HPP, high pressure 
pasteurizations and ultra-pasteurizations, and incredible new 
innovative packaging, that allows us to create local products 
that can travel the entire country, get there in less than 48 
hours, and be as fresh as it could be local. And you can 
deliver still those values, and never losing those core values, 
and the promise that all of us like to give to those consumers. 
So it doesn't stop at the small. These core values can be on a 
nationwide basis.
    The Chairman. What you have also done is reduce the cost to 
the consumers with your production of the Fairlife Milk, where 
folks who normally would have bought a single serve in 
disposable packaging are now able to get multiple servings of a 
higher protein, ultra-filtered milk, that they are able to 
consume the protein that they demand in a much more sustainable 
way, and also a more cost-effective way. So thank you. You cost 
my family less because my kids drink too much. So anyone else? 
All right, thank you everyone again for your time.
    We will dispose of closing comments, other than I do 
appreciate each and every one of you coming out to this 
institution to offer your testimony. Your testimony will be 
utilized by many in this committee room, and the staff that so 
efficiently put these hearings together, to help us move 
forward good ag policy into the future. I know the next farm 
bill was mentioned by some of you numerous times. I hope we get 
to another farm bill and get another farm bill across the 
floor. The last one was pretty tough. But we need testimony 
like this to be able to develop good programs, and also to be 
able to change the existing programs that we currently operate 
under, and those existing policies that we currently operate 
under, to make them better for producers like you. So thank you 
for your time today.
    Under the rules of the Committee, the record of today's 
hearing will remain open for 10 calendar days to receive 
additional material and supplementary written responses from 
the witnesses to any questions posed by a Member.
    This Subcommittee on Biotechnology, Horticulture, and 
Research hearing is now adjourned.
    [Whereupon, at 11:47 a.m., the Subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]
 Supplementary Material Submitted by Kurt Edward Tonnemaker, Co-Owner, 
                            Tonnemaker Farms
Insert 1
          Mr. Yoho. . . .
          Mr. Tonnemaker, you brought up something, which I was glad to 
        hear you say that. We need to get back to the basics about food 
        safety, whose responsibility is it. We, as government, have 
        certain regulations that people should meet, but over-
        regulations, as you said, like with the Food Modernization Act 
        or the Food Safety Act, that burdensome mandate that came out, 
        I have farmers in my area that grow tobacco, corn, cotton, 
        watermelons, blueberries, and they say that costs them $40,000 
        extra a year just in regulations, but it really didn't add to 
        the food safety. What you are saying is we need to go back to 
        education and tell people. I find it hard to believe that we 
        have advanced this far, but people don't know to wash their 
        vegetables, or, a chicken egg, it comes out of the cloaca of a 
        chicken, you have to wash it. There are certain basic things 
        that we need to teach. That goes back to kindergarten, stop, 
        look, and listen before you cross the road. And we need to go 
        back and educate the public.

    I suggest that a person be tasked with determining what the Goal of 
Food Safety really is meant to accomplish.
    Then the person could reduce the massive amount of paperwork down 
to what can reasonably be accomplished or controlled in the field.
    Completing unnecessary paperwork is not the answer.
    Getting Down to Basics and reducing the paperwork would allow the 
farmer to concentrate on implementation and the farming.
    Farmers want Safe Food as much as the consumer, we just do not want 
to spend needless hours filling out paperwork.
    Another real problem current farmers is a program to help existing 
farmers sell their farm to new farmers and possibly stay on the land 
too. The ability to restructure existing zoning and occupancy laws to 
encourage older farmers to stay on the farm and act as a resource for 
the new farmer. This could greatly improve the quality of life for the 
retiring farmer. The last thing we need is to put a useful people into 
a nursing home when they could really help the new farmer with first 
hand knowledge of their new farm.
Insert 2
          Ms. Graham. . . . There is a lot involved, and as you all 
        pointed out, the age of the average farmer is in the sixties 
        and there is not, unfortunately, the family continuation of the 
        businesses that we have seen. So whatever we can do to 
        encourage the next generation of farmers.
          . . . Can you provide any guidance on what would be some 
        additional marketing opportunities for the more vulnerable 
        populations that might like to go into farming, or are in 
        farming already?
          Mr. Tonnemaker. Well, thank you. I think one of the really 
        important things that we have kind of touched on today is the 
        difficulty of a person entering the market now, with the cost 
        of the land and the cost of the equipment. A lot of people can 
        run their business and can farm. There is the need for 
        education, with regulation and making sure that you comply with 
        all the regulations. But one of the main ills is getting help 
        for people to understand that there are programs out there 
        maybe that can help them, meet retiring farmers and find land, 
        and also to find ways, so they can develop their product and--
        like driving 100 miles to get you beef slaughtered is a long 
        way, and maybe help with education on how to run the facilities 
        to reuse your byproducts that are left over from the dairy 
        business. I think that kind of education, because it is 
        intimidating, the laws out there, as far as where you can farm 
        and how you can farm, and education is very, very important. 
        And I wish I could be more specific, but I just think that 
        focusing on education----

    The farmers could form a co-op of growers that could approach 
restaurants or farmers' market with the ability to supply continuous 
amount of vegetables over the season. They could also set up a center 
shared farm store which they all supply with produce.
    The farmers could share resources. Spreading out equipment and 
capital to allow each farmer to spend less during start up.
    Each farmer could specialize in producing one or two items on a 
regular basis thus reducing the need buying several types of seeds in 
quantity.
    Restaurants want guaranteed product availability over the entire 
season. Sharing the burden might allow farmers to approach more 
restaurants or sell at more farmers' markets.
    USDA program StrikeForce was not rolled out in New Hampshire, 
Florida, or Washington in 2015.
    Another really tough issue faces new farmers is being able to live 
on the farmland. Many farms in Western Washington are on flood plains 
or in areas with high water tables. These farmhouses have septic 
systems that are no longer in compliance.
    Since the septic systems are out of compliance no modernization to 
homes can be done. This is very hard on Modern farmers who wish to 
update electrical or plumbing to today's standards.
    One solution would be for the USDA to help adopt some new standards 
in what methods are available for these septic systems.
    One example would be a Manufactured Wetlands Septic System. This 
system utilizes several ponds and modern materials to treat the gray 
water so the end product can be used to irrigate. This method is not 
currently approved in the United States nor at the state level but 
could provide future and current farmers with a awesome tool.