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










            HEARING TO REVIEW THE STATE OF THE RURAL ECONOMY

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

                                HEARING

                               BEFORE THE

                        COMMITTEE ON AGRICULTURE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             SECOND SESSION

                               __________

                           FEBRUARY 24, 2016

                               __________

                           Serial No. 114-43


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]





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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

                                  (ii)
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                             C O N T E N T S

                              ----------                              
                                                                   Page
Bost, Hon. Mike, a Representative in Congress from Illinois, 
  submitted letter...............................................    61
Conaway, Hon. K. Michael, a Representative in Congress from 
  Texas, opening statement.......................................     1
    Prepared statement...........................................     4
Peterson, Hon. Collin C., a Representative in Congress from 
  Minnesota, opening statement...................................     5

                                Witness

Vilsack, Hon. Thomas ``Tom'' J., Secretary, U.S. Department of 
  Agriculture, Washington, D.C...................................     6
    Prepared statement...........................................     8
    Submitted questions..........................................    62
 
            HEARING TO REVIEW THE STATE OF THE RURAL ECONOMY

                              ----------                              


                      WEDNESDAY, FEBRUARY 24, 2016

                          House of Representatives,
                                  Committee on Agriculture,
                                                   Washington, D.C.
    The Committee met, pursuant to call, at 10:00 a.m., in Room 
1300 of the Longworth House Office Building, Hon. K. Michael 
Conaway [Chairman of the Committee] presiding.
    Members present: Representatives Conaway, Neugebauer, 
Goodlatte, Lucas, King, Thompson, Austin Scott of Georgia, 
Crawford, DesJarlais, Gibson, Hartzler, Benishek, LaMalfa, 
Davis, Yoho, Walorski, Allen, Bost, Rouzer, Abraham, Moolenaar, 
Newhouse, Kelly, Peterson, David Scott of Georgia, Costa, Walz, 
McGovern, DelBene, Lujan Grisham, Kuster, Nolan, Bustos, 
Maloney, Kirkpatrick, Plaskett, Graham, and Ashford.
    Staff present: Bart Fischer, Callie McAdams, Jackie Barber, 
Matt Schertz, Mollie Wilken, Scott C. Graves, Skylar Sowder, 
Stephanie Addison, Faisal Siddiqui, John Konya, Anne Simmons, 
Liz Friedlander, Matthew MacKenzie, Mike Stranz, Nicole Scott, 
and Carly Reedholm.

OPENING STATEMENT OF HON. K. MICHAEL CONAWAY, A REPRESENTATIVE 
                     IN CONGRESS FROM TEXAS

    The Chairman. Good morning. We call this hearing of the 
Committee on Agriculture on the state of the rural economy, to 
come to order. I would ask Rodney Davis to open us with a 
prayer. Rodney?
    Mr. Davis. Thank you, Mr. Chairman. Please, if you will, 
bow your heads.
    Thank you, Lord, for allowing us to come together today in 
these walls of this great institution that was built up around 
Your teachings. And as a practicing Catholic, I know one of the 
prayers that we always do together, I would ask each of you to 
join us in reciting the Lord's Prayer.
    Our Father, who art in Heaven, hallowed be thy name. Thy 
kingdom come, thy will be done, on Earth, as it is in Heaven. 
Give us this day our daily bread. And forgive us our 
trespasses, as we forgive those who trespass against us. Lead 
us not to temptation, but deliver us from evil. For thine is 
the kingdom, the power, and the glory, for ever and ever. Amen.
    The Chairman. Thank you, Mr. Davis. Mr. Secretary, welcome. 
Glad you are here this morning. I am pleased to welcome 
Secretary Vilsack to join us in this annual hearing to assess 
the economic conditions in farm country. Again, Mr. Secretary, 
thank you for joining us for the eighth time, seventh time, 
quite a lot of them.
    In the sense of the situation, it is fair to say that 
American farmers and ranchers are falling on very hard times 
right now. Worse yet, I don't really see a light at the end of 
the tunnel.
    To quantify what I am talking about, consider these facts: 
The 2 year drop in net farm income that occurred between 2013 
and 2015 marks the second largest drop on record, behind only 
the drop that occurred between 1919 and 1921. Moreover, the 3 
year drop in farm income from 2013 to 2016 marks the third 
largest on record, behind the drops of 1918 to 1921, and 1929 
to 1932, two of the worst periods in American agriculture 
history. From 2013 to 2015, net farm income is expected to drop 
by a staggering 54 percent. Over the 3 year period from 2013 to 
2016, net farm income is expected to drop even more, by 56 
percent.
    While conditions on the farm are certainly different today 
than they were back in the early years of the 20th century, 
these statistics still put into context what American 
agriculture is going through right now, and just how 
problematic a sustained downturn could be. In addition, as 
history has repeatedly demonstrated, these conditions in farm 
and ranch country have ramifications not only for farm and 
ranch families, but also for rural communities and the national 
economy as a whole. In short, we have a very serious problem 
unfolding right now in rural America.
    The farmers that I talk to from across the country tell me 
that they are very concerned that they do not see the kind of 
circumstances that are going to come along and end this 
downturn anytime soon. They are also concerned that even as the 
prices they receive plummet, the prices they are paying for 
inputs remain as high as ever. As Chairman of this Committee, 
my concern goes out to every farmer and rancher in the country, 
wherever they farm or ranch, and whatever they produce. But I 
have to confess that I really have a very special concern for 
those farmers and ranchers who not only fully share in today's 
economic downturn, but who never shared much in the economic 
boom that preceded the current bust. Of course, I speak of 
those farmers and ranchers who never saw a big run up in 
prices, and maybe none at all, or the farmers and ranchers who 
did see the run up in prices, but never had a commodity to sell 
due to natural disasters.
    It is an accurate appraisal to say that a lot of farmers 
and ranchers from across the country are living on loans or 
burning up equity these days, but none more than the farmers 
and ranchers who never had an opportunity to build equity 
before these hard times came along. The best solution for this 
problem is for prices to turn around, but as I indicated 
earlier, farmers and ranchers I talked to are very skeptical 
that that will happen anytime soon.
    For Congress's part, I believe it is our duty and 
responsibility to hold the line on the farm bill and crop 
insurance--to draw a hard line against attacks that would 
undermine these laws and further jeopardize our nation's 
farmers and ranchers. The Administration's budget, which 
proposes a 20 percent cut to crop insurance, as well as an 
attack upon crop insurance last fall during the negotiation of 
the bipartisan budget agreement, are not helpful. But I very 
much appreciate what Secretary Vilsack has done to come down on 
the side of the farmer and the rancher in these kind of 
debates.
    For the Administration's part, I believe there are at least 
five things in the Administration's power that would make a big 
difference for America's farmers and ranchers. First, oppose 
further cuts to the farm safety net provided by farm bill 
programs and crop insurance. Second, initiate WTO challenges 
against the high and rising foreign subsidies, tariffs, and 
non-tariff barriers that are key culprits in the current 
economic crisis and conditions on our farms and ranches. Third, 
withdraw the Waters of the U.S. regulation that threatens to 
federally regulate every ditch in the country, effectively 
gutting any exemption for agriculture. Fourth, persuade Senate 
Democrats to support voluntary labeling of biotech crops, and 
pass a Federal preemption of state and local biotech labeling 
regimes. I know, Mr. Secretary, that you are very much 
committed to getting this solved. And fifth, use your authority 
under the law to designate cottonseed as an oilseed for 
purposes of the farm bill.
    On this last issue, you and I have spoken extensively. We 
have exchanged papers. At the bottom, the stumbling block that 
stands in the way in our view of you taking action to deal with 
this growing crisis in the Cotton Belt is your lawyers, and 
your lawyer's belief in a lack of legal authority. Your lawyers 
point to a Supreme Court case that essentially held that law 
cannot be interpreted in a manner that would contradict a 
decision that was made by Congress.
    This legal analysis would be spot on if we were asking you 
to include cotton lint under the farm bill, but that is not 
what we are asking for. We are simply asking for you to include 
cottonseed. As you know, the two are not the same thing, even 
though they come from the same plant. Including cottonseed 
under the farm bill is not including lint by another name.
    While Congress did consider the appropriate policy for 
cotton lint in the 2014 Farm Bill, Congress never considered 
the question of whether to include or exclude cottonseed as a 
part of ARC or PLC. Instead, we left that decision to you. 
Therefore, were you to honor the bipartisan, bicameral request 
of more than 100 Members of Congress, and designate cottonseed 
as an oilseed, you would not be contradicting the law and you 
would have our full backing.
    I don't have to tell you that the acres planted to cotton 
are now at their lowest levels in 108 years, excluding 1 year 
in the early 1980s when the government forced set-asides. We 
also know this is not due to bad management on the part of farm 
families. This is due in large part to the actions taken by the 
Chinese and Indian Governments over which our farmers have 
absolutely zero control.
    There is a very real decision to be made here. Will the 
United States allow foreign governments to steal our cotton 
production, just as they stole textile mills, or will we stand 
up and say, ``No not this time. China and India, we will 
challenge your subsidies and stand by America's farmers until 
true free and fair trade is restored.'' Producers of other 
commodities should beware. The same thing could be happening to 
you.
    It all boils down to whether you stand by farmers and 
ranchers when they are under economic assault by foreign 
governments.
    [The prepared statement of Mr. Conaway follows:]

  Prepared Statement of Hon. K. Michael Conaway, a Representative in 
                          Congress from Texas
    I am pleased that Secretary Vilsack could join us for this annual 
hearing to assess the economic conditions in farm country. Thank you 
for joining us, Mr. Secretary.
    In assessing the situation, it is fair to say that America's 
farmers and ranchers are falling on some very hard times right now.
    Worse yet, I don't see the light at the end of the tunnel.
    To quantify what I am talking about, consider these figures:
    The 2 year drop in net farm income that occurred from 2013 to 2015 
marks the second largest drop on record, behind only the drop that 
occurred from 1919 to 1921.
    Moreover, the 3 year drop in net farm income from 2013 to 2016 
marks the third largest on record behind the drops from 1918 to 1921 
and 1929 to 1932, two of the worst periods in U.S. agriculture history.
    From 2013 to 2015, net farm income is expected to drop by a 
staggering 54 percent. Over the 3 year period from 2013 to 2016, net 
farm income is expected to drop by even more: a whopping 56 percent.
    While conditions on the farm are certainly different today than 
they were back in the early years of the 20th Century, these statistics 
still put into context what American agriculture is going through right 
now and just how problematic a sustained downturn could be.
    In addition, as history has repeatedly demonstrated, these 
conditions in farm and ranch country have ramifications not only for 
farm and ranch families but also for our rural communities and the 
national economy as a whole.
    In short, we have a very serious problem unfolding right now in 
rural America.
    The farmers that I talk to from across the country tell me that 
they are very concerned that they do not see the kind of circumstances 
that are going to come along and end this downturn any time soon. They 
are also concerned that even as the prices they receive plummet, the 
prices they are paying for inputs remain as high as ever.
    As Chairman of this Committee, my concern goes out for every farmer 
and rancher in the country, wherever they farm or ranch, whatever they 
produce. That is the job of a Chairman.
    But, I confess that I have a very special concern for those farmers 
and ranchers who are not only fully sharing in today's economic 
downturn but who never shared much if any of the economic boom that 
preceded the current bust. Of course, I am speaking of those farmers 
and ranchers who never saw as big a run up in prices, or maybe none at 
all, or the farmers and ranchers who did see the run up in prices but 
never had a commodity to sell due to natural disasters.
    It is an accurate appraisal to say that a whole lot of farmers and 
ranchers from across the country are living on loans or burning up 
equity these days, but none more than the farmers and ranchers who 
never had opportunity to build equity before these hard times came 
along.
    The best solution for this problem is for prices to turn around. 
But, as I indicated earlier, farmers and ranchers I talk to are very 
skeptical that this will happen anytime soon.
    So, what can we do?
    For Congress' part, I believe it is our duty, our responsibility to 
hold the line on the farm bill and crop insurance, to draw a hard line 
against attacks that would undermine these laws and further jeopardize 
our nation's farmers and ranchers.
    The Administration's budget, which proposes a 20 percent cut to 
crop insurance as well as the attack upon crop insurance last fall 
during negotiation of the Bipartisan Budget Agreement are not helpful. 
But, I very much appreciate that Secretary Vilsack has mainly come down 
on the side of the farmer and rancher in these kinds of debates.
    For the Administration's part, I believe that there are at least 
five things within the Administration's power that would make a big 
difference for America's farmers and ranchers.
    First, oppose further cuts to the farm safety net provided by the 
farm bill and crop insurance.
    Second, initiate WTO challenges against the high and rising foreign 
subsidies, tariffs, and non-tariff trade barriers that are key culprits 
in the current economic conditions our farm and ranch families face.
    Third, withdraw the Waters of the U.S. regulation that threatens to 
federally regulate every ditch in the country, effectively gutting any 
exemption for agriculture.
    Fourth, persuade Senate Democrats to support a Federal preemption 
of state and local biotech labeling regimes. I know, Mr. Secretary, 
that you are very committed to this.
    And, fifth, use your authority under the law to designate 
cottonseed as an oilseed for purposes of the farm bill.
    Mr. Secretary, on this last issue, you and I have spoken 
extensively. We have exchanged papers. At bottom, the big stumbling 
block that stands in the way of your taking action to deal with a 
growing crisis in the Cotton Belt is, your lawyers say, a lack of legal 
authority.
    Your lawyers point to a Supreme Court case that essentially held 
that a law cannot be interpreted in a manner that would contradict a 
decision that was made by Congress.
    This legal analysis would be spot on if we were asking you to 
include cotton Lint in the farm bill. But, that is not what we are 
asking for. We are asking for you to include cottonseed. As you know, 
the two are not the same even though they are from the same plant. 
Including cottonseed under the farm bill is Not including cotton lint 
by another name.
    While Congress did consider the appropriate policy for cotton Lint 
in the 2014 Farm Bill, Congress never considered the question of 
whether to include or exclude cottonseed as part of ARC or PLC. 
Instead, we left that decision to you. Therefore, were you to honor the 
bipartisan, bicameral request of more than 100 Members of Congress, and 
designate cottonseed as an oilseed, you would not be contradicting the 
law and you would have our full backing.
    I don't have to tell you that acres planted to cotton are now at 
their lowest levels in 108 years, excluding 1 year in the early 1980s 
when the government forced set-asides. We also know that this is not 
due to bad management on the part of farm families. This is due in 
large part to the actions of the Chinese and Indian Governments over 
which our farmers have absolutely zero control.
    There is a very real decision to be made here. Will the United 
States Government allow foreign countries to steal our cotton 
production just as they stole our textile mills, or will we stand up 
and say, ``No, not this time. China and India, we will challenge your 
subsidies and stand by America's farmers until truly free and fair 
trade is restored''. Producers of other commodities should beware. The 
same thing could happen to you.
    It all boils down to whether we are going to stand by our farmers 
and ranchers when they are under economic assault by a foreign 
government.
    I yield to my friend and Ranking Member, Mr. Peterson, for his 
opening statement.

    The Chairman. I now yield to my friend, the Ranking Member, 
for any comments that he might have.

OPENING STATEMENT OF HON. COLLIN C. PETERSON, A REPRESENTATIVE 
                   IN CONGRESS FROM MINNESOTA

    Mr. Peterson. Thank you, Mr. Chairman, and welcome back to 
the Committee, Mr. Secretary. I have lost count of the number 
of times that you have been here in the last 7 years, Mr. 
Secretary. We always appreciate your time and your advocacy for 
those of us in rural America. And I also look forward to your 
testimony today.
    As the Chairman indicated, we are taking a look at the 
rural economy today, and the Committee takes on this review 
annually and for the past few years, we have been able to point 
at strong farm prices as one of the reasons for the rural 
economy's success.
    While the rural economy generally remains strong, folks are 
getting concerned, as the Chairman pointed out, about the 
potential long-term impacts of the deteriorating prices that we 
have seen. Of course, this is why those of us on the 
Agriculture Committee worked so hard to pass the farm bill, and 
why we do it every 5 years. But, I do have some concerns with 
the current bill because we didn't get as high target prices as 
I wanted, but with these low prices, this also points out why 
the bill's safety net is so important.
    It is also worth noting the importance of crop insurance, 
and despite what critics will lead you to believe, the crop 
insurance program is effective and a responsive tool for 
farmers. I hope this Committee will remain united against calls 
for cutting the program.
    And last, I just want to personally thank you for your 
paying attention to the avian influenza situation that we had 
last spring, and you did an outstanding job in responding to 
it. Your agency was right there working with us. Dr. Clifford 
and APHIS and so forth, we had our glitches, but they did an 
outstanding job and you stepping up to the plate and using your 
authority to deal with that was very much appreciated. We are 
hoping, and keeping our fingers crossed, that we won't have 
another episode of that this spring. So I just want to 
personally thank you for that, and the folks in my area that 
were involved very much appreciate what you have done.
    So with that, there are a lot of issues that Members will 
want to raise today, so let's get started, and I yield back.
    The Chairman. I thank the Ranking Member. The chair would 
request other Members submit their opening statements for the 
record so the witness may begin his testimony to ensure there 
is ample time for our questions.
    I would like to welcome to our table the Honorable Tom 
Vilsack, Secretary of the U.S. Department of Agriculture. 
Secretary Vilsack, please begin when you are ready.

 STATEMENT OF HON. THOMAS ``TOM'' J. VILSACK, SECRETARY, U.S. 
          DEPARTMENT OF AGRICULTURE, WASHINGTON, D.C.

    Secretary Vilsack. Mr. Chairman, thank you very much, and 
to you and to Congressman Peterson and the Members of this 
Committee, I appreciate the opportunity to visit with you this 
morning. I look forward to the opportunity to visit about 
issues that matter to you and to your constituents and the 
people that I care about in rural America.
    Tomorrow, we have our Outlook Forum, which is an annual 
event in which we review the circumstances surrounding the farm 
country and rural economy. What we are going to learn tomorrow 
is what most of the Members, if not all of the Members, of this 
Committee are fully aware of, which is we are seeing a 
combination of a slowing global economy, particularly in China, 
which obviously reduces demand for product; a strong dollar, 
which is a reflection of the strong American economy, which 
makes our goods a bit less competitive in global markets, 
combined with record harvests here and elsewhere, have 
resulted, as the Chairman indicated, in lower farm income and 
revenue.
    The extent of that lower farm income is mitigated in part 
by lower input costs in the form of low interest rates and 
energy costs. Farm values have declined a bit. They have 
declined moderately over the last year or so. But debt to 
equity ratios still remain extraordinarily strong and stable, 
significantly different than periods of time when we were faced 
with a significant farm crisis.
    We would expect and anticipate to see increased borrowing, 
which will place some greater reliance and stress on our loan 
programs at FSA, particularly our loan guarantee program. The 
safety net is in place, and is, for the most part, working the 
way it was intended: $5.2 billion in payments were made last 
year to over 900,000 producers, and it is expected that 
payments from our safety net programs will increase this year.
    The rural economy at large is improving in part because of 
the diversification that has been supported by the farm bill 
that was passed in 2014. This is reflected in the fact that we 
are now seeing lower unemployment and poverty rates are coming 
down significantly, especially in the last 2 years. This has 
been helpful to farm families who are struggling with lower 
farm income, because they also have the opportunity for off-
farm income.
    I found it interesting and I share with the Committee this 
fact that the median farm family total income, which would 
include farm and non-farm income, reached a record level this 
year at over $81,000.
    We recognize the stress in some commodity areas, and we are 
focused on increasing demand for American product here through 
the promotion of the bioeconomy, and through expanded trade 
opportunities. That is why we believe, as I hope most, if not 
all, of the Members of this Committee believe that it is 
important for Congress to act to pass the Trans-Pacific 
Partnership Trade Agreement. According to the American Farm 
Bureau Federation report that was issued yesterday, that will 
add an additional $4.4 billion annually in additional farm 
income. It will expand American exports of farm products by 
$5.3 billion. This is part of an overall economic boost that we 
will receive from doing business with the Asian countries, 
improving our overall exports by over $350 billion, and our 
overall income to Americans by $130 billion on an annual basis.
    This, combined with opening up opportunities in Cuba, a 
market which American agriculture should dominate, should help 
us increase demand for product and begin getting ourselves back 
on strong footing.
    I certainly appreciate the Chairman's comments about 
cotton. I would say, Mr. Chairman, with respect, it is not 
lawyers. It is not lawyers that prevent me from doing what you 
would ask me to do. It is an oath that I took. It is an oath 
that I took at the time I took this job, which was to follow 
the Constitution and the laws of this country. Based on my 
understanding of the current circumstance and based on my 
understanding of the crafting of the farm bill, the reality is 
that Congress made a decision not to specifically include 
cottonseed in a list of other oilseeds under the other oilseed 
provision that you have made reference to. That decision 
basically made it impossible for me to do what you are asking 
me to do. Certainly, the Congress could reopen the farm bill 
and address it then, or Congress could remove the prohibition 
that currently exists under the Commodity Credit Corporation in 
the appropriations bill that was passed by Congress that 
prevents me from using CCC to provide assistance and help. Or 
we would work collaboratively together to work on a cost-share 
program with reference to ginning that you and I have talked 
about, Mr. Chairman, which we are still willing to do if the 
industry is willing to accept this.
    Fourteen percent of cotton was basically protected under 
the STAX Program, over $300 million in payments were made. We 
have made efforts under our Marketing Loan Assistance Program. 
We have also created an opportunity for certificates to be used 
in lieu of collateral for loans, all of which is helping to 
mitigate the consequences of very low prices, of which we are 
very, very aware.
    So I look forward to an opportunity to visit with the 
Committee on this issue and a multitude of other issues.
    [The prepared statement of Mr. Vilsack follows:]

 Prepared Statement of Hon. Thomas ``Tom'' J. Vilsack, Secretary, U.S. 
              Department of Agriculture, Washington, D.C.
    Mr. Chairman and Members of the Committee, I am pleased to have 
this opportunity to discuss the state of agriculture and the rural 
economy in the United States. For more than 7 years, I have had the 
honor and privilege of serving as Secretary of Agriculture. I've 
traveled to all 50 states and heard from farmers, ranchers and 
Americans far and wide, from all walks of life about the impact that 
USDA's staff, programs and services have on their lives. I could not be 
more proud of the work the men and women of USDA do each and every day. 
We have laid the foundation over the past 7 years to foster that 
innovation and to provide assistance to regions that need it most 
during times of adverse economic conditions. Today, the state of the 
agricultural economy remains sound despite lower commodity prices, and 
the innovation of American agriculture will continue to flourish and 
create economic opportunity across rural America.
U.S. Economy Is Recovering
    Policies pursued by President Obama after the collapse of the U.S. 
economy in the Great Recession helped the U.S. economy recover jobs and 
strength over the past 7 years. U.S. GDP is rising, and the national 
unemployment rate continues to decline. The U.S. agricultural sector 
has been a bright spot in the economy and played a major role in its 
recovery. Agriculture has made significant contributions to our trade 
balance by increasing exports to record high levels. We have added more 
agricultural-related jobs under this Administration, with one in twelve 
U.S. jobs currently supported by our agriculture sector; and our 
nutrition program programs have both helped children and families get 
the food assistance they need to be healthy and provided important 
employment and training opportunities to help adults move toward self-
sufficiency. The Administration's focus on economic recovery over the 
past 7 years has helped the majority of farm households improve their 
financial condition, and we can expect that to continue as farm incomes 
face increased pressure from lower commodity prices. Between 2010 and 
2015, median farm household income increased by more than 40 percent as 
farm households seized opportunities to increase off-farm income. 
During that period the median value of off-farm earned income also rose 
by 46 percent and nearly tripled for off-farm unearned income. Larger, 
commercial farms are more dependent on farm income for the majority of 
their household income. Those households benefited most from the recent 
commodity price highs several years ago, but are also more vulnerable 
to declining commodity prices and diminished returns from farming. In 
2016, USDA forecasts additional increases in median farm household 
income across all farm types (residence farms, intermediate farms, and 
commercial farms), including increased off-farm income and on-farm 
income.
Net Farm Income Under Pressure, But Balance Sheet and Land Prices 
        Remain Historically Favorable
    The current combination of the stronger dollar and relatively high 
global production has led to a large drop in expected 2015 and 2016 net 
farm income, relative to the 2011 through 2014 period. USDA expects 
real net farm income to be the lowest since 2002. There is some 
slowdown in land values, but these values have fallen modestly from 
recent record highs. However, the debt to asset ratio for U.S. 
producers is still near record lows indicating that the farm balance 
sheet is strong.
    Although a strong dollar benefits U.S. consumers purchasing 
imported goods, it makes U.S. exports appear more expensive to 
customers and our products less competitive relative to exports by 
other countries. In particular, the currencies in countries such as 
Brazil, Argentina, and Russia have fallen dramatically against the U.S. 
dollar. Moreover, global food commodity production has been at or near 
record highs since 2013. Globally, countries have built substantial 
stocks relative to use for most of the major cereals and oilseeds. In 
addition, the United States is projected to maintain peak output for 
meat and dairy products in 2016. Increased meat and dairy production 
this year is expected to be accompanied by falling wholesale prices for 
all meat and most dairy products. That will tend to lower retail prices 
for those goods, but also will lower cash receipts for most livestock 
and dairy producers.
Farm Safety Net Is Working But Gaps Remain
    As falling global commodity prices continue to depress farm income, 
there is the risk of negative impacts on farm equity, debt, and land 
prices. However, the current farm safety net is structured to provide 
important support for many crop and dairy farmers during a downturn.
    Last year, USDA enrolled 1.76 million farmers in the new 
Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs 
by conducting an unprecedented education campaign. ARC and PLC are a 
part of the farm-safety net, providing assistance only when there are 
year-to-year crop revenue or commodity price downturns. To date, ARC 
and PLC have provided over $5.2 billion in financial assistance for 
crop year 2014, to more than 900,000 farms. In addition, more than half 
of all dairy farms in the U.S.--over 23,000--have enrolled in the new 
Margin Protection Program for Dairy (MPP-Dairy). This voluntary program 
provides financial assistance to participating farmers when the 
margin--the difference between the price of milk and feed costs--falls 
below the coverage level selected by the producer. USDA paid dairy 
producers over $400,000 in calendar year 2015 to provide financial 
support during times of lower margins.
    Cotton producers are experiencing lower market prices and that the 
current safety net is not providing enough protection for producers. We 
want to help, but we will have to work with Congress to overcome the 
legal barriers that stymie more aggressive action.
    The 2014 Farm Bill indefinitely extended the Farm Service Agency's 
livestock disaster programs and the Tree Assistance Program. Since the 
passage of the farm bill, these programs have paid producers over $5.8 
billion to recover from natural disasters, including drought and 
wildfires.
    USDA worked with crop insurance companies to educate farmers and 
ranchers about the new conservation compliance requirements in the 2014 
Farm Bill and as a result, over 98 percent of Federal crop insurance 
participants provided the documentation necessary to comply with those 
requirements and maintain their benefits. We also strengthened the 
Federal crop insurance program to include new support for beginning 
farmers and producers of specialty crops including fruits and 
vegetables. The new Whole Farm Revenue plan will be offered in all 
counties in the United States in 2016.
    The farm bill included several reforms to the Federal Crop 
Insurance Program; however, there remain further opportunities for 
improvements and efficiencies. The President's 2017 budget includes two 
proposals to reform crop insurance, which are expected to save $18 
billion over 10 years. This includes reducing subsidies for revenue 
insurance that insure the price at the time of harvest by ten 
percentage points and reforming prevented planting coverage. These 
reforms will make the program less costly to the taxpayer while still 
maintaining a quality safety net for farmers.
    Access to credit remains a critical issue for producers, in 
particular for small and beginning farmers and ranchers. Since 2009, 
USDA has provided approximately 237,000 loans totaling over $33 billion 
to farmers and ranchers. We expanded credit by lowering the Farm 
Service Agency (FSA) Emergency Loan interest rate and working with the 
Small Business Administration to extend nearly $7 million in SBA 
emergency credit for rural small businesses.
    In recent years, USDA has responded to outbreaks of swine enteric 
coronavirus disease and highly pathogenic avian influenza. USDA 
responded quickly to the unprecedented outbreak of Highly Pathogenic 
Avian Influenza (HPAI) last winter and spring, working closely with 
industry, contractors, and states to depopulate nearly 50 million 
turkeys and chickens to stamp out the disease. USDA worked with trading 
partners to regionalize trade restrictions and reopen export markets 
for poultry and egg markets as quickly as possible. USDA also worked 
closely with USTR in developing and bringing a successful WTO challenge 
to India's AI restrictions on poultry and other products, obtaining 
critical findings in 2015 that India's measures failed to regionalize, 
were not based on international standards, and were more trade-
restrictive than necessary. And we redoubled our efforts to develop a 
comprehensive HPAI preparedness and response plan for 2016 and beyond. 
USDA and the poultry industry as a whole learned a lot of lessons 
during the 2015 outbreak of highly pathogenic avian influenza, and as a 
result, will be better prepared should the virus resurface in 2016,
Commitment To Increase Opportunities for Producers and Revitalize Rural 
        Communities
    When I became Secretary of Agriculture, we recognized that a spark 
was needed to make rural communities places where businesses--farm and 
non-farm alike--want to innovate, grow, and create more good paying 
jobs. That is why we focused our efforts on increasing exports and 
taking advantage of the emerging bioeconomy, including biomanufacturing 
and advanced biofuels, local and regional food systems, broadband, and 
telemedicine. Our efforts not only supported the most productive 
agricultural sector in the world, but also assisted rural communities 
to be places where all businesses, farm and non-farm alike, prosper and 
create jobs. A more robust and diversified rural economy helps 
agricultural producers and rural residents alike by providing more 
resiliency in times when the farm economy is in a downturn.
Trade Affected by Slowing Global Economy, But Trade Agreements Offer 
        Opportunities
    Part of our strategy to create a diversified rural economy is to 
expand the country's reach around the world by creating increased 
opportunities to export our agricultural products. In Fiscal Year (FY) 
2015, American agricultural producers achieved $139.7 billion in 
exports, the third highest year on record and up 45 percent from FY 
2009. Agricultural exports totaled over $911 billion for the period FY 
2009 through FY 2015, the best 7 year stretch in history. In addition, 
agricultural exports have increased in volume, demonstrating an 
increasing global appetite for American-grown products.
    USDA has worked hard to open new markets worldwide for farm and 
ranch products. Trade agreements, like those with Panama, Colombia and 
South Korea, create opportunities for trade growth. U.S. agricultural 
exports to these three countries grew by nearly 28 percent, from $7.6 
billion in FY 2012, when the trade agreements were first going into 
effect, to $9.7 billion in FY 2015, supporting approximately 73,000 
American jobs. U.S. agricultural exports to all U.S. FTA partners grew 
from $15.5 billion in 1994 to $56.9 billion in 2015, a nearly four-fold 
increase in 20 years.
    U.S. farmers are facing unprecedented competition amid a slowing 
global economy and appreciating dollar. That's why it is important for 
Congress to approve the Trans-Pacific Partnership (TPP). When 
implemented, the TPP agreement, with 11 Pacific Rim countries 
representing nearly 40 percent of global GDP, will provide new market 
access for America's farmers and ranchers by lowering tariffs and 
eliminating other barriers. American agriculture needs the good deal 
laid out in the TPP agreement to bolster its position in the light of 
stiff competition and the state of the world economy. We are committed 
to working closely with Congress to obtain support for this historic 
deal so that our businesses can sell more rural-grown and rural-made 
goods around the world, and more American workers can compete and win. 
Agricultural exports support farm income, which translates into more 
economic activity in rural areas. It is estimated that for each dollar 
of agricultural exports, another $1.27 in business activity is 
stimulated.
    Closer to home, another important market for U.S. agriculture is 
Cuba. USDA is proposing to establish an in-country presence in Cuba to 
cultivate key relationships, gain firsthand knowledge of the country's 
agricultural challenges and opportunities, and develop programs for the 
mutual benefit of both countries. U.S. agricultural exports have grown 
significantly since trade with Cuba was authorized in 2000. Since the 
implementation of the Trade Sanctions Reform and Export Enhancement Act 
(TSRA) in 2000, the United States has exported nearly $5 billion in 
agricultural and food products to Cuba. Cuba's geographical proximity 
and demand for U.S. products makes it a natural market. In fact, from 
2003 to 2012, the United States was the leading agricultural exporter 
to Cuba. A more open and normalized trade relationship with Cuba will 
benefit both countries and help address the competitive disadvantages 
that U.S. agricultural products currently face in this market. USDA's 
Economic Research Service (ERS) analysis suggests that greater 
liberalization could lead to higher and more diversified sales to Cuba, 
similar to what the United States exports to the Dominican Republic, a 
country with similar population and per capita income. U.S. 
agricultural exports to the Dominican Republic averaged $1.1 billion a 
year between 2012 and 2014, compared to $365 million to Cuba. Moreover, 
the United States exports a broad range of agricultural products--beef, 
turkey, breakfast cereals, and fresh apples--to the Dominican Republic 
that Cuba does not currently import in sizable amounts.
    USDA devotes significant resources to promote U.S. agricultural 
trade and open new overseas markets for U.S. products. With 96 percent 
of consumers living outside the United States, the only way U.S. 
agriculture can continue to grow and prosper is to ensure that U.S. 
producers can compete in the global marketplace. Between 2009 and 2015, 
U.S. companies participating in USDA-endorsed trade shows reported 
total on-site sales of more than $1.7 billion and more than $8.7 
billion in 12 month projected sales. An independent study found that 
U.S. agricultural exports increase $35 for every market development 
dollar expended by government and industry. Since 2009, USDA has also 
helped challenge 2,098 sanitary and phytosanitary, technical, and other 
barriers to the export of American agricultural products, helping to 
spur record exports of American agricultural products. For example, we 
have removed unfair restrictions to help farmers export more U.S. 
apples to China, a market with an estimated value of nearly $100 
million per year, and expanded market access for U.S. beef in Japan, 
Mexico, Hong Kong, the Dominican Republic, Ecuador, Uruguay, and 
Colombia. Total U.S. beef and beef product exports reached a record 
$6.8 billion (1.2 billion tons) in FY 2014. We work closely with USTR 
to vigorously enforce our international trade agreements, such as 
through our ongoing WTO challenge, together with New Zealand, to 
Indonesia's import restrictions on horticultural products, poultry, 
beef, and other products. We will continue to work with you and the 
U.S. agricultural community to open new markets and level the playing 
field for U.S. farmers and ranchers.
Investments in the Rural Economy Create Economic Opportunities for 
        Everyone
    We have recognized rural opportunities beyond agriculture by making 
historic investments in rural communities, making them more attractive 
to non-farm businesses and talented hard-working individuals looking to 
get ahead. USDA has sought to revitalize rural areas and diversify our 
nation's agriculture by making significant investments in rural 
infrastructure. Since 2009, we invested a total of $13.3 billion in new 
or improved infrastructure in rural areas through 10,623 water 
projects. These improvements helped nearly 18 million rural residents 
gain access to clean drinking water and better waste water disposal. 
Modernized electric service was delivered to more than 5.5 million 
subscribers and over 180,000 miles of electric lines were funded. We 
helped nearly 103,000 rural small businesses grow, creating or saving 
an estimated 450,000 jobs between FY's 2009 and 2015. Since 2009, USDA 
assisted more than 1.1 million rural families to buy or refinance a 
home, helping 141,000 rural Americans become homeowners in FY 2015 
alone.
    We also saw the need to provide increased opportunities to allow 
everyone to share in the prosperity of the growing economy. So we 
targeted our efforts to the poorest communities, invested in new and 
beginning farmers, and supported our veterans, which have increased 
opportunities for hard working Americans. Our efforts are bearing 
fruit. Over the last 5 years unemployment rates in rural areas have 
fallen fairly consistently in rural areas, declining by a full 
percentage point or more in each of the last 2 calendar years. These 
efforts have contributed to the employment gains in rural America that 
have happened since 2009 and have led to increased economic activities 
in high poverty communities.
    USDA's place-based efforts are making sure that the programs that 
help alleviate the impact of poverty are available and accessible even 
in the poorest and persistently poor areas. In 2016, we expanded the 
StrikeForce Initiative to four additional states to include a total of 
970 counties, parishes, boroughs, and census areas in 25 states and 
Puerto Rico. We know that place-based efforts work and we have seen 
StrikeForce bring economic opportunity directly to rural Americans 
where they live and help rural communities leverage their assets. In 
2015, in StrikeForce target areas, USDA partnered with more than 1,000 
organizations to support 56,600 investments that directed more than 
$7.5 billion to create jobs, build homes, feed kids, assist farmers and 
conserve natural resources in some of the nation's most economically 
challenged areas. Since the initiative was launched in 2010, USDA has 
invested more than $23 billion in high-poverty areas, providing a 
pathway to success and expanding the middle class.
    New and beginning farmers and ranchers are a fundamental part of 
the agricultural marketplace and are needed to carry on America's 
strong legacy of agriculture productivity. However, according to the 
2012 Census of Agriculture, their numbers are continuing a 30 year 
downward trend. To reverse this trend, we need to equip the next 
generation of farmers and ranchers with the tools they need to succeed. 
Under the leadership of Deputy Secretary Krysta Harden, USDA has 
increased access to our programs by collaborating with partners and 
improving customer service to increase opportunities for all sizes, 
segments, and types of farmers and ranchers to break down the barriers 
they face during the first 10 years of business. For example, USDA 
initiated a microloan program that has provided more than 16,800 low-
interest operating loans, totaling over $373 million to producers 
across the country, and has recently expanded to include farm ownership 
loans. We have also developed an innovative web tool and conducted 
other outreach activities, to help support key groups, like veterans, 
women, the socially disadvantaged, as well as facilitate 
intergenerational transfer of farms and ranches. To ensure the success 
and sustainability of beginning farmers and ranchers, USDA has created 
an agency priority goal that will publicly share USDA performance goals 
and progress in support of new and beginning farmers.
Rural America Needs a Strong Biobased Economy
    USDA continues to lead the way for renewable energy by supporting 
the infrastructure needed to grow the new energy economy. Since 2009, 
Rural Development has supported over 15,000 renewable energy projects 
to help producers and rural businesses save energy and increase their 
profitability and increase the production of renewable fuels. The 
Department has helped thousands of rural small businesses, farmers and 
ranchers improve their bottom lines by installing renewable energy 
systems and energy efficiency solutions, which will generate and save 
more than 9.4 billion kilowatt-hours--enough energy to power 820,000 
American homes annually. Under expanded authority provided by the 2014 
Farm Bill, we are working to expand the number of commercial 
biorefineries in operation that produce advanced biofuels from non-food 
sources through the Biorefinery Assistance Program. This focus on 
renewable energy has resulted in support for the construction of six 
advanced biofuels production facilities, over 2,200 wind and solar 
renewable electricity generation facilities, and 93 anaerobic digesters 
to help farm operations capture methane to produce electricity.
    USDA recognizes that the bioeconomy has the potential to create 
unprecedented growth in the rural economy, by creating opportunities 
for the production, distribution and sale of biobased products and 
fuels. Therefore, we made available $100 million in grants under the 
Biofuel Infrastructure Partnership (BIP), nearly doubling the number of 
fueling pumps nationwide that supply renewable fuels to American 
motorists, such as E15 and E85. Twenty-one states are participating in 
the BIP, with matching funds from state and private partners, providing 
$210 million to strengthen the rural economy and increase the demand 
for corn and agricultural commodities used in the production of 
biofuels. We are also proud of our effort to partner with the 
Department of Energy and Navy to create advanced drop-in biofuels that 
will power both the Department of Defense and private sector 
transportation throughout America.
    We also took new steps to support biobased product manufacturing 
that promises to create new jobs across rural America--including adding 
new categories of qualified biobased products for Federal procurement 
and establishing reporting by Federal contractors of biobased product 
purchases. The more than 2,200 products that have received 
certification to display the USDA Certified Biobased Product label are 
creating and increasing consumer and commercial awareness about a 
material's biobased content as one measure of its environmental 
footprint. We released a study of the bioeconomy last year and found 
the biobased products industry generates $369 billion and four million 
jobs each year for our economy. Biobased products industries directly 
employ approximately 1.5 million people, while an additional 2.5 
million jobs are supported in other sectors. Shifting just 20 percent 
of the current plastics produced into bioplastics could create 104,000 
jobs. Environmentally, the increased use of biobased products currently 
displaces about 300 million gallons of petroleum per year--equivalent 
to taking 200,000 cars off the road.
Local and Regional Food Systems Create Opportunities for Agriculture 
        and Communities
    This Administration has taken unprecedented steps to open the doors 
of USDA to new stakeholders and to adapt to changing consumer demands 
that impact agriculture. One of those changes has been the growing 
consumer interest in buying local--in supporting local farms and 
ranches with their food purchases. The value of local food sales has 
grown to at least $12 billion in 2014 from $5 billion in 2008, and some 
industry sources estimate that sales could hit $20 billion by 2019. At 
USDA, we recognize that this consumer interest is an opportunity for 
agriculture, and that strong local and regional food systems can help 
meet many goals. They harness the entrepreneurial innovation of small 
and medium-sized family farms and help them succeed in rural America; 
they drive the creation of new food businesses that in turn create 
jobs; and they are a strategy to connect low-income consumers with 
healthy food options in areas where they are currently under-served. 
Between 2009 and 2014, USDA invested more than $800 million in more 
than 29,100 local and regional food businesses and infrastructure 
projects. In FY 2015 alone, USDA directly supported nearly 10,000 farms 
and ranches, food entrepreneurs and communities through local food-
related projects. In addition, USDA has made expanding SNAP recipients' 
access to fresh fruits and vegetables through farmers' markets a 
priority in recent years. Between 2008 and 2015, the number of farmers' 
markets and direct marketing farmers that accepted SNAP rose from about 
750 to almost 6,500. Over $19 million in SNAP dollars was spent at 
farmers' markets in 2015, up from $4 million in 2008. This is a win-win 
for both farmers and SNAP participants.
We Must Continue To Reduce Hunger and Improve the Health and Nutrition 
        of Our Nation's Children
    The Administration continues its strong support for the 
Supplemental Nutrition Assistance Program (SNAP). SNAP kept at least 
4.7 million people, including nearly 2.1 million children, out of 
poverty in 2014. SNAP has been shown to have long-term benefits as 
well. Recent research indicates that for low-income individuals access 
to SNAP in early childhood led to a 16 percentage point decline in the 
likelihood of obesity as an adult and an 18 percentage point increase 
in the likelihood of completing high school. The Budget also supports 
WIC, ensuring that the program can serve all eligible applicants.
    Because hunger does not take a vacation during the summer months 
when school meals are unavailable, we have expanded the Summer EBT for 
Children demonstration pilots over the last 2 years, and the 
President's FY 2017 Budget proposes to stand up a permanent, nationwide 
program. Rigorous evaluations of Summer EBT pilots demonstrate the 
program effectively reduces food insecurity and improves nutrition. In 
tandem, we have expanded the Summer Food Service Program. In total, 
summer meals sites have served over 1.2 billion meals to low-income 
children since 2009.
    Schools around the country have made tremendous progress in 
improving the nutritional quality of school meals. During the 2014-2015 
school year, over 97 percent of schools successfully met the nutrition 
standards by serving meals with more whole grains, fruits, vegetables, 
lean protein and low-fat dairy, and less sodium and fat. I am pleased 
the Senate Agriculture Committee passed a bill that ensures progress 
will continue to improve our children's diets and urge Congress to 
reauthorize Child Nutrition Programs for our young people without 
delay.
Fostering Innovation Increases Productivity and Protects the Health of 
        Our Citizens
    We must continue to innovate to keep U.S. agriculture competitive. 
Long-term agricultural productivity growth relies on innovation through 
research funded by both public and private sectors. Innovations in 
animal/crop genetics, chemicals, equipment, and farm organization all 
result in American farmers producing more with less. In recent years, 
USDA scientists and university partners have developed new ways to deal 
with the influenza virus in pigs; increased milk production with fewer 
resources; created innovative and effective ways to manage pests; 
supported innovations in irrigation technologies resulting in water 
savings and improved nitrogen use efficiency; and increased 
profitability of farmers and livestock producers despite droughts and 
increasing temperatures. Studies have shown that every dollar invested 
in agricultural research returns between $10 to $20 in economic 
benefits to the nation.
    USDA has facilitated the adoption of new technologies by 
streamlining the process for making determinations on petitions 
involving biotechnology. These improvements provided more rapid and 
predictable availability of biotechnology products to farmers, 
ultimately providing technologies to growers sooner and more choices to 
consumers. In FY 2015 alone, USDA reviews found safe genetically 
enhanced varieties of potato, corn, soybean, cotton, and alfalfa. USDA 
estimates that the cumulative number of actions taken to deregulate 
biotechnology products based on a scientific determination that they do 
not pose a plant pest risk will increase from a cumulative total of 82 
actions in FY 2009 to an estimated cumulative total of 126 actions in 
FY 2017.
    Since 2009, USDA has worked to safeguard America's food supply, 
prevent foodborne illnesses and improve consumers' knowledge about the 
food they eat. For example, USDA adopted a zero tolerance policy for 
raw beef products containing six strains of shiga-toxin producing E. 
coli, giving products that test positive for any of these strains the 
same illegal and unsafe status USDA has long given products testing 
positive for E. coli O157:H7. Additionally, USDA set tougher standards 
for Salmonella and new standards for Campylobacter on poultry 
carcasses, and developed the first ever Salmonella and Campylobacter 
standards for chicken parts, which are more commonly purchased than 
whole carcasses. Together, USDA estimates these new standards will 
reduce illnesses by about 75,000 annually, and help the agency meet 
Healthy People 2020 goals. The total number of illnesses attributed to 
USDA-regulated products fell nearly 11 percent from 2009 to 2015, which 
equates to more than 46,000 avoided illnesses on an annual basis.
A Healthy and Prosperous America Relies on the Health of Our Natural 
        Resources
    America's farmers, ranchers and landowners have led the way in 
recent years to conserve and protect our soil, water and wildlife 
habitat. With the help of farm bill programs, USDA partnered with a 
record number of producers since 2009 to create not only a cleaner, 
safer environment, but to create new economic opportunities. We have 
enrolled a record number of private working lands in conservation 
programs and implemented strategies--such as landscape-scale efforts--
to restore our forests and clean our water supply. A new model for 
conservation investment established by the 2014 Farm Bill for the 
Regional Conservation Partnership Program (RCPP) has allowed USDA to 
leverage $800 million to support 115 high-impact conservation projects 
across the nation that will improve the nation's water quality, support 
wildlife habitat and enhance the environment.
    USDA is also helping rural America respond to a changing climate. 
While U.S. agriculture and resource management have long histories of 
successful adaptation to climate variability, the accelerating pace and 
intensity of climate change presents new challenges. For example, 
increases in atmospheric carbon dioxide, rising temperatures, and 
altered precipitation patterns are already affecting agricultural and 
forestry productivity. To address this challenge, we are helping 
farmers, ranchers, and forest land owners respond to these challenges 
in many ways. USDA's Regional Climate Hubs are developing and deliver 
science-based, region-specific information and technologies to 
agricultural and natural resource managers across the U.S. The Hubs are 
also providing technical support, regional assessments and forecasts, 
and outreach and training to enable climate-informed decision-making. 
By partnering with farmers, ranchers, rural land owners, and other 
stakeholders we can improve the resilience of farm and forestry systems 
to the challenges posed by climate change
    Using the authorities provided in the 2014 Farm Bill, we have 
developed a strategy to reduce net emissions and enhance carbon 
sequestration by over 120 million metric tons of CO2 
equivalent (MMTCO2e) per year by 2025. The strategy, 
outlined in ``The Building Blocks for Climate Smart Agriculture and 
Forestry,'' builds on USDA's history of cooperative conservation to 
support resilience to extreme weather, reduce greenhouse gas emissions, 
and increase carbon storage. Through this initiative, we will encourage 
actions that promote soil health, improve nutrient management, and 
conserve and enhance forest resources on private and public lands. In 
addition, USDA will redouble efforts to improve energy efficiency, 
develop renewable energy, and use biomass both as a liquid fuel and to 
contribute to heating, cooling, and electric needs.
    USDA's approach to climate change is practical, results-driven, and 
recognizes that efforts to address climate change fit within USDA's 
broader mission of rural development, food security, and conservation.
Conclusion
    Mr. Chairman and Members of the Committee, thank you for this 
opportunity to speak briefly about the current state of the rural 
economy in the United States. Rural Americans have shown over the past 
year their resolve and their willingness to embrace innovation--and I 
believe that the same tools that kept the rural economy resilient over 
the course of challenging year will help rural America continue to 
drive the economy forward.

    The Chairman. Thank you, Secretary, for being here. I 
didn't intend to go here, but Mr. Secretary, I wasn't in those 
rooms with Chairman Lucas and Ranking Member Peterson. I wasn't 
there, but I don't think there was any reference to cottonseed, 
period, during the farm bill negotiations. None. To rely on 
something that didn't happen, you have been misled. I just 
don't think that that was the case. Cottonseed didn't come up 
until these dire consequences arose, until it was shown in the 
STAX Program, only 14 percent of cotton was covered by STAX. 
That was nowhere near what folks thought it was going to be. It 
is not working.
    The cottonseed thing, to my references, came up late last 
year as a potential to put seed under the program and not lint. 
I don't think you are arguing that seed and lint are the same 
thing. They come from the same plant, but this idea that 
somehow there was a negotiation on seed specifically during the 
farm bill negotiations, I believe, is incorrect.
    Secretary Vilsack. Mr. Chairman, can I respond?
    The Chairman. Sure, yes, sir.
    Secretary Vilsack. First of all, in putting together the 
ARC and PLC programs, there was obviously a decision to remove 
cotton from those programs. I think everybody acknowledges 
that. Within the law, essentially there are provisions that 
define the opportunity for the Secretary to include additional 
oilseeds as crops as they evolve. That listing of other 
oilseeds includes a variety of other oilseeds. It includes 
sunflower seeds, rapeseeds, canola seeds. Clearly, Congress 
could have also included cottonseed in that list. They did not. 
That is an issue.
    Second, the industry came to us when we were crafting the 
risk management program under STAX and requested oilseed to be 
included in that risk management program.
    So those two facts, Congress didn't include it in the list 
and the industry asked us to include it in the risk management 
program, indicate what the intent was at the time.
    Now if Congress wants to reopen the farm bill, then 
obviously you will have to deal with the issue of the cost, 
which is one of the motivating reasons why all of this was 
established----
    The Chairman. I appreciate that, Mr. Secretary. That was a 
discussion you may have had or may not have had with cotton 
folks then. That is not a discussion that Congress had. Are you 
arguing that the list of oilseeds included is exclusive and 
that you have no discretion?
    Secretary Vilsack. No, what I am arguing is that that list 
and that provision is set up for oilseeds that arise during the 
course and between farm bills----
    The Chairman. Where are you getting that interpretation?
    Secretary Vilsack. Because that is the way in which this 
provision has been interpreted and utilized since its 
inception.
    The Chairman. Okay, so it wasn't new to the 2014 Farm Bill?
    Secretary Vilsack. We have used this before, not for seeds 
that have existed, Mr. Chairman, but seeds that have come up in 
between farm bills to allow us the flexibility----
    The Chairman. So sunflower seeds are brand new. They didn't 
exist before 2008? We gave you the discretion in order to use 
that discretion to look at new circumstances, and----
    Secretary Vilsack. Not in this particular circumstance. You 
gave me the discretion to use it if something crops up that was 
under----
    The Chairman. Something cropping up like an unexpected 
economic impact that the 2014 Farm Bill didn't anticipate?
    Secretary Vilsack. No.
    The Chairman. That wouldn't be unexpected?
    Secretary Vilsack. No, that is why we have CCC and that is 
why it was unfortunate that Congress put the prohibition in the 
omnibus budget bill that restricts me from using CCC. I am more 
than happy to do that. Remove that prohibition and we can set 
up a program to help cotton farmers in the interim, and then 
you can revisit this issue specifically when you debate the 
next farm bill.
    The Chairman. But for the restrictions on CCC, that was 
included in 2011 in response to things that the agency did in 
2010, you could list cottonseed as an other oilseed?
    Secretary Vilsack. I couldn't list cottonseed but we could 
create a program that would provide help and assistance in the 
interim.
    The Chairman. All right, and there are no other programs 
that you can do without that?
    Secretary Vilsack. The other issue that we talked about was 
the cost-share program----
    The Chairman. And why have you not done that?
    Secretary Vilsack. Well, because you have indicated to us 
that you weren't interested in us pursuing that.
    The Chairman. But you have already decided that you know 
what we are interested in and not interested in. If you have 
the sole discretion to do the cost-share program----
    Secretary Vilsack. I don't, sir. I don't.
    The Chairman. Why?
    Secretary Vilsack. You have to give me that discretion.
    The Chairman. How?
    Secretary Vilsack. You have to give me that direction, 
because you excluded it from the previous----
    The Chairman. I don't think cottonseed was discussed in the 
2014 Farm Bill.
    Secretary Vilsack. You had the opportunity and it was 
certainly discussed in terms of establishment of the risk 
management program, when we were specifically told to include 
cottonseed in that program.
    Look, Mr. Chairman, the easiest thing to do right now is 
not for us to continue to have this discussion, but for us to 
figure out a way in which that prohibition in CCC could be 
removed, because that would allow us the most immediate way of 
providing help and assistance, in addition to the cost-share 
beginning.
    The Chairman. Well, I have had some preliminary discussions 
with the Appropriations Committee. There are some historical 
issues with respect to the use of that discretion that gave 
rise to why that restriction has been in there since 2012, and 
anyway, my time has expired. We will have a second round, 
perhaps.
    Mr. Peterson, 5 minutes.
    Mr. Peterson. Thank you, Mr. Chairman.
    I want to switch gears, Mr. Secretary, and I know the CRP 
sign up has been going on for some time. I guess it is going to 
end in a week or so. Do you have any kind of a read on how that 
has developed and kind of where we are at with that? Do you 
have any information about----
    Secretary Vilsack. It is going to be quite competitive, 
based on the cap that has been established for CRP. We 
anticipate and expect it to be quite competitive. We also are 
going to see competition in terms of the grassland section of 
CRP as well.
    Mr. Peterson. Grassland?
    Secretary Vilsack. Yes.
    Mr. Peterson. What do you mean by competitive?
    Secretary Vilsack. Well, I would say we have roughly 2 
million acres of opportunity, and we think we are probably 
going to get requests that would exceed potentially that 2 
million acre threshold. So in that sense, it is competitive so 
we are going to have to focus our efforts on highly erodible. 
Focus our efforts on maintaining the continuous programs, which 
are very popular, so that we maximize the benefit and use of 
this program to the extent we can, based on the cap.
    Mr. Peterson. One of the problems we had when we wrote the 
farm bill is we wrote it when prices were good. That is always 
a problem. And it was also a problem with CRP, because we had 
people leaving CRP because they thought they could make more 
money farming it and renting it. In my part of the world, we 
had shelter belts taken out and all kinds of other stuff going 
on that I tried to warn people about.
    But my concern is, we have seen an increase of use of 
continuous, and that is good. Minnesota, we are one of the top 
ones in using continuous. But the biggest part of that is the 
CP-23, the wetlands restoration thing, and that is the reason 
that is being used so much is because the ones that want to 
stay in CRP, that is what they have had to do in order to get 
back into the program.
    But one of my concerns is that the way we have structured 
this, we have tilted too much towards this highly erodible and 
using specific kinds of seeds and so forth that are very 
difficult to establish. I can personally attest to that. And so 
my concern is, and we had a hearing on this, that we are going 
to focus too much of the CRP in certain areas because of the 
criteria that we have established with this. And one of the 
reasons CRP, in my opinion, has been so successful is it has 
been spread out in big tracts all over the place. And that 
happened because the original program was not a conservation 
program. The original program was a supply reduction program, 
because we had low prices, especially in wildlife, that is why, 
in my opinion, it has been so successful.
    I am worried about what is going on now, though, that we 
are going to be concentrating this stuff too much in certain 
areas, and if there is not going to be CRP in other areas 
because it doesn't meet the highly erodible and whatever other 
criteria we have. And we have guys plowing up perfectly good 
cover, and some of it needs to be restored. But why we are 
plowing up stuff that is perfectly good, we have no weeds in 
it, it doesn't make any sense.
    I don't know if we have any discretion in how you do this, 
but I hope that we can approach this in a way that we can keep 
a fair amount of this stuff spread out and not get this too 
concentrated as you are doing the process. That you don't do 
everything just based on the EBI, that there has to be some 
discretion there.
    Secretary Vilsack. Congressman, I appreciate the suggestion 
and I will certainly take that back and make sure that our team 
understands and appreciates what you just pointed out, which is 
the need for this program to be available in all parts of the 
country that really want it to be utilized. It is a fair point.
    Mr. Peterson. Now the grassland, I understand there has 
been, what, a million acres offered under grassland?
    Secretary Vilsack. Yes, I don't remember what the exact 
acreage is, but I know that there is quite a bit of interest in 
it.
    Mr. Peterson. Yes, so do you have any more specifics about 
that, or any----
    Secretary Vilsack. Just what I have----
    Mr. Peterson.--suggestions? There has been a lot of 
interest?
    Secretary Vilsack. It is a lot of interest, and 
understandable, because we have adjusted the rental rates now 
so that it is obviously attractive, more attractive than it has 
been for a while.
    Mr. Peterson. All right. Thank you, and I appreciate your 
being willing to take a look at that.
    Thank you. I yield back.
    The Chairman. The gentleman yields back.
    Mr. Neugebauer, for 5 minutes.
    Mr. Neugebauer. Thank you. Secretary Vilsack, it is good to 
have you here, and I appreciate your coming back again to speak 
to our Committee.
    I would say this from my perspective, and from my 
Congressional district. Your remarks about the state of the 
rural economy are a little bit overstated, since we don't feel 
that same situation in west Texas.
    I want to associate myself and have associated myself with 
the Chairman on the issue of the cottonseed. But one of the 
things I wanted to go back to is in a letter, I believe you 
alluded to a letter 100 of us sent you back in December and we 
encouraged the USDA to take any policy actions that could have 
a stabilizing effect on the U.S. cotton industry. And on 
February the 11th, you testified before the Appropriations 
Committee and mentioned the possibility of providing some 
assistance to help with cotton ginning. Where are we on that?
    Secretary Vilsack. Well, if it is something the industry is 
interested in having us pursue, and it is something that 
Members of Congress want us to look at, we would establish a 
cost-share program. We would have a discussion, obviously, 
about the percentage of the cost-share. In my discussions with 
some Members of Congress, we suggested a 50 percent cost-share, 
which would be about $150 million. It could be more than that. 
And we would establish and go to OMB for permission and 
authority to get this set up, and we would try to get it set up 
as quickly as possible and provide resources to the gins or the 
producers, depending on how we need to structure it in a way 
that does not create any kind of trade implications that would 
be negative to the industry.
    Mr. Neugebauer. What is keeping us from implementing it?
    Secretary Vilsack. We have received indications from some 
folks that it is not something that the industry wanted us to 
do at this point in time, but if they do, and you are telling 
me they do, then we would be happy to go back and start that 
process.
    Mr. Neugebauer. I think there is a little bit of a 
misunderstanding. I think one of the things that some people 
thought you were talking about that, obviously they were 
promoting the cottonseed issue. They thought you were trying to 
substitute that. Where we are, and I hope you understand that 
in cotton country, it is a severe issue. We have producers now 
that are not talking about how much of their equity they are 
willing to put into the next crop. We have producers that are 
sitting down with their bankers right now and the question of 
whether or not they are going to get to plant a crop, is 
whether they can continue to farm. And so as those 100 of us 
wrote you that letter, we were trying to paint a picture that 
we need for you to use every tool that is available to you as 
the Secretary of Agriculture to do that, and so my feedback 
from the industry is if that is one of the tools in the 
toolbox, let's get that tool out of the box. But we are not 
necessarily giving up on you sitting down at the table and 
discussing other tools that we might be able to do, because it 
is a very serious issue for the cotton industry.
    Secretary Vilsack. We are happy to do this. This is also 
the reason why we allowed for certificates to be used in lieu 
of the cotton as collateral for our loans, our marketing loans. 
We did do that. That is going to provide some small bit of 
relief, but we would be happy to go back and start that process 
now. It would be helpful if we could get an indication from the 
industry precisely what they think in terms of the technique 
and the details of how this would work on the ginning so that 
we would be assured that we get as much help to producers as we 
possibly could. That would be helpful. We have not received 
that kind of feedback, but we are more than happy to sit down 
with the industry tomorrow to begin that process.
    Mr. Neugebauer. I think they would be extremely helpful, 
but I also want to reiterate, I think that we need to look at 
other tools that you may have as Secretary, because as you 
know, this legislative process isn't always a real quick 
process, and a lot of these farmers don't have 6 months or a 
year for us to work out some of these issues. They need for 
some kind of response on an immediate basis, really.
    Secretary Vilsack. That is why having the CCC flexibility 
would be helpful, because that is something we could use fairly 
quickly. I would say in response to the Chairman's comments 
about why we have that, fair enough, but I am not going to be 
around, so why tie the hands of the next Secretary? Why not 
give the next Secretary the benefit of the doubt, or place 
restrictions on it so that it is used primarily for the things 
you want it to be used for, but a blanket prohibition makes it 
really hard to do this job in light of falling commodity 
prices.
    Mr. Neugebauer. My time has expired, Mr. Chairman.
    The Chairman. The gentleman's time has expired.
    Mr. Scott, 5 minutes.
    Mr. David Scott of Georgia. Thank you. Secretary Vilsack, 
welcome.
    I think we need to look at this from the standpoint of the 
cotton farmer right now, and we have a crisis in cotton 
farming. It is a very, very serious situation.
    So let me see if we can point out a direction here. First 
of all, we can't solve the problem of the oilseed, because we 
would have to open up the farm bill and go into that. So we 
have to put that aside. Now we have two other options here. We 
can go with the CCC, or we can go with the cost-share and the 
ginning. Is that correct?
    Secretary Vilsack. Or you could do both the CCC and the 
ginning.
    Mr. David Scott of Georgia. Wonderful.
    That is what I think we really, really need to do. My 
cotton farmers in Georgia this year are farming in 2015, 
280,000 acres less, less than they did before, so there is a 
real crisis here, and if we could use this hearing to send a 
message of security to the farmers who may be listening in that 
you as the Agriculture Secretary, we as the Agriculture 
Committee, we have the farmers' back.
    Now here is the other issue. The other issue is if we go 
down this road with these two programs, we've got a timing 
issue. Cotton planting is now for the next year. So can you 
explain to us if we use both of these, your indications, and I 
have talked with you before about this, says that you are 
willing to do this, but only a year. Are you still of that 
mind, because we need a much longer duration of whatever help 
we give the cotton farmers, more than a year.
    Secretary Vilsack. Well, Congressman, we are willing to 
work to put together a plan that creates a bridge between now 
and the time that you all take up the next farm bill and decide 
how to allocate these scarce resources that you will have 
available at that time to fashion a farm bill. So we are more 
than happy to talk about multi-year opportunities, and the CCC 
fix would obviously create that flexibility. In terms of the 
ginning, we have to obviously get the information and data from 
the mills, and we would be getting that probably this spring, 
so we would try to move as expeditiously as possible to get 
payments to folks.
    Second, I would encourage producers that are working with 
bankers that are a bit skeptical about all this to basically 
make sure that they understand that there are guaranteed loan 
programs at FSA that could potentially reduce that stress or 
that concern on the part of the banker, and hopefully they 
would utilize our programs to provide the credit to put a crop 
in the ground.
    Mr. David Scott of Georgia. Okay, and let me ask you, if we 
go with the CCC, what kind of timeframe, because I am very much 
concerned about making sure that our cotton farmers realize 
that we will be getting help to them in time. If we went with 
CCC, what would be the steps we need to do? How long would it 
take before the deal is in place to give security to the 
farmers?
    Secretary Vilsack. Obviously first it depends on how 
quickly you all can remove the prohibition, whether you have to 
do that through an appropriations process or whether you could 
do that in some bill that is going through the Congress. 
Assuming that this is the direction that you all want us to 
take, I am going to go back to our team and basically say let's 
put together a plan that could potentially be triggered as soon 
as, if and when, Congress acts.
    Now one thing we were thinking about doing in this space is 
the transition payment program that was in place in 2014 and 
2015 that was restricted by Congress to 2014 and 2015. That is 
something we could look at that we already have set up. 
Sometimes when you set up programs, you have technology issues. 
You have FSA training issues, and that takes a little time. But 
we try to get it done as quickly as we possibly could.
    Mr. David Scott of Georgia. Well, I would be very 
interested, and I know several Members on the Committee would 
be very interested in helping to speed the process along in 
getting that prohibition removed on the CCC.
    Now what about the ginning and the cost-sharing? How long 
and what would that process be?
    Secretary Vilsack. That does require us to have information 
from the mills, which we will get this spring and we would 
anticipate shortly thereafter would be able to make payments.
    Mr. David Scott of Georgia. Okay. Well, I----
    Secretary Vilsack. Assuming we get the details worked out 
with the industry to make sure that as we set this up, that the 
resources and help gets to the producer to the extent we can do 
that, and to the extent that we do it in a way that doesn't 
create trade implications that would be negative to cotton.
    Mr. David Scott of Georgia. Well thank you, Mr. Secretary. 
As you know that we, Georgia, is the number two cotton 
producing state in the nation next to Texas, so we are very 
concerned about that, and I certainly appreciate the 
opportunity working as quickly as we can in assisting you in 
any kind of way to bring these two, the CCC and the cotton 
ginning cost-share to fruition quickly.
    Thank you, sir.
    The Chairman. The gentleman's time has expired, and Mr. 
Lucas, 5 minutes.
    Mr. Lucas. Thank you, Mr. Chairman.
    Mr. Secretary, one kind of long point and two quick points. 
I would like to comment on a couple of programs that are near 
and dear to my heart that are really important to rural America 
and preserving our resources. That is the Public Law 83-566 and 
the Small Watershed Rehabilitation Program, close and dear to 
my heart. I think they are very important to preserving our 
resources.
    In last year's budget request, Fiscal Year 2016, the 
President's own document referenced the program as helping 
communities to adopt the changes in natural resources 
conditions, minimize the impact of natural disasters through 
the broad authorities provided by the program, a strategic 
combination of land treatment, structural measures, floodplain 
amenities that would be used to help communities create a more 
resilient infrastructure and natural resource system. I 
couldn't have said it better myself than the Administration 
said. I was a little surprised and I won't deny disappointed to 
see that there was no funding included in the President's 
budget proposal for this year. Could you talk for a moment 
about the Small Watershed Upstream Flood Control Program, P.L. 
83-566, and the rehabilitation program, and why they matter?
    Secretary Vilsack. Why they matter?
    Mr. Lucas. Why they are important, why they matter. I think 
they do. I believe you do, too.
    Secretary Vilsack. Well first of all, I would say they 
matter because you think they matter. I recognize----
    Mr. Lucas. You are a wise Cabinet Secretary, sir.
    Secretary Vilsack. Look, they matter for a number of 
reasons. One, because of the complexity of our land, because of 
the way in which it has evolved over time, because of the 
impact of changing climates, intense weather patterns, weather 
variability, there is an ever-changing landscape that creates 
risks. And to the extent that you have programs, big and small, 
to help you manage those changes, it is helpful.
    The challenge, of course, is how you fit all of the needs 
into a confined budget that has parameters that have been fixed 
from the top and basically filtered down and limit the 
appropriations process.
    Mr. Lucas. Absolutely, Mr. Secretary, and for my 
colleagues' benefit, those who may not have focused on the 
program, we are talking about building relatively small earthen 
dams, interlocking systems to manage floods to keep soil and 
water in place to allow it to meter through to protect human 
life, property, and wildlife. The program began back in the 
1940s, very successful.
    On that note, Mr. Secretary, let me step over to another 
topic, and I would be remiss now at approximately 7 years into 
your tenure as Secretary of Agriculture if I didn't laud you. 
Your help during the 2012 and 2013 and 2014 Farm Bill process 
was very important in working with both this Committee and the 
other committee on the other side of campus, so to speak, to 
overcome some really difficult circumstances. We went through 
some challenges, all of us on this Committee, and working with 
you and your good folks to finally achieve the Agricultural Act 
of 2014. And I appreciate that, and I laud you for that.
    But I have to conclude by simply saying in respect to my 
constituents back home and what my colleagues here are noting, 
there are some real challenges going on in certain sectors of 
agriculture back home. Cotton is one of those situations where 
we worked with every insightful group to try and address the 
WTO ruling, to try and craft something that would work within 
the general framework of the farm bill. It was a tough process, 
and unfortunately as is demonstrated back home, it wasn't a 
perfect result. We vest you and the very, very bright people 
that you choose down at the Department to help you implement 
the law with a great deal of discretion. I would urge you to 
look at the situation as it pertains to cottonseed and to try 
to, in whatever way you can, use that discretion to the maximum 
benefit of the folks back home that both you and I represent. I 
know you will do what you can legally. I am not an attorney, 
but I believe the way the language is put together, there are 
really bright attorneys out there who can achieve that 
necessary flexibility.
    But with that, again, thank you for your efforts on the 
farm bill, and I know you will do whatever you can.
    Secretary Vilsack. Mr. Chairman, you had a difficult job, 
obviously, and anybody who was part of that process, and it was 
made more difficult by the fact that you all had committed to 
providing a savings of, as I remember, $23 billion, and that 
required some very difficult choices to be made.
    At the same time, there were concerns from an international 
trade perspective which is one of the reasons why we are where 
we are. We are going to continue to look for ways in which we 
can provide help and assistance, as you all feel very strongly 
about your oaths, I feel very strongly about the one I took.
    Mr. Lucas. I would simply say in regards to the 2014 Farm 
Bill, the old adage about it is not your enemies that will get 
you, it is your friends sometimes is entirely true.
    With that, Mr. Secretary, I yield back, Mr. Chairman.
    The Chairman. The gentleman yields back.
    Mr. Costa, 5 minutes.
    Mr. Costa. Thank you very much, Mr. Chairman and Ranking 
Member, for holding this important hearing. Mr. Secretary, I 
want to commend you for your years of service to our country 
and to American agriculture. We have not always agreed, but you 
have always been willing to try to be there to solve problems 
both for the two farm bills that we have worked on, and the 
implementation of those farm bills.
    I have a series of questions I want to ask you, but I am 
struck by the numbers. In 1954, the average age of an American 
farmer was 48 years of age. Today, the average age of an 
American farmer is 59 years of age. And what we see is with 
2\1/2\ percent of America's population directly involved in the 
production of food and fiber, a comfort level that is alarming 
to me that Americans take their food, their food products for 
granted. It is a national security issue and we don't treat it 
like a national security issue. The fact of the matter is that 
American farmers and ranchers and dairymen produce the most 
cost-effective, healthiest food anywhere in the world that 
allows the rest of our country to be able to have a healthy 
diet and go about their business. And frankly, we have to do a 
better job of highlighting the importance of the security of 
America's food production, as we talk about a host of issues. 
Whether it is economic conditions in our rural communities, 
whether we talk about the trade agreements, whether we talk 
about the dairy industry, or whether we talk about cotton, as 
many of my colleagues have mentioned in their earlier comments 
and questions.
    Mr. Secretary, can you please explain to me, and I want to 
make it local for a moment just briefly, with the drought 
conditions that we are facing in California. You are not in 
control of the water, Federal water systems or the state water 
systems, but what additional aid that the USDA is undertaking 
to provide emergency assistance for farmers during this 
drought, really briefly, because I have a couple of other 
questions.
    Secretary Vilsack. Disaster assistance for livestock 
producers, additional emergency conservation funding, 
additional resources for rural development for the development 
of municipal water systems, those would be three things. 
Additional research that is allowing us to do better jobs with 
irrigation and seed technology that is going to allow us to 
produce crops with less water.
    Mr. Costa. Well, we appreciate that and we may be looking 
at La Nina conditions sadly next winter, and we may need more 
help.
    Rural definitions are a problem for many of us who have 
districts, and you have been to my district several times, and 
I thank you for meeting with farmers and ranchers and dairymen 
and women, dealing with communities. The Valley is pretty 
rural, but we have some population centers that are several 
hundred thousand people or more, and the communities within 
those counties that have a large city are unfortunately 
impacted because they don't qualify under the rural definition. 
Could you speak to that for a moment?
    Secretary Vilsack. Two things we were attempting to do to 
try to deal with that issue. One is our Business and Industry 
Loan program. We are now allowing for investments in those 
communities, if we can show that there is a direct benefit to 
smaller rural areas, so we provided some flexibility in that 
program.
    Second, we are working now looking at our portfolio to see 
if there is ways in which our water and loan portfolio we could 
use this as flexibly as possible to attract additional private-
sector investment in communities that often don't get 
attention.
    Mr. Costa. All right, quickly. California was $54 billion 
last year at the farmgate, the dynamic, diverse, 300 
commodities in our agricultural industry. We farmers obviously 
are proud of that fact, and a lot of people don't realize that 
of all of those 300 commodities, dairy is the number one 
effort. I want to thank you and the USDA's efforts to assist 
California in the last farm bill. We gave the opportunity and 
California dairymen voted by \2/3\ to join the Federal 
Marketing Order. Can you update us on the current status on 
that effort?
    Secretary Vilsack. Information is being produced to make 
sure the transcript is accurate. That will then allow the 
parties to essentially brief it. A decision will be made, and 
assuming the decision is to move forward, the referendum will 
take place shortly thereafter.
    Mr. Costa. I appreciate that. The dairy industry, as you 
know, is cyclical and right now we are in a downturn with $12 
per hundredweight milk prices and $14-$16 per hundredweight 
input costs, and it is very tough.
    Let me finally ask you, because out of that agricultural 
production, a lot of it in California is exported. It is $20.4 
billion last year. The negotiations on the economic analysis on 
a sector-by-sector benefit to American agriculture. Can we 
expect these analyses to be completed prior to the finalization 
before we vote on the TPP, these trade agreements?
    Secretary Vilsack. I believe they will be, and there are 
already analyses available, whether it is the Peterson 
Institute or the recent Farm Bureau evaluation which was 
announced yesterday.
    Mr. Costa. We are going to need that information, Mr. 
Chairman, and as we make our own evaluations on whether or not 
we are going to vote for that measure at the end of this year. 
And we appreciate that information, Mr. Secretary. Thank you.
    The Chairman. The gentleman's time has expired.
    Mr. King, for 5 minutes.
    Mr. King. Thank you, Mr. Chairman. I thank you, Mr. 
Secretary, for your testimony and your responses to the 
questions here. I am not going to add anything about cotton, 
just to lead this, and but I would like to go just to a number 
of things, and as a very, very large percentage of the avian 
influenza that hit this country was not only Iowa, but was my 
district specifically. It was something like 74 percent of the 
State of Iowa that was hit was in my district, and somewhere in 
the 60s overall for a while, at least, was a national measure 
of the layer loss that we had.
    I want to say that I believe that the way the USDA has 
handled the turkey loss in AI has been, generally speaking, the 
strategy for it has been adequate, and the things that we have 
learned from that will make us better, going forward. But I 
believe the disposal, for example, of turkeys and the 
composting in the building APHIS manages it and handles it 
well. We add to that the things that we learned, we are perhaps 
prepared for another disaster of that nature.
    However, with regard to the layers, I wanted to ask you 
about if you have made any changes in your strategy of disposal 
of layers where we may have as many as five million birds on a 
location that need to be disposed of very, very quickly. That 
seemed to be the biggest problem that cropped up in this huge 
loss that we had. Have you made any adjustments there in 
policy?
    Secretary Vilsack. I would say we have, because we want to 
do it within a 24 hour period of time, so we are trying to 
speed up the process, and then second, we want to pre-position 
assets in terms of knowing whether landfills are available or 
other disposal methods on the farm, which we have been able to 
use in states where we think there is a potential for this to 
reemerge. So we are better prepared today than we were, 
obviously, when this hit last year.
    Mr. King. Thank you. I just wanted to bring that up for the 
sake of us having a focus on that component, which was the most 
difficult, I believe, of all that we faced.
    The formula on the indemnity payments has been brought to 
my attention multiple times by layers that the data that has 
been used on that by APHIS is older data, back as far as 2010 
and 2011, from the BEA. And so has that been brought to your 
attention in the past, and have you taken any steps or 
considered bringing that up to modern data and readjusting your 
formulas for our layers on indemnity?
    Secretary Vilsack. Congressman, we have made changes to 
that indemnification process, and we will always be open to 
additional, more current data to make sure we are doing the 
right thing.
    I would caution that we want to make sure that it continues 
to be an indemnity effort as opposed to an insurance effort. I 
think if it is to be an insurance effort, that is something 
that you all have to decide when you craft the next farm bill.
    Mr. King. I would say putting together insurance on this is 
a very difficult proposition. We have looked at that as a means 
of representing my constituents, and if somebody can present a 
good formula for that, I am very interested. It didn't go as 
smoothly as I had thought it might, or hoped it might, I should 
say.
    But then have you changed the formula? Because one of the 
things they are asking is that if you move from the 2002 to 
2001 formula to up just 1 year even to the 2003 to 2012 
formula, it would change that gross margin deduction from an 85 
percent margin down to an 80.5 percent margin. That would be a 
significant difference to our producers, just to move up 1 
year. Is that something that you have done or considered?
    Secretary Vilsack. Changes have been made, Congressman, and 
I will get you the specifics on exactly how, but we made an 
effort to try and listen and adjust based on the information 
that was being provided to us by the industry.
    Mr. King. And I will provide you a fuller set of questions 
here, too, that will be helpful in responding to that, and I 
appreciate that.
    It is my sense that we have a pretty good handle on PEDv. 
Is that also your sense?
    Secretary Vilsack. I am sorry, on what?
    Mr. King. A pretty good handle on PEDv virus?
    Secretary Vilsack. Yes, although, with these things they 
can crop up at any point in time.
    Mr. King. That is exactly what I hoped to hear, that our 
attention is on that so that we remain prepared. I think we 
have done a reasonable job of reacting to it and overcoming 
that challenge.
    Then also I wanted to point out to you and to this record 
that we have contract growers, they are turkey producers, that 
still remains a collections of claims against one of the 
contractors that did some of the recovery work in my district, 
and I don't know how broad this goes, and so as some of these 
claims get put into place where there is either a claim with 
APHIS or the contractor, and that is not definitive sometimes 
on who has the responsibility for that. And I wanted to bring 
this to your attention, because I believe a list is coming to 
me very soon that aggregates these claims. I don't think it is 
a huge situation, but it is huge to the people that are 
affected by it, and I would ask for your cooperation on that, 
and perhaps collaboration, if we could get that resolved and 
close the books on the avian influenza in my district.
    Secretary Vilsack. Get us the list, Congressman. We will 
work with you.
    Mr. King. I will do that, and I thank you for your 
testimony. I thank the Chairman, and I yield back the balance 
of my time.
    The Chairman. The gentleman's time has expired.
    Mr. McGovern, for 5 minutes.
    Mr. McGovern. Thank you, Mr. Chairman, and Secretary 
Vilsack, this being the last year of your term, I want to take 
this opportunity to thank you for your incredible service. In 
particular, I want to thank you for the recent announcement 
that you and the White House made that would expand the summer 
feeding program, to get more kids into the summer feeding 
program, and I am grateful for that. But more importantly, lots 
of poor children and their families are grateful for that.
    And we are talking about the rural economy here today, and 
while the overall economy is getting better, there are a lot of 
families still struggling, and in rural areas that SNAP is 
still a big issue. We have had many, many, many, many, many 
hearings on SNAP in this Committee, but one of the issues that 
has come up in the hearings on SNAP is the need to better 
connect veterans with nutritious foods. And we know veterans, 
especially older veterans, suffer from a range of nutrition 
related health conditions, such as diabetes, high blood 
pressure, and heart disease, and these are conditions that can 
be treated, if you will, by increasing consumption of fruits 
and vegetables.
    So I would love to work on better connecting veterans with 
farmers' markets, perhaps through an incentive program where 
veterans receive vouchers at VA clinics to use for farmers' 
markets, or why not hold farmers' markets at VA clinics? And 
there are a lot of straightforward, simple steps that we can 
take to better connect the dots, and I hope that we can work 
with you and your Department on that.
    But second, and as I mentioned, we have had many hearings. 
I think we have had 11 eleven hearings on SNAP in this 
Committee, and I am not quite sure where they are all leading 
to, but something is up. And we have heard talk about block 
grants, we have heard talk about more onerous work 
requirements, but most recently, a leading Republican 
introduced a bill that would let states drug test the poor as a 
condition to receiving SNAP. Similar laws in Florida and 
Georgia have been struck down as unconstitutional, and there is 
a growing body of evidence that shows that states with narrower 
drug testing laws in the books are spending thousands of 
dollars to identify very few drug users. In fact, those 
receiving public assistance actually test positive for illicit 
drugs at a lower rate than the general population. It is 
interesting note that there is no requirement that corporate 
CEOs who receive government grants or subsidies be tested. 
There is no requirement that Members of Congress be tested. 
Maybe there should be a requirement that Members of Congress be 
tested. Maybe that might explain why we are doing some of the 
things that we are doing around here. But I am concerned that 
this bill is nothing more than another attempt to demonize poor 
people and has no basis in reality, and I am not sure how 
quickly we are going to see this, but I figure that we have 
this opportunity here today. I would like to ask you to comment 
on this bill and receive your advice and guidance as we move 
forward.
    Secretary Vilsack. Congressman, first of all, on the 
veterans issue I would encourage you to take a look at the 
Farmers' Market Promotion Grant Program and the Food Nutrition 
Incentive Program that were established under the 2014 Farm 
Bill as potential avenues today to finance what is a pretty 
good idea, and the idea of having farmers' markets at VA 
clinics is an interesting one, and I will take that back to our 
team.
    As I indicated to the Congressman Aderholt, when he 
proposed this in our Appropriations hearing, this is not 
something that will significantly impact and affect the help 
and assistance that folks who are addicted need. It will also 
be quite damaging to the children of family members who might 
be negatively impacted by this. I am not sure what the problem 
is and I am not sure that it solves any problem, but it does 
indeed create a stigma and it could, as you indicated, create a 
slippery slope in terms of precisely how many programs we are 
going to bring within this umbrella.
    A more effective way of dealing with this issue, from my 
perspective, is taking a look at expanding prevention and 
education, expanding first responders' ability to respond to 
overdose situations so that lives can be saved, providing more 
medical assistance, treatment opportunities, and particularly, 
specifically expanding access to services in rural areas. 
Seventy-six percent of the shortage areas for behavioral 
science and substance abuse and mental illness treatment exist 
in rural areas. It is an area that requires attention and 
requires resources, and also calling upon the entire community, 
including the faith-based community, to help us create an 
atmosphere and an attitude in rural areas where people can feel 
free to acknowledge they have challenges and a problem, and to 
be able to get help and assistance and support through AA and 
Narcotics Anonymous and so forth. These are things I think 
would be more beneficial if we are really interested in trying 
to help these people.
    Mr. McGovern. Let me just say thank you for heading up the 
President's efforts to deal with the opiate and substance abuse 
crisis that is going on in this country. We are all grateful 
for your leadership in that as well.
    I yield back.
    The Chairman. The gentleman's time has expired.
    Mr. Austin Scott, 5 minutes.
    Mr. Austin Scott of Georgia. Thank you, Mr. Chairman.
    Secretary Vilsack, thank you for meeting with the Georgia 
delegation yesterday, and prior to that meeting, I was with 
another man who was in a similar position who is now retired, 
and he said that any time he wanted to submit something to the 
Committee with a statement, that it had to go up the chain and 
be approved by the Administration. Have you experienced that 
same system, if you will, with the Administration, that if you 
are going to present something to the Committee that it has to 
be approved by people outside of your office?
    Secretary Vilsack. You mean the responses I am giving 
today?
    Mr. Austin Scott of Georgia. Yes, sir.
    Secretary Vilsack. No.
    Mr. Austin Scott of Georgia. Thank you for that.
    As respectfully as I can say it, I have serious concerns 
about some of the statements in what you have said. Today, the 
state of the agricultural economy remains sound, despite lower 
commodity prices. Those are, to me, very much inconsistent. The 
Administration's focus on economic recovery over the past 7 
years has helped the majority of farm households improve their 
financial condition, and we expect that to continue as farm 
income faces increased pressure from lower commodity prices. 
And as we faced increased pressure from lower commodity prices, 
that certainly hurts our financial condition, doesn't it? It 
seems that if we want to expand the summer feeding program, and 
I am not familiar with the details of that, but I do know that 
many of our kids, when school is out, they don't have food. And 
if that is consistent with your authority, then we should take 
care of the kids. My church does that. We have backpacks for 
kids. The teachers put it together, the principals put it 
together at the end of the school year because we are concerned 
about our kids not having food when they go home.
    And then we have an issue like cotton, which is so 
important to the area that I represent, and it seems to me in 
reading the things that you do have the flexibility to do what 
we have been asking for with regard to cottonseed, and it just 
seems consistent with the Administration that if it is 
something that they want or if it is some of their supporters, 
they will bend over backwards to make it happen. Cotton is a 
red state product, and our farmers, when we have a profit, the 
government takes 50 percent of it. When we die, the government 
takes 50 percent of our land. Now we are asking for a little 
bit of help just to get through some tough times. I would just 
appreciate if you would use the same flexibility to support our 
cotton farmers as is being used to do the other things, like 
expanding the summer feeding program.
    Secretary Vilsack. I have statutory authority to expand the 
summer feeding program. It is a mandatory program. I have that 
authority. The authority I don't have is the EBT program, which 
we are asking this budget to have authority to do. So we are 
asking Congress for permission to expand, but we are not 
expanding in that vein because we don't have permission to do 
it. That is the issue.
    Mr. Austin Scott of Georgia. How are lower commodity prices 
good for the farm economy?
    Secretary Vilsack. Well----
    Mr. Austin Scott of Georgia. That is what your statement 
says.
    Secretary Vilsack. No, that is not what we are saying, 
Congressman. That is a misstatement of what we are saying and a 
mischaracterization of what we are saying. I think what we are 
saying is that we wanted to make sure that people do not feel 
that we are in the same circumstances that we were in the 
1980s, because we are not.
    Mr. Austin Scott of Georgia. Mr. Secretary----
    Secretary Vilsack. And we are not, because there is a 
stronger safety net. We are not because the debt to equity 
ratio is much stronger, much more stable. We are not because of 
the level of bankruptcy filings. If you look at the data, it is 
going to suggest to you that we are in a softened period, no 
question. We want to increase demand. That is why trade 
agreements are important.
    Mr. Austin Scott of Georgia. Mr. Secretary, I am sorry. I 
am down to 1 minute and I need to reclaim that time.
    In 2016, you forecast additional increases in median 
income, farm household income across all farm types, but at the 
same time, we are fighting these commodity crises. And I want 
to get to a specific with the USDA and EPA, and this is the 
case whether USDA has very much done their job, and I 
appreciate it.
    Ms. McCarthy a couple of weeks ago, I asked her a question 
about some of the chemicals that you have approved. You have 
done your job. You have approved new biotech traits to give 
farmers a leg up on weed resistance challenges. Have you spoken 
with the counterparts at the EPA and asked them why they 
haven't or when potentially they will? We start planting in a 
couple of weeks.
    Secretary Vilsack. We are in a situation where we have a 
convoluted framework when it comes to biotechnology crops, if 
that is what you are asking about, Congressman. I want to make 
sure I am answering your question.
    Mr. Austin Scott of Georgia. It is not the crop, it is the 
chemicals that we use on it.
    Secretary Vilsack. Oh, okay. We are in constant contact 
with them, encouraging them and explaining the impact that 
their decisions may or may not have on folks in the 
countryside. Obviously, I don't run that agency so I can't 
dictate to that agency, but I can certainly encourage them, and 
we do.
    Mr. Austin Scott of Georgia. I am out of time. If I could 
make one final point? Secretary Vilsack, the people in the USDA 
know when we plant cotton. Your people know about agriculture. 
You know when we plant cotton. Ms. McCarthy had no idea when 
cotton was planted. She doesn't know that we need these 
products now, and so that is where we could use some help there 
is getting the EPA to go ahead and approve the products that 
you have already approved. We are starting to plant in a couple 
of weeks.
    Secretary Vilsack. They go through their process, 
Congressman, and we will encourage them to speed up as best 
they can.
    The Chairman. The gentleman's time has expired.
    Ms. DelBene?
    Ms. DelBene. Thank you, Mr. Chairman.
    Thank you, Mr. Secretary, for being with us today. I really 
appreciate it. And I also want to thank you and your staff for 
coming out to my district and meeting with so many of our 
farmers. I just met with some of them earlier this week, and 
they continue to comment about how much they appreciate you 
coming out and talking with them.
    As you know, I introduced a bill last Congress that was the 
basis for the SNAP employment and training pilot programs that 
were in the farm bill, and the end result was the $200 million 
program that you have started. Washington State has had a 
fantastic success with its E&T program, and it has helped 
participants achieve self-sufficiency and part of the criteria 
we wrote for awarding these programs was making sure that we 
had folks like the programs that Washington State put in place 
in mind.
    I wondered if you could comment on the breadth of the 
various proposals that are moving forward right now, and any 
impacts you see on E&T, going forward.
    Secretary Vilsack. It is a 3 year program and we are in the 
process of ensuring prompt implementation. The ten pilot 
projects basically are looking at different aspects. There are 
some aspects that are looking at how additional assistance and 
financial assistance might allow for transition into a job so 
that you don't lose benefits. Some are looking at ways in which 
those who face barriers, transportation barriers, for example, 
could be assisted. Others are looking at ways in which folks 
could be trained for the jobs that are actually existing in an 
improved economy so that they can take advantage of those new 
job opportunities. Some are taking a look at ways in which the 
veterans can be assisted and helped. So it is a broad spectrum 
here. We are trying to identify best practices so that those 
best practices can then be implemented in all 50 states, so we 
do a much better job of using the resources that are being 
provided.
    The sad reality today still is that states don't use all of 
the 50/50 money in terms of the employment and training. They 
are happy to use the 100 percent Federal money, but when it 
goes to putting a little skin in the game, fewer states than we 
would like are willing to do that.
    Ms. DelBene. Do you know what we could do to incentivize 
folks to do more there?
    Secretary Vilsack. Well, you can say that it is a joint 
responsibility, and it is in our best interest to put people to 
work in jobs that matter, and it is in our best interest and 
their best interest to try to get them to a point where they 
don't need as much assistance, but states are dealing with 
their budget challenges as well, and this is unfortunately not 
as high a priority for some states as it ought to be, in our 
view.
    Ms. DelBene. Thank you.
    Moving to a different subject, last year's fire season was 
one of the worst in recent memory for the Pacific Northwest. We 
have to end fire borrowing, and each time this happens, the 
Forest Service ends up transferring many funds away that are 
used to help maintain our forests. And you have been an 
outspoken supporter of the Wildfire Disaster Funding Act, which 
I and many other parties have cosponsored. We know how badly 
this reform is needed, and so I just wondered from your 
perspective, what do we need to do to get past this stalemate 
and move forward?
    Secretary Vilsack. Well, I don't intend to transfer the 
monies. We spent 62 percent of our budget last year fighting 
fires. This is a problem that everybody in Congress understands 
needs to be fixed. It just needs to get done. And the reality 
is by not getting it done, we are robbing opportunity. We are 
reducing job opportunities. We are making it difficult for 
mills to stay in existence. We are making it difficult for 
people to enjoy the forests in the way in which all of us would 
want them to enjoy. We have bailed them out. We bail folks out 
year after year after year, so I have instructed the Forest 
Service to do what they can to spend the money in the hopes 
that Congress, you all have appropriated the right amount, but 
if you haven't, you need to fix this problem. We are not a fire 
department. We are the Forest Service.
    Ms. DelBene. Well thank you. I agree with you. I think we 
need to fix this problem soon. I appreciate your help in doing 
that.
    One last quick question. One issue that was brought up when 
you visited my district was the lack of crop insurance for 
aquaculture, and I know your staff recently met with one of the 
Tribal chairmen from my district who asked that question, and I 
just want to ask for your commitment to continue working with 
us to ensure that this very critical and overlooked aspect of 
our agriculture system is protected in the future.
    Secretary Vilsack. We are and it is very consistent with 
the fact that in this Administration, we have expanded the 
number of crop insurance products or number of crops covered by 
crop insurance, and we have also significantly improved the 
reimbursement levels for some of our high value specialty 
crops.
    Ms. DelBene. Thank you.
    I yield back, Mr. Chairman.
    The Chairman. The gentlelady yields back.
    Mr. Goodlatte, 5 minutes.
    Mr. Goodlatte. Thank you, Mr. Chairman. Welcome, Mr. 
Secretary.
    I want to ask a question on behalf of my colleague, Mrs. 
Lummis from Wyoming. In 2013, the GAO Trails Maintenance Report 
confirmed that the U.S. Forest Service has over $314 million in 
deferred trails maintenance. Do you believe that it is 
important for Congress to weigh in on this framework that the 
Forest Service is developing that will address National Forest 
System trail concerns in a comprehensive manner?
    Secretary Vilsack. Yes, but it is going to require 
resources, which means you need to fix the fire budget.
    Mr. Goodlatte. And could volunteers help improve trails in 
a significant portion of the George Washington National Forest?
    Secretary Vilsack. There were, in this Administration, over 
600,000 volunteers have already been encouraged to participate 
in those kinds of activities. We also have the 21 CSC program, 
which a providing nearly 11,000 additional folks, including 
returning veterans. The reality is that we could do a lot more 
if we had stability and certainty in terms of our budget. We do 
not have that because of the fire suppression costs. It has to 
get fixed, Congressman. I don't know how many times I have to 
say that it has to get fixed. Otherwise, you will be having 
this conversation with the next Secretary, and the next 
Secretary, and the next Secretary until there is no trail 
maintenance costs because it is going to be eaten up by the 
fire budget.
    Mr. Goodlatte. Well, we certainly understand that, and we 
could go deeper into that, too, in terms of the 
Administration's policy with regards to harvesting timber, 
because that is one of the best tools to avoid the kind of 
catastrophic fires that we have been experiencing.
    Secretary Vilsack. We have harvested 20 percent more timber 
in this Administration than in previous Administrations, and we 
would be able to do more if you fixed the fire budget.
    Mr. Goodlatte. We encourage you to keep doing that, and do 
it in a way that you can market that timber so that you can 
raise some money to continue to harvest more and fix the 
trails.
    But we will take your advice to heart. We understand the 
nature of that problem.
    I want to talk to you about two other issues. One I know is 
of importance to you and you are familiar with. We understand 
that USDA's Biofuels Infrastructure Partnership will be 
providing $100 million in grant funds for the installation of 
biofuel blender pumps in 21 states. Considering that for the 
last 10 years, consumers have already been forced to foot the 
bill for the higher levels of ethanol blended into their 
gasoline, is it fair to ask them to pay another $100 million in 
order to prop up the ethanol industry?
    Secretary Vilsack. Twenty-one states participate in this 
program. They match the $100 million with $120 million in 
commitments. We anticipate and expect over 5,000 additional 
distribution sites being put in those 21 states, so there is a 
lot of interest in this program.
    Mr. Goodlatte. I know, but it is also not market forces 
determining this. It is the government determining how this 
money is going to be spent. I just mentioned that the ethanol 
industry already benefits from a unique mandate which 
essentially forces the American people to buy their product; 
therefore, I fail to see any reason to actually increase the 
amount of support this industry is given.
    Secretary Vilsack. Well, 450,000 jobs that are directly or 
indirectly affected by this industry, the fact that gas is less 
expensive because of it, the fact that we have better----
    Mr. Goodlatte. Mr. Secretary, I would challenge----
    Secretary Vilsack. There are a multitude of benefits.
    Mr. Goodlatte.--whether gas is less expensive because of 
it. Gas is less expensive right now because of international 
production of gas----
    Secretary Vilsack. That is also part of it, Congressman. 
You can't deny the fact that study after study shows that this 
industry has indeed over time reduced the cost of gas to 
consumers.
    Mr. Goodlatte. Actually, no I don't agree with that, 
because the----
    Secretary Vilsack. University of California-Davis did a 
study----
    Mr. Goodlatte. Mr. Chairman, the time is mine. Let me just 
say in response to that, Mr. Secretary, that the fact of the 
matter is that there have been a number of occasions in the 
past few years when because of the demand imposed by these 
ethanol mandates on corn production has caused the price of 
corn to spike, and because consumer driving habits have 
changed, the amount of oil consumed for that purpose that has 
dropped. The net effect has been that the industry has had to 
buy RINs, had to buy credits in order to be able to stay in the 
market. And those credits are, in fact, causing on some 
occasions both the price of food and the price of fuel to go up 
at the same time.
    Secretary Vilsack. There is no correlation, Congressman, on 
the food costs. That is just not accurate. And the reason it is 
not accurate is because we have increased corn production, and 
farmers get today, unfortunately, a fairly small amount of the 
food dollar, about 18. There is no correlation between food 
cost increases and ethanol. That is----
    Mr. Goodlatte. I strongly disagree, but let me get one more 
question in, if I may.
    Farmers in my district have contacted me about letters they 
have received from the NRCS which claim that the farmer 
received ``improper payments from NRCS conservation programs.'' 
I understand that the situation arose after USDA discovered 
discrepancies with farmers data universal numbering system, 
DUNS number, and current registration in the System of Award 
Management, SAM database. And I am told that this system has 
been in place since 2011, but that the USDA has just recently 
begun to verify if a farmer's DUNS number is correct, and SAM 
registration is current. Will a producer really have to pay 
back many years of conservation program payments?
    Secretary Vilsack. We have created a number of waiver 
programs and are working with producers who feel that this is 
inaccurate or unfair, and we have, on two different tranches, 
have millions of dollars of assistance has been provided, 
Congressman. So there is a waiver process. There is a process 
for the farmer to raise questions about the fairness of this, 
and if it is unfair, we won't do it.
    Mr. Goodlatte. Thank you. I am glad to hear that. We agree 
on that.
    Thank you, Mr. Chairman.
    The Chairman. The gentleman's time has expired.
    Ms. Kuster, 5 minutes.
    Ms. Kuster. Thank you, Mr. Chairman, and thank you, 
Secretary Vilsack, for being with us. I want to also commend 
you on your leadership on the heroin crisis, and just remind my 
colleagues that we have a co-chaired bipartisan task force to 
combat the heroin epidemic in particularly rural economies. My 
State of New Hampshire has been hit very hard. We have a number 
of bills that we are going to be recommending, and I would love 
to be able to run that by you and your staff, and engage with 
you as we go forward.
    A couple of quick questions. One that I hear often in New 
Hampshire, as I go around visiting my farmers and holding 
roundtables, is about the Margin Protection Program, and the 
particular issue for us, we are sort of at the end of the 
pipeline, if you will. This happens to us in energy and it is 
happening to us in the cost of feed so that the equation 
between the price for milk and the cost of feed, we are being 
squeezed very, very hard in New England and in New Hampshire in 
particular. I am just wondering if you have any comment on 
that, and how this program is going generally. I understand 50 
percent of dairy farmers are participating. Do you have any 
feedback on how it is going?
    Secretary Vilsack. A small number of farmers received 
payments last year. Depending upon what happens, the farmers 
with $8 and $7 protection may see some payments this year, it 
is expected. I think there is a need, as Congress considers the 
new farm bill, to discuss the current state, which does not 
give us the flexibility and the ability to regionalize those 
feed costs. I think under the circumstances as we listen to 
folks, that is something that should be addressed in the next 
farm bill, or if there is an opportunity to address it before, 
fair enough. But it is not something we can do from a 
regulatory perspective, but it is something that I think is a 
fair concern. There are significant differences in feed costs, 
and that needs to be factored into the program in order for it 
to work.
    And you are correct, roughly 50 percent of producers are 
participating, and of that 50 percent, about 55 percent 
purchased higher coverage, the $6, $7, $8 coverage.
    Ms. Kuster. Great, so I will follow up with colleagues 
about that regional difference on the feed costs.
    The other role that I have as co-chair of the Congressional 
Biomass Caucus, and we did have the EPA Administrator in here, 
and I had the chance to ask her about considering biomass as a 
renewable fuel, and what that means for our rural communities 
and timber interests, et cetera. Could you comment on any 
additional members as I know USDA has been a strong supporter. 
I really appreciate that. Anything else that you might add 
about biomass and the future for the biomass industry in our 
rural communities?
    Secretary Vilsack. Well, biomass studies have been 
conducted by the Department of Energy showing that there is a 
significant amount of opportunity here, a billion tons, is the 
most recent estimate. And we are looking at ways through our 
biomass centers, which are research centers throughout the 
entire country, to look for ways in which we could create the 
appropriate supply chain for each region of the country, 
whatever their specific biomass opportunity is, that they can 
access it and utilize it.
    We are also investing in resources through the section 9005 
program, which is advanced biofuel production, providing 
assistance to about 320 companies to produce biofuel from 
biomass, and we are also continuing to look for opportunities 
to invest in our loan guarantee program, section 9003, in a 
variety of different feedstocks so that we have a broad range.
    The last thing I would say is, there is tremendous 
opportunity for the Defense Department in terms of biofuel. The 
Navy wants to have \1/2\ of their fuel basically being biobased 
and domestically produced. I was privileged enough to be on a 
destroyer, watching it being refueled with beef tallow fuel out 
in the Pacific Theater just a couple of weeks ago, so there are 
terrific opportunities.
    The last thing is commercial aviation is also extremely 
interested in this fuel, and there are roughly 40 airports that 
sell 90 percent of the jet fuel, and they are extremely 
interested in doing this because of the emissions, and the 
benefit from the emissions to meet international standards. 
That is a 17 to 19 billion gallon market opportunity for us.
    Ms. Kuster. That is great.
    Secretary Vilsack. So there are plenty of opportunities.
    Ms. Kuster. Wonderful, and one last quick question, and a 
quick plug for your rural development program. It has been 
fantastic in higher education, community colleges, affordable 
housing, homeless veterans. We are using it every chance we 
get, and a shout out to Ted Brady in your operation who covers 
Vermont and New Hampshire, doing a fantastic job.
    I wanted to ask you about the affordable housing in rural 
communities. We have legislation. We are working with your 
staff, but I just want my colleagues essentially to know about 
a bill. There is a program that is coming to an end, and we ran 
into a situation of folks who were going to lose their 
affordable housing, and we are working with you. We do need 
legislation, going forward, and I will stay in touch with you 
and stay in touch with my colleagues to make sure that rural 
communities continue to have access to affordable housing.
    Secretary Vilsack. It is multi-housing and part of that 
problem has been solved by the budget process, but the other 
part is that as multi-family housing that has received 
assistance from USDA has their loans paid off----
    Ms. Kuster. Yes.
    Secretary Vilsack.--those units basically will go out of 
the system, and we expect and anticipate 75 percent of those 
units could potentially be out of the system in the next 10 to 
15 years----
    Ms. Kuster. That is my fear.
    Secretary Vilsack.--beginning in the very near future. So 
it is an issue----
    Ms. Kuster. We need to change the incentives to try to keep 
people in that program.
    Secretary Vilsack. Create a voucher system.
    Ms. Kuster. Thank you very much, Mr. Chairman.
    The Chairman. The gentlelady's time has expired.
    Mr. Crawford, for 5 minutes.
    Mr. Crawford. Thank you, Mr. Chairman.
    Mr. Secretary, as you know, China is forecast to hold over 
60 million bales of cotton in reserves in 2016, six times the 
level they held before implementing their reserve program 5 
years ago. Despite their reckless actions, India's own minimum 
support price has now resulted in India overtaking China as the 
world's largest cotton producer. And if that weren't bad 
enough, Turkey has seemingly concluded their purely retaliatory 
anti-dumping case against the U.S. that clearly violates the 
WTO procedure. All of this leading to the lowest cotton 
plantings in the United States in 108 years, with the exception 
of 1 year in the 1980s. and if that wasn't bad enough, add 
insult to injury, China is now dealing with their huge 
stockpile by shrinking their imports from 24\1/2\ million bales 
in 2011 to an estimated 5 million bales in 2016. That is an 80 
percent drop.
    Yet in February, on February 11, in an appearance before 
the Appropriations Committee, you said you were refusing to 
help cotton growers because you don't want to ``create 
difficulties for the industry relative to trade.'' I find that 
statement to be outrageous. Do you share our concerns that your 
refusal to act threatens U.S. cotton production and the very 
trade you say you are trying to protect?
    Secretary Vilsack. Congressman, that refers to the fact 
that Brazil brought a WTO case against us based on our cotton 
program as it existed before. They are very, very skeptical of 
anything we do in this space, so you have to be careful that 
you don't encourage Brazil to yet file another case. Their 
case, which they won, exposed us to potentially $800 to $900 
million of retaliation against crops throughout the entire 
agricultural sector so yes, I am concerned about that, and I 
should be. That is part of my job.
    Mr. Crawford. In your view, do China's and India's----
    Secretary Vilsack. That is not to suggest that I am not 
sympathetic with you in terms of your concerns about China. 
They are legitimate, and India.
    Mr. Crawford. Do you think China and India's actions with 
respect to cotton violate their commitments in the WTO, and if 
so, what is USDA and USTR doing about it?
    Secretary Vilsack. Well, I think that the Trade 
Representative's office is very acutely aware of this. It has 
expressed concerns to both India and China, and the fact that 
they are, potentially, they are already bringing cases in a 
number of areas indicates a willingness to take these folks on.
    There is a limitation in terms of the number of cases that 
they can handle from a staffing perspective, and we are 
certainly going to continue to encourage them to put pressure, 
and will continue to put pressure on China. They are very 
difficult to deal with in a lot of areas, not just cotton.
    Mr. Crawford. Understood. Perhaps your Department could use 
further counsel on trade issues, given your comments to the 
appropriators. In fact, the lack of a top trade advisor in the 
Department was contemplated by this Committee in the farm bill. 
That is why we authorized your Department the appointment of an 
under secretary of trade. Why haven't you appointed one yet?
    Secretary Vilsack. Congress has requested on two separate 
occasions that we study the issue, which we are in the process 
of following the Congressionally mandated direction.
    Mr. Crawford. Okay, let me switch gears. My colleague, Mr. 
Goodlatte, referenced the DUNS and SAM issue, and I appreciate 
your response to that. I would like to go a little further and 
say that the loss of payments on those contracts has created a 
huge cash flow problem for many of the farmers across the 
country, and some of them are in trouble with their lenders. 
Can we get your assurances today in writing so that they can 
provide the affected farmers and their lenders with some piece 
of mind on that issue?
    Secretary Vilsack. Congressman, over $24 million has been 
funneled through this waiver process, and that is the process 
that we are using to make sure that we are doing this properly.
    Mr. Crawford. I understand that, but in the interim, you 
have lenders that are starting to having to carry their 
farmers. We have farmers that are trying to make payments and 
they are $80,000 short because they haven't been paid. Is there 
something, even a piece of paper, that you could provide those 
farmers that they could go to their bankers and say we are 
good?
    Secretary Vilsack. Congressman, if you give me the names of 
those farmers, I will be happy to take a look and make sure 
that whatever we are doing does not jeopardize a situation for 
an unreasonable----
    Mr. Crawford. I would be happy to give you the names of 
those farmers, and a written response from you would, I am 
sure, allay their concerns.
    With that, I yield back.
    The Chairman. The gentleman yields back.
    Mr. Walz, 5 minutes.
    Mr. Walz. Thank you, Mr. Chairman, and Mr. Secretary, thank 
you for being here. More importantly, thank you for being a 
strong voice in rural America, and I understand my colleague, 
Mr. King, already addressed the issue of avian flu, but it is 
important to pass on to you how appreciative we are in the 
response last year, catastrophic, economically, and 
psychologically to our communities out there, and your 
willingness to get on the front-end, we have a lot of people 
feeling more confident that come spring, should we experience 
it again, we are ready. So I am grateful for that.
    I want to go back to an issue that is near and dear to my 
heart, and a little contrast to my colleague from Virginia, is 
biofuels. We are very proud of the industry. You created 
markets for our growers out there. You created homegrown, 
American fuel. You have created jobs where someone can go from 
Preston High School to get a degree at the University of 
Minnesota in engineering and chemistry, and come back home and 
work and produce fuel jobs in those communities.
    I understand that if the desire to seek clearer burning 
fuels isn't a priority, based on the science. You may ignore 
that, but the fact of the matter is, the vast majority of us do 
see that as a need. When I go down there and I see these 
plants, I see the jobs there, I see the trucks coming in with 
the market for the local producers. One thing I don't see is a 
U.S. Naval carrier battle group protecting the shipping lanes 
down there like we see when we import oil, and we need to have 
an honest conversation. The facts that you were giving were 
correct on the reduction of the import of foreign oil, 
reduction in carbon emissions, the number of jobs being 
created. And the fact of the matter is access barriers to the 
market have been created with artificial blend walls and the 
inability for people to make a choice at the pump. If I want to 
turn it to E15 and I want to use that, we can get there.
    So I would like you to use the remainder of my time, 
Secretary, because you have proven this not just in rhetoric, 
but you have created jobs out there by your leadership in this. 
What is your vision and what is the state of the biofuels 
industry now, and where do you see us in 10 years down the 
road, assuming we can give the certainty that every market 
should expect from us, and biofuel is no different?
    Secretary Vilsack. Congressman, the ability to maintain a 
strong and vibrant rural economy is dependent on our capacity 
to diversify and to create new opportunities to complement 
production of agriculture and exports, which has been the 
traditional way of supporting rural America.
    In my lifetime, agricultural production has increased by 
170 percent, even though the inputs have been relatively 
stable. That is producing 170 percent more on 26 percent less 
land, with 22 million fewer farmers. The challenge that we have 
in rural areas is that as we were getting fewer and fewer 
farmers and becoming more efficient with production of 
agriculture, we didn't overlay that with a complimentary 
economy that would allow folks to live, work, and raise their 
families in small communities. We are now doing that, and part 
of that is the bioeconomy, and what you have mentioned is the 
biofuel piece of this. There is also the bioenergy piece of it 
where we are seeing people converting biomass into energy. We 
are seeing dairy producers creating digesters that are 
producing methane and converting it into power. We are 
beginning to see chemicals and materials being produced, and we 
are beginning to see manufacturing come back in small towns. 
You complement that with a local and regional food system and a 
creative use of conservation, and you have more stimulation 
going on in your economy.
    The biofuel industry has been helpful, not just in the 
Midwest now, it is now expanding to the Northwest. There is 
very great interest in the commercial aviation piece of this. 
As I mentioned earlier, it is happening in the South with woody 
biomass and with perennial grasses. It is even beginning to 
percolate a little bit in Texas and Oklahoma. I am surprised 
that Texas was one of the aggressive users of this biofuel 
blender pump program. In fact, they might have been the largest 
recipient in terms of dollars.
    So it is something people like. It is something people 
want. It is helping to create jobs. It is, in fact, reducing 
the cost of gas over time. It is reducing emissions. During the 
last 15 years, it has taken 124 million car-equivalent 
emissions off the road that otherwise would have been on the 
road. It is reducing our trade deficit. It is helping to reduce 
our reliance on foreign oil. By no means the only reason we are 
reducing it, but it is part of the reason. And it is helping to 
diversify the economy. It is creating the jobs that so many 
producers today, if you look at the way in which farm income is 
generated, part of it is generated from the farm and a good 
part of it is also generated from off-farm income. And so many 
families have a spouse or the farmer themselves who are 
employed, and the result is that is why the median family farm 
household income is high, even though our farm income has come 
down. And you have to kind of look at the data, that it is 
beginning to work and we want to make sure we continue to 
expand those opportunities.
    Mr. Walz. Thank you for that, and we appreciate it. I yield 
back.
    The Chairman. The gentleman's time has expired.
    Mr. DesJarlais, for 5 minutes.
    Mr. DesJarlais. Thank you. Thank you, Mr. Secretary, for 
appearing before us so often.
    I wanted to acknowledge that one of our great leaders in 
Tennessee Farm Bureau, Lacy Upchurch, is retired. I know you 
had a lot of respect for Lacy, and we are happy to welcome the 
new President of the Tennessee Farm Bureau, Jeff Aiken, to 
Washington. I had the opportunity to visit with him earlier 
this morning, and he and I share a similar concern. We know 
that the USDA website has a mission statement of help rural 
America thrive, but we both share the concern in the 
President's new budget. After the ag community essentially in 
an attempt to do their part in cutting spending, Washington 
gave up direct payments, is now seeing the President propose a 
20 percent cut to crop insurance. How do you feel about the 
President's proposal, and have you spoken with him about it?
    Secretary Vilsack. Well part of the proposal is focused on 
prevented planting concerns that have been raised by both 
Government Accountability Office, who is your Congressional--
and by our own Inspector General. And so it is appropriate and 
necessary for us to be responsive to the concerns that are 
raised by these oversight and accountability organizations when 
they raise concerns about how that program is being run, and 
the cost to taxpayers.
    The second area has to do with price harvest loss issues 
and the amount of subsidy for that. It is currently at 62 
percent. The President suggested that perhaps it would be 
appropriate at 50 percent, a fair deal to taxpayers, farmers, 
and insurance, and all of this is in the context of a very 
constrained budget. The budget I am working with today, from an 
operating standpoint, is less that it was the first full year 
the President submitted a budget. When you place artificial 
restrictions and caps on budgets, you have to make choices. So 
if it is not in that space, is it in the conservation space you 
want me to make that choice? Is it in the farm loan space you 
want me to make that choice? Is it in the rural development job 
creation space you want me to make that choice? Is it in the 
food safety place you want me to make that choice? It is 
ultimately about these choices, and they are not easy. They are 
very difficult, and you all understand that because you have to 
make choices throughout the entire budget, and you have to 
prioritize. Obviously, everyone has a different set of 
priorities, and that is what makes this process interesting to 
watch. And you all will speak, you will create a budget, and 
the next Secretary will live with that budget.
    But the reality is, it is less than it was, but yet I can 
show you that we are doing record amounts of work on virtually 
every mission area.
    Mr. DesJarlais. Shifting to the Waters of the U.S. for a 
minute. We know that 31 states and organizations have filed a 
lawsuit against the rule. Associations who represent rural 
America, like the Farm Bureau, National Cattleman's, National 
Corn Growers, National Pork Producers, U.S. Poultry and Egg 
Association, just to name a few, basically organizations that 
share the USDA's mission of helping rural America thrive are 
all calling for the Administration to scrap this rule, start 
over, and develop a rule with meaningful input from state and 
local stakeholders.
    What input did the USDA have on this rule or provide on the 
rule?
    Secretary Vilsack. We have an advisory process in which we 
advise EPA on our view of the impact and effect of what they 
are considering. Obviously, we don't dictate what a sister 
agency does. And obviously, courts are going to decide based on 
the injunction that currently is in place. What is going to 
happen with that rule.
    Mr. DesJarlais. Are you supportive of EPA's rule in its 
current form?
    Secretary Vilsack. I would say this. I think there is a lot 
of misunderstanding about what the rule is and what the rule 
isn't, which is why I encouraged the Administrator to get out 
and encouraged her teams to get out and visit with farmers and 
have farmers be able to see what it covers and what it doesn't 
cover.
    Mr. DesJarlais. And she was here in this Committee, as you 
probably know, just a week or 2 ago. Gina McCarthy, is that who 
you are referring to?
    Secretary Vilsack. I am sorry, what?
    Mr. DesJarlais. Were you referring to Gina McCarthy getting 
out?
    Secretary Vilsack. Yes.
    Mr. DesJarlais. Okay.
    Secretary Vilsack. And her teams to basically create a 
situation in which farmers could bring information about their 
individual operations to EPA personnel so that they could say 
this is in, this is out, because there is some confusion. It is 
a very difficult circumstance and I understand that farmers are 
very, very concerned. And if there was more communication, 
there might be a little less concern.
    Mr. DesJarlais. Okay. Well, it is pretty clear that they 
have spoken, the 31 lawsuits, all the organizations that have 
brought this forward. It is not very clear. Just the definition 
of a ditch could take an hour to go through. So I mean, it is 
not clear and you have the President's ear on this, and we 
would hope that representing the ag community, you would be on 
the side of all the stakeholders who have spoken so loudly to 
have this rule scrapped, and let's start over because it was 
not done in a proper fashion through the rulemaking process.
    I thank you for your time.
    The Chairman. The gentleman's time has expired.
    Ms. Lujan Grisham, 5 minutes.
    Ms. Lujan Grisham. Thank you, Mr. Chairman, and Mr. 
Secretary, it is nice to have you before the Committee again. I 
appreciate, as always, your efforts for rural economic 
development investments, and given the nature of my state and 
our current economic condition, which is severe, and I 
appreciate all those investments and all that you are doing.
    But I really want to talk about what more we could do, 
given the fact that nine counties out of the 33 counties in my 
state have above 20 percent poverty, and that poverty rate has 
been persistent over a 30 year period. Given that, recognizing 
that we have those issues and conditions around the country, in 
2009, we wanted ten percent of those rural economic development 
investments to go to these areas of persistent poverty. That 
expired in 2013. So I am interested really in two things. Did 
that mandate or set aside, how do we want to identify that, did 
that have an impact, and if it did, do we need to maybe do that 
again? And if it didn't, what things do you think and do you 
recommend that we could be doing, because in spite of those 
economic development efforts, New Mexico and others are still 
really lagging behind. I want to work with every stakeholder 
and every policymaker to make sure that New Mexico gets what it 
needs to end this persistent poverty in our rural and frontier 
areas.
    Secretary Vilsack. Congresswoman, what we measure, we do. 
What we create as goals, we strive to accomplish. The goal of 
ten percent, we actually at USDA decided that that was not 
ambitious enough. We looked at 20 percent initially of 
resources being spent in those counties that have been dealing 
with persistent poverty. I can tell you that as of last year, 
22 percent of our resources were invested in those counties, 
and now we are focused on potentially moving that up.
    We also have created StrikeForce, which ensures that we 
have a coordinated effort within USDA to make sure that we are 
working with community building organizations to identify the 
current needs as it is as seen at the local level, not based on 
what we think is appropriate. And as a result of StrikeForce in 
over 900 counties, $23.6 billion has been invested in 190,000 
different investments, everything from single family housing 
loans to conservation efforts, farm loans.
    We then extended that effort through the Rural Council the 
President set up, the first ever, and now we are focused not 
just on creating economic opportunity, but also trying to 
mitigate the impacts of poverty through our Rural Child Poverty 
Initiative. We are taking a look at best practices in terms of 
a two generation approach. We just had a conference with the 
National Association of Counties officers and officials, NACo, 
and we have challenged 100 counties to work with us to create 
programs and strategic plans----
    Ms. Lujan Grisham. Great, and the hard part is, and I don't 
disagree with any of your statements about the StrikeForce, 
about meeting and exceeding your goals, but looking at the 
outcomes just in my backyard, they are not there. And we have 
been cost shifting as a state to the counties who I think I 
have convinced in my state to declare behavioral health 
emergencies in their local areas to see if we can't trigger a 
larger public health emergency in the state, because I haven't 
gotten any Federal support to deal with that, and the state 
support is gone. We are the only state in the country, which is 
not your issue, per se, at all, that doesn't have a behavioral 
health infrastructure anymore. It is completely gone. So do you 
see a way to take this StrikeForce idea and to leverage that 
with other Federal investments, given your relationship and 
expertise in rural economic development?
    Secretary Vilsack. That is what we are doing with the Rural 
Council. We have telemedicine cooperatives with HHS. We have a 
Veterans' Blue Button Initiative with the Veterans Affairs. But 
I would say on the mental health behavioral service area, we do 
fund mental health clinics through USDA through the Community 
Facility Grant Loan Program, and in fact, we funded $23 million 
worth of those in the last couple of years. So it may be 
something we can work with you on.
    Ms. Lujan Grisham. That sounds great. I will definitely, 
and I have just a few seconds left, work with you on that, Mr. 
Secretary, so thank you very much.
    I also want to encourage you to, I hope, reach a favorable 
decision to help New Mexico's dairy producers, given our dairy 
loss related to the huge snowstorm that we had in early 
January. The state declared an emergency and we have written to 
you as a delegation, and we are hoping for a favorable reply as 
soon as possible.
    Secretary Vilsack. Your producers qualify for the disaster 
assistance program, and the way in which that turned out, they 
can actually qualify in either 2015 or 2016. Secretarial 
designation isn't going to be providing the kind of help that 
you all want, but there is an administrative process that you 
all can go through in terms of building and equipment losses. 
So we will be glad to work with you on that.
    Ms. Lujan Grisham. Thank you, Mr. Secretary, and thank you, 
Mr. Chairman. I yield back.
    The Chairman. The gentlelady's time has expired.
    Mr. Benishek, 5 minutes.
    Mr. Benishek. Thank you, Mr. Chairman. Thank you, Mr. 
Vilsack, for being here today.
    I just want to touch on a few things. You have had a wide 
variety of issues discussed here today, but I want to talk a 
little bit about the Forest Service. Believe me, I agree with 
you on the emergency fire spending. That is a problem we have 
to fix. But I still question how sales within the forest are 
conducted and done that could be done better. I spend a lot of 
time in rural Michigan. We have three Federal forests, and I 
talk to people who work in the forest all the time. I 
understand that you could have better budgets. One of my 
problems understanding it is that when you sell trees, you make 
money, and yet there is no money in sales. That is the argument 
I have heard before from the Forest Service.
    But the people that actually do the harvesting, the 
contractors, the loggers, they tell me that they can't get a 
sale done because of the way the sales are let. I mean, there 
is too big of a project. There is not enough smaller projects 
so that the average logger in the area can actually do the 
project, and a lot of the sales just don't get done for reasons 
like that, not so much the lack of funds, but just the lack of 
adequate planning of the sale. Can you comment about that, Mr. 
Vilsack?
    Secretary Vilsack. Well, we actually have increased sales 
and our goal is higher this year than last year. Our goal was 
higher last year than the year before, and we have been making 
a steady increase in the number of board feet that are being 
treated.
    Mr. Benishek. One of my forests has seen that, but the 
other two forests haven't.
    Maybe it is a local person, I don't understand why, for 
example, like I told you, they are trying to sell a thousand 
acre sale. Well, the guys that do these bids, they can't do a 
thousand acre sale. They don't have that many guys to do it. 
They can't comply with all the rules. Is there a way it could 
be done so that the local loggers could actually bid on these 
jobs?
    Secretary Vilsack. We can work with you on this issue. I 
would say that many of these contracts, you mentioned staffing 
and you might not think that that is an issue, but it actually 
is. There is staffing involved in all of these contracts. There 
are analyses that have to be done, and the reality is we--
because of the fire budget, we have reduced the staffing of 
that team, of that staff, in order----
    Mr. Benishek. Oh, I understand that, and believe me, I 
would be willing to work with you on----
    Secretary Vilsack. Well that is the problem.
    Mr. Benishek.--on fixing these silos of money so that you 
can actually use the money that you get from a sale to actually 
continue to do more work on that.
    Secretary Vilsack. There is a 50 percent reduction in the 
staff, Congressman, a 50 percent reduction in the staff.
    Mr. Benishek. No, I agree that we need to fix the fire 
issue. But what I am telling you is that this example that I 
gave you of a bid being left that nobody in the area can 
actually bid on. The way that they proposed that bid, the staff 
didn't make it in a way that people that actually do the 
logging in the area could bid on it. So that's not really not 
having staff, that is the staff not doing it right.
    Secretary Vilsack. That is why I say I would be happy to 
work with you on that issue. I mean, that is a fair concern, 
and if we are not structuring these in a way that fits the 
terrain or fits the forest, then that is a problem on us and I 
am happy to take that back.
    Mr. Benishek. Well, I would really like to work with that, 
because I hear that all the time, to tell you the truth. That 
is the issue. Not the issue that they are not getting bids, but 
the bids aren't working.
    I just want to bring up one more thing. Does the Forest 
Service have a line item, as I understand it, for land 
acquisition? Isn't there a way that we could use that money a 
little bit smarter than acquiring more land Secretary Vilsack?
    Secretary Vilsack. To acquire more land?
    Mr. Benishek. Yes.
    Secretary Vilsack. Well, there are some folks who don't 
want us to acquire a lot of land.
    Mr. Benishek. I think we should manage the land you have 
instead of acquiring more. Do you know what percentage of that 
line item in the budget is actually being used?
    Secretary Vilsack. It is a really small amount. It is a 
really small amount in terms of the overall budget. It is a 
very, very small amount, and oftentimes, the only time it is 
used is basically in fills so that it makes sense----
    Mr. Benishek. Yes, and I understand that kind of stuff, but 
I would like a little more detail. Maybe your staff can provide 
that for me, going forward, okay, in the next month or 
something. Okay.
    Secretary Vilsack. We will get you that.
    Mr. Benishek. Thank you. I am out of time.
    The Chairman. The gentleman yields back.
    I now recognize Mr. Davis, for 5 minutes.
    Mr. Davis. Thank you, Mr. Chairman. Mr. Secretary, great to 
see you again. Thanks for being here.
    This past November, the FDA published guidance on voluntary 
labeling of products of biotechnology, and once again, affirmed 
the government's position that there is no scientific 
justification for government interest in mandating on package 
labeling of products in biotech. The food industry has recently 
announced the development of a voluntary smart label, 
specifically designed to provide consumers with this 
information. I assume the USDA is consistent with the FDA's 
position in support of voluntary labeling?
    Secretary Vilsack. Congressman, we are working with the 
industry to try to resolve the dilemma that we are facing in 
the very, very near future with the implementation of the 
Vermont law. That is going to create chaotic circumstance and 
situation, and it requires some kind of adjustment and some 
kind of national approach to this so we don't have 50 different 
state efforts and we don't have individual companies like 
Campbell's making the decision that we are going to go ahead 
and do what we want to do. We want some standardization of 
this. So I don't want to be cute about this, but I think that 
what the FDA has resolved is fine, but the reality is we are 
confronted with this circumstance that could create real chaos 
in the market. We need to get this thing fixed.
    Mr. Davis. Well you answered both of my follow up 
questions. I completely agree with you. I think we do need a 
national standard, and I am willing to work with you and your 
agency to help make that argument as we move forward, so thank 
you on that.
    Secretary Vilsack. Here is the biggest point that Congress 
is going to have to decide. I don't think there is any question 
that people can probably reach an agreement that there needs to 
be some kind of time period between now and fill the blank, 2 
years, 3 years, 5, whatever the time period is, in which the 
industry will do the job of educating consumers about how they 
can access information about what is in their food. A 1-800 
number, a website, the smart label. At the end of that period, 
what happens? If there is consumer understanding and 
acceptance, you don't need to worry about what is on the 
package. If there is not, what happens, and that is the issue 
that ultimately has to be decided.
    Mr. Davis. I agree with you, and I appreciate your 
comments, Mr. Secretary.
    I am going to move on to another subject. Last week, I 
asked Administrator McCarthy about the progress that EPA is 
making to establish the new ag related standing committee of 
the Science Advisory Board, which as you know, was enacted as 
part of the 2014 Farm Bill. Now the Administrator informed me 
that as recently as 2 weeks ago, EPA met with the USDA to 
finalize that standing committee. I just wanted to make sure 
you were aware of the Administrator's commitment as the EPA 
consults with you, and also members of this vital committee, 
the ag community needs the USDA to weigh in with its expertise 
and guidance, and I look forward to partnering with you to 
finalize that process.
    Now my last line of questioning is in regards to 
pesticides. Federal laws dictate that the USDA serve as an 
important advisor to the EPA in the regulation of pesticides. 
Historically, your agency and their expertise and advice has 
been evident in the actions the EPA has taken to evaluate 
pesticides and their uses. USDA's perspective and knowledge of 
production agriculture, truly, Mr. Secretary, is critical. 
However, it is concerning to hear from the farm community, 
because they express increasingly urgent concerns about EPA's 
failure to meaningfully consider your expertise, advice, and 
opinions, especially during the formal interagency review. Can 
you give us a quick summary of how do you interact with the EPA 
when we deal with issues such as the neonicotinoid seed 
treatment on soybean production?
    Secretary Vilsack. It is a situation where our technical 
experts and their expertise communicate to EPA the concerns 
with whatever EPA is proposing and suggesting, and basically 
advising what we believe will be the impact and effect in the 
countryside on what they are considering, and encouraging them, 
if there is going to be a significant impact for them to 
reassess their approach. It is advisory, obviously, it is not 
dictating. It is advisory. So we have that constant 
communication. Sometimes, depending upon the nature of the 
issue, may elevate to the senior staff if there is a very 
serious disagreement or a serious concern, and at times, it can 
also elevate even higher. But it is a process of communication 
at various levels.
    Mr. Davis. Well specifically in regards to the recent 
release that the EPA put out in regards of the benefits 
analysis for seed treatments on soybeans, did that get elevated 
to the senior staff level? Were there concerns at the USDA? Do 
you feel your expertise was actually utilized in this release?
    Secretary Vilsack. That is a difficult question for me to 
answer. It is not something that was discussed with me, but it 
may very well have elevated to the senior staff and been 
resolved at the senior staff level. Or basically, sometimes we 
have to agree to disagree.
    Mr. Davis. Well, I am out of time. I yield back whatever 
balance I don't have.
    The Chairman. The gentleman yields back his time.
    Mr. Allen, 5 minutes.
    Mr. Allen. Thank you, Mr. Chairman, and thank you, Mr. 
Secretary, for being here this morning. Thank you also for 
meeting with our Georgia Members here, and in the Senate, 
yesterday.
    I just wanted to clarify one thing that Congressman Scott 
had asked you about the cost-share program. For some reason 
yesterday, and I wrote it in my notes, but we were talking 
about $300 million yesterday, and you mentioned $150 million 
today. Could you clarify what you think that program might 
benefit?
    Secretary Vilsack. I mentioned both figures yesterday, $300 
million is the total cost we estimate of ginning costs.
    Mr. Allen. Okay.
    Secretary Vilsack. And $150 million would be the 50 percent 
cost-share that had been discussed.
    Mr. Allen. All right, good. Thanks for clarifying that.
    Also, since our meeting yesterday, I met with dozens of our 
colleagues both here on the Committee and also with our 
colleagues over in Appropriations, and our industry leaders, 
and the first thing that I would like to ask you is you 
mentioned that the appropriators took away your broad authority 
to provide assistance under section 32 of the CCC Charter Act. 
When did they do that, and why did they do that?
    Secretary Vilsack. They have been whittling away at that 
for the last couple of years. I think there were concerns about 
the way in which we were utilizing that authority to help 
farmers and producers during difficult times for particular 
segments and particular aspects of agriculture, so they have a 
blanket restriction. The reality is that when you have a 
blanket restriction, you have situations like this where there 
is a need for flexibility and I don't have it.
    And I would also say, Congressman, as I said earlier, it is 
fine if they have concerns about me, but they have to 
understand that this appropriations bill is more likely going 
to be impacting the next Secretary, so they ought to at least 
give the next Secretary the flexibility.
    Mr. Allen. Exactly, and of course, that has been since 
Fiscal Year 2012 that it has included a rider preventing you 
from using that, and in talking to the appropriators, many of 
them believe that it was because of a Senate race in Arkansas 
and providing assistance there, is there any truth to that?
    Secretary Vilsack. There were farmers who were suffering 
significant problems in the State of Arkansas and in 
surrounding areas, and this was an effort to try to provide 
help and assistance at the request of those producers and at 
the request of Members who represented them in Congress, which 
is not different than what is happening today in cotton.
    Mr. Allen. And this was not a direct request of Senator 
Blanche Lincoln's failed 2010 Senate reelection bid?
    Secretary Vilsack. She was the chair of the Agriculture 
Committee, and obviously she made a request in her capacity as 
the chair, and as a Senator.
    Mr. Allen. Okay. Now the other thing that I am having a 
hard time doing in talking with you and I will try one more 
time, but I have carried the conversation we had back to our 
industry leaders and members and colleagues on the Committee, 
and we have this difference of opinion as far as cotton is 
concerned. Obviously lint is part of cotton. We export 80 
percent of our lint. Cottonseed is part of it, and we export 
less than ten percent of cottonseed. It is my understanding, 
and this is testimony by a former Chairman here, that you said 
that Congress expressly removed the eligibility of cotton for 
ARC and PLC assistance. It is true that upland cotton is no 
longer a covered commodity, but that completely misses a major 
point. The prior designation of upland cotton as a covered 
commodity only impacted cotton lint. Cottonseed has never been 
a covered commodity.
    Secretary Vilsack. When we were structuring the STAX 
program, the industry requested that STAX cover cottonseed.
    Mr. Allen. Do we have evidence of that? Can you get me 
evidence of that?
    Secretary Vilsack. Well I can get you the folks at RMA to 
do that.
    Mr. Allen. Okay, because I can't seem to find anybody 
that----
    Secretary Vilsack. Well, hindsight is always 20/20, and the 
reality, let's be candid here. The reality is that at the time 
this farm bill was being put together, everyone was operating 
under the assumption and belief that they needed to save $23 
billion, and choices and issues had to be factored, and it was 
a lot of give and take. And cotton was also faced with the 
Brazilian cotton case, and the retaliation that faced us as a 
result of that.
    Mr. Allen. I understand.
    Secretary Vilsack. And decisions were made to create this 
program, and there was no effort at the time to include 
cottonseed in the list of all of the other oilseeds that were 
known at the time. We have already expressed a willingness to 
help the cotton industry, if I believed in good faith that I 
have the ability to do this, I would do it. I do not believe in 
good faith I have that ability.
    Mr. Allen. Well, what we believe is we expressly gave you 
the authority to designate other oilseeds at your discretion.
    Secretary Vilsack. You gave me the authority in situations 
where oilseeds crop up in between farm bills that were not 
fully appreciated and not aware of. We have never, ever 
exercised this particular provision in the way that you are 
asking us to exercise.
    Mr. Allen. Well, you have to give me more to go on, because 
I am having a very difficult time explaining that to my farmers 
back home who are going out of business.
    Secretary Vilsack. Well, we will----
    Mr. Allen. Thank you. I yield back.
    Secretary Vilsack.--be happy to help them if you give us 
the permission and the capacity.
    The Chairman. The gentleman's time----
    Secretary Vilsack. You can reopen the farm bill----
    The Chairman. The gentleman's time has expired.
    Mr. Bost, 5 minutes.
    Mr. Bost. Thank you, Mr. Chairman. Thank you, Mr. 
Secretary, for being here.
    I am going to go down a little bit different road. We 
actually in the State of Illinois and everyone along the 
Mississippi River had the wonderful opportunity at Christmas 
and New Year's to have what some people would consider not a 
real good gift and not a real happy New Year, in the fact that 
the Mississippi rose to the 1993 levels, but did it in about 
1\1/2\ or 2 weeks. When it did that, it blew through an area in 
deep southern Illinois known as the Len Small levee, and 
pictures are worth a thousand words, so I am going to show you 
what we got and the sand that moved through, and the 
devastation. This was all productive farmland prior to that 
levee break. Some of the area they had as much as 1", most of 
it, 3 to 5 of sand that moved, this, as you can see, is an 
irrigation system that was actually buried and wadded up.
    Now that being said, the reason why I am wanting to show 
you those is because in August of 2015, you declared 87 
counties in Illinois an agricultural disaster in a letter to 
Governor Rauner. Also in that letter, you outlined the systems 
available to producers in Illinois who may be affected and 
noted that each claim would be treated on a case-by-case basis.
    Mr. Chairman, without objection, I would like to submit 
this letter to the Secretary and put it into the record.
    [The information referred to is located on p. 61.]
    Mr. Bost. Now believe me, because I work with these people 
all the time. Farming in a floodplain is tough, and with that 
being said, my question is will the same assistance that was 
provided in 2015 disaster declaration be available to producers 
in the affected areas of my district that experienced this 
flood, and I know that is pending on the governor's 
declaration, and how can the rural development help these 
communities that are in this situation?
    Secretary Vilsack. The governor can make this request, and 
then we have been turning around these requests very quickly. 
So we would await the governor's request. I would be happy to 
have our staff take a look at whether or not a Secretarial 
designation from me, which is not necessarily dependent on the 
governor's request, can be done. I don't know that it can, but 
we would be glad to look at that.
    I would say there are two or three places where we could 
provide some help. I think NRCS could potentially be helpful. 
There are obviously loans, disaster loans that are available to 
producers. There is also the issue of what kind of crop 
insurance protection they have, and the impact and effect that 
this is going to have on their ability to plant a crop in 2016, 
and what kind of protections may be afforded. And in terms of 
rural development, I will have our folks reach out to you. I am 
trying to think of the program within Rural Development that 
would be helpful. I think NRCS and FSA are probably more likely 
to be helpful.
    Mr. Bost. Okay.
    Secretary Vilsack. But there may be something that Rural 
Development can do, but my guess is it is primarily NRCS and 
FSA.
    Mr. Bost. And kind of just following up on that, we know 
that obviously crop insurance, if they can get crops out at all 
this year, but crop insurance is actually going to go up 
because of this. Is there anything that they can be done to get 
relief from a potential increase for that insurance to try to 
bring that area back? Do you know that?
    Secretary Vilsack. Well, there is that ability, I will be 
happy to check with RMA about that.
    Mr. Bost. Okay, if you just work with our staff to try to 
figure it out?
    Secretary Vilsack. Yes, I will be happy to ask about that.
    Mr. Bost. And I am going to just say thank you for your 
work on GMO and what we had to deal with out of this Committee 
and what we moved as far as the problems that can exist with 
each state that is labeling out there. And we are hoping that 
this gets all the way through and we can actually stop it, but 
what happens if we don't get something done before July 1?
    Secretary Vilsack. Vermont law goes into effect. Food 
processing entities will have to think whether they want to 
segregate their supply chains and incur costs, or whether they 
want to do business or reduce access to product. And other 
states, obviously, are considering this, and frankly, the 
answer and whatever is done needs to recognize that this is not 
the first and only and last time that we are going to be 
dealing with things like this. Folks are going to raise issues 
about how crops are raised all the time, so we have to have 
some kind of mechanism, the smart label answers this, to be 
able to rapidly adjust to whatever consumers are interested in 
knowing, but doing it in a way that doesn't convey the sense 
that the product is unsafe, because it is not. There are 
hundreds, hundreds of studies to the effect that it is not 
unsafe.
    Mr. Bost. I appreciate working with you, and with that, I 
yield back.
    The Chairman. The gentleman yields back.
    Mr. Rouzer, 5 minutes.
    Mr. Rouzer. Thank you, Mr. Chairman. Mr. Secretary, thank 
you very much for being here, and I also want to quickly thank 
you for your help in working with us on lean meats as it 
related to the Dietary Guidelines.
    Two things I want to raise with you, and both are of great 
concern to me. Speaking of lean meats, pork, the other white 
meat, I understand the Humane Society filed a suit against USDA 
over the sale of that trademark. It is also my understanding 
that USDA may now be considering a settlement agreement with 
the Humane Society. As I understand the way this has played 
out, Humane Society filed the suit. The case was initially 
dismissed on the basis of a lack of standing. Then the D.C. 
Circuit reversed that ruling, but USDA did not appeal or 
otherwise exhaust any of the natural defenses that you 
typically would pursue. Was that a decision made by USDA, or 
was that made by the Department of Justice, or where was USDA 
in the mix on this?
    Secretary Vilsack. It was a decision made in concert with 
the industry.
    Mr. Rouzer. So now has the industry been in----
    Secretary Vilsack. Industry has been involved in 
discussions about how to structure this in such a way: the 
issue has to do with the payment for that trademarked phrase 
that is no longer being used. There is a question about the 
check-off dollars being used in that way, and the industry is 
now working with the Humane Society in between the timeframe 
that has been granted by the court to try to figure out how to 
do this in a way that is satisfactory to all parties.
    Mr. Rouzer. Well who suggested the settlement? Where did 
that come from? I can't imagine the industry suggested the 
settlement.
    Secretary Vilsack. Well, I don't know that that is 
necessarily correct. The industry is interested in getting this 
resolved.
    Mr. Rouzer. Well, I can certainly understand that. I guess 
the part that concerns me a little bit is there seems to be a 
tendency, and this is not just related to this specific case, 
but across the board where someone files suit and then rather 
than pursuing every legal option available, we just settle. 
That is the overarching concern that I have across the board.
    Secretary Vilsack. You may be right about other cases, but 
I don't think that that is the situation here. I think the 
circumstances are that you have a situation where payments were 
being made, multi-million dollar payments were being made for 
something that was no longer being used, and legitimate 
questions were raised about that, and so in an effort to try to 
get matters resolved and get those monies continuing to promote 
the industry, the folks are in the process of discussing how 
this can be structured in a way that makes sense. It doesn't 
invite legal challenge.
    Mr. Rouzer. Moving on to another issue, cotton. You have 
heard a lot about cotton today. I am not going to belabor the 
point, other than saying that my producers back home are really 
struggling. In fact, I met with a group of cotton farmers last 
week. Their situation is quite concerning, and of course, all 
of agriculture is struggling as it relates to commodity prices 
and the weather, et cetera.
    Where I have an even broader concern, though, is as it 
relates to fighting back with these other countries, our 
farmers feel like they are the punching bag. When is the United 
States Government--when are we going to fight back as it 
relates to domestic supports that are provided in other 
countries, for those countries that we are competing against? 
That is a real frustration all across the country, and 
particularly in my district. When is the last time we had 
pursued a challenge against domestic supports by another 
country?
    Secretary Vilsack. Well, there is a case pending. Issues 
have been raised with China about poultry, but I would be happy 
to get you the list of cases that have been raised or the 
issues that have been raised.
    Look, we have had 7 of the best years cumulatively of ag 
exports in the history of the country, and we are aggressively 
pursuing more opportunities, and we are convinced that the 
Trans-Pacific Partnership will provide us incredible 
opportunities, and reopening our opportunities in Cuba. So we 
are constantly looking for ways to expand the market, and when 
we think there is a problem, the passage of the recent customs 
bill is a reflection of you all expressing a desire for more 
enforcement, and you are going to continue to see more cases 
that have been brought in this Administration, not necessarily 
in agriculture regards, but the entire economy than any 
previous Administration.
    Mr. Rouzer. We are not just opening markets, but it is 
important for us to go on offense and challenge some of these 
other countries the way they like to challenge us.
    Mr. Chairman, I yield back my time.
    The Chairman. The gentleman's time is yielded back.
    Mr. LaMalfa, 5 minutes.
    Mr. LaMalfa. Can I defer, please?
    The Chairman. Mr. Newhouse, for 5 minutes.
    Mr. Newhouse. Thank you, Mr. Chairman, and thank you, Mr. 
LaMalfa.
    Mr. Secretary, as everyone is singing your swan song, I 
don't know if it is totally unprecedented for the next 
Administration to keep a current Secretary, so just to put my 
2 in there for your performance. I appreciate working with you 
over the last 7 years.
    A couple of questions real quickly. Earlier this month, I 
noticed that APHIS published a Notice of Intent to revise its 
biotech regulations and complete an environmental impact 
statement, an EIS, which is required under the NEPA for such 
changes.
    I have to tell you, first of all, that the Notice of Intent 
seemed somewhat vague. It wasn't clear what commodities or 
technologies were intended to be regulated. Under the notice, 
things previously unregulated would potentially fall under 
regulation, such as the seedless watermelons, for one example. 
Could you tell me what prompted this regulatory revision, and 
how a systemic revision can be expected to be in it? And as a 
follow up to that, I was very concerned that there was only 30 
days given for a comment period, and as you well know, 
something of this importance I would hope it could have as much 
time as possible for stakeholders to weigh in. Would you 
consider perhaps extending that 30 day period?
    Secretary Vilsack. This has to do with plant pest risk 
assessment section of the biotech regulations that USDA is 
involved in. We had proposed a set of changes many, many, many 
years ago that has sort of languished, and so we decided to 
withdraw that proposal and start the process again to give 
people an opportunity to refresh their comments, as they had 
provided previous comments. We provided a list of alternative 
options. One of those options has to do with trying to make 
this process as efficient as possible. We heard concerns from 
the industry that we take a good deal of time, and we have 
reduced that time from 90 months to about 13 months on average 
now. We have reduced the backlog, but there is still a desire 
for greater efficiency. So to the extent that we have already 
passed on a technology, the question is why should we have to 
reevaluate that same technology if it is in a different crop? 
That is a question, and a legitimate one for comment.
    As far as the comment period is concerned, we were always 
open. If we see that there is a significant interest in this 
and there is a lot of demand, we have in the past been willing 
to provide additional time, and that may very well happen in 
this case. I don't want to commit to it, but it may very well 
happen.
    Mr. Newhouse. Well thank you very much.
    On the GMO issue, I would just add my ditto to Mr. Bost's 
comment and appreciate your support on working on behalf of 
making sure we have a clear movement forward, something that 
will prevent us from having a patchwork of regulations around 
the country. So thank you very much for your work on that 
issue.
    Let me talk a little bit about forest certification 
programs. Last September, the EPA published an interim 
recommendation for environmental standards, as well as 
ecolabels for use in Federal procurement. Their recommendation 
for lumber excludes several of what we see as credible 
standards, including the SFI, which is Sustainable Forestry 
Initiative, and the ATFS, the American Tree Farm System. I 
don't have to tell you that across the United States, a huge 
percentage of the forest area is covered under those two 
systems. In my home state, 95 percent of the forests are 
covered under those. I can tell you I was disappointed to learn 
of this recommendation, and asked what kind of determination or 
without consultation by USDA should we see in the future. Is 
the USDA going to stand up for these certification programs? 
Could you provide us with an update on how you plan to educate 
the DOE as well as the EPA about these certification programs?
    Secretary Vilsack. Congressman, I will be happy to ask our 
team to give you a full briefing on the process that is in 
place. If you see that it is not robust enough, I am sure that 
you will be able to tell us that. I can commit to you that we 
make every effort to try to make sure that EPA is aware of our 
views on certain things and what we think the likelihood would 
be of the impact in the field. Obviously, it is a sister agency 
and frankly, I don't necessarily want, and I don't think you 
want the EPA to tell me what I should be doing, do you?
    Mr. Newhouse. Absolutely not, but I would be hopeful that 
you would engage with those two other agencies and educate them 
as to the importance of those programs.
    Secretary Vilsack. Fair enough.
    The Chairman. The gentleman's time has expired.
    Mr. Newhouse. Thank you, Mr. Chairman. I appreciate it.
    The Chairman. Mr. Kelly, 5 minutes. I am sorry, Mr. 
LaMalfa, 5 minutes. Sorry about that.
    Mr. LaMalfa. Thank you, Mr. Chairman, parachuting in here.
    Mr. Secretary, thank you for appearing again with us here 
today, and your dedication to doing so in past hearings.
    An issue we have a lot, especially, it is important up in 
our district is the Resource Advisory Committee known as RAC. 
There is an appointment process which is important for the 
funding for RAC work to be done on forestry and other land 
management issues, which is really important for secure rural 
schools, for example, in our area. And so what we find is that 
the RAC committees, some of them don't have enough members on 
them because the appointment process hasn't been fulfilled to 
reach a quorum. They have to have a quorum to make decisions on 
the allocation of funding, so it delays the process for what 
Forest Service needs to get done, and the BLM, et cetera. Are 
you aware of that? Is there some way we could goose this 
process along a little bit to get to RAC appointees so they can 
have quorums in doing their good work?
    Secretary Vilsack. Congressman, I basically approve all 
those appointments, and from time to time as I am approving 
them, I notice that there are categories that are not filled 
because there is no nomination or no recommendation for the 
local area. I can't give you an example. There may be a request 
for a Native American representative, or there may be a request 
for an engineer, or there may be a specific request the way the 
RAC is set up.
    Mr. LaMalfa. Do you have any flexibility where let's just 
say the Happy Camp, California, may not have a lot of engineers 
and for the area that that RAC would cover, for example. Is 
there flexibility or do you need a legislative fix to allow 
some more flexibility? Do you find you are bound by that a 
little bit?
    Secretary Vilsack. That is a very good question, and I 
don't know the answer to that question, but I will take it back 
and find out.
    Mr. LaMalfa. Please.
    Secretary Vilsack. It has been frustrating to me because 
sometimes I will check off six names, but there are eight other 
categories that are not----
    Mr. LaMalfa. Yes, and I understand that they want a little 
diversity or all different types of input. I suppose maybe we 
could narrow that down or broaden it to be public members--go 
ahead.
    Secretary Vilsack. I don't know that it is our regulation 
that sets up the categories. I am not sure about that, and that 
is what I will check.
    Mr. LaMalfa. Okay. I would love to help on that a little 
bit.
    And generally on Forest Service issues here, again, we have 
had a lot of fire in northern California. You visited Trinity 
County here about 2 years ago, and we had, in 2014, a 
devastating fire up in Siskiyou County as well. We are just now 
getting to where they are putting out salvage contracts here in 
early 2016 for a 2014 fire. The process of doing the study and 
some of the background involved has taken so long that the 
value of the wood there for salvage, and it is a very modest 
project, four percent of the 200,000+ acres is what we are 
talking about is what the project is, and the value of the wood 
goes away month by month with infestation of bugs and other 
things that happen to the burnt trees. So can you see a way we 
can expedite more? It seems like it is a reinvention of the 
wheel every time we have a salvage, like oh, we never heard of 
that. We better study it to death. And I am not saying you, 
sir, but there is a process here that is very cumbersome that 
doesn't allow us to get out there and get on this, get the 
value out, and get the forest recovered. You see it on private 
lands. You can fly over it on the checkerboard pattern of 
private versus public lands. They are out there. They are 
recovering the forest. They are replanting. Our Federal lands 
are the ones suffering. It is the next tinderbox as the brush 
builds up and the old dead wood still stays there.
    I will stop. Can we help you in any area on that, or do you 
see a remedy?
    Secretary Vilsack. I am a broken record on this. First and 
foremost, it is about staffing, and the reality is a 50 percent 
reduction in staff because we are transferring money to put 
fires out.
    Mr. LaMalfa. We are working on that, sir. We will 
allocate----
    Secretary Vilsack. We have been working on it for years, 
Congressman. We need to get it done this year.
    Mr. LaMalfa. Yes. Bipartisan support to do it----
    Secretary Vilsack. Great. That will be a happy day for me.
    Second, we have looked at ways in which we can streamline 
the analysis, the NEPA process and all that kind of stuff that 
has to go into any kind of Federal action. We actually have 
streamlined that process and we are continuing to look for more 
efficiencies in that process. And in reference to Trinity 
County, I know that we just did enter into a fairly significant 
contract there. I was told just 2 days ago about that.
    Mr. LaMalfa. Yes. This is the one in western Siskiyou, but 
we just need help to be able to do it the same season. Ideally, 
you should be able to have a protocol you would follow 
immediately after a fire when the last embers are out that we 
are in there starting just like on private land. So anything we 
can do, please follow up and I would love to have the answer on 
that RAC question as well, and see what we need to do there.
    Thank you. I yield back, Mr. Chairman.
    The Chairman. The gentleman's time is yielded back. Trent, 
it is your turn. Sorry about that.
    Mr. Kelly. Mr. Secretary, I stayed here for 2 hours and 15 
minutes, and I am basically going to ask you some of the same 
questions that other people have asked you.
    It is more of an impassioned plea, and it is more of 
leadership, because I respect you tremendously, and I know that 
you can get to the right answer to do the right thing. And I 
wouldn't have stayed here and asked something if I didn't feel 
like the whole farm industry of my state depends on your 
decision, Mr. Secretary, that is yours to make. And quite 
frankly, I think that you are wrong in the way that you read 
the Supreme Court, and I am a lawyer and I understand those 
things. I understand. I had JAG officers as a commander in the 
guard who will tell me I can't do things, when I know, in fact, 
that it is their interpretation of the law, but their 
interpretation is wrong and I can go and do the research behind 
that to show that is not the only interpretation, and that is 
not the right interpretation. I know also as a former district 
attorney that we would argue over rules of evidence where I 
would have briefs on cases which the circuit court judge had 
found something and then the higher court ruled to reverse or 
affirm.
    And Mr. Secretary, all I ask you to do is to open your mind 
and go back and relook, because, clearly, the industry may have 
intended for cottonseed or not intended, but I don't care what 
the industry thinks. What the statutory construction goes to is 
not what the industry thought. What the statutory construction 
goes to is what Congress thought. Not what the industry 
thought, which is a separate incident, but what Congress 
thought. And Mr. Secretary, I can truly say that I believe that 
Congress when they said other oilseeds and allowed you the 
authority to do that, I don't think that they thought about 
cotton one way or the other. I think at that time the only way 
they thought about cotton was in lint. And Mr. Secretary, they 
have given you the power to do this, in this statute as it is 
written, where it says other oilseeds, and it did not 
explicitly rule out cotton. Now the industry may have talked 
about that, but the Congress and the committees in Congress did 
not. And Mr. Secretary, all I am asking you to do is go back. 
You have the authority. And right now, timeliness is of the 
essence. If this doesn't happen quickly; and the other 
recommendations that you have aren't going to get us there. 
They are not quick enough, and I have had many, many officers 
over the years tell me that an 80 percent solution on time is 
better than a 100 percent solution 10 minutes after it works. 
And 10 minutes is too long. If we do this in August, if we do 
this in April, it is past the point to have an impact on my 
farmers.
    Back in the district this week, I went and spoke at the 
peanut buying point in Memphis, Tennessee, and I talked to a 
lot of my peanut farmers one-on-one. And it is not just cotton 
that is impacted. It is impacting my peanut farmers right now 
because one of the most important or the most profitable places 
that you can make right now was peanuts. But right now I have 
cotton farmers growing peanuts because it is profitable, which 
depresses the price of my peanuts, which means now my peanut 
farmers are suffering from the same thing.
    Mr. Secretary, again, I respect you and I think you are 
doing the right thing, and I think you got to that conclusion 
by looking at the law. The only thing I will ask you, Mr. 
Secretary, is please relook at it, because I know that you have 
the authority and I know what Congressional intent was at the 
time, and you can get to either as most legal arguments, and 
you and I as lawyers understand that. You can get to the right 
answer if you choose to, Mr. Secretary, and as a plea from my 
farmers in Mississippi, I am asking you at least reopen and 
relook and give them an opportunity to make the sale.
    And for your comments, Mr. Secretary?
    The Chairman. The gentleman yields?
    Mr. Yoho, 5 minutes.
    Mr. Yoho. Thank you, Mr. Chairman, and Mr. Secretary, I am 
going to sound like a broken record, I guess, but I do 
appreciate your being here today.
    As you know, the subject of GMOs come up often. It is 
relatively hot. It is a relatively hot topic, and not all for 
the good. It seems that there are surprisingly large groups of 
folks that prefer the ostrich approach to science and feeding a 
growing world. Granted, some, like our European friends, are 
taking the anti-GMO position in a fairly blatant effort to 
obstruct trade and harm American farmers and ranchers. Others 
are doing so because they just don't know any better. The rest 
may honestly believe that the GMOs are harmful, even though 
pretty much everything they and their families eat is the 
product of genetic modification. Humans have been crossbreeding 
plants and animals over thousands of years, and modern science 
just expedites that process.
    What concerns me, however, is that the USDA, United States 
Department of Agriculture, doesn't seem to be a champion of the 
results of that science. And heck, I was in a briefing with 
Melinda Gates, and she sang the praises of GMOs and highlighted 
the fact that we can't feed the world or America's hungry, much 
less get them the needed increase in levels of vitamins and 
essential nutrients without the GMOs. If we want global 
security and stability, make sure people's bellies are full.
    You have agencies like the Agricultural Research Service 
and the National Institute of Food and Agriculture, not to 
mention our land-grant universities, leading the charge for 
scientific advancement in the food and science industries in 
agriculture. Under your direction and the funding provided by 
the hardworking American taxpayers, we should be celebrating 
the safety and the increased benefits of these GMOs, and if 
not, maybe we should stop funding these. We can't feed a world 
with just organic farm and farm plots. Not that there is 
anything wrong with them, there just aren't enough of them.
    And given all that, Mr. Secretary, when can we expect you 
and the U.S. Department of Agriculture to be the biggest 
cheerleaders for the sound science in feeding the world's poor, 
and help stave off this hunger epidemic that is going to come 
when we hit nine billion people in the world?
    To fend off the false narratives coming out of the media, 
we are funding all this stuff but we are not seeing the 
results. We are not seeing, not just you, but the USDA, the 
scientific community, our land-grant universities standing up 
and championing this. What are your thoughts on that?
    Secretary Vilsack. Congressman, I am just trying to collect 
myself, because what you have just outlined is just completely 
incorrect.
    Mr. Yoho. Okay. How is that? Explain that.
    Secretary Vilsack. Because no one in the Capitol of 
Washington, D.C. has been more of an advocate for genetically 
modified technologies in agriculture than me. So I don't know 
what you are reading or what you are not reading. I don't know 
if you don't know about the fusses that we have with the 
Chinese over their regulatory system that I have been 
consistently fighting for 7 years. I don't know if you don't 
know about the 7 hours of meetings I had trying to broker a 
compromise on the issue of labeling. I don't know if you aren't 
aware of the fact that I was the co-chair of the Biotech 
Partnership when I was governor with Governor Johanns at the 
time, promoting this technology. I don't know if you don't know 
about all of the public comments I have made about the safety 
of this, including a comment that I made recently at the 
Appropriations Committee where factcheck.org wondered why I 
said there were hundreds of studies outlining the safety of 
biotechnology, only to find out that, actually, I was wrong, 
because there were literally thousands. I don't know what you 
are talking about.
    Mr. Yoho. Okay. Let me interrupt here, because there is a 
lot I don't know, granted, but what I can tell you is----
    Secretary Vilsack. You shouldn't state that we are not 
championing this when we, in fact, are.
    Mr. Yoho. Well let me give you an example. The papaya that 
was genetically modified for the ringspot virus in the 
University of Florida was done over 10 years ago, and we are 
still waiting for it to get released. It is just now getting 
ready to be released because of the narrative from the 
environmental groups and the EPA saying well we are not sure 
this is safe, but the studies were done. We should be up here 
in the government saying, ``Hey, wait a minute,'' and go back 
to the EPA and say, ``Hey, we have done the research. We know 
this is safe.'' Then it is the same with so many of these other 
products. We did a teleconference call the other night, and 
people are saying you guys have taken away the ability to label 
GMOs and we had to correct them. And I agree with the standards 
that you are talking about, but I want to hear the USDA in the 
press when they attack beef and beef is bad and this and that.
    Secretary Vilsack. We have been. In fact, when I came into 
this office, there was a backlog of biotech regulatory actions. 
We have erased that backlog. So that is just not even accurate. 
It is not even close to being accurate.
    Mr. Yoho. I disagree with you on that. I mean, if you look 
at that----
    Secretary Vilsack. Well, you are wrong, with all due 
respect----
    Mr. Yoho. I yield back. I am over time.
    The Chairman. The gentleman yields back.
    Mr. Thompson, 5 minutes.
    Mr. Thompson. Thank you, Chairman. Mr. Secretary, it is 
good to see you. I will try not to be a broken record. I can't 
even find a needle for my record player anymore.
    So I want to say, first of all, I had hosted just a couple 
of weeks ago an event in the district, trying to make it more 
efficient for the great people working at NRCS and Rural 
Economic Development. We did an event and called it Finding 
Funding Opportunities Outreach event, and it really did well. I 
want to put a plug in for Gary Reed from my area from NRCS, a 
USDA employee. He did a great job coming out. We tried to make 
it one-stop shopping, so we had a room full of people. There 
were township supervisors and community leaders and healthcare 
folks looking at all the different programs that are available 
through USDA, trying to make it easier for folks to navigate 
and Gary did a great job. So thank you for that and your 
support of those programs.
    I just want to check in, as you know, the 2014 Farm Bill 
gave the Forest Service a lot of tools to help the agency 
better manage the National Forests, including some of the 
challenges we have. We did that through the categorical 
exclusions, dealing with insects, disease treatment 
designations, as well as reauthorization of both stewardship 
contracting, good neighbor authority. Any thoughts on how the 
Forest Service is doing with these tools? How is that working 
out?
    Secretary Vilsack. Congressman, I have information in front 
of me here and I hope it is accurate, but if you take a look at 
the time period from 2001 to 2008, we did 1,144 million board 
feet in Pennsylvania of treated wood. From 2009 to 2015, we 
have done 23,134 million board feet. So we are continually 
looking for ways in which we can increase activity.
    Mr. Thompson. And the board feet have been going up. 
Obviously, as Chairman of the Subcommittee, I track that very 
close across the country, but specifically in the Allegheny 
National Forest. When you talk about across Pennsylvania, it is 
ANF. That is the forest. Any thoughts in break down? I know a 
lot of that increase has been in stewardship contracting, and 
that is important because that is how we go after undergrowth. 
That is how after the invasive and non-invasive species, 
diseases, the lifeblood and local jobs to do that, rely a lot 
on local contractors. But there is a distinct difference in the 
economic value, and in the long-term management of the forest, 
when you divide it between stewardship contracting and green 
stick. I think green stick production is still lacking. And I 
recognize you don't need to revisit the staffing issue, we 
brought that up and identified the number of foresters that we 
have lost, retirements in the Forest Service. We certainly 
recognize that, but any thoughts in terms of just where that 
number is, and the distinction between stewardship contracting 
and green stick production?
    Secretary Vilsack. Stewardship contracting agreements are 
providing roughly 30 percent of the timber volume.
    Mr. Thompson. Our goal, with the Committee, was work with 
you to help increase that number, and stewardship contracting 
as well, but we want green stick to----
    Secretary Vilsack. What are you thinking is--I don't know 
if it is appropriate, Mr. Chairman, if I ask a question?
    Mr. Thompson. I would love it.
    Secretary Vilsack. What do you think an appropriate ratio 
is?
    Mr. Thompson. Well, more, just given the status of where we 
are----
    Secretary Vilsack. You mean less stewardship and more----
    Mr. Thompson. No, we want to see them both increase, but we 
don't want the stewardship contracting, which has been really 
good and has increased, but we also need to make sure that we 
are putting the resources on the ground, the boots-on-the-
ground, and getting the regulatory barriers. That is why we did 
the things with the categorical exemptions, giving you more of 
those tools, trying to take the target off your back from these 
environmental groups that are not achieving their mission. They 
are actually ruining our forests. They are allowing them to 
decay. We are allowing stands of timber, until we get around to 
harvest them, we have gone past the point of value in the other 
living entities, and they will start to decay and lose value. I 
think that is the goal. There is a lot of frustration. I know 
Members of the Committee, and I, are fans of the Forest 
Service. I take the opportunity to stop in and thank the folks 
working in the Forest Service wherever I travel.
    Secretary Vilsack. One thing I have noticed in the last 
couple of years is that there is now a better collaborative 
spirit in many of the forests across the United States. I think 
people are recognizing precisely what you have said, which is 
that people have to get along here in order to get work done, 
and that there has been too much delay in the fussing and 
fighting that has been associated with the forests, and that 
has damaged the forests. Hopefully we are going to see more 
collaboration and more quick contracting and more stewardship 
and more activity, and more demand for the wood products that 
we are producing.
    Mr. Thompson. Thank you.
    The Chairman. The gentleman's time has expired.
    Mr. Secretary, I know you are getting close to your hard 
stop, and I certainly appreciate you being here this morning.
    Let me ask you one other question real quick, and then I 
will make some closing remarks and you can flee the 
jurisdiction. But, thank you for being here this morning. I 
appreciate it.
    I have had a multi-year disagreement with Navy Secretary 
Mabus, in particular, with his greening up the Navy, the extra 
costs associated with that program that DOD is absorbing at a 
point in time where our pilots aren't being able to fly as much 
as they need. There are a lot of readiness issues out there, 
just operational maintenance and things going on. We 
specifically included a provision in last year's NDAA that said 
the Navy cannot buy drop-in biofuels if the costs are not 
competitive with conventional fuels. Now, I understand that 
USDA has weighed, in using your CCC authorities, to buy-down or 
do whatever you are doing to buy-down those costs, so that it 
looks like the Navy is buying this jet fuel, algae-based jet 
fuel or whatever, at something approaching what it would cost 
for normal fossil fuel-based jet fuels. Is that a misstatement 
on my part, a misunderstanding on my part? Is that what you all 
are doing?
    Secretary Vilsack. There was an agreement between the 
Department of Energy, the Department of Agriculture, and the 
Department of Defense, several years ago, to try to encourage 
this industry, and we all pledged a certain level of resource 
to this effort. So what you have indicated is probably 
accurate. I am not sure how much assistance we provided, but we 
probably provided some assistance.
    The Chairman. Yes, at least in 2014 it was $161 million. We 
think it is $170 million this year. That last number is one 
that was told to me. I don't have it. Maybe it is a pledge, 
but----
    Secretary Vilsack. I don't think it was that much.
    The Chairman.--if you would take this one for the record, 
because I caught you flat-footed, and this is not a ``gotcha'' 
session. We had enough of that today already. But take it for 
the record, because I am concerned that you guys might have 
been used to help the Navy get around a NDAA restriction that 
we put in there, and you certainly don't want to do that.
    Mr. Secretary, I don't know if you are the longest-serving 
Agriculture Secretary, but you are one of the longer serving 
Agriculture Secretaries. The 14 months I have been in this 
slot, you have worked hard at developing a relationship with me 
and I have reciprocated. And we built that. I never intended 
for the cotton thing to be personal at all, and we just have a 
disagreement. I took an oath as well, and your thought that I 
would be asking you to break your oath, I disagree with that. I 
would never ask you to break your oath and do something that 
was wrong or against the rules. I have good lawyers on my team 
that are telling me you have all the authority you need to do 
that, and you have good lawyers on your team telling you that 
you don't. We always stick with the lawyers we pay. I got that, 
but I did not ask you to break your oath by any stretch of the 
imagination, and that was never intended.
    We have some cotton guys out there that are hurting, and 
you know that. You are sympathetic to their issues. I disagree 
with my colleague, Mr. Yoho. You are one of the best champions 
out there for biotechnology labeling. You had me at your home 
at dinner one night and this subject came up out of the blue 
long before it became a hot topic, and you were already working 
on a solution to try to figure out how we can do this labeling 
thing so that we can get the consumer the information they 
want. It is not a food safety issue. In other areas you have 
done it really well. We just have a disagreement.
    My good friend, Mr. Kelly, was a lot better at expressing 
our desire to try to keep working on this cotton thing, because 
of the issues that are going on, but I do appreciate your 7 
long years and however much time you have left in your tenure. 
You have done a great job. I am proud of the FSA and the work 
they do in implementing our farm bills. I am proud of what your 
team does, and there are some choices going out there. You guys 
made a choice that you wanted to plus up spending somewhere 
else in the farm bill. You want to take it out of crop 
insurance. Those are just differences of opinion on the 
circumstances. We have cut your budget. You have divided 
government, you have this dust up between the White House and 
us, and while I am not aware of the USDA overreaching its 
boundaries or going beyond its charters to do things that upset 
the rules, but certainly there are agencies out there that do 
that. And, we are in tough times. We have $19 trillion of debt 
and we can't afford to do everything we want. I did not ask you 
under any circumstance to break your oath. I never would. And I 
appreciate the hard work you have put in all these years, the 
sacrifices you and your wife have made to serve agriculture and 
rural America the way you have done. You have done a great job. 
We just simply have a disagreement on an important issue that, 
all politics are local. I represent a bunch of cotton guys, and 
if this thing were going on in corn in Iowa, who knows what 
might be happening.
    I appreciate your efforts and would echo Mr. Kelly's 
comments. My public comments for the last 3 months on this 
issue have been very circumspect in trying to make sure I 
didn't do anything that made it more difficult for you to get 
to the conclusion that we want, that you dig your heels in, in 
a way that makes this unworkable and not happen. None of my 
public comments have ever done anything but simply say, ``Look, 
we have to get to an answer. I don't care who gets credit for 
it. This is the designation that we want.''
    I appreciate your understanding this morning, 2\1/2\ hours 
of give and take, and I appreciate that and your service.
    Ranking Member Peterson also wishes you well. Under the 
rules of the Committee, today's record of the hearing will 
remain open for 10 calendar days to receive additional 
material, supplemental written responses from the witness to 
any questions posed by a Member. This hearing of the Committee 
on Agriculture is adjourned.
    [Whereupon, at 12:38 p.m., the Committee was adjourned.]
    [Material submitted for inclusion in the record follows:]
 Submitted Letter by Hon. Mike Bost, a Representative in Congress from 
                                Illinois
August 12, 2015

  Hon. Bruce Rauner,
  Governor,
  State of Illinois,
  Springfield, IL.

    Dear Governor Rauner:

    Thank you for your letter of July 23, 2015, requesting a disaster 
designation for Illinois counties that suffered losses due to excessive 
rain and flooding that has occurred in 2015.
    The Department of Agriculture reviewed the Loss Assessment Reports 
and determined that there were sufficient production losses in 87 
counties to warrant a Secretarial natural disaster designation. 
Therefore, I am designating 87 Illinois counties as primary natural 
disaster areas due to damage and losses caused by excessive rain and 
flooding that occurred during the period of June 1, 2015, and 
continuing. Those counties are:

 
 
 
Adams,             Fulton,            Logan,            Randolph,
Alexander,         Gallatin,          McDonough,        Richland,
Bond,              Greene,            McLean,           Rock Island,
Brown,             Grundy,            Macon,            St. Clair,
Calhoun,           Hamilton,          Macoupin,         Saline,
Carroll,           Hancock,           Madison,          Sangamon,
Cass,              Hardin,            Marion,           Schuyler,
Champaign,         Henderson,         Marshall,         Scott,
Clark,             Henry,             Mason,            Stark,
Clay,              Iroquois,          Massac,           Tazewell,
Clinton,           Jackson,           Menard,           Union,
Crawford,          Jasper,            Mercer,           Vermilion,
Cumberland,        Jefferson,         Monroe,           Wabash,
DeKalb,            Jersey,            Montgomery,       Warren,
DeWitt,            Johnson,           Morgan,           Washington,
Douglas,           Kane,              Peoria,           Wayne,
DuPage,            Kankakee,          Perry,            White,
Edwards,           Knox,              Piatt,            Whiteside,
Effingham,         La Salle,          Pike,             Will,
Fayette,           Lawrence,          Pope,             Williamson,
Ford,              Lee,               Pulaski,          Woodford.
Franklin,          Livingston,        Putnam,
 

    In accordance with section 321(a) of the Consolidated Farm and 
Rural Development Act, additional areas of your state are named as 
contiguous disaster counties. Those counties are:

 
 
 
Boone,             Cook,              McHenry,          Stephenson,
Bureau,            Edgar,             Moultrie,         Winnebago.
Christian,         Jo Daviess,        Ogle,
Coles,             Kendall,           Shelby,
 

    In addition, in accordance with section 321(a) of the Consolidated 
Farm and Rural Development Act, counties in adjacent states are named 
as contiguous disaster areas. Those states, counties, and numbers are:

    Contiguous counties in Adjacent States:

 
 
 
                              Indiana (10)
 
Benton,        Knox,          Newton,        Sullivan,      Vigo,
Gibson,        Lake,          Posey,         Vermillion,    Warren.
 
                                Iowa (7)
 
Clinton,       Jackson,       Louisa,        Muscatine,     Scott.
Des Moines,    Lee,
 
                              Kentucky (5)
 
Ballard,       Crittenden,    Livingston,    McCracken,     Union.
 


 
 
 
                              Missouri (15)
 
Cape           Lewis,         Mississippi,   Ralls,         St. Louis
 Girardeau,                                                  City,
Clark,         Lincoln,       Perry,         St. Charles,   Ste.
                                                             Genevieve,
Jefferson,     Marion,        Pike,          St. Louis,     Scott.
 

    A Secretarial disaster designation makes farm operators in primary 
counties and those counties contiguous to such primary counties 
eligible to be considered for certain assistance from the Farm Service 
Agency (FSA), provided eligibility requirements are met. This 
assistance includes FSA emergency loans. Farmers in eligible counties 
have 8 months from the date of a Secretarial disaster declaration to 
apply for emergency loan. FSA considers each emergency loan application 
on its own merits, taking into account the extent of production losses 
on the farm, and the security and repayment ability of the operator.
    Local FSA offices can provide affected farmers with further 
information.
            Sincerely,
            
            
  [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]          
            
           
    
            
Hon. Thomas ``Tom'' J. Vilsack,
Secretary.
                                 ______
                                 
                          Submitted Questions
Response from Hon. Thomas ``Tom'' J. Vilsack, Secretary, U.S. 
        Department of Agriculture
Questions Submitted by Hon. K. Michael Conaway, a Representative in 
        Congress from Texas
    Question 1. The farmers and ranchers I am talking to are facing 
very difficult times, and those that aren't yet are very nervous about 
the direction things are headed. What analysis, if any, has USDA done 
to look at the challenges farmers are having in securing credit for the 
upcoming crop year?
    Answer. USDA continually monitors both the financial health of US 
farmers and farm sector credit availability. Here is our current 
assessment:
    An overall decline in commodity prices in calendar year 2015 
resulted in a second consecutive year of lower net farm income. Overall 
cash receipts fell $43.6 billion from 2014 levels (^8.7 percent). The 
largest dollar declines were for dairy (^28.1 percent), hogs (^25.1 
percent), and corn (^15.6 percent). Production expenses fell for the 
first time since 2009, but the decline was only 2.0 percent. The 
largest declines in expense items were for fuel and feed costs, which 
declined by $10.8 billion (12.8 percent). Labor, interest, and property 
tax expenses increased by 8 percent. Total Direct Farm Program payments 
for 2015 were up 10.4 percent from 2014 ($1 billion) and at the highest 
level since 2010. Recent Federal Reserve Bank surveys of agricultural 
bankers indicate cropland values in many central Corn Belt regions have 
declined around three percent year-over-year. Irrigated and ``good 
farmland'' values have fallen more slowly or held steady. Through the 
third quarter of 2015, overall lender credit quality appears to be 
good, though bankers were expecting a decrease in loan performance. 
Although off-farm income can provide a substantial cushion, a second 
year of reduced commodity prices and farm incomes is constraining 
working capital, contributing to an increased demand for non-real 
estate credit. While farms overall have strong balance sheets with low 
debt-to-asset ratios, a majority of the farm debt is held by farms with 
over $500,000 in farm sales. These larger farms, which tend to be more 
indebted, are more likely to face liquidity constraints. Here are some 
key points.

   While overall financial conditions remain strong, farm 
        financial risk indicators such as the debt-to-asset ratio are 
        expected to rise slightly in 2015, reflecting increased 
        financial pressure. Declining farm sector assets primarily 
        result from a modest decline in farmland value as well as 
        higher debt. Equity is expected to erode by 4.8 percent, the 
        first drop since 2009. However, as a matter of perspective, 
        debt-to-asset ratios are not at levels seen during the farm 
        financial crisis of the early 1980's.

    On an ongoing basis, USDA economists analyze several data sources 
to keep abreast of any changes in farm financial health including:

   USDA's Economic Research Service (ERS) develops both current 
        estimates and forecasts of future farm income which are 
        reported on a semi-annual basis and made available at http://
        www.ers.usda.gov/topics/farm-economy/farm-sector-income-
        finances/2016-farm-sector-income-forecast.aspx.*
---------------------------------------------------------------------------
    * Editor's note: the referenced documents are retained in Committee 
file.

   USDA conducts the annual Agricultural Resource Management 
        Survey (ARMS) to access the current financial condition of 
        farmers and ranchers. The ARMS provides farm-level information 
        on household income, farm finances including liquidity, 
        solvency, and debt capacity, and wealth. Results of the ARMS 
        can be accessed at http://www.ers.usda.gov/data-products/arms-
        farm-financial-and-crop-production-practices/tailored-reports-
---------------------------------------------------------------------------
        farm-structure-and-finance.aspx.*

   USDA staff utilize Federal Reserve Bank surveys to access 
        the availability of credit to farmers. (See, for example: 
        https://www.kansascityfed.org/research/indicatorsdata/
        agcreditsurvey/articles/2016/5-12-2016/banker-comments-10th-
        district-4-12-2016.) Also, internal data on participation in 
        direct and guaranteed loan programs provides information on 
        farmers currently receiving FSA loans as well as those with 
        loans outstanding.*

    Examples are listed below of recent analyses undertaken by USDA 
which have utilized these data sources to look at the challenges 
farmers may face in securing credit:

   Mounting Pressure in the U.S. Farm Sector, Federal Reserve 
        Bank of Kansas City March 2016. http://www.kansascityfed.org/
        research/agriculture/agoutlook/articles/mounting-pressure-in-
        us-farm-sector.*

   America's Diverse Family Farms: 2015 Edition, USDA, Economic 
        Research Service, December 2015. http://www.ers.usda.gov/
        publications/eib-economic-information-bulletin/eib-146.aspx.*

   Changing Structure, Financial Risks, and Government Policy 
        for the U.S. Dairy Industry, ERR-205, U.S. Department of 
        Agriculture, Economic Research Service, March 2016. http://
        www.ers.usda.gov/publications/err-economic-research-report/
        err205.aspx.*

   Annual Report on Term Limits for FSA's Direct Loan Program. 
        USDA, Farm Service Agency, September 2015. http://
        www.fsa.usda.gov/Assets/USDA-FSA-Public/usdafiles/NewsRoom/
        eFOIA/pdfs/term_limits_report_Sept_2015.pdf.*

    Question 2. Secretary Vilsack, last year you were asked about the 
sterile fruit fly production facility in Edinburg, Texas, and you 
responded that the facility was in a category of USDA facilities in 
most need of repair. How much has USDA requested in the 2017 budget to 
renovate or replace this facility?
    Answer. While USDA has not requested any specific funding in the 
2017 budget to replace this facility, APHIS is reviewing the condition 
of all of its facilities for consideration in future planning.

    Question 3. Secretary Vilsack, 2 weeks ago when we met with EPA 
Administrator McCarthy, several of our questions related to the 
willingness of EPA to consult with USDA when developing regulations. 
The Administrator went to great lengths to suggest that the 
relationship between EPA and USDA is a positive one, but failed to 
provide any concrete examples of how those consultations resulted in 
significant changes to EPA's proposals.
    Can you tell us how it is that EPA's consultation with USDA on the 
revised worker protection standard rule resulted in the inclusion of 
the designated representative provision? This provision was not in the 
proposed rule, nor was it in the final rule submitted to the House 
Agriculture Committee last May, yet it was in the final rule published 
later in the summer.
    Answer. In addition to USDA comments provided to the Office of 
Management and Budget (OMB) consistent through the interagency review 
process governed by Executive Order 12866, the worker protection 
standard rule required formal consultation between EPA and USDA under 
the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA). This 
FIFRA process between EPA and USDA was undertaken prior to OMB 12866 
review. Comments submitted during the interagency review process are 
provided to the Office of Information and Regulatory Affairs (OIRA) and 
are considered pre-decisional and deliberative. OIRA then incorporates 
those comments into the materials provided to the rulemaking agency or 
department.

    Question 4. Mr. Secretary, what comments did you provide EPA and 
the Army Corps on the WOTUS rule during the interagency review? Will 
you provide the Committee with specific comments that USDA provided on 
the rule? Further, and perhaps more importantly, do you think EPA and 
the Army Corps took into consideration USDA concerns? What evidence do 
you have that they actually took any of USDA's concerns into 
consideration?
    Answer. USDA provided comments on the Clean Water Rule to the 
Office of Management and Budget (OMB) from October 2013 through May 
2015 consistent with the interagency review process governed by 
Executive Order 12866. Comments submitted during the interagency review 
process are provided to the Office of Information and Regulatory 
Affairs (OIRA) and are considered pre-decisional and deliberative. OIRA 
then incorporates those comments into the materials provided to the 
rulemaking agency or department.
    The final rule reflects USDA input and concurrence through both 
informal and EO 12866 interactions. The final rule includes important 
agricultural provisions, such as waters being used for normal farming, 
ranching and silvicultural activities are not considered categorically 
jurisdictional as adjacent waters. The final rule also reflects 
longstanding EPA and Army Corps practices on agricultural land, such as 
providing that waters of the United States do not include artificially 
irrigated areas that would revert to dry land should irrigation cease.

    Question 5. Secretary Vilsack, in recent years, EPA has had to rule 
on several waiver requests to the Renewable Fuel Standard (RFS). Their 
recent adjustments to the RFS have basically reflected current market 
conditions. This band aid approach is not sustainable, and it is 
obvious that the RFS needs to be reformed. Do you have any 
recommendations on how the RFS can be improved? Do you think another 
agency or department, other than EPA, would be better suited to handle 
the RFS waiver process? Could USDA handle this process?
    Answer. The Clean Air Act requires the Environmental Protection 
Agency (EPA) to set the RFS volume requirements annually. Prior to the 
EPA setting the standards through a notice-and-comment rulemaking 
process with opportunity for public comment, USDA meets with the EPA 
and provides data and market information as part of the process in 
determining proposed and final volumes. In testimony before the Senate 
Energy and Public Works Committee, EPA indicated their plan to return 
to timelier rule makings that will provide more certainty for 
participants. USDA will continue to provide information and feedback as 
the rule making process continues.

    Question 6. The Department originally estimated that Conservation 
Compliance would affect a very limited number of producers. No one was 
supposed to be made ineligible in 2016. Can you confirm that 100% of 
producers who want to buy insurance in 2016 will not be made ineligible 
because of conservation compliance issues?
    Answer. Conservation compliance only impacts the ability of 
producers to receive premium support and does not impact producers' 
eligibility to purchase crop insurance. However, some producers may 
have made the choice to forego premium support in order not to comply 
with conservation compliance. RMA worked with NRCS, FSA, our private 
partners, and commodity groups to inform farmers and ranchers about the 
new conservation compliance requirements. Any farmer or rancher that 
did not have an AD-1026 on file received three letters and at least one 
phone call. As a result, over 98 percent of crop insurance customers 
complied with the provisions. Most of the remaining two percent are 
likely retired, deceased, or operating under a different entity. RMA 
has implemented several exemptions to ensure beginning farmers and 
those who are new to USDA programs, as well as those that have formed 
new entities, do not lose premium subsidy. To date, over 1,000 
exemptions have been granted by RMA. In addition, FSA has granted 24 
individuals and entities relief for timely filed AD-1026 due to 
extenuating circumstances so far for reinsurance year 2016.

    Question 7. Secretary Vilsack, your testimony recognizes six 
biofuel refineries funded through USDA energy programs producing 
advanced biofuels. Are any of these facilities producing advanced 
biofuels on a commercial scale? What other products are they producing?
    Answer. All six biorefineries are expected to produce advanced 
biofuels on a commercial scale. One of the biorefineries will produce 
engineered biochar in addition to advanced biofuel and another will 
produce amino acids and alanine in addition to advanced biofuel.

    Question 8. Secretary Vilsack, in a Memorandum of Understanding 
(MOU) between USDA, the Department of Energy, and the Department of the 
Navy, USDA pledged $170 million of CCC funds towards developing and 
supporting the commercial biofuel industry, particularly for the use in 
national defense. Can you tell me (1) what is the specific authority, 
other than the very broad CCC Charter Act authority, you used to 
obligate such funds, and (2) how much of the CCC funds have been spent 
to date and on what--did this money go towards promoting feedstocks or 
was it used for capacity building?
    What is the current difference in price that USDA is paying between 
the price per gallon for conventional fuels and these biofuels? Does 
the Department have procedures in place to control expenditures when 
energy prices drop, when prices for conventional fuels are 
significantly lower than they have been historically? With the current 
price levels for conventional fuels, are there procedures that prevent 
USDA from covering a disproportionate share of the cost of alternative 
fuels for the Department of Defense's alternative fuel purchases?
    Answer. Farm-to-Fleet was announced in December 2013 and 
incorporates the acquisition of biofuel blends into regular Department 
of Defense (DOD) domestic solicitations for jet engine and marine 
diesel fuels. The Navy seeks to purchase JP-5 and F-76 advanced drop-in 
blended biofuels ranging from a minimum blend of ten percent to a 
maximum blend of 50 percent ethanol with conventional fuels. The 
Defense Logistics Agency Energy (DLA Energy), which awards fuel 
contracts on behalf of the Navy, is responsible for announcing 
solicitations, evaluating and awarding contracts, and overseeing fuel 
procurement and delivery. DLA Energy determines which fuels are cost 
competitive and makes final determinations on procurement.
    The Credit Commodity Corporation (CCC) makes assistance available 
through Farm-to-Fleet to eligible biofuel suppliers that successfully 
bid in a DOD solicitation for jet engine and marine diesel fuels. A 
supplier must use feedstocks that are renewable and produced in the 
United States in order to be awarded a contract under Farm-to-Fleet.
    To date, DLA Energy has awarded one contract under the Farm-to-
Fleet program. That contract requires AltAir Fuels to deliver 77.66 
million gallons of a marine diesel biofuel blend at a price of $2.1544 
per U.S. gallon. DLA Energy and CCC share the cost for this fuel--to be 
paid when AltAir delivers the fuel to the Navy--with DLA Energy paying 
$1.995825 per U.S. gallon and CCC paying $0.158575 per U.S. gallon. 
CCC's total commitment of funds under the AltAir agreements is 
approximately $12.315 million. The amount remaining under the original 
MOU, after adjusting for years that there was sequestration, is 
approximately $153.7 million. The MOU is still valid, and this amount 
remains available for use under the MOU.
    No CCC funds have been used for capacity building, and funds are 
not tied to specific facilities.

    Question 9. Regarding last year's outbreak of avian influenza, 
indemnification payments are currently calculated on the 10 year 
average for the years 2002 through 2011. Data was available from last 
year for the years 2003 through 2012, but it was not used by USDA. Why 
is APHIS not relying on the most recent BEA data for the 10 year 
average of undistributed corporate profits for farms and food and 
beverage and tobacco products industries?
    Answer. The updated 2012 Bureau of Economic Analysis (BEA) data, 
which is updated once a year, came out after the outbreak had started. 
APHIS used the most recent data available at the beginning of the 
outbreak.

    Question 10. Secretary Vilsack, what measures is APHIS taking to 
provide indemnity payments for HPAI on a uniform basis? For example, 
how does APHIS decide when it updates its indemnity formula 
assumptions? Further, how does APHIS establish the cutoff point for 
farmers receiving indemnity under an old versus updated indemnity 
calculation? And, Mr. Secretary, what has been APHIS' policy with 
respect to indemnity payments for contract farmers to date?
    Answer. When the 2014-2015 Highly Pathogenic Avian Influenza (HPAI) 
outbreak began, APHIS realized that it did not have specific authority 
to provide indemnity payments to contract growers. APHIS developed an 
interim rule that now allows the agency to pay contract growers that is 
modeled after the split that already existed in the Agency's 
regulations for Low Pathogenic Avian Influenza (LPAI). APHIS has 
examined the indemnity calculator and revised it based upon the input 
it has received from industry. For example, APHIS increased the number 
of weeks' worth of eggs for which it would provide compensation based 
upon updated data it received from the poultry industry. In that case, 
APHIS provided, to ensure uniformity, retroactive indemnity payments to 
producers who had been affected during the outbreak. As USDA considers 
additional changes to how it determines values for indemnity payments, 
the Department will make a decision on when these changes become 
effective. The level of data currently available and how the changes 
can be made in a uniform manner are some of the considerations that 
factor into this decision.

    Question 11. How does APHIS expect to change its HPAI payment 
policies going forward under the recently proposed Interim Rule (APHIS-
2015-0061) regarding how indemnity payments are paid to owners versus 
contractors? Further, does APHIS expect to revise its HPAI 
indemnification formula in light of the recently proposed Interim Rule 
(APHIS-2015-0061)?
    Answer. The interim rule creates a formula that will allow APHIS to 
split such payments between poultry and egg owners and parties with 
which the owners enter into contracts to raise or care for the eggs or 
poultry based on the proportion of the production cycle completed. 
APHIS is reviewing its indemnity formula, but the overall indemnity 
determination is separate from the interim rule on the allocation of 
the total indemnity between the owner and the contact grower.

    Question 12. How have APHIS' HPAI indemnity payment practices 
differed between farmers affected by HPAI versus those affected by Low 
Pathogenic Avian Influenza?
    Answer. Prior to the Interim Rule, APHIS was limited in its ability 
to pay contract growers as the authority for payments for HPAI 
indemnity were limited to those who actually own the bird. Under the 
LPAI regulations, APHIS did have the authority to provide split 
payments to both owners and contract growers. The Interim Rule gave 
APHIS the same authority for HPAI as it previously had for LPAI to 
allow a split of indemnity payments in situations where owners had a 
contract grower raising poultry.

    Question 13. As recently as last March, the Farm Service Agency 
assumed the fair market value for laying hens to be $19.61 per bird 
under the Livestock Indemnity Program, while at the same time, APHIS 
was only assuming a fair market value of just over $4 per bird for its 
HPAI payments. How do you explain and justify such a significant 
disparity between the determinations of the two agencies?
    Answer. APHIS indemnity payments and FSA Livestock Indemnity 
Program payments are fundamentally different. For APHIS, the purpose of 
indemnity for HPAI is to encourage quicker disease reporting to help 
the Agency stamp out or stop the spread of the disease, by paying 
producers for the destruction of layers as part of the disease response 
efforts. Payments under LIP reflect weather-related disasters, and thus 
the calculation of a gross value for layers recognizes that often the 
disaster has destroyed the physical facilities in which capital-
intensive layer production occurs. As such, producers are implicitly 
compensated for costs incurred while production is not occurring 
because of the disaster, which can be many months until facilities are 
rebuilt, bird population restored, and production begun.

    Question 14. Secretary Vilsack, at our July 22nd oversight hearing 
last year, my colleague Mr. Lucas asked how USDA had spent the $100 
million in Title I implementation funding we included in the farm bill. 
At the hearing, you stated that you would provide a written breakdown 
of how that money was spent, but the Committee has not received that 
from USDA. Can you provide us with a detailed accounting of how that 
money was spent?
    Answer. The 2014 Farm bill provided $100 million in mandatory 
funding for the Farm Service Agency (FSA) to implement programs under 
Title I. The farm bill funding was subject to sequestration, 
accordingly, the amount of funding available to FSA after sequestration 
was $95.2 million. Funding has been used to hire temporary employees; 
develop educational and information technology tools for the 
implementation of Agriculture Risk Coverage (ARC), Price Loss Coverage 
(PLC), and the Noninsured Disaster Assistance Program (NAP); support 
operational costs, i.e., travel and training for temporary staff 
implementing these programs; and conduct outreach, through cooperative 
agreements, with universities and state extension services. As of 
September 30, 2015, $59.8 million has been obligated as follows:

----------------------------------------------------------------------------------------------------------------
                                  Obligations through 12/31/ Planned Obligations for 1/
              Item                           2015             1/16 through  9/30/2016    Total Budget  Authority
----------------------------------------------------------------------------------------------------------------
Temporary Employees/Overtime                $29,945,695                $20,697,241                $50,642,936
            Travel/Training                    $596,905                 $6,078,485                 $6,675,390
         Operating Expenses                  $1,681,620                 $2,908,652                 $4,590,272
     Information Technology                 $21,556,587                 $5,753,606                $27,310,193
    Extension and Education                  $5,994,319                     $5,681                 $6,000,000
                  Activities
                                 -------------------------------------------------------------------------------
  Total.........................            $59,775,126                $35,443,665                $95,218,401
----------------------------------------------------------------------------------------------------------------


    Question 15. Mr. Secretary, there is a timeline included in the 
June 30 and September 30 ACRSI reports the Committee received. Have 
there been any changes to this timeline since those reports were 
submitted? Can you give us an updated timeline of ACRSI, and when do 
you envision it will be completed?
    Answer. Since September 30, 2015, there are no changes to the 
timeline included in the ACRSI report submitted by FSA to the 
Committee. Planning for the 2016 Spring Expansion 2016 is currently 
underway and on track for deployment in May 2016.

    Question 16. As part of the 2014 Farm Bill, USDA was instructed to 
inform the House and Senate Agriculture Committees on whether it had 
reached ``substantial completion'' of ACRSI. The report submitted to 
the Committees on June 30 indicated that so far, this program is only 
operating in ``pilot'' form in 30 counties in Illinois and Iowa. The 
subsequent report submitted on September 30 outlined a phased expansion 
to 15 states in the fall of 2015. It has been reported that it will be 
rolled out nationwide for 13 crops in 2016. Is this correct, and if so, 
will this rollout be in the spring or fall? If this funding is granted 
by the House and Senate Agriculture Committees, how do you intend to 
use the remaining $10 million tied to substantial completion of ACRSI?
    Answer. The 2016 Spring Expansion expands ACRSI to include 13 crops 
in all 50 States. USDA is currently evaluating lessons learned and 
obtaining stakeholder feedback and will use this information, in 
addition to results of the 2016 Spring Expansion, to identify and 
prioritize additional functionality needed to determine the most-
effective use of the remaining $10 million. This information will be 
provided to the House and Senate Agriculture Committees later this 
summer, following the completion of the spring acreage reporting 
period.

    Question 17. In the current dispute over the sale of Pork. The 
Other White Meat, has USDA evaluated what the impact of the Court of 
Appeals decision will be on other check-off programs under the 
management of USDA?
    Answer. This case remains in litigation, and it would be premature 
to discuss its impacts.

    Question 18. Please describe the decision-making process that USDA 
undertook to understand these considerations prior to entering into 
settlement negotiations, and the specific determination that USDA 
reached.
    Answer. USDA is not discussing settlement with Plaintiff Humane 
Society of the United States (HSUS). HSUS and USDA previously discussed 
settlement in the fall of 2015, but those discussions concluded with a 
joint filing with the Court on December 23, 2015, and are not ongoing. 
In that joint filing, USDA announced its plans to conduct a review and 
valuation of the four trademarks, and HSUS stipulated to dismissal with 
prejudice of a significant part of its lawsuit. On April 20, 2016, USDA 
decided to approve, based on the valuation of the four trademarks by an 
independent expert and other factors, continuing $3 million payments 
under the 2006 asset purchase agreement between the National Pork Board 
(Board) and the National Pork Producers Council (NPPC). As part of its 
review, USDA directed the Board to contract for an independent 
valuation of the current value of the trademarks. USDA, in consultation 
with the Board, identified Stout Risius Ross (SRR) as the most 
qualified company. SRR concluded that, as of January 1, 2016, the 
investment value of the four trademarks is between $113 million and 
$132 million using the cost approach, one of several acceptable and 
recognized approaches for determining valuation.
    Consistent with the district court's direction, HSUS and NPPC 
submitted valuations for consideration as part of the review. After 
evaluating the valuations submitted by HSUS and NPPC, USDA deemed SRR's 
range of $113 million to $132 million to be the most reliable estimate 
of the value of the trademarks. On April 20, 2016, the Board, NPPC, and 
HSUS were notified of USDA's decision to approve the $3 million payment 
under the terms of the agreement.

    Question 19. Please describe how USDA views the National Pork 
Board's independence and autonomy under the Pork Promotion, Research 
and Consumer Information Act of 1985 (``Pork Act'')?
    Answer. The Board administers the Pork Checkoff Program under the 
Pork Act, with oversight from USDA. This means that the Board 
determines projects in accordance with the Pork Promotion, Research, 
and Consumer Information Act of 1985 (7 U.S.C. 4801-4819) (Pork Act) 
and Pork Promotion, Research, and Consumer Information Order (7 CFR 
1230) (Order) issued thereunder. It is first the responsibility of the 
Board to determine the projects to fund and submit them to USDA for 
approval. It is then within USDA's oversight role to ensure that 
activity funded with checkoff dollars is in accordance with the Pork 
Act, Order and regulations, and USDA and government policies and 
guidelines.

    Question 20. What are the respective roles of the National Pork 
Board and USDA under the Pork Act?
    Answer. The Pork Act authorizes the Board to administer the Pork 
Checkoff Program, including entering into contracts and engaging in 
plans and projects--all within the oversight authority of the Secretary 
of Agriculture.

    Question 21. Please describe, in detail and with citations to the 
specific legal authority, the Secretary of Agriculture's powers under 
the Pork Act, or otherwise, to direct the National Pork Board to 
undertake specific actions?
    Answer. The Pork Promotion, Research, and Consumer Information Act 
of 1985 (7 U.S.C. 4801-4819) states that the Secretary has oversight of 
the Board and all expenditures. All Board funding expenditures are 
subject to advance approval by USDA. For example, section 1619(a)(2) of 
the Pork Act states that the ``Board shall prepare and submit to the 
Secretary, for the approval of the Secretary, a budget for each fiscal 
year . . .'' Section 1619(a)(3) states that ``[n]o plan, project, or 
budg-
et . . . may become effective unless approved by the Secretary.''

    Question 22. If the National Pork Board reaches a decision to honor 
its current contractual arrangement with the National Pork Producers 
Council for the sale of Pork. The Other White Meat, what authority does 
USDA hold to reverse or otherwise deny that action?
    Answer. On April 20, 2016, USDA decided to approve continuing 
annual payments of $3 million under the terms of the agreement.

    Question 23. If the National Pork Board decides to end the review, 
or otherwise indicates that it wants to stop settlement talks with the 
Plaintiffs, will USDA honor that desire?
    Answer. Settlement talks are not ongoing with the Plaintiffs, and 
the review has concluded with USDA's decision to approve continuing 
annual payments of $3 million under the terms of the agreement.

    Question 24. If the National Pork Board decides, after the review 
has been conducted, to continue to honor the contract for the sale of 
the Pork. The Other White Meat, will USDA allow that?
    Answer. On April 20, 2016, USDA decided to approve continuing 
annual payments of $3 million under the terms of the agreement based on 
its review.

    Question 25. USDA has ordered the National Pork Board to retain a 
trademark valuation firm and begin the process of reviewing the value 
of the Pork. The Other White Meat trademarks. Who is paying for the 
valuation to be conducted? Who provided the names of the trademark 
evaluation firms? Who selected the vendor?
    Answer. The Board paid for the valuation. USDA provided a list of 
potential contractors to the Board and, after discussions with the 
Board, identified Stout Risius Ross (SRR) as the most qualified 
company.

    Question 26. Once the trademark valuation report is submitted to 
the USDA, who will undertake the ``review'' of the Pork. The Other 
White Meat Purchase Agreement? Who are the senior officials that will 
ultimately make a decision on whether to continue performing under the 
purchase agreement or not? Does the authority to make that decision 
rest solely with the National Pork Board? If not, why not?
    Answer. SRR submitted its trademark valuation report to USDA on 
March 30, 2016. After reviewing the valuation and other relevant 
materials, the Agricultural Marketing Service, exercising oversight 
authority delegated by the Secretary, made the decision to approve 
continuing annual payments of $3 million under the terms of the 
agreement on April 20, 2016.

    Question 27. On February 24, 2016, Secretary Vilsack testified to 
this Committee that the decision to enter into a settlement agreement 
with the Humane Society of the United States and other Plaintiffs/
Petitioners was (1) made in concert with the pork industry; (2) that 
the pork industry has been involved in discussions concerning the 
settlement and ``review''; (3) that the industry ``is now working with 
the Humane Society'' to ``figure out a way to do this that is 
satisfactory to all parties'' and to resolve the litigation through 
settlement discussions.
    Please state who the specific organizations and/or individual 
representatives of the pork industry are that Secretary Vilsack 
referred to in his testimony?
    Answer. Soon after HSUS filed suit, USDA representatives reached 
out by telephone to Board staff to discuss the lawsuit and potential 
options and have held additional meetings to update the Board since 
that date. Further, USDA and DOJ attorneys have had discussions with 
attorneys representing NPPC.

    Question 27a. Please provide the Committee with copies of any and 
all communications, including but not limited to phone records, e-
mails, notes, letters, calendar appointments, or other filings between 
USDA or the Department of Justice and the Plaintiff/Petitioners 
regarding the decision to settle this lawsuit.
    Answer. There has been no settlement of the lawsuit and settlement 
talks are not ongoing with the Plaintiffs. The review has concluded 
with USDA's decision to approve continuing annual payments of $3 
million under the terms of the agreement.

    Question 27b. Please provide the Committee with copies of any and 
all communications, including but not limited to phone records, e-
mails, notes, letters, calendar appointments, or other filings between 
USDA or the Department of Justice and the pork industry regarding the 
desire of the pork industry to settle this lawsuit as claimed by 
Secretary Vilsack.
    Answer. Since the inception of the litigation, USDA has provided 
updates to Board staff and gathered information regarding the 
trademarks from the Board. In addition, USDA has invited Board 
representatives to the Court hearings. To USDA's knowledge no Board 
staff or Board members attended the hearings.

    Question 28. On March 5, 2016, at Pork Forum, both the National 
Pork Board and the National Pork Producers Council unanimously passed 
resolutions, cosponsored by every state delegate body in attendance, 
which strongly disagree with the decision of USDA to enter into a 
settlement agreement with HSUS and with USDA's decision to direct the 
National Pork Board to conduct a review of the Pork. The Other White 
Meat sale.
    Does USDA recognize any organizations other than the National Pork 
Board, the National Pork Producers Council, or the various state Pork 
Producer Councils as official representatives of the U.S. pork 
industry? If so, who or what are these organizations?
    Answer. USDA recognizes a number of pork organizations, including 
those listed and many others, as representing the interests of members 
of the U.S. pork industry. However, there is no such specific list of 
``official representatives.'' Specifically related to the Pork Checkoff 
Program, USDA only officially recognizes State Pork Producer 
Associations as being eligible to nominate producers to the Board and, 
besides the Board itself, directly receive Pork Checkoff collections.

    Question 29. In light of the overwhelming opposition of the U.S. 
Pork industry to USDA's unilateral decision to cease defending the 
National Pork Board's contract and to enter into settlement discussions 
with HSUS and other plaintiff/petitioners, what authority does the 
National Pork Board hold to end the ``review'', or otherwise indicate 
that it wants to stop settlement talks with the Plaintiffs, and defend 
and honor its contract for the purchase of Pork. The Other White Meat?
    Answer. Settlement talks are not ongoing with the Plaintiffs, and 
the review has concluded with USDA's decision to approve continuing 
annual payments of $3 million under the terms of the agreement.

    Question 30. The National Pork Board's March 5, 2016 advisement 
states that USDA ``entered into settlement discussions with HSUS. While 
USDA has not shared the terms of settlement being discussed with NPB, 
USDA has withheld approval of the annual payment to NPPC in 2016.'' 
Please explain Secretary Vilsack's testimony that settlement was made 
in concert with the pork industry and that the pork industry had been 
engaged in the settlement discussions with HSUS?
    Answer. USDA is not discussing settlement with HSUS. HSUS and USDA 
previously discussed settlement in the fall of 2015, but those 
discussions concluded with a joint filing with the Court on December 
23, 2015, and are not ongoing. In that joint filing, USDA announced its 
plans to conduct a review of the trademark valuation, and HSUS 
stipulated to dismissal with prejudice of a significant part of its 
lawsuit. On April 20, 2016, USDA approved continuing annual payments of 
$3 million under the terms of the agreement based on its review of the 
valuation and other factors. The Board, HSUS, and NPPC were notified of 
the decision.

    Question 31. The National Pork Board's March 5, 2016 advisement 
states that ``USDA has directed NPB to contract for another valuation 
of the trademark and expects to make a determination regarding approval 
of the 2016 payment by the middle of June.'' Please explain Secretary 
Vilsack's testimony that the pork industry requested the settlement to 
be entered into and the valuation of the trademarks value to be 
conducted?
    Answer. USDA directed the Board to contract with an independent 
expert to determine the present-day value of the trademarks. NPPC 
specifically asked to be allowed to submit materials for consideration, 
and USDA invited both NPPC and HSUS to submit such materials. Both 
parties submitted valuations.

    Question 32. Considering the apparent conflict between the pork 
industry's decision to vigorously defend the contract and USDA's 
decision to enter into a settlement agreement with HSUS, is the 
National Pork Board authorized to retain independent counsel to 
represent the interests of that organization and the U.S. pork 
industry? If not, why not?
    Answer. USDA, the only defendant named in the lawsuit, has approved 
continuing annual payments of $3 million under the terms of the 
agreement. The agency is prepared to defend that decision going 
forward.
Question Submitted by Hon. Dan Benishek, a Representative in Congress 
        from Michigan
    Question. During the recent, ``State of the Rural Economy'' 
hearing, we discussed several aspects of the Forest Service budget. 
Specifically, I would like to better understand the percentage of the 
USDA-FS budget utilized for land acquisition each year over the last 10 
years, as well as the amount in dollars.
    In addition, please provide a breakout, if possible, of where the 
land acquisition projects were funded in FY16, as well a short 
justification for each project.
    Answer. The percentage of the Forest Service appropriations 
dedicated to land acquisition over the previous 10 years is, on 
average, less than one percent. The table below includes the percentage 
of the agency's budget utilized for land acquisition each year over the 
last 10 years, as well as the specific dollar amount.

----------------------------------------------------------------------------------------------------------------
                                  USDA Forest Service           Land Adjustment           Percentage of Land
         Fiscal Year                Appropriations                Allocation          Adjustment  Appropriations
----------------------------------------------------------------------------------------------------------------
                  FY16                $5,680,346,000                 $64,601,000                         1.1
                  FY15                $5,073,246,000                 $48,666,000                         0.9
                  FY14                $4,896,611,000                 $44,654,000                         0.9
                  FY13                $4,556,651,000                 $50,666,000                         1.1
                  FY12                $4,845,876,000                 $53,701,000                         1.1
                  FY11                $5,096,746,000                 $33,982,000                         0.6
                  FY10                $5,315,256,000                 $64,822,000                         1.2
                  FY09                $6,107,566,000                 $50,866,000                         0.8
                  FY08                $5,039,428,000                 $43,091,000                         0.8
                  FY07                $4,697,796,000                 $46,667,000                         0.9
----------------------------------------------------------------------------------------------------------------

    The table below includes a breakout of where the land acquisition 
projects were funded in FY16, as well a short justification for each 
project.

------------------------------------------------------------------------
                              National Forest/
      Amount         State        Project             Justification
------------------------------------------------------------------------
       $1,000,000        AZ  Coconino National  Fossil Creek: Protect
                              Forest             watersheds, minimize
                                                 soil erosion, and
                                                 rehabilitation of
                                                 landscape
       $2,800,000        CA  Shasta-Trinity     Castle Crags: climate
                              National Forest    change resilience and
                                                 watershed protection
         $200,000        CA  Pacific Crest      California Southwest
                              National Scenic    Desert: recreational
                              Trail              access and viewshed
       $1,100,000        CA  Eldorado National  Royal Gorge:
                              Forest             recreational access to
                                                 wilderness area;
                                                 diverse habitat for
                                                 wildlife facing climate
                                                 change
         $700,000        CA  Six Rivers         Hurdygurdy: recreational
                              National Forest    access, watershed
                                                 protection and wildlife
                                                 habitat
         $800,000        CO  Roosevelt          Toll Properties:
                              National Forest    wilderness access,
                                                 watershed protection
                                                 for drinking water
                                                 supply for Denver, and
                                                 wildlife habitat
                                                 protection
       $5,000,000        CO  Rio Grande         Upper Rio Grande: water,
                              National Forest    history, and working
                                                 lands anchored by the
                                                 Rio Grande River
       $3,900,000        FL  Osceola National   Florida-Georgia Longleaf
                              Forest             Pine Initiative: Red-
                                                 cockaded Woodpecker
                                                 habitat and fresh
                                                 drinking water supplies
       $1,625,000        ID  Caribou-Targhee    High Divide: public
                              National Forest    access to existing
                                                 Federal land, and
                                                 protects animal and
                                                 fish migration
                                                 corridors linking
                                                 Yellowstone National
                                                 Park to Idaho and the
                                                 Frank Church Wilderness
                                                 in Montana.
         $425,000        ID  Frank Church       High Divide: public
                              River of No        access to existing
                              Return             Federal land, and
                              Wilderness         protects animal and
                                                 fish migration
                                                 corridors linking
                                                 Yellowstone National
                                                 Park to Idaho and the
                                                 Frank Church Wilderness
                                                 in Montana.
       $2,500,000        ID  Sawtooth National  High Divide: public
                              Forest             access to existing
                                                 Federal land, and
                                                 protects animal and
                                                 fish migration
                                                 corridors linking
                                                 Yellowstone National
                                                 Park to Idaho and the
                                                 Frank Church Wilderness
                                                 in Montana.
       $2,300,000        ID  Sawtooth National  High Divide: public
                              Forest             access to existing
                                                 Federal land, and
                                                 protects animal and
                                                 fish migration
                                                 corridors linking
                                                 Yellowstone National
                                                 Park to Idaho and the
                                                 Frank Church Wilderness
                                                 in Montana.
       $1,800,000        MI  Ottawa National    Great Lakes Northwoods:
                              Forest             protection of watershed
                                                 of Lake Superior,
                                                 drinking water supply
                                                 and recreation
       $2,175,000        MN  Chippewa National  Minnesota Northwoods:
                              Forest             recreational access and
                                                 watershed protection
         $515,000        MN  Superior National  Minnesota Northwoods:
                              Forest             recreational access,
                                                 wildlife habitat and
                                                 watershed protection
       $2,070,000        MO  Mark Twain         Current River:
                              National Forest    recreation access to
                                                 Current River, wildlife
                                                 habitat and watershed
                                                 protection
       $1,525,000        MT  Beaverhead-        High Divide: public
                              Deerlodge          access to existing
                              National Forest    Federal land, and
                                                 protects animal and
                                                 fish migration
                                                 corridors linking
                                                 Yellowstone National
                                                 Park to Idaho and the
                                                 Frank Church Wilderness
                                                 in Montana.
         $200,000        MT  Beaverhead-        High Divide: public
                              Deerlodge          access to existing
                              National Forest    Federal land, and
                                                 protects animal and
                                                 fish migration
                                                 corridors linking
                                                 Yellowstone National
                                                 Park to Idaho and the
                                                 Frank Church Wilderness
                                                 in Montana.
       $1,250,000        NC  Pisgah National    North Carolina
                              Forest             Threatened Treasures:
                                                 recreational access,
                                                 viewshed and water
                                                 protection
         $440,000        NC  Uwharrie National  North Carolina
                              Forest             Threatened Treasures:
                                                 recreational access and
                                                 wildlife habitat
         $840,000        OR  Umatilla National  Pacific Northwest
                              Forest             Streams: commercial and
                                                 recreational anadromous
                                                 fisheries and wildlife
                                                 habitat
         $550,000        OR  Wallowa-Whitman    Pacific Northwest
                              National Forest    Streams: commercial and
                                                 recreational anadromous
                                                 fisheries and wildlife
                                                 habitat
       $1,635,000        TN  Cherokee National  Tennessee Mountains:
                              Forest             recreational access and
                                                 healthy watersheds
       $2,320,000        UT  Uinta-Wasatch-     Wasatch Watersheds-
                              Cache National     Bonneville Shoreline
                              Forest             Trail: access and
                                                 protect viewshed
       $1,990,000     VA/WV  Jefferson          Rivers of the
                              National Forest    Chesapeake: protection
                                                 of water quality
                                                 upstream of the
                                                 Chesapeake Bay
       $3,000,000        WA  Pacific Crest NST  National Trails System:
                                                 public access and
                                                 viewshed protection
       $1,000,000        WY  Bridger-Teton      Upper Gros Ventre--Kohl:
                              National Forest    recreational access to
                                                 the Wild and Scenic
                                                 Gros Ventre River;
                                                 wildlife corridor
       $1,025,000        WY  Bridger-Teton      Greater Yellowstone
                              National Forest    Area: access to
                                                 recreation and cultural
                                                 sites; protection of
                                                 wildlife corridor
-------------------
    $44,685,000...
------------------------------------------------------------------------

    In addition, land acquisition funding is used for ``cash 
equalization'' in cases where land values are not equivalent and the 
Forest Service includes money along with the land exchanged. Additional 
land acquisition funds are used to acquire critical inholdings as well 
as to acquire key parcels for priority recreational access as follows:

------------------------------------------------------------------------
 
------------------------------------------------------------------------
         $250,000   Cash Equalization (Up to 20 exchanges as needed)
       $2,000,000   Critical Inholdings 17 parcels)
       $8,000,000   Priority Recreational Access (5 parcels)
       $9,666,000   Administrative Costs
-------------------
  $19,916,000.....
------------------------------------------------------------------------

Questions Submitted by Hon. Steve King, a Representative in Congress 
        from Iowa
BEA Data Questions
    Question 1. For the first deduction from gross margin (currently 
84%), why is APHIS not relying on the most recent BEA data for the 10 
year average of undistributed corporate profits for farms and food and 
beverage and tobacco products industries?
    Answer. The updated 2012 BEA data, which is updated once a year, 
came out after the outbreak had started. APHIS used the most recent 
data available at the beginning of the outbreak.

    Question 2. Why is APHIS deducting ``dividends'' from gross margin 
to arrive at retained earnings?
    Answer. APHIS is not deducting dividends from gross margins to 
arrive at retained earnings. APHIS uses the Bureau of Economic Analysis 
estimates of undistributed corporate profits, commonly called retained 
earnings, as a basis to determine the amount of gross margin that is 
allocated back to the bird value. Undistributed corporate profits do 
not include dividends, because no money is invested back into the 
capital assets of the company--including the birds--until after 
individual owners and taxes are paid.

    Question 3. Exactly what items is APHIS accounting for by relying 
on BEA data for this deduction?
    Answer. APHIS references BEA data not to make deductions, but to 
determine what portion of the operating margin historically would 
become retained earnings by farms and food manufacturing firms.
Additional Deduction Questions
    Question 4. Why does the indemnification formula include an 
additional deduction of 6% to cover debt retirement, capital 
improvements, research and development, and asset valuation?
    Answer. In cases of egg-laying hens, these formulas are used to 
determine the amount of net income that ultimately would be used to 
improve the asset (or bird) value. In doing so, historical information 
from the BEA shows that \1/5\ of net income becomes retained earnings, 
and the Agency believes that about \1/2\ of retained earnings would be 
used to increase asset value.

    Question 5. On what data is APHIS relying to arrive at a deduction 
amount equal to 6%?
    Answer. APHIS uses BEA historical data to make its determinations 
about the asset value of egg-laying hens.
Inconsistent Indemnity Payments Questions
    Question 6. What measures is APHIS taking to provide indemnity on a 
uniform basis? For example:
    How does APHIS decide when it updates its indemnity formula 
assumptions?
    Answer. APHIS has previously updated its indemnity calculator when 
it has received new information and statistics from viable sources 
about its calculations. In the case of the 2014-2015 outbreak, APHIS 
updated the calculator to reflect additional information, presented by 
industry, about the length of time for which egg-laying hens produce 
eggs. For the sake of uniformity, APHIS provided retroactive indemnity 
payments to producers who had been affected during the outbreak.

    Question 6a. How does APHIS establish the cutoff point for farmers 
receiving indemnity under an old versus updated indemnity calculation?
    Answer. In the example from the previous answer, APHIS provided 
retroactive payments to producers when it updated the indemnity 
calculator. As USDA considers additional changes to how it determines 
values for indemnity payments, the Department will make a decision on 
when these changes become effective. The level of data currently 
available and how the changes can be made in a uniform manner are some 
of the considerations that factor into this decision.

    Question 7. What has been APHIS' policy with respect to indemnity 
payments for contract farmers to date?
    Answer. APHIS was limited in its ability to pay contract growers as 
the authority for payments for HPAI indemnity were limited to those who 
actually own the bird. Under its Low Pathogenic Avian Influenza (LPAI) 
regulations, APHIS did have the authority to provide split payments to 
both owners and contract growers. APHIS issued an Interim Rule, on 
February 9, 2016, which gives APHIS the same authority for HPAI as it 
already had for LPAI to allow a split of indemnity payments in 
situations where owners had a contract grower raising poultry.

    Question 8. How does APHIS expect to change its payment policies 
going forward under the recently proposed Interim Rule (APHIS-2015-
0061) regarding how indemnity payments are paid to owners versus 
contractors?
    Answer. The interim rule creates a formula that allows APHIS to 
split such payments between poultry and egg owners and parties with 
which the owners enter into contracts to raise or care for the eggs or 
poultry based on the proportion of the production cycle completed.

    Question 9. Does APHIS expect to revise its indemnification formula 
in light of the recently proposed Interim Rule (APHIS-2015-0061)?
    Answer. APHIS is considering changes to its indemnification 
formula, but not as a result of the Interim Rule.

    Question 10. How have APHIS' indemnity payment practices differed 
between farmers affected by HPAI versus those affected by Low 
Pathogenic Avian Influenza?
    Answer. Prior to the Interim Rule, APHIS was limited in its ability 
to pay contract growers as the authority for payments for HPAI 
indemnity were limited to those who actually own the bird. Under the 
LPAI regulations, APHIS did have the authority to provide split 
payments to both owners and contract growers. The Interim Rule gave 
APHIS the same authority for HPAI as it previously had for LPAI to 
allow a split of indemnity payments in situations where owners had a 
contract grower raising poultry.
Additional Questions Concerning APHIS's Compensation Process
    Question 11. What attempts has APHIS made to produce compensation 
equations to compensate all poultry producers, especially turkey 
producers?
    Answer. APHIS' indemnity compensation formulas account for the 
different markets between different segments of the poultry industry. 
Turkey producers, for example, are compensated using formulas that 
account for the costs of raising turkeys and the market for turkey meat 
and products.

    Question 12. What attempts has APHIS made to produce protocols to 
compensate producers for the full economic cost of the process of 
dealing with Avian Influenza outbreaks, including downtime loss while 
the flocks are depopulated.
    Answer. While we strive to minimize downtime, APHIS will not pay 
for downtime losses as these payments would be outside the scope of the 
purpose of indemnity. Indemnity is paid to producers to compensate them 
for the value of the animals destroyed as part of an animal disease 
outbreak and is intended to encourage early reporting and active 
participation of producers. Providing downtime loss is more in line 
with a traditional disease insurance program.
Questions Submitted by Hon. Jeff Denham, a Representative in Congress 
        from California
    Question 1. The President's budget once again targets the vital 
U.S. crop protection program, making drastic cuts and undermining the 
program that was laid out in the 2014 Farm Bill. What is USDA doing to 
ensure that the farm bill does not get administratively reopened, and 
that the program does not get altered in ways that run counter to what 
Congress approved?
    Answer. Our proposal to reduce the premium subsidy on revenue 
coverage that provides protection for upward price movements at harvest 
time would provide a savings to the taxpayer, yet still provide 
meaningful assistance for the producer. Our proposal to reform 
prevented planting coverage would address Office of Inspector General 
and the Government Accountability Office findings and would help to 
improve program integrity in the prevented planting program. The 
proposal represents a proactive response to oversight concerns and 
further facilitates an equitable partnership.

    Question 2. Despite the Risk Management Agency's (RMA) continued 
assertions to the contrary, specialty crop insurance agents have been 
financially constrained under the current Standard Reinsurance 
Agreement (SRA). They continue to express to me ongoing concerns they 
have over the inequities it created.
    With a new SRA on the horizon, what efforts will RMA make to reach 
out and work with insurance agents to ensure farmers do not face 
dwindling coverage options?
    Answer. Since 2010, before the current Standard Reinsurance 
Agreement (SRA) took effect, the average Administrative and Operating 
expense subsidy (A&O) for specialty crops in California increased 
significantly--from $1,783 per policy in 2010 to $2,915 in 2015. The 
number of crop insurance agents in California has remained stable 
throughout this time period.
    Also since 2010, the insurance coverage options available to 
growers have expanded to include several additional specialty crops, 
such as olives and pistachios. Whole Farm Revenue Protection, which 
covers virtually any crop, has been enhanced and expanded to all 
counties in California. Coverage has also been added for apiculture and 
pasture, rangeland, and forage. Revenue coverage has been extended to 
oranges, strawberries, and cherries.
    The SRA is a financial agreement between the Federal Crop Insurance 
Corporation and the Approved Insurance Providers (AIPs) who take risk 
on the insurance policies sold. In addition, there are certain aspects 
of program delivery included in the SRA that both parties give careful 
consideration and due diligence to assure farmers and ranchers are 
adequately serviced. In the past when an SRA has been subject to 
change, RMA has made such changes available on its website for comment. 
As with any potential program change or issue, RMA is open and willing 
to listen to comments, suggestions or concerns to assure an efficient 
and effective Federal crop insurance program for our nation's farmers 
and ranchers.

    Question 3. Secretary Vilsack, I often hear concerns from the farm 
community about EPA's repeated failure to meaningfully consider USDA's 
expertise, advice and opinions, especially during formal interagency 
review of pesticides--both conventional and biological.
    Please explain how USDA engages with EPA, both formally and 
informally, and how you can ensure that engagement becomes more 
productive, meaningful, and most importantly, evident to the public.
    In particular, can you describe for the extent to which USDA 
expertise is being valued and included in EPA's recent actions related 
to treated seeds and biopesticide reviews?
    Answer. The USDA Office of Pest Management Policy (OPMP) was 
established to provide for the effective coordination of agricultural 
policies and activities within USDA related to pesticides and of the 
development and use of pest management tools, while taking into account 
the effects of regulatory actions of other government agencies 
including EPA. OPMP works with the staff at EPA's Office of Pesticide 
Programs (OPP) to respond to informational requests related to 
agricultural pest management. As part of EPA's registration review, 
OPMP provides benefits information when dockets open, reviews published 
preliminary risk assessments, and provides comments on proposals 
presented by EPA on various subjects, including seed treatment, 
resistance management, and other topics. We continue our efforts for 
more productive, meaningful, and effective engagement. All our comments 
are included in the public EPA regulatory dockets. The Directors of 
OPMP and OPP interact on a regular basis. However, staff level 
interactions occur nearly daily. The Director of OPMP represents USDA 
interests in pesticide issues on EPA's Pesticide Policy Dialogue 
Committee, which is a federal advisory committee.

    Question 4. Secretary Vilsack, in your testimony you touch on how 
your agency has been working to address unfair trade barriers and 
restrictions that impact ag access to foreign markets. Has your agency 
being working with USTR to address the ongoing international trade 
issues the U.S. almond industry is facing, particularly with India? If 
so, can you elaborate on the progress of your efforts?
    Answer. USDA works in collaboration with USTR to address barriers 
facing California almond exports. For example, USDA worked with USTR to 
lead efforts at bilateral and multilateral levels to address one of the 
European Union's pesticide regulations and its impact on U.S. 
agricultural exports. Based on these efforts, the Commission took steps 
to maintain a pesticide maximum residual level (MRL) for an orchard 
treatment widely used by the U.S. almond industry. Our intervention in 
this matter protected over $1.9 billion in almond exports to the 
European Union, most of which come from California. This intervention 
also protected an additional $1 billion in other, non-almond tree nut 
exports to the European Union.
    With respect to India, at the U.S.-India Trade Policy Forum and 
during subsequent travel to India this past fall, USDA Under Secretary 
Scuse reinforced USTR's request to eliminate the tariff on in-shell 
almonds, which is currently 35 rupees per kilogram (24/pound). USDA 
continues to make the argument to India that eliminating the almond 
tariff would benefit Indian food processors and consumers, and help 
curtail smuggling.
    On other issues, USDA and USTR resolved the wholesale and retail 
packaging and stickering issue with the Food Safety and Standards 
Authority of India (FSSAI). During the October 2015 Trade Policy Forum, 
FSSAI clarified that labeling requirements for bulk in-shell almond 
shipments can be addressed by stickers at the port of importation, 
helping to facilitate U.S. almond exports. USDA continues to request 
that FSSAI recognize ``lot ID's'' for entire non-retail consignments 
instead of requiring details on individual bins. USDA has been working 
closely with Indian Customs officials to ensure that customs documents 
(e.g.: No Objection Certificate) are not misused by almond importers to 
breach contracts.

    Question 5. Secretary Vilsack, in your testimony it is mentioned 
that USDA has a goal to publicly share its performances goals and 
progress in support of new and beginning farmers. When can the public 
expect to see this?
    Answer. USDA has created new, Agency Priority Goal (APG) based on 
USDA-wide metrics, to increase access and opportunities for Beginning 
Farmers and Ranchers (BFR). The goal and associated reports on USDA's 
performance are currently available on both the www.usda.gov/newfarmers 
and www.performance.gov sites.
    This goal states that by September 30, 2017, USDA will increase 
access to key BFR programs, which will result in increasing investments 
to BFR by a value $5.6 billion over 2 years. Within existing resources, 
USDA will expand opportunities for BFR through targeted outreach and 
increased technical assistance, resulting in increasing new and 
beginning farmer and rancher participation in key programs by 6.6 
percent over the goal term. Increased investments to the next 
generation of farmers and ranchers will contribute to growing their 
value, and support economic development and stability in their 
communities, both through increased opportunity and support for 
longevity of new operations.
    This complements a larger body of work aimed at expanding 
opportunities presented by USDA to new and beginning farmers. Over the 
past seven years, USDA has engaged its resources to support a strong 
next generation of farmers and ranchers by improving access to land and 
capital; building new markets and market opportunities; extending new 
conservation opportunities; offering appropriate risk management tools; 
and increasing our outreach, education, and technical support. As an 
example, in October 2015, USDA updated our virtual front door for the 
next generation of farmers and rancher to access USDA resources--
www.usda.gov/newfarmers--to serve more diverse audiences and provide 
even more connections to supportive programs for new farmers. USDA has 
also engaged stakeholders on the critical issue of access to land--a 
top challenge identified by beginning farmers and ranchers. The 
Department continues to explore additional ways to support the next 
generation of farmers and ranchers.
Question Submitted by Hon. Doug LaMalfa, a Representative in Congress 
        from California
    Question. To follow up on my question in regards to the Resource 
Advisory Committee (RAC) appointment process, it is important that we 
find out why exactly these vacancies are not being filled and how we 
can fix this so these RACs can fulfil their responsibilities. You 
mentioned there are spots that are not filled due to lack of 
categorical requests, such as an engineer. Do you have any flexibility 
to waive these criteria requirements in order to expedite the approval 
process so members can fulfill their responsibilities? What tools can 
you use to help fill these vacancies more rapidly?
    Answer. Each Secure Rural Schools Resource Advisory Committee (RAC) 
is established pursuant to section 205 of the Secure Rural Schools and 
Community Self-Determination Act of 2000 (SRS Act) (16 U.S.C. 7125), 
and in accordance with the provisions of the Federal Advisory Committee 
Act (FACA), (5 U.S.C., App.2).
    In accordance with the SRS Act, each RAC must be comprised of 15 
members who provide balanced and broad representation from within each 
of three specialized categories of interests required by the Act. 
Members also must reside within the state(s) in which the RAC is 
organized. To the extent practical, the membership of each of the three 
categories must include residents in the vicinity of the National 
Forest for which the committee provides advice.
    In accordance with the SRS Act, members and replacements are 
appointed to 4 year terms or reappointed for an additional 4 years. The 
Secretary of Agriculture makes the decision to appoint from among the 
qualified candidates submitted.
    The requirements for representation are statutory. We do not have 
the flexibility to waive the specialized categories for which RAC 
members can qualify under the SRS Act. In accordance with the SRS Act, 
each RAC shall be comprised of 15 members who provide balanced and 
broad representation from within each of the following three categories 
of interests specified in the Act:

          a. Five persons who represent:

                  1. Organized labor or non-timber forest product 
                harvester groups;
                  2. developed outdoor recreation, off-highway vehicle 
                users, or commercial recreation activities;
                  3. Energy and mineral development, or commercial or 
                recreational fishing interests;
                  4. Commercial timber industry; or
                  5. Federal grazing permits or other land use permit 
                holders or represent non-industrial private forest land 
                owners within the area for which the committee is 
                organized.

          b. Five persons who represent:

                  1. Nationally recognized environmental organizations;
                  2. Regionally or locally recognized environmental 
                organizations;
                  3. dispersed recreational activities;
                  4. Archaeological and historical interests; or
                  5. Nationally or regionally recognized wild horse and 
                burro interest groups, wildlife or hunting 
                organizations, or watershed associations.

          c. Five persons who represent:

                  1. State elected office (or a designee);
                  2. County or local elected office;
                  3. American Indian Tribes within or adjacent to the 
                area for which the committee is organized;
                  4. Area school officials or teachers; or
                  5. affected public-at-large.
Question Submitted by Hon. David Rouzer, a Representative in Congress 
        from North Carolina
    Question. Last September, the EPA published Interim Recommendations 
for environmental standards and ecolabels for use in Federal 
procurement. EPA's recommendation for lumber excludes several credible 
standards that are widely used in the United States, including the 
Sustainable Forestry Initiative (SFI) and American Tree Farm System 
(ATFS) standards. Across the United States, more than 82 million acres 
of forestland are certified to either the Sustainable Forestry 
Initiative (SFI) or the American Tree Farm System (ATFS). This 
represents more than 70 percent of all certified forests in the United 
States. In North Carolina, 94 percent of the states certified forests 
are managed to SFI or ATFS standards. These forests provide a renewable 
timber resource, clean water, wildlife habitats, and numerous other 
public benefits. They also support thousands of jobs. I was 
disappointed to learn that this recommendation, along with a prior 
lumber determination by the Department of Energy, was made without 
consultation with the USDA. USDA not only has expertise in forest 
management and forest products, but has publicly stated that SFI and 
ATFS standards can be used to verify sustainability of forest products. 
I am hopeful that USDA will engage with DOE and EPA and work with them 
to change their current programs to recognize all three credible forest 
certification standards. Can you provide us an update on how you plan 
to work with and encourage EPA and DOE to recognize these forest 
certification programs for procurement purposes?
    Answer. The U.S. Department of Agriculture's (USDA) Natural 
Resources and Environment Mission Area has met with EPA's Office of 
Chemical Safety and Pollution Prevention to discuss the interim 
recommendations. EPA's Standards Executive plans to reach out to the 
Sustainable Forestry Initiative (SFI), the American Tree Farm System 
(ATFS) and other forestry stakeholders regarding review of forestry 
labels and their alignment with Federal policies guiding EPA's use of 
voluntary consensus standards and private-sector conformity activities. 
USDA also plans to provide relevant, existing analysis to inform EPA's 
decision making for the lumber/wood category, going forward.
Questions Submitted by Hon. Dan Newhouse, a Representative in Congress 
        from Washington
    Question 1. Secretary Vilsack, I want to thank you for your work on 
GMO labeling and the time you have invested in trying to find a 
solution that prevents a potentially devastating patchwork of state and 
local labeling laws from taking effect. The House Committee on 
Agriculture has also spent a great deal of time working on what we 
believe is a strong, bipartisan bill to resolve the patchwork issue--a 
bill that was approved by almost \2/3\ of the U.S. House. Can you tell 
me what you think will happen if we don't get something enacted before 
the July 1st labeling compliance deadline in Vermont?
    Answer. As Congress considers the path forward on this complex 
issue, I will continue to provide technical assistance to prevent the 
potential economic impact of a patchwork of state and local labeling 
laws. I am convinced that the segregation systems necessitated by such 
state and local labeling laws will have a cost and food companies have 
an incentive to pass on as much of this cost to consumers as they can. 
Some companies may decide that they want to segregate product for trace 
back. Some companies may also want to have separate warehouses, 
auditing systems, and the like While there has been progress in the 
conversation, I understand an issue remains as to whether or not the 
chosen method of providing the product information is useful to the 
consumer. Regardless of the potential mechanism (e.g., QR code, 1-800 
number, web-based system, etc.), some believe there needs to be an 
assessment of whether a substantial number of consumers find the 
mechanism useful to determine whether it is desirable to put 
information on the package itself. To address the overarching issue, 
congressional action is needed.

    Question 2. Secretary Vilsack, to follow up on a question I asked 
during the hearing with you, last September, EPA published interim 
recommendations for environmental standards and ecolabels for use in 
Federal procurement. EPA's recommendation for lumber excludes several 
credible standards that are widely used in the U.S., including the 
Sustainable Forestry Initiative (SFI) and American Tree Farm System 
(ATFS) standards. Across the United States, more than 82 million acres 
of forestland are certified to either these two systems. This 
represents more than 70 percent of all certified forests in the United 
States and 95 percent in my home state of Washington. I was 
disappointed to learn this recommendation, along with a prior lumber 
determination by the Department of Energy, was made without 
consultation with the USDA. The Department of Agriculture not only has 
expertise in forest management and products, but has publicly stated 
that SFI and ATFS standards can be used to verify sustainability of 
forest products. I am hopeful USDA will engage DOE and EPA and work 
with them to change their current programs to recognize all three 
credible forest certification standards. Can you provide us an update 
on any plans you have to interact with and educate EPA and DOE about 
these forest certification programs?
    Answer. The U.S. Department of Agriculture's (USDA) Natural 
Resources and Environment Mission Area has met with EPA's Office of 
Chemical Safety and Pollution Prevention to discuss the interim 
recommendations. EPA's Standards Executive plans to reach out to the 
Sustainable Forestry Initiative (SFI), the American Tree Farm System 
(ATFS) and other forestry stakeholders regarding review of forestry 
labels and their alignment with Federal policies guiding EPA's use of 
voluntary consensus standards and private-sector conformity activities. 
USDA also plans to provide relevant, existing analysis to inform EPA's 
decision making for the lumber/wood category, going forward.
Question Submitted by Hon. Suzan K. DelBene, a Representative in 
        Congress from Washington
    Question. Last September, the EPA published Interim Recommendations 
for environmental standards and ecolabels for use in Federal 
procurement. The EPA's recommendation for lumber excludes several 
standards that are widely used in the United States, including the 
Sustainable Forestry Initiative (SFI) and the American Tree Farm System 
(ATFS) standards. Across the United States, more than 82 million acres 
of forestland are certified to either the Sustainable Forestry 
Initiative (SFI) or the American Tree Farm System (ATFS). This 
represents more than 70 percent of all certified forests in the United 
States. In Washington State, 95 percent of the states certified forests 
are managed to SFI or ATFS standards. To what extent was this 
recommendation, along with a prior lumber determination by the 
Department of Energy, made in consultation with USDA? It's my 
understanding that USDA has publicly stated that SFI and ATFS standards 
can be used to verify the sustainability of forest products. Can you 
provide us an update on how you plan to work with EPA and DOE on these 
forest certification programs?
    Answer. The U.S. Department of Agriculture's (USDA) Natural 
Resources and Environment Mission Area has met with EPA's Office of 
Chemical Safety and Pollution Prevention to discuss the interim 
recommendations. EPA's Standards Executive plans to reach out to the 
Sustainable Forestry Initiative (SFI), the American Tree Farm System 
(ATFS) and other forestry stakeholders regarding review of forestry 
labels and their alignment with Federal policies guiding EPA's use of 
voluntary consensus standards and private-sector conformity activities. 
USDA also plans to provide relevant, existing analysis to inform EPA's 
decision making for the lumber/wood category, going forward.

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