[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
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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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