[Senate Hearing 114-646]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 114-646

                   THE U.S. DEPARTMENT OF AGRICULTURE
               AND THE CURRENT STATE OF THE FARM ECONOMY

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

                                HEARING

                               BEFORE THE

                       COMMITTEE ON AGRICULTURE,
                        NUTRITION, AND FORESTRY

                          UNITED STATES SENATE


                    ONE HUNDRED FOURTEENTH CONGRESS

                             SECOND SESSION


                               __________

                           SEPTEMBER 21, 2016

                               __________

                       Printed for the use of the
           Committee on Agriculture, Nutrition, and Forestry
           
           
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           COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY



                     PAT ROBERTS, Kansas, Chairman

THAD COCHRAN, Mississippi            DEBBIE STABENOW, Michigan
MITCH McCONNELL, Kentucky            PATRICK J. LEAHY, Vermont
JOHN BOOZMAN, Arkansas               SHERROD BROWN, Ohio
JOHN HOEVEN, North Dakota            AMY KLOBUCHAR, Minnesota
DAVID PERDUE, Georgia                MICHAEL BENNET, Colorado
JONI ERNST, Iowa                     KIRSTEN GILLIBRAND, New York
THOM TILLIS, North Carolina          JOE DONNELLY, Indiana
BEN SASSE, Nebraska                  HEIDI HEITKAMP, North Dakota
CHARLES GRASSLEY, Iowa               ROBERT P. CASEY, Jr., Pennsylvania
JOHN THUNE, South Dakota

               Joel T. Leftwich, Majority Staff Director

                Anne C. Hazlett, Majority Chief Counsel

                    Jessica L. Williams, Chief Clerk

               Joseph A. Shultz, Minority Staff Director

                                  (ii)

  
                            C O N T E N T S

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                                                                   Page

Hearing(s):

The U.S. Department of Agriculture and the Current State of the 
  Farm Economy...................................................     1

                              ----------                              

                     Wednesday, September 21, 2016
                    STATEMENTS PRESENTED BY SENATORS

Roberts, Hon. Pat, U.S. Senator from the State of Kansas, 
  Chairman, Committee on Agriculture, Nutrition, and Forestry....     1
Stabenow, Hon. Debbie, U.S. Senator from the State of Michigan...     9

                                Witness

Vilsack, Hon. Tom, Secretary, U.S. Department of Agriculture, 
  Washington, DC.................................................     4
                              ----------                              

                                APPENDIX

Prepared Statements:
    Stabenow, Hon. Debbie........................................    44
    Tillis, Hon. Thom............................................    47
    Vilsack, Hon. Tom............................................    48
Document(s) Submitted for the Record:
Tillis, Hon. Thom:
    Additional comments submitted for the record.................    66
Question and Answer:
Vilsack, Hon. Tom:
    Written response to questions from Hon. Pat Roberts..........    68
    Written response to questions from Hon. Debbie Stabenow......    73
    Written response to questions from Hon. Michael Bennet.......    86
    Written response to questions from Hon. John Boozman.........    79
    Written response to questions from Hon. Sherrod Brown........    85
    Written response to questions from Hon. Robert Casey, Jr.....    90
    Written response to questions from Hon. Kirsten Gillibrand...    87
    Written response to questions from Hon. Heidi Heitkamp.......    89
    Written response to questions from Hon. Amy Klobuchar........    86
    Written response to questions from Hon. Ben Sasse............    81
    Written response to questions from Hon. John Thune...........    83
    Written response to questions from Hon. Thom Tillis..........    80
Additional Material(s) Submitted for the Record:
Vilsack, Hon. Tom:
    Supplemental USDA Letter, National Organic Standards Board, 
      October 19, 2016, written response.........................94-118


 
                   THE U.S. DEPARTMENT OF AGRICULTURE
               AND THE CURRENT STATE OF THE FARM ECONOMY

                              ----------                              


                     Wednesday, September 21, 2016

                              United States Senate,
         Committee on Agriculture, Nutrition, and Forestry,
                                                     Washington, DC
    The Committee met, pursuant to notice, at 10:01 a.m., in 
room 328A, Russell Senate Office Building, Hon. Pat Roberts 
presiding.
    Present: Senators Roberts, Boozman, Hoeven, Perdue, Ernst, 
Tillis, Sasse, Thune, Stabenow, Leahy, Brown, Klobuchar, 
Bennet, Gillibrand, Donnelly, and Casey.

 STATEMENT OF HON. PAT ROBERTS, U.S. SENATOR FROM THE STATE OF 
KANSAS, CHAIRMAN, U.S. COMMITTEE ON AGRICULTURE, NUTRITION, AND 
                            FORESTRY

    Chairman Roberts. Good morning. I call this meeting of the 
Senate Committee on Agriculture, Nutrition, and Forestry to 
order.
    I apologize for interrupting all this very important talk.
    Senator Brown. It is about baseball.
    Chairman Roberts. Oh, baseball?
    Senator Donnelly. --about the Cubs. A Cubs and Indians 
World Series. You heard it from me first.
    [Laughter.]
    Chairman Roberts. Well, if you said the Royals, I might be 
a little more interested.
    Today is a special day for this Committee. We have the 
administration's longest serving cabinet member before us, 
giving his final testimony in this historic room, Secretary Tom 
Vilsack. Tom, welcome.
    It was January 14, 2009, when you testified before this 
Committee for the first time. During that hearing, I asked you 
to be a champion, a spokesperson, and an educator for 
agriculture. Many times over the last seven-plus years you have 
done just that and done it well.
    Now I may not agree with all of your decisions, but I do 
believe you work extremely hard to promote rural and small-town 
America. Thank you for that.
    When you were here in February of last year, we focused on 
the implementation of the 2014 Farm Bill, and producers from 
across the country offered their testimony, and you responded 
to their concerns. Today's hearing is essentially an extension 
of that conversation and an opportunity for all of us to 
address the economic concerns we hear rising from farm country.
    Eleven days ago, I and Chairman Conaway, attended the 
Kansas State Fair, a great opportunity to hear firsthand what 
folks had on their minds. Plain and simple, farmers and 
ranchers are worried the downturn in the agriculture economy is 
taking a toll on their pocketbooks and the health of many 
family operations.
    In Kansas and across the Midwest, we have had a bountiful 
wheat harvest. I had a farmer call me from northwest Kansas. He 
had over 100 bushels an acre. Don't anybody tell anybody that 
biotech is not important.
    Now there are expectations for potentially record-setting 
corn and soybean crops. We have got a lot of wheat on the 
ground, corn incoming.
    Most years, this would be great news. However, these high 
yields come at a time when we are experiencing large 
inventories worldwide. At the farm gate, the drop in commodity 
prices--[cell phone interruption]. At least I did not have to 
tell you let it go.
    [Laughter.]
    Chairman Roberts. Somehow this is appropriate. I am not 
sure why, but it is.
    At the farm gate, the drop in commodity prices and farm 
income are felt firsthand, and their magnitude is foremost on 
everyone's mind around this table. In Kansas, the continued 
downward trend in wheat prices has triggered loan deficiency 
payments for hard red winter wheat for the first time in over a 
decade.
    With large global inventories for wheat, corn, dairy, and 
more, the prices farmers receive and their income levels may 
stay relatively low for several years. I hope that is not the 
case, but that is the reasonable prediction. This is not a 
positive trend for agriculture producers, input suppliers, 
equipment manufacturers, or our rural communities and small 
towns.
    Farm country has experienced quite the rollercoaster since 
2009, as noted in the Secretary's submitted testimony. Our 
farmers and ranchers have seen historic high prices and now 
historic lows. They fought droughts, floods, fires, disease, 
and whatever Mother Nature could throw at them. That is what 
farmers do. They take on Mother Nature's worst, and they plow 
forward.
    They understand this challenge when they sign up, and they 
also understand it is part of the way of their life. But they 
also understand that they have a fighting chance to survive.
    However, their chances of survival can quickly go from slim 
to none when they are not only battling the weather but also 
the heavy hand of government over-regulation. During these 
tough economic times, farmers, ranchers, and agribusinesses 
compete at the thinnest of profit margins. Unfortunately, this 
administration appears to be moving forward with regulations 
across all sectors that will knowingly cut these margins, 
hurting both producers and consumers.
    For example, the Department's new organic standards would 
require intensive capital investments for livestock and poultry 
producers and ultimately lead to increased disease and death of 
poultry.
    Livestock producers also face uncertainty and dread over 
proposed GIPSA rules that were originally proposed in 2010. 
They know very little of the USDA's plans to finalize the 
rules, and if they cannot exercise their right to make comments 
on regulations, that would directly impact their marketing 
abilities. I hope they get that right.
    Let us not forget that this administration has proposed 
cuts to the crop insurance program each and every year. 
Congress fought hard, we fought hard, I fought hard, everybody 
on this Committee fought hard, to beat back a proposal that 
would have stripped $3 billion out of the program last year 
following a $6 billion cut and another $6 billion cut--the crop 
insurance program is not a bank--only to have the 
administration propose more harmful cuts in their budget sent 
to Congress months later.
    Let me say, with regards to those proposed cuts not in this 
room, not on my watch, not on the watch of many of us here on 
the Committee.
    It is not just the producer who has seen troublesome 
regulatory proposals. For consumers, the new SNAP retailer 
proposed rule could force 100,000 stores to leave the program. 
I am worried about that mother on the SNAP program who would 
not have access to that convenience store to redeem their 
benefits. How does this help those in need?
    These examples are just within the Agriculture Department. 
They are a drop in the bucket compared to the flood of 
regulations we have seen pop up from the EPA, FDA, Department 
of Labor, OSHA, and other regulatory agencies, that would 
directly hurt the well-being of the agriculture sector.
    Whether it is the Waters of the U.S., delayed approvals of 
innovative biotechnologies, access to critical inputs, or new 
reporting requirements, these regulations have reasonable 
business men and women truly worried, concerned, angry, giving 
up about whether they can continue as a business, and what 
might be proposed in the last months of this administration.
    My fundamental concern, and the main concern from farm 
country, is that any administration--any administration, 
Republican, Democrat, Libertarian--would put an agenda ahead of 
sound science, and that voices critical of production 
agriculture will drive government decisions. They fear they are 
being ruled, not governed. I hope that is not the case.
    So today I find myself asking for what I asked for in 
2009--a champion, a spokesperson, an educator who will stand up 
for production agriculture. Mr. Secretary, you have filled that 
role on many occasions over the last seven-plus years. I am 
asking you to finish your term with that same mindset; I know 
you will.
    I am glad you are here today. Hopefully, this hearing will 
shed additional light on the Department's plan for the last few 
months and calm our producers' fears and worries during these 
trying times.
    My dear friend and colleague and the distinguished Ranking 
Member, Senator Stabenow, is in the Finance Committee. She will 
be here very soon. As soon as she gets here, she will be 
recognized to make her opening comments.
    I now turn to you, sir, Secretary Vilsack, to make your 
opening statement.

 STATEMENT OF HON. TOM VILSACK, SECRETARY, U.S. DEPARTMENT OF 
                          AGRICULTURE

    Secretary Vilsack. Mr. Chairman, thank you very much. To 
the members of the Committee, thank you for the opportunity to 
be here this morning.
    I am not going to spend the full five minutes of my time 
because I know that your time is limited. I just simply want to 
say ``thank you'' to this Committee for providing an incredible 
example to the rest of the Congress and the Senate and the rest 
of the country.
    During the course of my time as Secretary, which I have 
been honored to have this position, this Committee on the 
Senate side and its companion committee on the House side have 
worked diligently to pass a solid farm bill, have taken on the 
difficult task of dealing with labeling, and I think have shown 
the ability and capacity to work across party lines, out of 
mutual respect, for the benefit of rural America and all of 
America.
    So my comment today, Mr. Chairman, is just simply to say 
``thank you'' for providing that example. I think this 
Committee has done what the founding fathers of this country 
expected it to do, which was to have vigorous debate but at the 
end of the day to find common ground and common cause.
    I look forward to your questions, and hopefully I can 
provide some insight on some of the issues that you have raised 
in your opening statement.
    [The prepared statement of Secretary Vilsack can be found 
on page 48 in the appendix.]
    Chairman Roberts. Mr. Secretary, thank you very much for 
your brief comments.
    We are going to move to questions now in the interest of 
time, and the Secretary, as always, has a severe time schedule. 
I have several questions here, and then we will go down the 
list of those who came, and finish that up, and hope we can 
have Senator Stabenow as soon as she can.
    My first question is related to biotech disclosure. We 
reviewed the USDA's request for information to implement the 
study of the potential technology challenges mandated in the 
recently passed biotech disclosure legislation. That is the 
bill you mentioned. That is the bill we have been working on 
for several years.
    It appears that the USDA is going well beyond the scope 
directed in the law. The USDA's draft work statement calls for 
an additional consumer use study which aims to identify the 
likelihood consumers will use electronic or digital disclosures 
when making food purchasing decisions.
    Mr. Secretary, you invested a lot of your time to help us 
get a biotech solution bill across the finish line. I know you 
understand how delicate these negotiations were, how narrow the 
path to success was.
    So with that level of investment and knowledge, I do not 
know why, with the first shot out of the gate, the Department 
would go well beyond the law with implementation. I have to 
wonder if the USDA would simply stick to the scope of the 
statute, were that the case I am not sure you would have to 
come asking us for money.
    We cannot go beyond the scope of the law and expect to 
retain support for this bipartisan agreement. It was a very 
hard-fought bipartisan agreement, and we got 63 votes, and the 
President signed it, and you were an integral part of that.
    Would you care to comment?
    Secretary Vilsack. Mr. Chairman, I respectfully perhaps 
disagree with the characterization of this as beyond the scope. 
I think what we are trying to do is to solicit information and 
comments to make sure that as we begin the process of putting 
together the implementation that we do so with the full extent 
of awareness and knowledge of various issues that we think are 
important and are part of what you all have directed us to do.
    I think it is a study that requires resources, and we 
obviously are challenged with a budget that is less than it was 
my first full year as Secretary.
    We will continue to focus on ways in which we can do this 
in the right way. We want to lay the foundation. We want to 
solicit information. We want to take every side and every 
aspect into consideration as we did during the course of the 
negotiations.
    The reason for this is, number one, to reduce the 
litigation risk of any implementation. There is always that 
risk, and we want to make sure that we do not cause further 
delay. Secondly, we also have international regulations and 
responsibilities that we have to be cognizant of.
    So by doing this, by proposing this study, by looking at 
various aspects, we will be in a position to be able to respond 
to any concerns that might arise and lay a strong foundation 
for a future administration that will obviously, at the end of 
the day, finalize all of this. This is not going to get done in 
the next couple of months.
    So we think we are working consistently with your 
direction, and we think we are going to solicit the information 
that is going to allow us to put together a solid rule that 
will be able to be defended in any potential litigation, and 
hopefully avoid it, and be able to respond to any concerns from 
our international trade partners.
    Chairman Roberts. There is a pasture that we are operating 
in with regards to the draft work statement, and it, with 
regards to the legislation, was passed. As in any pasture, we 
put up some fences. We are just going to make sure that we stay 
between the fence posts.
    Median farm income. In your testimony, you highlight that 
median farm household incomes appear to be strong compared to 
other sectors. But when you look at the USDA's estimates, 
excluding off farm income, the median farm income was actually 
negative in 2014 and 2015, and it is forecast to decline even 
further in 2016.
    While we could argue over which is the better measure, it 
is clear that many producers are struggling to cover their cost 
of production or make any profits on their farms. For some farm 
families, off farm income is literally a life support system. 
Their farm revenues may cover their farm expenses, but it may 
not be enough to feed, clothe, or even educate their families.
    Mr. Secretary, the farmers and ranchers that I talk to 
remain in distress and worry about whether or not their family 
farm can stay afloat. Besides household incomes, what other 
measures are you using to assess the state of the farm economy?
    Secretary Vilsack. Well, let's talk about markets first and 
foremost. The good news is that export markets are up and we 
are projecting a slight increase on export markets. Obviously, 
this Congress and Senate will make determinations potentially 
on possible trade agreements that could substantially expand 
opportunity.
    Secondly, I think we are looking at debt-to-equity. The 
lowest debt-to-equity level we have ever experienced was 11.3 
percent. The debt-to-equity level today is 12.4 percent. In 
1985, in the midst of the farm crisis that you and I are 
certainly aware of, it was 22 percent. So the debt-to-equity 
ratio still appears to be strong.
    Then we look at the farmers and farm operations that are 
extremely leveraged or highly leveraged. Those are the people 
that we are most concerned about because those are the folks 
that are on the edge. We calculate that roughly 10 percent of 
the operations--I think it is 6 percent on the livestock side, 
4 percent on the crop side--are in those 2 categories, which 
means that 90 percent of the operations are outside of those 2 
categories.
    Now we are going to continue to work hard to try to promote 
trade, continue to try to reduce unscientific barriers that 
exist to trading opportunities. We have had, frankly, the eight 
best years of agricultural exports in the history of the 
country, and hopefully, that is going to continue.
    But we are faced with a bumper crop, as you indicated, and 
we are faced with a global surplus, and we are faced with a 
world economy and global economy that is not as strong as any 
of us would like. The strong dollar in the past has made it a 
little bit more competitive for us.
    So we are facing some challenges, but I think we are up to 
it. I think we are going to continue to look for ways in which 
we can help these folks.
    Record amount of credit. First, only the second time in the 
history of our agency have we lent out more than $6 billion. We 
reprogrammed money with your approval to, for the most part, 
meet the debt requirements.
    You mentioned deficiency payments, and we expect and 
anticipate in October significant ARC and PLC payments far 
above what was experienced last year. So our hope is that 
provides some level of help and assistance.
    I know I am going to get a question from Senator Leahy 
about dairy. We will talk about that in just a second.
    Chairman Roberts. That usually comes at the 11th hour and 
59th minute when we are considering the farm bill, with all due 
respect to my distinguished colleague.
    I am going to take the chairman's prerogative of asking one 
more question; I apologize for this. I have to say this is the 
first time I have ever gone over time with regards to asking 
questions, and I apologize to my colleagues.
    I have served under many chairpersons and chairmen who have 
never even bothered to look at the time. Matter of fact, we 
used to bet on what time that would be when I would be sitting 
there where Mr. Perdue would be.
    You mentioned trade. Ag trade is growing both in volume and 
complexity. Building support for a free trade agreement is only 
part of our trade challenges although that is a heck of a 
challenge. Trade agreements are always overcriticized and are 
always oversold, and it takes a heck of a lot of work.
    In the 2014 Farm Bill, Congress mandated the Department to 
generate a plan and to implement a reorganization incorporating 
a new undersecretary for trade and foreign agricultural 
affairs.
    The first step that the law required was for the Department 
to report a reorganization plan to Congress within 180 days. I 
hate to tell you that this report is now over 2 years late--957 
days since signed into law.
    In June of this year, you responded to a letter I sent back 
in February, stating you anticipate USDA would finalize a 
report this year. I understand you have tasked the Office of 
the Chief Economist with the task of completing this report, 
and I have great confidence in their work.
    As you near the end of this administration, can you assure 
us that you will provide your strong forward thinking and 
recommendation for this reorganization, and provide the report 
for this year? I think this is absolutely essential if we are 
going to have a breakthrough with the Pacific Rim trade deal 
and, for that matter, any trade deal that follows.
    Secretary Vilsack. Mr. Chairman, I apologize for not being 
able to respond in the time that you designated for the report. 
However, Congress requested not one, but two, studies which 
complicated our timeline. I can assure you that we are on track 
to get these studies completed.
    This is a very, very, very complicated issue that you have 
presented to us. It does not just simply involve setting up an 
undersecretary of trade. It really does take--requires a look 
at all the equities within the USDA and outside the USDA 
relative to trade, and there are a multitude of equities. I was 
surprised at the complexity of this in terms of our team 
talking about this, but we will do what we can to make sure 
that this is teed up for the next administration.
    Chairman Roberts. I appreciate that.
    I have one more question, and then we will get to the 
members.
    Following up on what I mentioned earlier, Ranking Member 
Stabenow and I, along with 45 other Senators, more than 160 
members on the House side, the Congressional Black Caucus, and 
the Small Business Administration, have all expressed serious 
concerns over the proposed rule on SNAP retailer standandards. 
Under this rule, an estimated 100,000 stores could be forced to 
leave the program. In urban and rural places, these small 
businesses are vital to everyone in the communities that they 
serve, especially those that may need a little assistance in 
making ends meet.
    What is USDA doing to ensure that the final rule will not 
push retailers off the program, hurting both SNAP recipients 
and the economy in rural communities like western Kansas?
    Has anybody considered consumer demand? Has anyone 
considered that the mother working two jobs cannot get to the 
grocery store, if there is a grocery store?
    You are making, apparently, small businesses under this 
proposed rule display 168 items. Why not 170 or 142? I mean, I 
do not understand the reasoning behind the number 168. Maybe 
that was done with a great deal of study; I do not know.
    Would you care to comment? I think this is something that 
we just do not need to get into.
    Secretary Vilsack. Well, Mr. Chairman, I think first of all 
we have to understand the challenge that we face as a country, 
with a third of our children at risk of being obese or in fact 
obese, the health care costs, the loss of productivity 
associated with obesity, chronic diseases that these kids will 
take into adult life, and the reality of adults today in 
America, and the health care costs associated with obesity.
    Having said that----
    Chairman Roberts. Mr. Secretary, let me just interrupt, and 
I apologize for doing this. I have not done this before, but 
the obesity crisis is real. Everybody agrees about that. But 
forcing small retailers to display 168 items in the back or the 
front, maybe that is part of the answer, but the best part of 
the answer is to take away the Blackberry or what the 
distinguished Senator from Vermont is looking at, take that 
away, have mandatory physical education programs that were 
present when you and I were in high school, get people off the 
couch, and shut off the television. A lot of that takes adult 
leadership, but we can do it within our school systems. I think 
that would go a long way toward solving the obesity problem 
rather than trying to shut down 100,000 retailers here.
    I fully understand where you are coming from with regards 
to the administration's goal for kids to eat good food.
    I would also point out that we are wasting one-third of the 
nation's food. That is why I hope we can get this child 
nutrition bill finally passed.
    With those comments--well, I interrupted you. Why don't you 
finish your statement? Then I am going to recognize Senator 
Stabenow.
    Secretary Vilsack. Well, Mr. Chairman, you are absolutely 
right. There is no single one answer to the obesity issue.
    But one answer is that many of the people do live in food 
deserts, and they are serviced by not being served by a full-
scale grocery store, and the reality is that the selection in 
many of these convenience stores is very limited.
    I think the intent of what we were attempting to do was 
appropriate, which is to suggest that there needs to be more of 
the basic food groups represented in these convenience stores, 
there needs to be a bit more variety and a bit more choice. I 
think it is hard to be against those concepts and values.
    I will be the first to admit, and I think our team would be 
the first to admit, that the concerns that have been raised 
about this are legitimate. I would expect and anticipate that 
we will see some changes in terms of what we ultimately, 
finally propose relative to the retailer rule because of the 
concerns that you have expressed. So they are legitimate, but I 
think the concept is also legitimate and appropriate.
    Chairman Roberts. Thank you, Mr. Secretary.
    I welcome now and recognize the distinguished Ranking 
Member from the clutches of the Finance Committee.

STATEMENT OF HON. DEBBIE STABENOW, U.S. SENATOR FROM THE STATE 
                          OF MICHIGAN

    Senator Stabenow. Well, thank you very much, Mr. Chairman.
    As you know, also being a member of the Finance Committee, 
an important pension markup today and there is a lot of impact 
on people in Michigan. So I apologize for being late, Mr. 
Secretary, but it was important for me to be there for a few 
moments.
    Mr. Chairman, I would just ask that my opening statement be 
put in the record, and I will go----
    Chairman Roberts. Without objection.
    [The prepared statement of Senator Stabenow can be found on 
page 44 in the appendix.]
    Senator Stabenow. Thank you.
    I will go to questions, but I, first of all, just want to 
say, Mr. Secretary, what a pleasure it has been to work with 
you and thank you for your incredible service. I am sorry I did 
not hear your comments, but I am very grateful for the breadth 
and depth of your work. There is not a stronger advocate for 
rural America and families and businesses and those who earn 
their living from agriculture and for the food industry, nor a 
stronger advocate for our consumers who count on us to get it 
right on food access and food policy. So thank you very much 
for all of your terrific work.
    Let me first ask about a different topic, one of concern to 
me internationally as it relates to food security. Since 2013, 
when a Chinese-based company announced their intent to purchase 
Virginia-based Smithfield Foods, I have strongly supported 
strengthening the review of foreign purchases of U.S. food and 
agricultural companies through a process we call CFIUS, and I 
feel strongly that the USDA and FDA should have a permanent 
seat at that table. Food security is a national security issue.
    The recent purchase of Syngenta by ChemChina and other 
foreign purchases of U.S. agricultural technologies companies 
continues to raise serious concerns. We invest in research. We 
develop technology and innovation. Now we are seeing a very 
specific strategy by China to rather than invest in their own, 
to purchase ours.
    Mr. Secretary, I know you are prohibited by law from 
discussing USDA's role in the CFIUS review process. But, can 
you discuss why food security plays an important role in 
national security, and any of your thoughts as it relates to 
this issue?
    Secretary Vilsack. Well, first of all, Senator, I apologize 
for saying this, but I want to make sure that you hear the same 
thing that I directed to the Chairman, which is my thanks to 
you for the leadership that you have shown and the example that 
you have provided in working across party lines to get 
substantive legislation through this process. You all have 
provided a great example to the rest of the Congress and the 
Senate. So thank you.
    I was in Jordan not long ago, talking to the King of 
Jordan, and we were talking about the Syrian situation. His 
solution, which I think is correct, is he essentially said to 
me, Mr. Secretary, is there any way in which we could 
reestablish agriculture in Syria? Because if we did we would 
have employment opportunities, we would have a chance to create 
an environment and an economy that would potentially reduce the 
anxiety that is leading to the refugee crisis, in part.
    If you look at every hot spot in the world today, I think 
most of them, if not all of them, do not have a functioning 
agricultural economy and have a lot of hungry people.
    So if we are serious about protecting our own people, if we 
are serious about making sure the world is a safer and better 
place for our kids and grandkids, then we have to understand 
the role that agriculture in this country and agriculture 
around the world will play in providing that level of security.
    I think, frankly, there is a lack of appreciation at times, 
not certainly on this Committee but in other parts of this 
town, on the significant role that agriculture plays and the 
complexity of agriculture in every country and every aspect of 
the economy.
    We have a robust, complex, multistaged economy in this 
country in part because we established, first and foremost, an 
agricultural economy. I think in any way in which the 
agricultural issues can be inserted in the conversation and 
discussion, both as an understanding of the significance and 
also as part of the solution, I think would be helpful.
    I think it is not just what you mentioned. It is also the 
National Security Council, the White House. I think there needs 
to be an ag representative in that concept because I think 
these issues are really important, and I think they are 
fundamental to making a more secure and safe world.
    Senator Stabenow. Thank you very much. I could not agree 
more.
    Let me turn back now around food security here at home. You 
know the farm bill, among many, many, many things, is about 
providing safety, and that is both for farmers, whether it is 
livestock disaster assistance--and we have seen that was the 
first program triggered after we passed the farm bill--or 
whether it is what is happening now with prices, or whether it 
is families and food security. There is a reason why we have 
the safety nets in place.
    While we are seeing the costs on the farmers' side go up--
and I hope our programs--we worked hard to put things in 
place--would work. Mr. Chairman, I hope, we are all hoping, 
that they are doing the job for people. Crop insurance 
certainly has been doing that.
    The good news is that we are at the lowest point in terms 
of poverty rate since 1968, I think, and the costs on the food 
security side for families has gone down as a result of that 
because the economy is doing better. So that is really how it 
works.
    But I wonder if you might speak to a provision that we had 
in the bill that relates to education and training around the 
Supplemental Nutrition Assistance Program.
    We know the number of Americans receiving SNAP has been 
declining for several years as the economy gets better. 
Families no longer need a temporary food assistance. That is 
good news.
    I am also concerned that the three-month time limit on SNAP 
may be reinstated in states that do not offer a job training 
option. We know some individuals experience barriers to 
employment that have little to do with the labor market. To 
address this, we made significant investments in the farm bill 
to test innovative, new ways to help SNAP recipients get and 
keep good-paying jobs.
    So I wonder if you might tell us about the types of 
projects and support services being offered through the farm 
bill pilots, and why reinstating time limits without offering 
job training would be less effective.
    Secretary Vilsack. Well, I appreciate the question and 
appreciate the leadership of this Committee in addressing this 
issue of employment opportunities.
    Ten states were selected in this process. It is a three-
year process with a very significant evaluation component to 
our efforts. What we are seeing are programs designed to reduce 
the barriers that people currently have in terms of 
employment--it may be a transportation barrier. It may be a 
childcare barrier--providing resources and flexibility to be 
able to remove that barrier, so people can actually go to work 
and become gainfully employed.
    In some cases, it is a specific focus on returning 
veterans. There is a program that is addressing returning 
veterans and trying to make sure that they are employed as 
quickly as possible.
    In some cases, it is understanding that folks living in 
rural areas maybe have employable skills but where the jobs 
are, are significantly farther away from where they live, and 
providing appropriate transportation systems to be able to 
ensure that they can get to work. So there is a multitude of 
programs in that space.
    There has also been an effort to sort of leverage the work 
that you all did by establishing a Center of Excellence in the 
State of Washington that does this particularly well. Nine 
states are now working with the State of Washington in terms of 
best practices.
    What we have also seen, Senator, as a result of your work 
and this Committee's work, is that more states are now taking 
better advantage of the 100 percent training money than they 
did before and even some states have begun to be better 
utilizers of the 50-50 money that is available.
    The last thing I would say is that we are working with 
states on this issue of able-bodied worker adults without 
dependents and the waiver that you mentioned, and we are making 
sure that states understand the 15 percent threshold or 
exemption that provides some protection. We want to make sure 
that people are surveying their workforce because there may be 
folks who do qualify for an exemption for one reason or 
another, maybe a substance abuse, mental illness type of issue, 
or health care issue.
    So we are working to try to minimize the impact of states 
that make the decision to remove the waiver either in whole or 
in part, but there are still a significant number of states 
that have that in place in part of their states.
    Senator Stabenow. Thank you.
    Chairman Roberts. Senator Perdue.
    Senator Perdue. Sorry, Mr. Chairman.
    Mr. Secretary, thank you for being here and for all you do 
for the ag business.
    Georgia, agriculture, obviously, is very important. It is 
over half of our GDP. The ag and timber industry employs over 
half a million. They are our best conservationists in the 
state. We are the number one state for peanuts, broilers, 
pecans, and blueberries; number two in cotton.
    I am concerned about regulation. Everywhere I go and talk 
to our farmers, regulation is the number one topic, and then 
comes labor.
    In your role of coordinating the interest of the ag 
industry, you have done a great job, and I would like to ask 
you a question today regarding traits like dicamba and 2,4-D 
that the USDA has approved that would alleviate effects of 
these weeds and so forth, and pests, that are damaging.
    We lost a billion dollars over the last decade in our 
cotton industry alone to pests and weeds, but the EPA has not 
approved the herbicide that works in conjunction with these 
approved traits. Clearly, the process can be improved.
    My question is: With you being the voice of agriculture, 
how do we improve the communication and collaboration with 
other regulatory bodies to ensure that we are getting producers 
the tools they need as quickly as possible? The farmers want to 
comply. The problem is right now it is taking so long to get 
direction out of cross-departmental regulation.
    Secretary Vilsack. Senator, I agree, and we have been 
communicating with EPA specifically on that issue, asking them 
to take quicker action so that producers would have some 
certainty in terms of what they will have available to them. It 
is an interesting relationship. Obviously, I frankly do not 
want the EPA telling me how to run my Department, and I suspect 
the administrator of EPA does not want me to tell her how to 
run her department.
    What we can do, and what we do , and we do it frequently 
and often and forcefully, is to explain what we think the real-
life consequences will be of something that they may be 
considering, or the real-life consequences of inaction or a 
delay in action. We have done that on the issues that you have 
raised.
    Senator Perdue. The timber industry is obviously very 
important. We actually have the largest privately owned 
commercially available timberland in the country, and over 55 
percent of our timberland in Georgia is privately owned.
    Your Department oversees and maintains the world's most 
comprehensive national database on forest--the Forest Inventory 
and Analysis Program. Can the FIA Program help us with 
something?
    Right now, biomass--you have mentioned it in your 
testimony--is very important to the country. It is important to 
the forestry industry. Yet, we are having trouble getting the 
regulators to tell us what sustainability really means. What is 
a sustainable practice in the forestry industry? You have been 
very active in that.
    Can the FIA help us in that area, with the utilization of 
biomass, and make it sustainable and make sure that we are all 
trying to achieve the same goal?
    Secretary Vilsack. Well, we have provided comments to our 
friends at EPA on this issue to explain to them what we think 
needs to happen and the certainty that needs to happen.
    In the meantime, we are also focused on trying to find ways 
in which we can use biomass within USDA programs. We have 
funded 230 wood energy programs, over a billion dollars 
invested in that initiative. We have worked with WoodWorks to 
try to create new opportunities for building. We have a green 
building initiative within USDA. We have the BioPreferred 
Program in which we are encouraging Federal agencies to use 
wood. Then most recently we have the Tall Wood Building 
Contest, looking at ways in which we can encourage multistory 
buildings and construction from cross-laminated timber. All of 
that is being done and will continue to be done.
    I think as we deal with issues involving climate and 
climate change, as we deal with issues involving reduced 
emissions, I think we are going to see a greater need and 
reliance on biomass, and I think that will be a hopeful sign 
and opportunity for rural areas.
    We obviously need to have some degree of certainty about 
precisely what it does mean to be sustainable, and we have 
certainly provided what we think is a very common-sense, 
science-based response to EPA, and hope that they will listen, 
and hope that they act quickly.
    Senator Perdue. Are you hopeful that we can get a 
resolution on that, though? I mean, we have the data, but there 
is this open question about what that really means. It bothers 
me that EPA has an open card now to determine that on the fly, 
if you will.
    Secretary Vilsack. Well, I always want to remain hopeful, 
Senator. I do not want to be hopeless.
    I think we need to continue to press the case, and we will. 
I give you that assurance.
    Secretary Perdue. Thank you.
    Thank you, Mr. Chairman.
    Chairman Roberts. The always distinguished Senator 
representing the dairy interests in Vermont continually.
    Senator Leahy. Well, thank you, Mr. Chairman. One of the 
reasons we get along so well is we are two of the people who 
know how to comb our hair around here. On days when----
    Chairman Roberts. You did not have to go there.
    [Laughter]
    Senator Leahy. I just want you to know that even if I leave 
the room, I am watching you from up there. I admire what you 
and Senator Stabenow have done in chairing this Committee 
because I know it is not an easy thing.
    Secretary Vilsack, I appreciate what you have done. We have 
talked many times. You have come to Vermont a number of times. 
From our economic development to our rural towns, our critical 
water quality work on Lake Champlain, to our Vermont children 
are now eating healthier school lunches with more locally 
produced Vermont foods, you have helped us on all of these 
things.
    But the one thing that worries me right now is the 
difficult time we are having with struggling dairy farmers. As 
I discussed with you yesterday, I hear from them every day. Let 
me just tell you a couple.
    One farmer in Craftsbury Common, a small town. I used to 
ride there on my bicycle, when I was a youngster, from my home 
town in Montpelier. ``Dear Senator Leahy, we need help. We 
cannot pay our grain bill. Many area farmers have been shut off 
from the grain companies. This is serious and needs immediate 
attention.''
    Another Vermont farmer. Even the large megafarms are 
feeling the pain. A longtime farmer in Craftsbury said he is 
losing a thousand dollars per day.
    A young dairy farmer in Addison County my staff met with 
just a couple weeks ago said, ``Quite frankly, I do not know 
what to tell my wife when I go home at night. She asked me 
about the unpaid bills that are piling up.''
    A very small farm in Orleans County: ``The hammer hit in 
January this past year. My income from farming was cut right in 
half. We are losing 10,000 a month. How much longer can we do 
this?''
    I do not know what to tell them.
    We have been through a massive policy shift. We moved to 
the new insurance-like tool with the Margin Protection Program 
and its hefty premiums.
    I appreciate the cheese purchases you made in August, but 
it is not enough. I am talking to the Appropriations Committee 
about the CCC and the Section 32 provision, but we are not 
going to get them into the CR.
    Is there anything you can do to help, and what is the 
holdup? Do OMB and the White House understand the financial 
crises these dairy farmers are facing?
    Secretary Vilsack. Well, first of all, Senator, I want you 
to know and I want the Committee to know that we are very, 
very, very cognizant of the challenges that the dairy industry 
is currently facing. It is one of the reasons why we made the 
cheese purchase that you mentioned.
    We would have had more capacity with section 32 in the CCC 
program, but each year that has been reduced; our capacity has 
been limited by Congress. We have also had the flexibility for 
direct price support that we once had eliminated despite the 
fact that we would be in a position to notify Congress of any 
utilization of CCC.
    We have, as you mentioned, just recently announced $11 
million in payments under the Margin Protection Program. What 
is interesting to note there is if farmers in 2016 had 
purchased the same level of coverage as they purchased in 2015 
those payments would have been $40 million. But for whatever 
reason farmers made the decision in 2016 to reduce the level of 
coverage by buying catastrophic coverage and not buying the 
level of coverage they had purchased in 2015. I think that 
suggests to me that we need to continue to do a better job of 
educating folks about this shift that has taken place from a 
payment system to an insurance system.
    We are going to continue to look for ways.
    At the end of the fiscal year, we are very, very limited. 
Everything I can do, Senator, I have done. I have spent every 
dime of credit that the Congress has given me the permission to 
loan out. I have spent every dime of CCC money that I have that 
Congress has provided for section 32 purchases. I have provided 
as much under the Dairy Margin Protection Program as Congress 
has authorized us to do and as farmers have purchased.
    After the first of the year, assuming that you all do your 
work and give us additional resources after October 1, we will 
obviously be in a position to take a look at whether or not 
there are additional steps we can take, and we will certainly 
do that.
    But at the end of the day, everything I can do I have done. 
Every penny that I have that I could spend, I have spent.
    Senator Leahy. Thank you.
    I also think about the great work NRCS is doing in Vermont. 
I know it is a problem across the country, but we need more 
personnel, we need more engineers. I realize this gets in the 
weeds, but we have Vermont's TMDL with EPA. Can we just work 
together on this to make sure there is enough personnel with 
NRCS to get this done right?
    Secretary Vilsack. Senator, we certainly can work together 
on it. This is another circumstance and opportunity to remind 
this Committee that the budget that I am working under is less 
than the budget it was in fiscal year 2010, which was the first 
full budget that this administration submitted. I do not know 
if there are other departments that are in that same 
circumstance, but we have had a 5 to 10 percent reduction in 
our budgets.
    At the same time, some of our budgets, within this capped 
environment that we live in, have had to increase. I do not 
want to get into a touchy subject, but the forest situation and 
the fire suppression budget, which is eating up a substantial 
amount of our Forest Service budget, has not been fully 
addressed in my view. So we are challenged.
    What we have attempted to do is improve process. We have 
attempted to use technology to extend the ability of people to 
be in the field and provide more technical assistance. We have 
looked for partnerships through the Regional Conservation 
Partnership Program and others to engage more outside 
assistance and help, to try to do as much as we possibly can.
    I am proud of the fact that despite all of the challenges 
we face we have a record number of acres enrolled in 
conservation today than at any other time in the history of the 
country.
    Senator Leahy. No. I applaud you, what you have done with 
what you have, and I will also try to carry your message to the 
Appropriations Committee, and that you also had the opportunity 
to serve. We ask a lot, but we have to do our job and pay the 
bills, too.
    Thank you, Mr. Chairman.
    Chairman Roberts. I would simply make the statement that 
this Committee passed the first forestry bill in 13 years that 
gets into management reform. There are other committees that 
have jurisdiction, and we do have a funding challenge, but we 
will address that. Every member of this Committee understands 
the ramifications for our budget.
    Senator Tillis.
    Senator Tillis. Thank you, Mr. Chairman. Mr. Chairman, I 
would like to submit an opening statement for the record.
    Chairman Roberts. Without objection.
    Senator Tillis. Thank you. In the interest of time.
    [The prepared statement of Senator Tillis can be found on 
page 47 in the appendix.]
    Senator Tillis. I want to follow up on where Senator Perdue 
was headed, but I want to begin, Secretary Vilsack, by thanking 
you. Our office has had a number of very productive 
interactions with many of your staff, and we appreciate your 
willingness to come meet with us and collaborate.
    I do have to say I have got some questions today, that 
maybe I am not 100 percent behind some of the things that I see 
or maybe I need more information to feel comfortable. I am 
going to get to those, but I want to start by saying that I 
travel across the State a lot. I spend a lot of time with 
farmers, whether it is apple growers or tree growers out in 
western North Carolina or sweet potato and tobacco growers in 
eastern North Carolina.
    The issue of price really has not come up. The issue that 
comes up every single time I meet with these farmers is the 
uncertainty created by regulations, either the burden by 
existing regulations or the threat of additional regulations 
that could be very harmful to an industry. I want to cover two.
    If I do not have enough time, I know that my colleague 
here, who reminds me frequently that North Carolina is the 
second largest pork producer in the United States--but 50 
percent of our agriculture output comes from livestock, either 
hogs or poultry.
    We have got a concern with the GIPSA rule. It looks like--
at least because we do not have a lot of clarity on it, it 
looks like it is a replay of the 2010 proposed rule. I would 
like to find out what is broken because we seem to have a 
pretty fast, efficient process today.
    I think some of the restrictors that would restrict 
producers to sell, and packers to buy, livestock.
    I am trying to find out if that is actually about to 
happen, and if it is going to happen to what extent have the 
stakeholders been involved, and when can we get more clarity on 
exactly what this proposed rule would look like.
    Secretary Vilsack. Well, Senator, this conversation with 
GIPSA actually began as a result of circumstances in North 
Carolina, where producers, particularly in the poultry 
industry, were unfairly dealt with, with Pilgrim's Pride's 
bankruptcy. These were producers that were asked to invest a 
substantial amount of money in expanded operations only to find 
that their contracts were pulled out from under them without 
much notice and the ability to try to secure additional 
purchasers of the poultry they were producing.
    So it did start, and continues to start, with the fact that 
there are circumstances where producers are not being dealt 
with fairly in our view and certainly in the view of the 
producers that came to us asking for help.
    Senator Tillis. Yes, you know, oftentimes around here, 
regulations exist for a reason, and I understand why you have 
to have some regulations in place, to provide certainty and 
consistency, but a lot of times we may overreact. So I 
appreciate taking a look at the situation with Pilgrim's Pride, 
but what I am hearing from reputable operations in my State is 
this could actually cause problems for people who are doing it 
right.
    So I think it is rightsizing and having an open discussion 
about it. I think one of the concerns is that we are not really 
sure exactly what would be proposed and how quickly it would be 
proposed. So it is that uncertainty that I am trying to 
communicate on behalf of my farmers.
    Secretary Vilsack. Well, I understand that, and what I can 
say since we are still in the process of formulating, it is 
difficult for me to respond with any specificity because I do 
not want to presuppose the outcome and I do not want to 
presuppose a system or process that is not consistent with the 
administrative rules process.
    What I can tell you is this: There is no intent or desire 
on the part of the USDA, under the time as long as I am 
Secretary, to sort of foist something on folks without the 
opportunity for them to understand what it is and without the 
opportunity for them to say whether we have it right or wrong.
    We will follow the administrative process, and I can assure 
you that we are not going to play a situation where we, at the 
last minute, do something and folks have no recourse. So that I 
can assure you.
    Senator Tillis. Well, I hope so.
    I think that I will leave the question about the organic 
livestock rule. I think Senator Ernst has a similar concern. 
That is an area where we think things are moving fairly 
quickly, either the interaction with OMB or the process. So 
hopefully Senator Ernst will get into that.
    Mr. Chairman, I also would like to submit for the record 
something that we put together that relates to Smithfield that 
was brought up. I want to mention that the only thing that I 
have seen as a result of the Smithfield acquisition is the 
creation of 1,000 additional American jobs. So I know there is 
some concern around the sale, but I think it is important, 
because of their presence in North Carolina, for me to bring 
that up.
    There was also a comment made about Syngenta, which also 
has operations in North Carolina. If we are wondering why some 
of these mergers are happening--I serve on the Judiciary 
Committee--then all we need to do is put a mirror at the end of 
this dais and point it in our direction.
    A lot of the regulatory and tax burdens that these 
companies are dealing with are the reason why they are having 
to merge. If we want to get serious about preventing it, you 
cannot have a Syngenta whose net income has been negative for 
the last three years. They are just reacting to market 
situations that are critically important for the future of our 
agriculture here in this country. I think that we need to--if 
we want to really solve this problem with mergers, the tsunami 
of mergers as it was described in the committee yesterday, then 
the earthquake of regulations and tax policies here have to 
stop.
    Thank you, Mr. Chairman.
    Chairman Roberts. Senator Donnelly.
    Senator Donnelly. Thank you, Mr. Chairman.
    Mr. Secretary, thank you for your service. You have done an 
extraordinary job for our country, and we are very grateful for 
it.
    I wanted to ask you about opioids and the USDA recently 
announced an initiative to use some rural development housing 
resources to help provide transitional housing for people 
recovering from substance abuse. In my State, as in many 
states, this is a huge, huge issue, and one of the challenges I 
hear about repeatedly is lack of available housing for people 
in treatment and recovery programs. I know you have had this 
initial step. Is there anything else that you are looking at in 
the pipeline?
    Secretary Vilsack. Senator, we used our community facility 
resources to expand access to mental health services and 
substance use disorder clinics. We have also used our rural 
utility service resources to expand telemedicine to provide 
access to specialists.
    On the housing front, this was a result of a conversation 
we have had with folks in drug courts, where they are anxious 
to redirect people out of the criminal justice system into 
treatment, but the challenge is that there is no place to put 
these folks. So we are looking in a handful of states to see 
how this could operate because this would be a new approach.
    Senator Donnelly. Right. Is that the pilot program that you 
have going?
    Secretary Vilsack. Yes. Yes, in an effort to try to see if 
we can perfect it. Assuming it will work, and I think it will, 
we will look for ways to expand it.
    Senator Donnelly. I also wanted to ask you as a governor, 
as a Secretary of Agriculture, as someone who is steeped in 
understanding our rural communities. So much of our opioid and 
heroin problems are in our rural communities as well. If there 
were a couple of things you were looking at as pushes on this, 
as things we can do, what would you say?
    Secretary Vilsack. Well, there is a lack of treatment 
facilities, which requires resources. The President's budget 
has proposed additional resources for treatment facilities.
    Here is why it is important in rural areas, to your point, 
Senator: There are, I think, a little over a thousand 
behavioral service centers located in the United States. These 
are centers that provide assistance to people who are dealing 
with addiction. I believe only 25 of them are located in rural 
areas. Twenty-five.
    The suicide rate among rural men is twice the rate in rural 
areas that it is in urban centers, and the same thing is also 
true for women.
    The substance abuse issue is more difficult and complex in 
rural areas because of a lack of treatment and because, 
frankly, in those small towns sometimes it is hard for people 
to acknowledge that they have got a problem and many times 
folks do not want people to know that they have a problem. 
There are not the recovery services that are available.
    So, first of foremost, treatment.
    Secondly is an acceleration of an understanding of when and 
under what circumstances, as limited as they need to be, 
opioids are appropriate. I think we have got new CDC 
guidelines. We have new FDA rules. Working with the American 
Medical Association, we are trying to get physicians to 
understand when and under what circumstances to use opioids. We 
are working with over 100 medical schools, pharmacy schools, 
and nursing schools to incorporate a better understanding of 
pain management and the options that are available before 
opioids are used. So there is aggressive work there, but I 
think we could accelerate the pace of that significantly.
    Senator Donnelly. I want to ask you about the foot-and-
mouth disease vaccine. A number of our livestock producers in 
Indiana have been talking and telling us that they would prefer 
to respond to a foot-and-mouth disease outbreak through 
vaccination to control a potential spread, but the current 
vaccine bank is inadequate right now to provide the quantity 
necessary. I was wondering what the plans are and what the 
Department will be doing to improve the quantity of vaccine 
available and expanding the number of strains.
    Secretary Vilsack. Well, the challenge with this is that 
current capacity is limited because of where the research is 
being done, on Plum Island. It is being done offshore. There 
have been concerns expressed about transferring that research 
to a facility within the U.S., and there are concerns about the 
impact that that has because you would be introducing, in 
essence, FMD into the internal workings of the U.S.
    We have been waiting for the industry at large to come to 
us with a consensus opinion about whether or not that is 
appropriate. There is still some division, some uncertainty 
about that.
    I think when a facility in Kansas is ultimately completed--
I like to refer to it as the Roberts Facility.
    Senator Donnelly. That is not what the people on Long 
Island call it.
    Secretary Vilsack. Yes, well. We would then be in a 
position to provide the level of certainty and guarantees of 
safety that people are concerned about. But right now that is 
the impediment, is where the research done, because in Plum 
Island there is a limited capacity to experiment with different 
variations. If you had a larger facility with biocontainment, 
you would be able to do a lot more research more quickly and 
you would be able to create more vaccine more quickly.
    Senator Donnelly. Well, I just--on behalf of the people of 
Indiana, I want to thank you for everything you have done for 
our State and our rural communities for a number of years now. 
Thank you.
    Secretary Vilsack. Thank you, Mr. Chairman.
    Chairman Roberts. Senator Donnelly, we are going to invite 
you out to ``The Little Apple,'' Manhattan, Kansas, where NBAF 
is.
    Senator Donnelly. I would like that. I hear the bagels are 
amazing there.
    [Laughter.]
    Chairman Roberts. We may whip you down to Dodge City and 
make you an honorary marshal, too.
    Senator Donnelly. Thank you.
    Chairman Roberts. You bet.
    Let's see. We have Senator Ernst.
    Senator Ernst. Thank you, Mr. Chairman, and thank you, 
Secretary Vilsack, for being with us today.
    There has been a lot of discussion, not only in this 
Committee but as I am traveling around the State back home, 
about the depressed state of our farm economy and what we can 
do to really help turn that around.
    I am always of the thought that less Federal Government 
involvement is better for our folks back home, not more. What I 
am hearing mostly from our Iowans, especially the farmers, the 
ranchers, and our landowners, is that it really feels like the 
Federal Government is out to get them, and I see that a lot 
with a number of the rules and regulations that are coming 
forward. They feel that government actions are really unfairly 
targeted at them, and what I would like to do is just give a 
few examples of that.
    This past June, the EPA released its 520-page draft 
Ecological Risk Assessment report of the herbicide atrazine, 
and much like their nearly 300-page WOTUS rule, it threatens to 
increase costs for those farmers who really are the backbone--
we know this very well--the backbone of our affordable and safe 
food system. This EPA risk assessment with the herbicide 
atrazine, they really see that, the farmers and ranchers see 
that, as taking away a key weed management tool that has been 
proven safe in over 7,000 scientific studies.
    This could cost the average corn grower 30 to 60 dollars 
per acre at a time when producers are faced with 3 dollar corn 
or lower. I know in Red Oak at the ``Merc'', corn has been 
lower than $3, and that is well below the cost of production.
    Additionally, the Department of Labor issued a memo in July 
of 2015 that would reclassify the majority of traditional 
farmer cooperatives in the U.S., making it even more costly for 
them to supply a basic crop nutrient, nitrogen, in the form of 
anhydrous ammonia to their farmer-owners, while having a very 
negligible impact on safety.
    So there are a number of issues right there, and while 
those issues are sowing uncertainty for row crop farmers, the 
USDA is planning to move forward with the GIPSA rule, which is 
something that my colleague just mentioned, which could further 
harm some of our livestock producers.
    This Committee in May heard testimony from those 
stakeholders, and they told us then that the cost of this rule, 
the GIPSA Rule, could be $350 million per year to the pork 
industry alone.
    Again, all of these rules and regulations are really just 
overwhelming our farmers and ranchers, and it is a hallmark of 
the administration failing to take into consideration the input 
of stakeholders, and it goes well beyond the congressional 
intent that we have set forward and really cherry-picking 
studies that support a political agenda.
    You did mention to my colleague from North Carolina that 
you thought it was important that the stakeholders have a voice 
in this. For the GIPSA rule, will you be taking public comment 
for that particular rule?
    Secretary Vilsack. Senator, we will make sure that we 
follow the administrative process in terms of what we propose. 
Since we have not completed the work, I do not know what the 
final product is going to look like, but I can assure you that 
we are not going to put out something that does not allow 
people to review it, understand it, and to give us feedback on 
it.
    Senator Ernst. I appreciate that very much. I will take 
that as a yes because we have seen a number of agencies in the 
Federal Government--EPA is a great example--where they have 
proposed rules and regulations, and they are pushed out in the 
form of memos and other guidelines, where they can circumvent 
public input.
    Secretary Vilsack. That is not going to be the case here.
    Senator Ernst. Thank you very much. I appreciate that. We 
have a lot of stakeholders that would like to speak up on this.
    Just a little bit more about the GIPSA rule and a story 
that was shared with me from a young man. He is 22 years old. 
He and his fiancee own and operate a 3,600-head wean-to-finish 
hog barn in southeastern Iowa, not too far from your hometown 
of Mt. Pleasant. His father was killed in a very tragic 
accident, but this young man was able to return back to the 
farm, and he secured financing for the construction of a $1.2 
million facility, which is great for him. He entered into a 12-
year contract with one of the large pork integrators, and he 
was able to finance 100 percent of the project because there 
was strength behind that contract.
    The proposed GIPSA rule could make it very hard for young 
farmers starting out to be able to take on this size project, 
and so we want to make sure that we are still giving access to 
credit and for these young folks to get into farming. So I just 
want to make sure that you are aware of situations like that 
and that the GIPSA rule does not make it more difficult for our 
young people to gain these types of contracts and to get into 
farming.
    Secretary Vilsack. Senator, the only thing I can say is 
that we stand ready to provide assistance and help to 
producers. You know, I think there is a bit of fairness, if I 
can respond back to some of the concerns that you raised, and I 
certainly understand the concerns that you have raised with 
reference to the EPA.
    But there is another side to government that often does not 
get discussed in the context of this part of our economy. It is 
the credit extension that we do--over $6 billion. Thirty-seven 
thousand producers have received credit from the government 
that might not be able to have gotten credit from a bank 
without the government assistance and help.
    There are the trade missions and the incredible work that 
our folks are doing to expand trading opportunities around the 
world to sell more of our products that we are engaged in.
    The investments that this government has made in the bio-
based economy and extending opportunities for higher blends of 
ethanol, for example.
    You know, those are examples of government that I think 
oftentimes do not get recognized and balanced against some of 
the concerns that you have raised. I think it is appropriate 
for me to make sure that everyone understands I see the balance 
sheet perhaps slightly differently than some of the folks in 
this Committee do.
    Senator Ernst. Certainly. We appreciate the opportunities 
that are extended to those that are entering into renewables 
and investing in those ventures, as well as those younger 
farmers and ranchers that are just trying to make ends meet as 
well, and I appreciate that assistance that you provide. We 
just want to make sure that government is not hindering those 
opportunities.
    So thank you very much, Mr. Secretary.
    Thank you, Mr. Chairman.
    Chairman Roberts. Senator Bennet.
    Senator Bennet. Thank you, Mr. Chairman.
    Mr. Secretary, I also want to thank you for your principled 
and effective leadership and your public service, Mr. 
Secretary, and the long public service before that. I think you 
are kind to say the Committee has set an example. I think you 
have set an example, as I have said before, for what principled 
leadership should look like in a time in our political system 
when there is almost none.
    I should also say ``thank you'' on behalf of Colorado's 
farmers and ranchers for your constant presence in our State 
over the last seven years. It has been much appreciated at a 
time when people have nothing good to say about anybody here 
and wonder whether--and cannot name anybody here. People in 
Colorado know the name Tom Vilsack, and they appreciate the 
work that you have done. So thank you.
    In that spirit and the work that you have done as governor 
of Iowa, now the work as secretary of agriculture the last 
seven years, I wonder as we think about the next farm bill 
reauthorization process. What do you think this Committee 
should do, thinking as broadly as you can, to help keep farmers 
on the land and rural communities strong in this country, not 
just at this moment of low commodity prices, although that 
presents enormous challenges, but in a normalized economy as 
well?
    Secretary Vilsack. Well, I would make two comments, 
Senator, and thank you for your kind words although I think 
probably the last name Vilsack is probably more a function of 
my son and daughter-in-law than----
    Senator Bennet. It is probably true.
    Secretary Vilsack. Who are constituents of Senator Bennet.
    I think, first and foremost, starting the conversation 
about the farm bill a little differently than we started the 
last conversation, which is that we--I think this Committee was 
confronted with a challenge placed on it by others to save 
money. The $23 billion number sticks in my mind as sort of the 
starting point for conversation. How could we save $23 billion? 
When you start the farm bill conversation that way, you 
essentially begin the process of pitting the interests that are 
represented in this farm bill, which are broad, against one 
another.
    I think it would be much more helpful and much more 
profitable for us to start the conversation with: What is the 
need?
    There is no question that dairy, for example, to use that--
you have got a strong dairy industry in your State. The Margin 
Protection Program I think, conceptually, is a solid idea. The 
reality is it is a national program that does not appreciate 
the regional differences that exist within the dairy industry, 
and so there is a tweak there that could be done.
    I know the folks in the South are concerned about the lack 
of assistance for cotton and the need for perhaps a rethinking 
of STAX. There is obviously a tremendous demand for rural 
development resources. There is a tremendous opportunity for 
trade.
    So basically starting the process by saying what is the 
need out there, defining what the need is, figuring out how 
much that costs to meet the need, and then beginning the 
creative thought process to try to figure out how you meet as 
much of that need as possible with current resources, and then 
make the case.
    The case has to be made, and it is made by members of this 
Committee, but it needs to be made by members outside of this 
Committee, that rural America plays an incredibly important 
role in the future of this country and the security of this 
country.
    Every single person in this room, every single person in 
this room who is not a farmer, had the privilege, the 
opportunity, the luxury of not being a farmer because we have 
delegated the responsibility of feeding our families to a 
relatively small number of Americans, and they do it in a way 
that provides us the capacity to have a heck of a lot more in 
our pocketbooks when we leave the grocery store than just about 
anybody else in the world. So we have a much more diverse 
economy and much more flexible economy in large part because we 
have a functioning agricultural economy.
    I think if people really understood that, then it might be 
easier for this Committee to start the conversation with ``What 
is the need'' as opposed to ``This is how much money you have 
to save'' because when you start it that way you put all of you 
in a heck of a box.
    I think you did a remarkable job working within that box, 
but you had to work within it, and I think you probably could 
have done a lot more had you not had that be the starting 
point.
    Senator Bennet. I appreciate the answer to that question.
    I am running out of time, but I wanted to mention an issue 
that you raised, which is the fire borrowing issue and, more 
broadly, the budget at the Forest Service, which is now 
literally engulfed by firefighting rather than doing the forest 
mitigation that needs to be done, and in a senseless way 
because this is all being done in the name of fiscal 
responsibility. It is terribly irresponsible not to spend money 
on the front end.
    So I would ask you, Mr. Secretary, if at the end of this 
year we can find a way to come together around this, not just 
on fire borrowing but also restoring the budget, I hope that 
you and the President will make this a priority at the end of 
the year, to see if we cannot finally get this done.
    Secretary Vilsack. It is definitely a priority of the 
President's, and it is definitely a priority for our Department 
and for me.
    It is just a simple statistic. In 1996, 16 percent of the 
Forest Service budget was based on fire suppression. Today, it 
is--last year, it was 52. We expect this year it will be 56 and 
it will be rapidly 66 percent of the budget. So you do not have 
a Forest Service; you have a fire department.
    Senator Bennet. It is a fire department, and we are not 
maintaining the forest in this country.
    Thank you, Mr. Chairman. Thank you.
    Chairman Roberts. Senator Boozman.
    Senator Boozman. Thank you, Mr. Chairman.
    Thank you, Mr. Secretary, for being here, and also thank 
you for visiting our State on several occasions and all the 
help that you have provided in the past.
    As you know, in August, we went through the same flooding 
process in northeast Arkansas as in Louisiana. The University 
of Arkansas's Division of Agriculture released a preliminary 
estimate of it costing Arkansas crops 45 to 50 million dollars, 
again hitting right before they were harvested.
    As you know, crop insurance works better in some parts of 
the country than others. Is there anything; do you have any 
tools; is there anything that can be done on you all's end, to 
help those that is in regard to non-insurance losses?
    Secretary Vilsack. Senator, what we do have is a disaster 
loan program, and essentially that is available. It would 
certainly be helpful if the local and state FSA team were to 
communicate to me that there is a need for a disaster 
declaration.
    We just turned around the Louisiana disaster declaration in 
10 days. It came to our office on September 9th, and I signed 
it on the 19th.
    Senator Boozman. Sure.
    Secretary Vilsack. I do not know that Arkansas has done 
that yet, but if they have not, that would be one thing that I 
would encourage you to encourage them to do and encourage them 
to take a look at the disaster loan program.
    Now I will tell you that the disaster loan program is not 
as attractive as the normal loan program because the interest 
rate is a little higher because of the budget constraints that 
we have. So one thing you could look long-term is looking at 
whether or not the interest rate on those disaster loans could 
be reduced. Now that would increase the cost of the program, 
obviously.
    Senator Boozman. Sure.
    Secretary Vilsack. But it would make it a much more 
feasible alternative than exists today.
    There are also conservation resources that can be helpful 
in dealing with the aftermath of a flooding, whether it is 
emergency conservation assistance or just our regular 
conservation program. So that is another avenue that I suggest 
you take a look at.
    Senator Boozman. Very good. Thank you.
    USDA has taken over the catfish inspection, and I think you 
had a good summer in the sense that several shipments were 
rejected by the USDA that contained dangerous cancer-causing 
carcinogens such as crystal violet and malachite green. One 
ship from China, actually once they found out that the USDA was 
doing the inspection, actually turned around and went back to 
where it came from.
    Can you tell us a little bit about your thoughts on the 
good work that the USDA inspectors are doing and how you think 
the program is working at the time?
    Secretary Vilsack. Well, Senator, I think you made a very 
good case. The inspection process that we are undertaking is 
significantly more thorough than the traditional approach to 
inspections of catfish.
    I think it is interesting. I have heard here today the 
necessity of the government providing certainty, and I just 
would ask you all to provide certainty on this issue because we 
keep flipping back and forth. Just tell us. Do you want us to 
do the inspection, or don't you?
    Senator Boozman. We want you to do it.
    Secretary Vilsack. Well, I know you do----
    [Laughter.]
    Secretary Vilsack. --but some of your colleagues do not, 
and you just need to make up your mind.
    Senator Boozman. But I do think the fact that once you 
started doing it----
    Secretary Vilsack. There is no question. There is no 
question.
    Senator Boozman. --you have done a great job and for the 
American consumers's sake.
    Secretary Vilsack. Right. There is no question that it is a 
more thorough inspection. Also, it will, I think, avoid 
mislabeling because oftentimes people are paying catfish rates 
for fish that are not catfish.
    Senator Boozman. Right.
    Secretary Vilsack. So.
    Senator Boozman. Mr. Secretary, again, I want to thank you 
for your work on the cotton gin cost-share program this year. I 
know we disagree about cotton seed, but I want to thank you for 
your hard on this particular area. It really has been very, 
very helpful.
    I do want to note the importance of maintaining the 
infrastructure of cotton gins, cotton warehouses, cotton seed 
crushers, et cetera. If cotton production continues to decline, 
the infrastructure of the cotton industry will be lost as well, 
and when we lose that infrastructure cotton production is 
likely not to return.
    This all goes back again with your theme, which you so 
eloquently talked about, in regard to rural America and the 
importance of these things. In your testimony you really, like 
I say, very eloquently talked about that. More needs to be 
done. I guess I do not really have a question. I just 
appreciate you looking at that area and again trying to address 
it. It is a difficult question, but we do appreciate your hard 
work in that area.
    Secretary Vilsack. You know, I think the key here is for us 
to continue to look for market opportunities----
    Senator Boozman. Right.
    Secretary Vilsack. --and continue to look for creative ways 
to use what we grow and what we raise, every aspect of it. That 
is why I am a big proponent of the bio-based economy because I 
think there are lots of ways in which we can utilize our crops 
in a multitude of ways that we may not even be thinking about 
today, but with research we create new opportunities internally 
to the U.S.
    Then obviously the export market is important for us to 
continue to push, and that is why I think it is helpful to have 
trade agreements that will open up new markets, particularly in 
the Asia area.
    Senator Boozman. Thank you, Mr. Secretary.
    Secretary Vilsack. Thank you.
    Senator Boozman. Thank you, Mr. Chairman.
    Chairman Roberts. Senator Klobuchar.
    Senator Klobuchar. Thank you very much, Mr. Chairman.
    Thank you, Mr. Secretary. Looking over all the work you 
have done since you became ag secretary, you have been 
absolutely phenomenal and, I know my colleagues would agree, 
available. Your leadership on everything from public-private 
partnerships to opioids to biofuels to conservation has really 
been unparalleled, and I want to thank you for that.
    In fact, I do not even know where to start with my 
questions, but I will let you know because of your great 
leadership on avian flu I got to be the keynote speaker at the 
Worthington King Turkey Days right on the border with Senator 
Thune's State, which meant that I found out an hour before that 
after giving the keynote I had to kiss the Minnesota turkey on 
the stage. I want to thank you for your work on avian flu and 
that great honor that I had this weekend.
    But my first question really is about----
    Secretary Vilsack. Is there a photo of that, Senator?
    Senator Klobuchar. Yes, sadly, there is one. Congressman 
Walz had it. I asked him not to retweet it.
    First of all, the Improving Access to Farm Conservation 
Act. Senator Boozman and I have introduced that bill that would 
improve access to voluntary farm conservation programs 
administered through NRCS. It tries to reduce some of the 
paperwork for our medium and small producers. I will let you 
know about that. Do not have to have a question.
    But I will say in general on conservation, on the CRP 
program, we have a lot of people with interest as you can 
imagine. I think 1,367 offers for CRP, only 149 accepted in 
Minnesota. How is USDA working to make sure that the acres with 
the highest level of environmental benefit are being 
prioritized during the general sign-up? What can we do to 
improve it?
    Secretary Vilsack. Well, Senator, we start with the fact 
that the number of acres to be enrolled in CRP has declined, 
and that gets back to my earlier comments about starting with 
the conversation with need rather than saving money. I think 
there is obviously--given the current state of the ag economy, 
I think there is the need for a conversation about how many 
acres in CRP is appropriate, generally, above and beyond the 
limit that we are now faced with.
    Because of that limit, the Environmental Benefits Index 
that we used for this round was the highest and toughest and 
most competitive we have seen. So you can be assured that we 
are investing in the most highly sensitive environmental lands.
    We also obviously have continuous programs that are 
popular, and those will continue to provide assistance. In 
Minnesota, we are looking at more SAFE acres. We are also, I 
think, on the cusp of a new CREP that could be very helpful in 
terms of the water quality initiative in Minnesota.
    Senator Klobuchar. Good. Well, thank you. I also just hope 
that is something we can keep working on for the next farm 
bill.
    Our renewable fuels, you have been helpful on that. 
Obviously, we have got some changes to the standard. We would 
like to see more.
    Given the additional uncertainty as a result of record 
supplies and lower commodity prices, do you anticipate offering 
additional grant funding under the Biofuels Infrastructure 
Partnership, something that you have been so helpful with?
    Secretary Vilsack. Senator, given the fact that we have 
only got a couple of months left in this administration, our 
focus has been on making sure we implement the BIP program and 
utilize the resources that we have allocated. We are working 
with 21 states. Many states have been aggressive, Minnesota 
being one of them, to expand the number of pumping systems. I 
think we have roughly 1,500 that are either in operation or 
under construction.
    Some of the challenges are some states have been a little 
bit slow to get this process going. So I am spending a lot of 
my time calling governors and writing to governors, saying, 
hey, let's pick up the pace. We want to be able to get this 
resource.
    But I am confident. We are seeing a very great interest in 
this. I hope that we invest this money wisely. It has been 
leveraged more than $100 additional dollars of support and help 
from the industry itself. So we are talking about an over $200 
million initiative. My hope is that we will continue to see 
progress and future administrations will see the need for an 
expansion.
    Senator Klobuchar. Exactly. I will ask you a question about 
biomass on the record, but one of my colleagues was talking 
about forestry. I worked on the Good Neighbor Authority that 
gives the Forest Service additional flexibility to work with 
willing state and private landowners to implement forest 
management practices. Now that the final agreement has been 
signed between the Forest Service and the Minnesota DNR, how 
quickly can the Forest Service move to begin implementing the 
project?
    We just had--we have been much slower than some of the 
other states. We have a new head of the Superior National 
Forest in Minnesota. It has really become a problem for us.
    Secretary Vilsack. Well, we are going to move as 
expeditiously as possible. I would point out that all of these 
efforts require staff.
    Getting back to the fire suppression issue, we have 
increased the fire budget. We have increased the fire personnel 
significantly. I think it has been like a 100 percent increase 
in fire personnel.
    We have had to reduce the personnel that do the work 
consistent with the Good Neighbor policy and the stewardship 
contracting by 38 percent because of the reductions in 
resources. So it is a resource issue, but we will do everything 
we possibly can. We are a very strong believer in the Good 
Neighbor policy and the stewardship contracting.
    Senator Klobuchar. Thank you.
    Secretary Vilsack. We are actually treating more wood than 
in the previous decade.
    Senator Klobuchar. Okay. I will ask two other questions on 
the record, Mr. Chairman. One is about the wolves. You are well 
aware of my efforts to delist the wolves, and again, that has 
been slowed down because of litigation, but I would have some 
questions about that.
    Then the second thing is on rural housing. Collin Peterson 
and I were just out in Minnesota and some really big efforts 
are begin made, which we appreciate. I still see it as a drag 
on our economy that we do not have enough housing. I know you 
are a leader on that. I will ask that on the record as well.
    Thank you.
    Secretary Vilsack. Thank you.
    Chairman Roberts. Without objection, the questions will be 
submitted. I am sure the Secretary will respond.
    [The following information can be found on page 86 in the 
appendix.]
    Chairman Roberts. Senator Hoeven.
    Senator Hoeven. Mr. Secretary, thanks for being here and 
for your work on behalf of agriculture. Our farmers are facing 
a very tough time with low commodity prices and so very 
important that we give them all the help that we can. I know 
you understand that.
    First thing I want to bring up is the WTO challenge that 
USTR is making to China on wheat, corn, and rice. Very 
important. I trust you support that effort in terms of China's 
unfair practices and trying to help our exports.
    Secretary Vilsack. It was a joint announcement, Senator 
Hoeven. I was right next to Ambassador Froman when we announced 
it jointly the other day.
    Under the WTO, China basically has some de minimis that 
they could--which gives them flexibility. It is like 8.5 
percent. They are substantially above the de minimis in terms 
of their subsidy. We think it is about probably $100 billion 
above, conservatively. So this is a real effort to get them to 
play fair.
    It is also a message, frankly, not just to China but to 
every one of our trading partners, that if we--if you enter 
into agreements then we have to enforce them. These 
administration has been very aggressive in that effort and with 
some degree of success. We have not lost a case yet.
    Senator Hoeven. Right. I know you support it and appreciate 
the fact that it was a joint announcement. Just wanted you to 
talk about how important it is and your support for it, and I 
want to thank you for that very much.
    Secretary Vilsack. Well, at the end of the day, a $100 
billion is a significant amount of opportunity that is being 
lost because of the subsidy.
    Senator Hoeven. Absolutely. With the strong dollar, it is a 
real challenge for our exporters right now.
    Secretary Vilsack. Yes, it is.
    Senator Hoeven. So we have got to do all we can, and so I 
thank you for that effort, and I strongly support it.
    Also, access to credit. Senator Klobuchar and I are 
supporting an effort to double the FSA loan limits, both the 
direct loan limits and the guarantee, up to 2.5 million. I 
would like you to comment on your thoughts in that regard.
    Secretary Vilsack. Well, I understand the intent. I would 
just point out that when you double the loan limits you 
potentially could limit the number of loans provided. So you 
want to make sure that you do not just double the limit but you 
also take a look at the funding.
    As I indicated earlier, for just the second time in 
history, we have exceeded $6 billion in credit. We have used 
every dime that you all have provided to us in terms of credit. 
So, if you are going to change the level of loans, then you 
have got to make sure you adequately fund the loan portfolio.
    Senator Hoeven. Very good point. Both on the ag side--
farmers, ranchers, our producers--and on the banking side, the 
finance side, both sides support this. So we have got strong 
support and want to work with you and everybody on this 
Committee to get it put into place and appreciate your point 
about the aggregate.
    Crop insurance, very important that we support crop 
insurance. Right now, obviously, a risk management tool for our 
producers. There has been some talk or some rumor that RMA may 
be looking at changing the 1-in-4 rule under Prevented Plant. 
Are you aware of any effort to change the 1-in-4 rule under 
Prevented Plant?
    Secretary Vilsack. I know that there has been some 
discussion about Prevented Planting, and I know that the RMA 
has been working with the industry. To be honest, Senator, I do 
not know whether it relates specifically to the 1-in-4 or a 
more general concern. I would be happy to get back to you on 
that. But there is conversation about that, and there has been 
conversation within the industry, working with them on this 
issue of Prevented Planting.
    Senator Hoeven. I want to emphasize the importance of 
Prevented Plant and the 1-in-4 rule and particularly now with 
low commodity prices. So I would ask for your support for crop 
insurance and for that 1-in-4.
    Secretary Vilsack. Yes. I think the issue that they are 
dealing with in Prevented Planting has to do with California, I 
think. So it may be something different than what you are 
talking about.
    Senator Hoeven. Okay. Flexibility under the farm program, 
making sure it is farmer-friendly, particularly in these 
challenging times. Under the ARC program, we are trying to get 
more flexibility for the state FSA councils so when you have a 
county that is an anomaly. Maybe they do not have enough NASS 
data or some other issue.
    So like a contiguous county may qualify for an ARC payment. 
The county right next to it does not. Yet, they have the almost 
identical circumstance. Needs to be some flexibility for your 
state FSA councils. So I am advocating giving you more 
flexibility, more authority there. Could you comment on that?
    Secretary Vilsack. Well, clearly, you have to have--when 
the decision was made to make a countywide system as opposed to 
an individual farm system, which was also driven by the need to 
save money, going back to the issue of what the need is, you 
have got to have a system. You have to have some basis for 
making that decision.
    So, as you point out, we do the NASS surveys. If farmers 
choose not to provide that information for whatever reason, 
that makes it hard for us to have that as the criteria. Then we 
look at RMA. If we do not have sufficient RMA data, there has 
to be plan C, and so the state committee's flexibility would be 
appropriate.
    Senator Hoeven. That is what I am talking about; that 
flexibility is vitally important. Imagine you are a farmer in 
that county and you are farming next to John Thune and Thune 
will not send in his NASS data. You should not be penalized for 
that, right?
    Secretary Vilsack. Well, I agree, but I would hope, knowing 
Senator Thune as I do----
    Senator Hoeven. I know you would walk over to the Thune 
farm and you would get----
    Secretary Vilsack. --I am sure he did fill out his survey. 
But your point is well taken, I mean.
    But my point is also well taken, which is we should 
encourage our producers to provide us the information.
    Senator Hoeven. Agreed, we are.
    Then the last point, I see my time has run out, Mr. 
Chairman, but I would just like to--on the Brazilian beef 
imports, same thing for our ranchers. You know, they are 
fighting this. To try to export with a strong dollar, they are 
immediately at a 30 percent disadvantage. But also, just on the 
public safety in regard to foot-and-mouth disease, concerns on 
the part of our industry about Brazilian beef imports, could 
you touch on that?
    Secretary Vilsack. Sure. We have done an assessment. We 
understand and appreciate that there is additional work that 
the Congress has requested us to do. We will do it. FSIS has to 
also do an equivalency determination. That has not yet been 
done.
    I will say this, however: It is very difficult to go to 
China or any other country that we go to, to try to open up a 
market, because of the BSE incident in 2003. It is now 2016. 
The market is still closed.
    We say: Science needs to rule. Science has to dictate. You 
have to follow the rules.
    It is very hard to do that if on the other hand we are not 
willing to do the same thing for other countries.
    So the question is: Do we do an assessment? Yes, we do. Is 
it a solid assessment? I believe it is. I have confidence and 
faith in our folks at APHIS. We are cognizant of the concerns. 
It is often limited. There are inspections.
    We cannot be for science on the one hand and not for it on 
the other hand. So just consistency, I think, is important.
    Senator Hoeven. Right. Again, it is just such a tough 
export situation for our producers, and not just in ag but any 
commodity, with the strength of our dollar. We start out so far 
behind. We really have to be tough in working on behalf of our 
farmers----
    Secretary Vilsack. We do.
    Senator Hoeven. --in international markets.
    Secretary Vilsack. Senator, we have got the eight best 
years of ag exports in the history of the country.
    Senator Hoeven. Again, thanks for your work on behalf of 
our producers. I appreciate it.
    Chairman Roberts. Senator Gillibrand.
    Senator Gillibrand. Thank you, Mr. Gillibrand.
    I just want to associate myself with the questions that 
were asked by Senator Bennet as well as Senator Leahy. We have 
a lot of concerns in upstate New York with small dairies and 
that the Margin Insurance Program really did not work well for 
them this year. There were problems with feed costs going down, 
with milk prices going down. So that margin did not cover the 
cost of production. So they did not get as much money as they 
would have thought, and so they really found the program to be 
unhelpful.
    I am grateful that you mentioned to Senator Bennet that you 
would look at regionalizing the cost of feed to make it 
relative to your region because, obviously, in the Northeast we 
have to ship a lot of feed, you have the additional cost of 
transportation, and so it is really more accurate to do it 
regionally. So I am grateful that you will at least study that 
issue.
    But I do think the program needs to be adjusted because it 
has not worked well. If you do adjust it to work better, do you 
have strategies to do outreach so that our farmers can get that 
information so that they can appropriately cover their risk?
    Secretary Vilsack. Senator, first of all, we can only 
implement the program based on the instructions and directions 
that you all have provided. So I think as you start the next 
farm bill conversation the regional differences needs to be a 
topic of conversation within the farm bill. I cannot do that on 
my own. USDA has to have instructions from the Congress to do 
that, number one.
    Number two, I do not know if you were here earlier. So I am 
going to repeat something, and I apologize if you were. But 
that is that if farmers in 2016 had purchased the same coverage 
as they purchased in 2015 there would have been 4 times the 
payments. Four times. Instead of at $11 million, it would have 
been close to $44 million.
    So part of it is basically getting people to understand 
this is an insurance product. We probably have done outreach. 
We will continue to do outreach, and we will continue to 
encourage folks not just to look at the catastrophic coverage 
but higher levels of coverage, which they had in 2015 but for 
some reason chose not to do in 2016.
    I do not know if that has happened in upstate New York, but 
it has----
    Senator Gillibrand. Yes. They did not get paid out. So they 
thought it was a waste of money.
    Secretary Vilsack. Well----
    Senator Gillibrand. Because the feed cost problem. So it 
was not representative of their cost of production.
    Secretary Vilsack. Well, that is true, but if they had the 
coverage that they had the previous year then they would have 
received resources.
    So it is sort of a couple of things, I think. One is the 
regional differences, and one is also making sure that farmers 
use the tool that we now have that will allow them to make 
certain calculations in terms of what is best for their 
operation based on what we are projecting the dairy costs to 
be.
    Now the good news is we are seeing a slight uptick. So, 
hopefully, we are headed in the right direction instead of the 
wrong direction.
    Senator Gillibrand. Thank you.
    I would also like to look at the issue of rural poverty. 
Your commitment to addressing rural poverty, particularly the 
persistent poverty that robs too many children in rural areas 
of their future, has really been important and remarkable.
    Recently, a series of stories ran in one of our local 
upstate New York newspapers in the North Country about 
intergenerational challenges of poverty in that community, and 
this is an area that has undergone economic upheaval with the 
loss of traditional manufacturing and family farms facing low 
commodity and dairy prices.
    As Secretary, you have implemented innovative programs, 
like the StrikeForce Initiative and Promise Zones, to bring 
Federal resources to communities most in need. How are these 
programs working to help communities like the North Country 
reinvent themselves and establish long-term solutions to the 
economic challenges faced by a lot of our rural communities?
    Secretary Vilsack. Well, StrikeForce has been, I think, 
incredibly successful because it has provided for an integrated 
response on the part of all mission areas at USDA. So FSA works 
with NRCS, works with RD, works with our nutrition programs, to 
make sure that we are holistically dealing with the 970 
counties that are now in the StrikeForce program. Over 200,000 
investments have been made. Roughly $25 billion has been 
invested in those persistently poor areas.
    We have also challenged ourselves to make sure that we are 
allocating and investing a certain percentage of our resources 
in the most persistently poor areas of this country.
    Representative Clyburn talks about his ``10-20-30'' 
program. We sort of adopted a model of that. We had a ``20 by 
20'' program which was 20 percent of our rural development 
resources in the 20--in census districts that have had poverty 
rates in excess of 20 percent.
    We have exceeded that. We had a goal to do it by 2016. We 
exceeded it in 2014, and we are building on that.
    So there has been a targeted and integrated approach, and 
we are going to continue to use our rural development 
resources. We have helped over 112,000 businesses. Four hundred 
and fifty thousand jobs have been supported through this 
effort. Infrastructure investments. I mean, I could go on, but 
it is significant.
    Senator Gillibrand. Thank you.
    I have no time remaining, but I am going to submit for the 
record a question about rural broadband. Senator Capito and I 
have a bill that I would like your thoughts on, as well as 
ideas and guidance from you about other ways to amplify rural 
broadband.
    I have a specific question about the droughts in upstate 
New York and western New York, that I will submit for the 
record.
    Thank you so much, Mr. Secretary.
    Chairman Roberts. Without objection.
    Mr. Secretary, did you ever watch the movie ``High Noon?''
    Secretary Vilsack. Yes, sir. Gary Cooper.
    Chairman Roberts. Do you notice any resemblance between 
Gary Cooper and Senator Thune?
    [Laughter.]
    Secretary Vilsack. Senator Thune, do you want me to 
recognize that?
    Senator Thune. Just play along with him.
    Secretary Vilsack. Whatever you say, Mr. Chairman.
    Chairman Roberts. His wife looks like Grace Kelly, too.
    Coop, you have been riding fence. You are a little late. 
What are you doing?
    Senator Thune. Thank you, Mr. Chairman. It is almost high 
noon. So we want to wrap this up, but I appreciate the hearing.
    Mr. Secretary, as you know, over the past several years and 
a couple of farm bills, we have had an ongoing conversation 
about conservation programs, in particular the CRP program, 
which I continue to believe is the cornerstone of all USDA-
administered conservation programs.
    One of the concerns that I hear from constituents in South 
Dakota about CRP is there is a lack of common sense when it 
comes to guides and policy coming out of Washington.
    As you know, one of the biggest problems in the CRP program 
lies in the mid-contract management policies that for years 
have required CRP participants in South Dakota to dispose of 
vegetative cover by burning or other means but would not allow 
the vegetative residue to be donated to livestock operators who 
need hay because of drought. You agreed to allow this.
    I would like to get your commitment today that this policy 
of donating vegetative cover from any CRP practice removed 
under a mid-contract management can be donated to livestock 
producers who need it, that will continue into the future years 
as part of FSA policy.
    Secretary Vilsack. Well, Senator, first of all, I 
appreciate your bringing this issue up, and I think you are 
absolutely right. We need to have a more common-sense approach, 
and oftentimes we need to make sure that we understand the 
impact of these approaches in various regions of the country.
    I am happy to commit to you that up to, and including, noon 
January 20th that the policy that I have articulated is going 
to continue to be the policy. I cannot promise you that future 
administrations will see it the same way. I would hope that 
they would and would certainly encourage them to see as a 
common-sense, appropriate measure.
    We are learning more about farm management. We are learning 
more about land management. I think the more we learn perhaps 
the greater the flexibilities we can find within CRP.
    Senator Thune. One of the other issues that we have talked 
about, and that has to do with mid-contract management, is 
also--and this is something that I think would benefit not only 
South Dakota but a lot of other states. In 2012, most of the 
United States suffered from a severe drought, and I personally 
visited with the Wildlife Federation, Ducks Unlimited, 
Pheasants Forever, who agreed in a request that there be 
emergency haying and grazing allowed on several CRP practices 
that FSA determined were environmentally sensitive and on which 
FSA had previously prohibited emergency haying and grazing, 
which you ended up allowing.
    Well, a NEPA analysis was done in 2012 specifically to 
address that issue on these practices, and this is the--I am 
going to quote from their statement: ``A recent NEPA analysis 
for a one-time approval for emergency haying and grazing on 
these additional practices during 2012 found that as long as 
the haying or grazing was conducted in accordance with a 
modified conservation plan and under the guidance and approval 
of the STC and NRCS conservationist, among other stipulations, 
there would be no lasting significant impacts to wetlands.''
    Yet, we had the same situation this year in 2016 in South 
Dakota, same counties and other states that were approved for 
emergency haying and grazing, but once again FSA headquarters 
would not allow haying and grazing on these environmentally 
sensitive, continuous CRP contracts that an earlier NEPA 
analysis provided that haying and grazing, would not be 
harmful.
    So my question is: It was allowed in 2012. How does USDA 
not justify it given the circumstances that we face this year, 
it was a proven success, and particularly given the fact that a 
lot of these vegetation harvested from these acres could help 
those that need it, drought-stricken ranchers?
    Secretary Vilsack. Senator, it is a good question, and I 
will be happy to go back and try to find a more definitive 
answer if there is one or encourage them to rethink the 
decision they made.
    Senator Thune. I would appreciate if you would do that. 
This is an issue that we kind of deal with on an ongoing, seems 
like almost annual basis in certain areas of our State. Given 
that NEPA research based on the 2012 experience, it seemed to 
me at least this ought to be something we could fix.
    Finally, I would like to appreciate the fact that there are 
State Acres for Wildlife Enhancement, or SAFE acres, that have 
been targeted for South Dakota in the past, but I would like to 
call your attention to the fact that in the last CRP general 
sign-up South Dakota landowners applied to enroll more than 
40,000 acres; yet, only 2 contracts totaling 101 acres were 
accepted. Three states--Colorado, Kansas, and Washington--were 
able to enroll more than 208,000 acres, more than half of the 
total accepted.
    As you know, South Dakota depends heavily on CRP and 
currently has a backlog of more than 20,000 acres requested for 
East and West River SAFE and Duck Nesting Habitat CRP acres. 
But can you tell me if there will be additional acres allocated 
to South Dakota for any of these practices in the near future?
    I point that out because, as I said, out of 400,000 acres 
that were allocated for the general sign-up South Dakota 
applied for 40,000 or 10 percent of that total, and only got 
approved for 101 acres or 25 10,000ths of the total amount 
allocated. To me that just seems completely unacceptable and 
unjustified, and I cannot explain to any farmer in South Dakota 
how with 40,000 acres requested, in an area of the country 
where a CRP program is so important, we got 101 acres approved.
    Secretary Vilsack. Well, I think the answer is that we--
because of the limitation that Congress has placed on the 
number of acres in the program, we have a higher threshold for 
acres to get enrolled in the general sign-up. We did 400,000 
acres, or 410,000 acres I think, in the general sign-up.
    I suspect that there are probably still acres left in terms 
of the SAFE program or upland game programs that we could 
potentially utilize.
    But it is a matter of economics, Senator. If you want more 
acres, then you have got to provide us the resource and the 
capacity to have more acres. You have limited that. You have 
reduced it from 32 million down to 24 million.
    Senator Thune. That is an issue we are going to have to 
address in the next farm bill, for sure.
    Having said that, the question I asked earlier about SAFE 
acres and Duck Nesting Habitat CRP acres, on which we have, as 
I said, a backlog of about 20,000 acres, does USDA have more of 
those?
    Secretary Vilsack. Here is the challenge with that. I mean, 
you certainly have a justifiable question. The concern I think 
that our folks have is that they rushed determinations in the 
past and they ended up getting adjoined in court from the 
actions that they took. So I think they are trying to be 
thoughtful of that and trying to make sure that they do not 
have additional injunctions imposed on them that would further 
delay the implementation.
    But I am happy to take a look at that, as I indicated to 
you. We will be happy to take a look at it.
    Senator Thune. But those programs, SAFE acres and Duck 
Nesting Habitat, those CRP programs, you have authority and 
capacity, I believe. Our State does have requests in a 20,000-
acre backlog, and so that is the question.
    Secretary Vilsack. We will take a look at that in terms of 
whether or not there are acres that are being not used in some 
states that could be. We will just take a look. I want to make 
sure I do not over-promise to you, but I will take a look at 
it.
    Senator Thune. Well, I would appreciate that. Twenty-five, 
ten-thousandths of the amount in the general sign-up seems like 
proportionately a real bust.
    Secretary Vilsack. But it is not proportional, though, 
Senator. That is the problem. I mean, it has to be based on the 
Environmental Benefit Index. I think frankly the higher the 
index, obviously, the fewer acres are going to meet the 
threshold.
    Senator Thune. Mr. Chairman, thank you.
    Chairman Roberts. Senator Casey.
    Senator Casey. Mr. Chairman, thank you. I am sorry I am 
late. I was at another hearing trying to get a miners' 
protection--or, a miners' pension protection bill done today. 
So we are late.
    Mr. Secretary, I was with you last night at a dinner where 
I thanked you for your service, and I reiterate that today. I 
have seen not only in Pennsylvania but across the country a lot 
of great public servants--presidents, governors, mayors, all 
kinds of folks. We would be hard pressed to find a better 
Secretary of Agriculture, and we are grateful for that service.
    I do not have a lot of time, but I will try to raise two 
issues, neither of which will surprise you. The first is dairy, 
and the second is the Chesapeake Bay. I know we are very 
limited. I will submit more for the record.
    First, on dairy, I know you have spent a lot of your not 
just time as Secretary but a lot of your life working on issues 
like this, and we have talked about it a lot. You know of the 
acute problem we have had in Pennsylvania and a lot of states 
on the loss of dairy farms, hundreds a year going back many 
years, long before you were Secretary.
    We know that we made the change to the Margin Protection 
Program, and I know you talked about this earlier. Enrollment 
is low in Pennsylvania, and that is obviously an issue.
    Our staff tells us they were talking to a farmer the other 
day who is losing 8,000 bucks a month and will likely be losing 
his farm. That is, not just recently but over years, a typical 
story.
    If you look at 15 years, Pennsylvania dairy production 
showed a negative growth of around minus 3.1 percent over those 
15 years. We have a particularly difficult challenge because of 
the cost of production.
    So I guess if you could just assess based upon all the work 
that you have done and all the efforts you have put forth, are 
there other options we should be considering, including new 
authority, new legislation, new approaches? I guess the bottom 
line is: What do you think would be most effective to help our 
dairy farms and farmers?
    Secretary Vilsack. Let me offer a couple of suggestions, 
Senator, that will be repetitive. I apologize, but I think it 
is worth repeating.
    We would have been able to do more in Section 32 
potentially if we had more capacity within Section 32 in the 
CCC program, but each year that has been reduced; our capacity 
has been reduced by the Congress. So that is one area.
    Secondly, we used to have some significant flexibility to 
sort of craft creative solutions in situations like this. That 
authority has been taken away through the appropriations 
process. So that should be restored.
    The Margin Protection Program. As I indicated to Senator 
Gillibrand, part of the issue I think is that people made the 
decision early in the process not to believe in the program in 
the sense that they did not sign up for the same level of 
coverage in 2016 that they did in 2015. Had they signed up for 
the same level of coverage, we would have paid out $40 million 
instead of $11 million. So there is that issue.
    There is the regional feed differential issue that I think 
will need to be addressed in the next farm bill, as to whether 
or not you can distinguish between regions of the country where 
feed costs are up or down, and whether or not that could impact 
and affect the level of payment.
    I think also in terms of these small dairies I have been 
encouraging them to think about not necessarily working in the 
commodity-based market that they are currently in but creating 
their own individual market. This Committee, in this Farm Bill, 
I think made an historic investment in local and regional food 
systems, and the ability to afford for these small producers to 
produce their own ice cream, to produce a value-added product, 
to create a market where they sell directly to the local school 
district instead of selling to a major processor, that they 
work to create their own contracts where they can negotiate 
their own price for their product.
    Oftentimes, at the local level, people are willing to pay a 
penny or two more for something because they know the farmer; 
they know the money is going to stay in the community; they 
know it is helping the general community.
    So those would be suggestions that I would make.
    Frankly, we also have to look at our credit programs. You 
know, we have run out of money on the credit side, and that 
again is related to budget. The budget we are dealing with is 
less than it was in 2010, and there are consequences to that.
    Senator Casey. I know that you just announced, and we 
appreciate this, a purchase of 20 million dollars of cheese to 
help those dairy producers. We are grateful for that.
    Is there any way to assess or measure the impact of that? I 
guess secondarily whether you can--if there are other kind of 
emergency measures that can be taken.
    Secretary Vilsack. Well, we have run out of resources 
within Section 32, which is the first point I made.
    You know, I do not think--it is probably not going to be 
accurate to suggest that the slight increase that we have seen 
recently in prices is directly related to that purchase. I 
think it sent a signal. I do not know that it had a profound 
impact on the market, but it certainly sent a signal that 
people are paying attention.
    You know, the issue of trade is important. You know, the 
dairy industry in this country has become a major exporter, 
which was not the case a number of years ago, but today it is. 
To the extent that we can continue to look for competitive 
markets overseas I think is incredibly important as well and 
very, very much necessary to be able to maintain stability in 
the dairy market.
    Senator Casey. I will submit a question for the record on 
the Chesapeake Bay resources, and I know we have talked about 
that. I will follow up with it.
    Secretary Vilsack. Mr. Chairman, may I say something about 
the Chesapeake Bay?
    Chairman Roberts. Sure.
    Secretary Vilsack. There is a phenomenal statistic on the 
Chesapeake Bay, which I learned recently, which is that 99 
percent of the cultivated acres in the Chesapeake Bay Area have 
at least some conservation practice being utilized. Ninety-nine 
percent. 52 percent of the acres, at some point in time within 
a 4-year period, have had a cover crop. The impact of that 
conservation and those cover crops has resulted in an actual 
reduction in the hypoxic area within the Chesapeake Bay and 
increased significantly of the underwater grasses that has led 
to a return of the blue crab, more oysters, and more fish.
    So this, I think, sort of underscores the necessity of 
continued investment in the conservation programs, in the 
regional conservation partnership program, in all of this.
    We have recently worked with Governor Wolf to redirect some 
resources into Pennsylvania because you have a real challenge. 
It is hard for your producers to understand the benefits of 
conservation for the Chesapeake Bay when your State does not 
necessarily get the benefits of the bay in terms of the 
economic opportunity that tourism brings. So we are trying to 
be sensitive and responsive. I think Pennsylvania has received 
almost--I think it is--if it is not the number one state in 
terms of resources in this effort, it is the number two state 
in the watershed.
    Senator Casey. Mr. Secretary, I know we are out of time. 
Thank you very much, and we are, as always, proud of your 
Pennsylvania roots.
    Chairman Roberts. Senator Stabenow.
    Senator Stabenow. Well, thank you, Mr. Chairman. I think we 
have had a good discussion this morning.
    Thank you again, Secretary Vilsack. I have got a number of 
questions that I will submit for the record, but I did want to 
ask you about our Foundation for Food and Agriculture Research. 
I think one of the important things that we did that is a real 
legacy, as we look at the importance of agricultural research, 
is the Foundation, putting together something that will last 
longer than all of us and a public-private initiative.
    So I wondered, in looking at what the foundation is doing 
and being a strong supporter of it. The Foundation has 
announced an ag research prize at the National Academy of 
Sciences and is funding a new innovator award for young ag 
scientists, both of which I support, but we have yet to see 
specific research projects. I wonder if you could talk about 
what the USDA is doing, you are doing, in working with the 
board and the executive director to both establish research 
priorities and to begin funding specific research projects.
    Secretary Vilsack. Well, the first step obviously was to 
get the board composed. The second step was to have that board 
do the due diligence and thoughtful work about what areas 
needed to be focused on. That then puts us in a position where 
we deal with the fourth and final piece of this, which is to 
find partnerships.
    I know that there were efforts underway on a conservation 
research project, for example, that the Foundation was 
committed to, but our partner at the end of the day made a 
decision that he was not particularly comfortable with the 
parameters of the research project. He did not necessary want 
as much engagement with land grant universities as we thought 
was appropriate. So that project, which we had spent a lot of 
time on, unfortunately did not get funded.
    But there are priorities set. They are working with land 
grant universities and other research components, and they are 
looking for projects. I would expect and anticipate you will 
see a much more robust suite of projects coming through the 
process in 2017.
    Senator Stabenow. Thanks very much.
    Mr. Chairman, I will turn it back to you.
    Chairman Roberts. Thank you.
    Senator Perdue touched on this, as did most members, and 
you stated yourself that, representing agriculture, you have 
made every effort to work with the folks over at the EPA. 
Matter of fact, in 2009, you stated you looked forward to 
working with Lisa Jackson at that time--it would be Gina 
McCarthy now--and you thought that she recognized, ``the 
important role that EPA plays generally in agriculture.'' You 
indicated that data and sound science were necessary and 
important for basing decisions, and I thank you for that.
    But as we look back on the past eight years, particularly 
at EPA and how the EPA is judged by farmers and ranchers, 
everybody in rural and small-town America, I am very troubled 
to see efforts, renewed efforts, that I have experienced in my 
entire public career, which spans about three decades.
    Here we go again trying to regulate farm dust--rural, 
fugitive dust; milk spills; every farm pond and ditch--that is 
WOTUS; delays in approval of new seed technologies and 
agriculture chemicals, aggressive climate change-related cap 
and tax proposals, priorities placed on environmental lawsuits 
and endangered species at the expense of farmers and ranchers.
    Mother Nature gave us some rain in Kansas, and so the 
lesser prairie chicken is now the greater lesser prairie 
chicken. We could have saved a lot of trouble and time and 
effort when we just tried to say, look, if it rains, the 
habitat will increase.
    Help me understand. I know that you have worked with the 
EPA, I know that you have defended agriculture, and I know that 
you believe in sound science. But tell me how we can better 
defend our farmers and ranchers from a host of these policies 
and regulations that are not based on sound science or data, 
and how can we assure our producers and our technology 
providers that regulators will use a scientifically sound and 
predictable and fair process.
    Secretary Vilsack. Well, one suggestion I would make, Mr. 
Chairman, is to build on the progress that USDA and the 
Department of Interior have developed with reference to the 
Endangered Species Act.
    I think there has been a new way of thinking on sage 
grouse, lesser prairie chicken, a number of other potentially 
endangered species, which is essentially USDA coming to the 
Department of Interior and saying: Look, producers want to do 
the right thing. They just simply need to know what to do. They 
need help in terms of financing what to do. They want some 
degree of certainty that once they do it that they will not 
have to redo it or do it again or do more.
    So, as a result of that, we were able to enter into an 
agreement with the Department of Interior that if producers 
would take certain actions we at NRCS would provide resources 
on cost-share, that they would be guaranteed for 30 years that 
if that animal or critter or whatever gets listed they would be 
deemed in compliance. We saw remarkable acceptance of that 
approach. So I think that is the wave of the future of some 
kind of way in which we could create greater certainty or 
predictability, number one.
    Number two, I cannot speak about the processes within EPA 
because I do not know them, but what I can tell you is that 
when I was first secretary it took 90 months to get a 
biotechnology trait reviewed by APHIS. Ninety months. Today, it 
takes 15 months, and we are probably close to 13 months on most 
of them.
    How did we do that? We did not sacrifice any of the quality 
of the review. I asked for a chart of all the people that were 
involved in the 90-month process, and then I asked them to go 
through a process improvement that any corporation or business 
would go through to try to streamline a process without 
sacrificing the quality.
    It may be that there are certain circumstances and 
situations within agencies where process improvement could 
potentially streamline the process. So that is the second.
    The third----
    Chairman Roberts. Does the EPA have a chart?
    Secretary Vilsack. I do not know. That is why I do not know 
the answer to that question.
    Chairman Roberts. Can you substitute your chart for the EPA 
chart even if they do not have one?
    Secretary Vilsack. I cannot tell the EPA what to do 
because, as I said earlier, I do not want them telling me what 
to do.
    Chairman Roberts. I have been trying to tell them what to 
do for some time.
    Secretary Vilsack. Right. But you actually have more 
capacity to do that than I do.
    What I can do is make an effort to make sure that they 
understand the real-life consequences of inaction or action, 
and I make an effort to make sure that they understand the need 
to go out and talk to farmers and producers. Gina McCarthy, who 
is the current administrator, has done that.
    On the Waters of the U.S., I will tell you the advice I 
gave the EPA, which is part of the challenge is that there are 
hundreds of thousands of farming operations and hundreds of 
thousands of different circumstances throughout the country.
    It would be helpful if you went out. I think they have done 
this in a couple of states. If you had your technical people go 
out and have farmers come to you with information about their 
specific operation, with a specific question. Is this in or 
out? Does this have to be? Because oftentimes what you will 
find is what farmers are most concerned about actually is not 
going to be covered or is not--there is no basis for them to be 
concerned about it.
    There is a fear, a real fear, but it can be dealt with by 
just simply a communication, and frankly, we do not probably do 
governmentwide enough of that. We do not define the problem 
before we define the solution, and we do not educate people 
about what we are trying to do before we do it, and so there is 
a natural reaction.
    So, those would be my suggestions.
    Chairman Roberts. Well, thank you for trying. Thank you for 
trying to be the defender of agriculture over at EPA.
    We had 11 Senators with Gina McCarthy on WOTUS, Waters of 
the U.S. Two pages with regards to the legislation, about the 
third draft.
    Normal cropping operations are exempt. Sounds pretty good.
    Eighty-eight pages of regulations. Eighty-eight. The font 
was about 10-point. You had to squint to read it.
    I do not know of any commodity group, any farm 
organization, any lawyer or any CPA, any group that can wade 
through all that and then tell a farmer whether or not the dry 
creek bed is going to be under the Waters of the U.S., or the 
farm pond where no self-respecting duck would ever land, et 
cetera, et cetera. That is the problem. I thought we reached a 
pretty good understanding, but that was not the case.
    I think this is a subject area where if it is not the 
number one issue, that is why a lot of folks that I represent 
feel ruled and not governed, and they get really upset.
    I am not trying to pick on you. I am just trying to say 
that we have some serious problems.
    I have several other things I want to mention with regards 
Department oversight, and then I will close, and we might even 
make--well, no, we are not going to make 12, but we will make 
12:30.
    Your testimony lists what is going right in America, and we 
appreciate that. I am happy to share in the good news for our 
farmers and ranchers, but it is also the responsibility of this 
Committee to examine serious challenges at the Department, and 
the inspector general has identified some of them.
    For instance, the inspector general found that the CCC's 
financial statements were inadequate and could not pass a 
third-party audit. Now that is really important. It is 
difficult for anybody to understand the CCC to begin with, but 
that is a problem.
    They also identified financial control failures in the NRCS 
and the Rural Energy for America program, the REAP program, 
where 100 percent of the REAP program samples had errors.
    The inspector general just released its 2016 list of USDA 
management challenges, which is significant because it lists 
the same challenges it listed last year in its 2015 report.
    Further, the report notes countless OIG recommendations 
that the Department did not complete or that went 
unimplemented. Obviously, you do not have enough staff to do 
everything that the OIG wants you to do yesterday.
    So considering your recent comments of how legislators may 
approach funding levels in the next farm bill, can we reach an 
understanding how the USDA is working to be a better steward of 
existing funding and meeting the numerous challenges as 
outlined by the OIG? I am not asking you to respond to that.
    Secretary Vilsack. Oh, can I? I would like to respond to 
it.
    Chairman Roberts. All right, fine.
    Secretary Vilsack. Let me talk about the CCC audit. 
Basically, we had a change in auditors, and there was a 
difference of opinion within those auditors about what was 
acceptable.
    So with a new auditor we said, okay, fine. If you are not 
willing to accept what the previous auditor accepted, fair 
enough.
    We have brought in specialists, and we are working through 
this process aggressively to satisfy our new auditing firm.
    On NRCS, when I came into office, we have not had a clean 
audit on NRCS. We have been working incredibly hard over the 
period. It was really, really, really bad. We have worked 
incredibly hard, and we are making significant progress, and 
knock on wood, I think we are going to get to a very good place 
here in the next year or two on that audit that you will have 
much more confidence.
    On the REAP thing, I think that was a really small sampling 
size that was taken in that particular circumstance.
    I am telling you this, Mr. Chairman, so that I know what 
you just outlined. Because I deal and I meet with the OIG folks 
on a quarterly basis. I am kept to date on a monthly basis on 
every single OIG audit, every GAO audit of concern, and we take 
those things very seriously.
    On the management challenges, I think that if you read the 
report you will find that there have been improvements on the 
management challenges. It is not a situation where it is 
exactly the same letter that we got the year before. There are 
actually several areas where they have actually seen 
improvements.
    Chairman Roberts. Mr. Secretary, we want to thank you for 
coming today. As the agriculture economy continues to trend 
lower, unfortunately, your testimony, insight, and plans are 
invaluable to this Committee.
    Thank you and thank you for your service over these eight 
years. Now your job is not quite finished, but we wish you all 
the best as you finish your work at the USDA and whatever is 
next.
    As we evaluate Federal policies, let's keep in the 
forefront of our minds the wants and needs of our business men 
and women involved in agriculture.
    Throughout the past eight years, there have been plenty of 
challenges ranging from devastating droughts to floods, from 
wildfires to freezes. Farmers and ranchers are as resilient as 
their crops and livestock when it comes to bouncing back after 
natural disasters.
    Whether it is a push by EPA to expand their jurisdiction 
over the Waters of the United States or the Dodd-Frank rules 
restricting access to credit, or especially to our community 
banks, the biggest frustration I hear from producers is the 
government too often stands in their way. I know you have heard 
that as well.
    The regulatory framework we have today is vast. It is 
confusing, often counterproductive. We must find new ways to 
inject common sense into the rulemaking process across the 
entire Federal Government.
    While there were many questions today regarding the 2014 
Farm Bill--actually, there were not that many questions on the 
2014 Farm Bill. Interest is already building for the future of 
the farm programs. The next farm bill must provide risk 
management tools that are straightforward, market-oriented, and 
defendable.
    Now the Ranking Member and I, regardless of what happens 
down the road, will be doing the same thing we did the first 
time when we passed a farm bill in record time. I think we 
passed this farm bill in what? Two and a half hours in this 
Committee? Even talked the leader at that particular time into 
putting it on the floor and passed it. Now it did run into a 
brick wall in the House, but we intend to do the same thing, 
and we will be asking your help and your ideas as well.
    We have to face these realities head-on. Producers in their 
field are being asked to do more with less. We also have to be 
willing to find solutions that stay within our budget caps and 
trade rules.
    We have right at two years to pass the next farm bill, and 
yes, there will be another farm bill. We will have a full and 
transparent discussion of what is working, what is not, which 
burdens are hindering our competitiveness. This is after we sit 
on the wagon tongue with all of our producers and listen.
    As I said when I took the gavel last year, this Committee 
will be the voice of the producer. This Committee will not only 
provide them a platform to spread the word of the value of 
production agriculture but also be the forum for our farmers 
and ranchers to participate in shaping the next farm bill. At 
the end of a producer-led policymaking process, we will have a 
farm bill that recognizes modern agriculture, respects our 
fiscal environment, and provides the necessary support for 
American agriculture to be successful.
    As you have indicated, Mr. Secretary, it might be a good 
idea to focus on the needs, the value of a farm program, and 
the value of what we, ``we'' meaning all of our producers and 
who we represent, what we do for our country in a troubled and 
hungry world. If we can do that I think, or do our job a lot 
better than that, I think our road might be somewhat easier.
    To my fellow Committee members, I ask that any additional 
questions you may have for the record be submitted to the clerk 
5 business days from today or by 5:00 next Wednesday, September 
28.
    That concludes our hearing. The Committee is adjourned.
    Thank you, Mr. Secretary.
    Secretary Vilsack. Thank you.
    [Whereupon, at 12:14 p.m., the Committee was adjourned.]

      
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