[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]


  THE FUTURE OF FARMING: TECHNOLOGICAL INNOVATIONS, OPPORTUNITIES, AND
                        CHALLENGES FOR PRODUCERS

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

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                        GENERAL FARM COMMODITIES
                          AND RISK MANAGEMENT

                                 OF THE

                        COMMITTEE ON AGRICULTURE
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED FIFTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             JULY 13, 2017

                               __________

                            Serial No. 115-9
                            
                            
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          Printed for the use of the Committee on Agriculture
                         agriculture.house.gov


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                        COMMITTEE ON AGRICULTURE

                  K. MICHAEL CONAWAY, Texas, Chairman

GLENN THOMPSON, Pennsylvania         COLLIN C. PETERSON, Minnesota, 
    Vice Chairman                    Ranking Minority Member
BOB GOODLATTE, Virginia,             DAVID SCOTT, Georgia
FRANK D. LUCAS, Oklahoma             JIM COSTA, California
STEVE KING, Iowa                     TIMOTHY J. WALZ, Minnesota
MIKE ROGERS, Alabama                 MARCIA L. FUDGE, Ohio
BOB GIBBS, Ohio                      JAMES P. McGOVERN, Massachusetts
AUSTIN SCOTT, Georgia                FILEMON VELA, Texas, Vice Ranking 
ERIC A. ``RICK'' CRAWFORD, Arkansas  Minority Member
SCOTT DesJARLAIS, Tennessee          MICHELLE LUJAN GRISHAM, New Mexico
VICKY HARTZLER, Missouri             ANN M. KUSTER, New Hampshire
JEFF DENHAM, California              RICHARD M. NOLAN, Minnesota
DOUG LaMALFA, California             CHERI BUSTOS, Illinois
RODNEY DAVIS, Illinois               SEAN PATRICK MALONEY, New York
TED S. YOHO, Florida                 STACEY E. PLASKETT, Virgin Islands
RICK W. ALLEN, Georgia               ALMA S. ADAMS, North Carolina
MIKE BOST, Illinois                  DWIGHT EVANS, Pennsylvania
DAVID ROUZER, North Carolina         AL LAWSON, Jr., Florida
RALPH LEE ABRAHAM, Louisiana         TOM O'HALLERAN, Arizona
TRENT KELLY, Mississippi             JIMMY PANETTA, California
JAMES COMER, Kentucky                DARREN SOTO, Florida
ROGER W. MARSHALL, Kansas            LISA BLUNT ROCHESTER, Delaware
DON BACON, Nebraska
JOHN J. FASO, New York
NEAL P. DUNN, Florida
JODEY C. ARRINGTON, Texas

                                 ______

                   Matthew S. Schertz, Staff Director

                 Anne Simmons, Minority Staff Director

                                 ______

      Subcommittee on General Farm Commodities and Risk Management

             ERIC A. ``RICK'' CRAWFORD, Arkansas, Chairman

FRANK D. LUCAS, Oklahoma             RICHARD M. NOLAN, Minnesota, 
MIKE ROGERS, Alabama                 Ranking Minority Member
BOB GIBBS, Ohio                      TIMOTHY J. WALZ, Minnesota
AUSTIN SCOTT, Georgia                CHERI BUSTOS, Illinois
SCOTT DesJARLAIS, Tennessee          LISA BLUNT ROCHESTER, Delaware
RICK W. ALLEN, Georgia               DAVID SCOTT, Georgia
MIKE BOST, Illinois                  SEAN PATRICK MALONEY, New York
RALPH LEE ABRAHAM, Louisiana         STACEY E. PLASKETT, Virgin Islands
DON BACON, Nebraska                  AL LAWSON, Jr., Florida
NEAL P. DUNN, Florida                TOM O'HALLERAN, Arizona
JODEY C. ARRINGTON, Texas

                                  (ii)
                            
                            C O N T E N T S

                              ----------                              
                                                                   Page
Crawford, Hon. Eric A. ``Rick'', a Representative in Congress 
  from Arkansas, opening statement...............................     1
    Prepared statement...........................................     2
Nolan, Hon. Richard M., a Representative in Congress from 
  Minnesota, opening statement...................................     3

                               Witnesses

Tiller, Billy, Co-Founder and Advisor to the CEO, Grower 
  Information Services Cooperative, Lubbock, TX..................     5
    Prepared statement...........................................     7
Janzen, J.D., Todd J., President, Janzen Agricultural Law LLC, 
  Indianapolis, IN...............................................    18
    Prepared statement...........................................    19
Casurella, Deborah, Chief Executive Officer, Independent Data 
  Management, LLC, Hudson, WI....................................    28
    Prepared statement...........................................    29
Royse, J.D., Roger, Founder and Owner, Royse Law Firm, PC and 
  Royse AgTech Innovation Network, Menlo Park, CA................    35
    Prepared statement...........................................    36

 
  THE FUTURE OF FARMING: TECHNOLOGICAL INNOVATIONS, OPPORTUNITIES, AND
                        CHALLENGES FOR PRODUCERS

                              ----------                              


                        THURSDAY, JULY 13, 2017

                  House of Representatives,
         Subcommittee on General Farm Commodities and Risk 
                                                Management,
                                  Committee on Agriculture,
                                                   Washington, D.C.
    The Subcommittee met, pursuant to call, at 10:01 a.m., in 
Room 1300, Longworth House Office Building, Hon. Eric A. 
``Rick'' Crawford [Chairman of the Subcommittee] presiding.
    Members present: Representatives Crawford, Gibbs, Allen, 
Abraham, Bacon, Dunn, Arrington, Nolan, Walz, Bustos, Blunt 
Rochester, Maloney, Plaskett, Lawson, and O'Halleran.
    Staff present: Emily Wong, Mollie Wilken, Rachel Millard, 
Trevor White, Liz Friedlander, Mike Stranz, Troy Phillips, 
Nicole Scott, and Carly Reedholm.

    OPENING STATEMENT OF HON. ERIC A. ``RICK'' CRAWFORD, A 
            REPRESENTATIVE IN CONGRESS FROM ARKANSAS

    The Chairman. Good morning. This hearing of the 
Subcommittee on General Farm Commodities and Risk Management 
entitled, The Future of Farming: Technological Innovations, 
Opportunities, and Challenges for Producers, will come to 
order. Thank you for joining us today.
    Yesterday, the full Committee held a productive discussion 
on how technology is influencing specialty crop production. 
Today, our Subcommittee will explore how promising new 
information technologies, and the increasing utilization of 
data in agriculture, are influencing the future of farming.
    It is a critical time for everyone involved in production 
agriculture as we face tough choices ahead. Given tight margins 
and a continued slump in the prices at the farm gate, even 
routine day-to-day decision making can determine whether the 
farmer will turn an annual profit. These challenges in farm 
country underscore the importance of the decisions we make in 
the next farm bill, which we will have to write with fewer 
resources than we had the last go-round.
    But as we begin to answer the tough questions, one thing is 
clear for farmers and policymakers alike: Technology plays an 
undeniably important role in how we address these challenges. 
The decisions we make surrounding data and agriculture 
technology will decide the future of farming in America and 
impact producers for years to come as technologies continue to 
expand and evolve.
    This is the third hearing we have held in the last year-
and-a-half related to big data and the ground is already 
quickly shifting. Big data is influencing planting decisions, 
optimizing yields, it gives farmers tools to more accurately 
assess soil health and water usage, and it is even cutting down 
on labor costs. Farmers are also quickly learning that smart 
investments in new technology will not only make them more 
efficient, but will also conserve resources and ensure their 
land will remain productive for generations to come. Finally, 
big data is making USDA farm programs more accurate, efficient, 
and easier for farmers to navigate.
    But while cutting-edge technology promises many benefits, 
there are also significant challenges to overcome. There 
continues to be considerable uncertainty in the legal and 
regulatory landscape. Farmers are justifiably concerned about 
the privacy and security of their data, while questions loom 
over data ownership. Inadequate rural broadband access is also 
a significant barrier for farmers who lack the high-speed 
Internet needed to take full advantage of the innovations we 
are discussing today. And, as the industry continues to make 
investments in its future, the Federal Government must keep 
pace to modernize and adapt to a rapidly changing environment.
    Our distinguished witnesses here with us today will present 
some of the promising benefits of big data in agriculture and 
will also enlighten us about how they are tackling the many 
challenges they are facing. I look forward to hearing their 
views as we assess the role of government in the modernization 
of agriculture. I believe this is key to ensuring that America 
remains the most abundant and affordable supplier of food and 
fiber in the world.
    [The prepared statement of Mr. Crawford follows:]

Prepared Statement of Hon. Eric A. ``Rick'' Crawford, a Representative 
                       in Congress from Arkansas
    Thank you for joining us today.
    Yesterday, the full Committee held a productive discussion on how 
technology is influencing specialty crop production. Today, our 
Subcommittee will explore how promising new information technologies 
and the increasing utilization of data in agriculture is influencing 
the future of farming.
    It is a critical time for everyone involved in production 
agriculture as we face tough choices ahead. Given tight margins and a 
continued slump in prices at the farm gate, even routine, day-to-day 
decision-making can determine whether the farmer will turn an annual 
profit. These challenges in farm country underscore the importance of 
the decisions we make in the next farm bill, which we will have to 
write with fewer resources than we had the last go-round.
    But as we begin to answer the tough questions, one thing's clear--
for farmers and policymakers alike--technology plays an undeniably 
important role in how we address these challenges. The decisions we 
make surrounding data and agriculture technology will decide the future 
of farming in America and impact producers for years to come as 
technologies continue expanding and evolving.
    This is the third hearing we've held in the last year-and-a-half 
related to big data and the ground is already quickly shifting. Big 
data is influencing planting decisions and optimizing yields, it gives 
farmers tools to more accurately assess soil health and water usage, 
and it's even cutting down on labor costs. Farmers are also quickly 
learning that smart investments in new technology will not only make 
them more efficient, but will also conserve resources and ensure their 
land will remain productive for generations to come. Finally, big data 
is making USDA farm programs more accurate, efficient and easier for 
farmers to navigate.
    But while cutting-edge agriculture technology promises many 
benefits, there are also significant challenges to overcome. There 
continues to be considerable uncertainty in the legal and regulatory 
landscape. Farmers are justifiably concerned about the privacy and 
security of their data while questions loom over data ownership. 
Inadequate rural broadband access is also a significant barrier for 
many farmers who lack the high-speed Internet needed to take full 
advantage of the innovations we are discussing today. And, as the 
industry continues making investments in its future, the Federal 
Government must keep pace to modernize and adapt to a rapidly changing 
environment.
    Our distinguished witnesses here with us today will present some of 
the promising benefits of big data in agriculture, and will also 
enlighten us about how they are tackling the many challenges they're 
facing. I look forward to hearing their views as we assess the role of 
government in the modernization of agriculture. I believe this is key 
to ensuring that America remains the most abundant and affordable 
supplier of food and fiber in the world.

    The Chairman. I would now like to recognize my friend, the 
Ranking Member from Minnesota, Mr. Nolan, for any comments he 
would like to make.

OPENING STATEMENT OF HON. RICHARD M. NOLAN, A REPRESENTATIVE IN 
                    CONGRESS FROM MINNESOTA

    Mr. Nolan. Can you hear me? There we go. I had it covered 
up.
    Thank you, Chairman Crawford, for getting me turned on 
here, if you will pardon the expression. But I thank the other 
Members of the Committee, the Subcommittee here, for holding 
this important hearing regarding the future of farming and the 
opportunities and the challenges presented by data technology 
innovations.
    And thanks to the great panel of witnesses that we have 
here. We thank you for coming. We have a couple old sayings 
around this town. First is, you better come to town and make a 
case for yourself, because if you don't there is a possibility 
that this town might not know you exist. Worse yet, if they 
know you exist and you don't show up, they might think you 
don't care. Thank you for taking the time to be here.
    And you should know that the proceedings and the knowledge 
and the information garnered here will end up going far beyond 
the Members of this Committee and our staffs. It is reviewed 
and paid attention to by policymakers and thinkers and 
advocates not just in this country, but all over the world. 
Your testimony is very, very important here today.
    And the other old admonition is that in this town, if you 
are not at the table you might be on the menu, and you don't 
want to be there.
    So welcome.
    The fact is that technology innovations have greatly 
benefited our farm economy. My gosh, when I was first elected 
to the Congress, if you reaped 80, 90 bushels an acre of corn, 
you were an all-star. And nowadays, why, it is like get out of 
town, where have you been? We have quadrupled yields, not just 
for corn but so many of the other important commodities that 
have not only helped feed America, but have helped feed in many 
cases a starving and a hungry world. Agriculture has played 
such an incredibly important role in our economy and in the 
world economy.
    More recently, farmers have become more efficient with 
those crop yields, as I mentioned, do a better job of 
predicting the environment and innovation there through the use 
of data technologies. And while we have undoubtedly seen great 
benefits from these innovations, there are also important 
questions we must answer related to ownership of data collected 
on farms as well as its security and its privacy.
    We must also assure that access to information is balanced, 
does not allow for the manipulation of markets, as we have 
sometimes seen in the past. Some of us may remember how clever 
the Russians were back in the seventies at manipulating our 
farm markets, not to imply any parallels with what is happening 
today.
    Finally, we must continue to invest in rural America, 
broadband, to ensure that our producers have the ability to 
receive and to send data at acceptable speeds and affordable 
prices.
    High-speed broadband is not unlike what the REA and the 
Rural Telephone Administration were for past generations. If 
you don't have the latest communications capabilities, you are 
out of luck. You are not going to grow. You are not going to 
prosper. You are not going to be able to fully communicate and 
participate in all that America has to offer.
    American agriculture might be entering a new era because of 
these data technologies, but we need to make sure farmers and 
rural communities benefit from these innovations as well.
    So with that said, I am looking forward to your testimony. 
I know all the other Members of the Subcommittee are looking 
forward to your testimony as well. And once again, I thank 
Chairman Crawford for holding this important hearing.
    Mr. Chairman, I yield the balance of my time.
    The Chairman. Thank you, sir, I appreciate it.
    We have four distinguished witnesses with us here today, 
and I want to introduce each one of them. But first I would 
like to recognize the gentleman from Texas to introduce our 
first witness.
    Mr. Arrington, cotton-eyed Jodey, you are recognized.
    Mr. Arrington. There is a story to that, but I will spare 
you.
    Thank you, Mr. Chairman. It is my honor to introduce to you 
a fellow west Texan and a friend from my hometown of Lubbock, 
Texas, Billy Tiller. He is a fourth-generation ag producer. He 
received his accounting degree from the greatest university in 
the land, Texas Tech University. He has been on a bank board. 
And as a CPA, he understands the business of agriculture, and 
he certainly has a unique perspective on industry profitability 
and those challenges as an ag lender and what they present to 
our ag lenders.
    He is an entrepreneur and he has been involved in ag 
technology startup companies, where I met him as Vice 
Chancellor for Research and Technology Commercialization at 
Texas Tech. He and his wife Crystal are parents of four 
children and five grandchildren.
    We got to visit before this hearing, and I said, ``What do 
you want me to say about your background?'' He said, ``Two 
things: I am a cotton farmer.'' And that is what he is most 
proud to be known as, is a cotton farmer. He said, ``If you are 
going to do something to help the cotton farmers, I am in. If 
you are not, I am not going to be a part of it.''
    That is my philosophy too, Billy. Thank you for being here.
    And, Mr. Chairman, thank you for indulging me.
    The Chairman. Yes, sir, thank you. The gentleman yields 
back.
    I would like to introduce Mr. Todd Janzen, President, 
Janzen Agricultural Law, from Indianapolis, Indiana.
    Welcome.
    Ms. Deb Casurella, CEO, Independent Data Management, 
Hudson, Wisconsin. And finally, Mr. Roger Royse, founder of 
Royse Law Firm in Menlo Park, California.
    I would like to direct the witnesses, direct your attention 
to the lights in front of you, a green light, a yellow light, 
and a red light. It is just like driving. When you see the 
light is green, keep your foot on the gas; when it turns 
yellow, get ready to stop; and when it is red, slam on the 
brakes. And we will get through this and get to our questions 
as quickly as we can.
    So, having said that, I would like to recognize our first 
witness. Mr. Billy Tiller, you are recognized for 5 minutes.

 STATEMENT OF BILLY TILLER, CO-FOUNDER AND ADVISOR TO THE CEO, 
      GROWER INFORMATION SERVICES COOPERATIVE, LUBBOCK, TX

    Mr. Tiller. Thank you, Chairman Crawford, Ranking Member 
Nolan. And Jodey, thank you for the introduction.
    I would like to add something to his introduction. In the 
data world, I am about all farmers. And the beauty is we all 
collect acres, we all have planting varieties, and we have 
seed, and we put out chemicals. As we do all these things, it 
is all measured against land. If I do it in cotton, you can do 
it in corn, you can do it in soybeans, you can do it in 
specialty crops. That is the beauty of what is going on.
    He has pretty well introduced me, so I am going to jump 
right into what is going on here. I have a grower information 
services cooperative that I founded. It is a cooperative owned 
by growers. The idea behind it was to create value and control 
for the grower.
    Because what we are dealing with today is really a world 
where there is some fear among growers, what is going on in 
this data world. If we have a governing board at the 
cooperative, I am hoping this continues to grow, I think you 
will see that really taking hold.
    We have 41 states covered, about 1,400 members. And out of 
that, I would say there are 10,000 growers that have talked to 
me in the last 5 years, have tremendous interest. And when the 
platform is up and fully functional, you will see those growers 
come in to help us.
    I want to talk today about the opportunities, the 
challenges, and literally the innovations in agriculture. I 
could focus on GiSC, but I want to talk about what I have been 
able to see in the last few years.
    And as I say that, the opportunity is real. Ag 2.0 and Ag 
3.0 is here, and we are seeing some things happen now around 
the Internet of Things. There are a lot of challenges to 
creating adoption in agriculture, and they are due to the fact 
that I have had a lot of tools created for me and many of them 
I don't need. They don't solve any of my pain points. They look 
cool, they cost a lot of money, but I am looking for things I 
can actually put into the farm, I can implement, and that I can 
use to collect data.
    I would say that so far the value has not exceeded the 
maximum cost that has been charged for some of these things, 
not all them, but a lot of them. I think there is also fear on 
the part of the grower not understanding what is going on. You 
will be interested in Mr. Janzen's testimony about something 
called the Transparency Evaluator that is very vital to the 
industry.
    The other thing I would say are the time factors. Farmers 
are caught up in prioritizing and reprioritizing their time on 
daily basis. When they are collecting data it has to be more of 
an automated fashion. It has to be autonomous. They are not 
going to go in at night and spend 3 hours actually entering 
data about seed varieties and those sorts of things. They are 
through at the end of the day. We will be able to use new 
technologies that you see coming onto the forefront to be able 
to automatically or semiautomatically collect data.
    There has been a lot of ag hype, and it has been promises, 
promises, promises that have gone on around ag tech companies 
and hundreds of millions of dollars that have been invested, 
and yet they haven't solved our problem. Money hasn't quite 
been the issue.
    The ownership issue is there. I would love to sit with any 
of you and talk about that. But the ownership of the data, it 
is a critical issue. I have groups today tell me, ``Billy, your 
co-op, your members, you can't own your data.'' I mean, that is 
ludicrous to me. What do you mean, I can't own my data? Are you 
going to go tell a small business owner he can't own his data? 
That is the craziest thing I have ever heard. Just because I 
use a certain piece of equipment, I can't own the data?
    I am hung up on I am going to own my data off my cotton 
farm, and that way I can do things with it. And I may share it 
with third parties so I can get value.
    Then there is the concern about disruption in the industry. 
There is no doubt we have disruption going on in the industry, 
and that creates fear among the industry players. We have to 
literally stop the fear among the industry players so they feel 
like that we can move forward.
    I want to hit a few points before I run out of time here, 
and those are, how could you help us? One problem we have is we 
need to make sure that we have the rural broadband, the 
connectivity in place, and that is a place this Committee could 
really play.
    I am going to ask you to really think hard as you are 
making those investments into the USF fund, those sorts of 
things. We have to have them, because we need speed.
    I am going to tell you, if these millennials want their 
food to talk, and they do, they want traceability, the only way 
we are going to make it talk is to actually have connectivity 
all the way back to the field level. Keep that in mind.
    People are moving to town, but the land is never going to 
move, so we need the connectivity back. It is not so much for 
the residents. It will help, telemedicine, all those things, 
but it is so that we can use it on the farms.
    I want to wrap up by talking about on the challenges 
something Ken Zuckerberg said. Ken is the head of research for 
Rabobank, and in a statement he said: ``We believe that a 
standardized system is necessary to drive farmer adoption of 
digital agriculture services. Yet without a common data 
platform and operating system, it is unlikely that growers, or 
the vendors providing precision farming services, will fully 
capture the value associated with digital agriculture.''
    I would say this last: We are working with a lot of 
companies, from big ones like IDM and The Weather Company, 
great things that we can innovate and bring right in to groups 
like Farmobile and their PUC, to groups like IBM, and Deb's 
reporting tool that you are going to hear about. These things 
are there. We just have to integrate them, get them back to the 
farmer.
    Thank you for what you do for the American farmer. I am so 
appreciative of how you all build and create and protect the 
CLU layer and all those things that you do around section 6 and 
section 1619. Thank you for your hard work.
    [The prepared statement of Mr. Tiller follows:]

Prepared Statement of Billy Tiller, Co-Founder and Advisor to the CEO, 
          Grower Information Services Cooperative, Lubbock, TX
    Good morning. My name is Billy Tiller, founder of Grower 
Information Services Cooperative (GiSC). I am honored to be given the 
opportunity to talk to you about the state of ag data innovation today. 
My interests in this subject are personal; not only as the founder of 
GiSC, but also as a 4th generation farmer operating a 6,400 acre family 
farm in the high plains of west Texas, producing cotton, grain sorghum, 
and sunflowers. As a farmer who has long realized the value of digital 
data systems--from the efficiencies of digital information capture and 
data exchange to the productivity potential of data analysis--I began 
to see the almost endless use cases for technology applications for my 
operation and my partners' operations in the food & fiber supply chain. 
In 2010, I began a conversation with my longtime friend and associate 
Monty Edwards, a large crop insurance agent with deep generational 
roots in agriculture, about how digital technologies could improve our 
businesses, communications with partners, and ultimately, our quality 
of life.
    Through those conversations and additional investigation, we 
determined a unified, digital agri-information system with certain 
capabilities was needed to truly ``digitally transform'' farm operation 
information. Ideally, this information system would be capable of: (1) 
capturing and collecting significant farm operation data, (2) 
organizing and normalizing that data into logical data sets; and (3) 
sharing information, both from farmers to their trusted third parties 
and from those third parties back to farmers (with farmers in control 
of that sharing). At the time GiSC was formed in late 2012, the then 
commercially available technology existed to create an information 
system with these capabilities. However, at that time no such system, 
or similar solution, had been adopted by growers on any scale.
    Today, in 2017, that continues to remain the case. Farmers' data 
related to their operations are stored in ``data silos.'' Some of that 
data are stored in various ``clouds'', uploaded from technology 
applications purchased by fa[r]mers or provided to them by various 
vendors. Other data are stored locally in thumb drives and hard drives. 
Yet even more data are recorded on paper, stored on farmers' pickup 
truck dashboards and farm office desks and filing cabinets.
    GiSC sprang from the conclusion that the ``disconnect'' between 
current information collection and distribution practices and the 
digital possibilities was (and continues to be) at least as much a 
business organizational problem as a technology problem and involves 
the relative value of farmers' data. Unlike the data captured and 
communicated on typical technology/information platforms for consumers, 
such as social media platforms, farm operation data is, in essence, 
intellectual property--the farmer's trade secrets and ``know-how.'' 
Farmers are hesitant (and rightfully so) to entrust that data with 
third parties in which those farmers have no vested interest.
    Bridging this disconnect, for us, was to turn to an organizational 
form U.S. growers have turned to for generations to solve shared 
problems: farmer cooperatives. Granted, the vision of GiSC, as a data 
cooperative, was a unique idea back in 2012 and, as far as I am aware, 
remains a one-of-a-kind organization to this day. GiSC, as a 
technology/business platform, provides its farmer-members what no other 
platform can: real control over their Intellectual Property, their farm 
operation data.
    By offering a secure data platform service (an integrated system of 
technology tools and applications) to its members, GiSC can provide the 
obvious benefits of digitalization to an industry that finds itself 
outpaced by most other industries in information technology adoption, 
while at the same time protecting farmers' interest in their data. A 
cooperative is owned by its members. Farmers, by owning the service 
that provides the digital platform to capture, collect, and store 
operational data, are afforded two valuable and distinct advantages:

   Control--Through the data governance provided by GiSC (its 
        members and board of directors) and GiSC's primary value 
        proposition: growers own all the data that originates on their 
        operations or from their operations' activities.

   Value--GiSC is uniquely positioned to return value back to 
        its farmer-members for their willingness to include their data 
        in the Coop's digital platform, whether in the form of 
        operational benchmarks and insights, advanced data analytics, 
        and/or member patronage.
GiSC Today: At a Glance
    GiSC has grown from those initial conversations in 2010 and its 
formation in 2012 to a nation-wide cooperative, with 1,400 forward 
looking farmer-members from 41 states. GiSC has developed a vast 
network of loyal supporters who share its vision. As an example, GiSC 
has built a strong working relationship with the Agricultural Data 
Coalition (ADC), a coalition of research universities, prominent grower 
organizations and associations, equipment manufacturers, and regional 
input/service providers. These entities came together in an effort to 
help farmers better control and manage their data and to promote 
innovation in the industry. GiSC and ADC continue to work together to 
identify synergies and target opportunities for cooperation in areas in 
which the two organizations share mutually aligned values.
    The fact is many things have changed for GiSC since its inception 
to today. However, GiSC's three key objectives, the Coop's cornerstone 
and foundation, remain the same.

  (1)  Bring attention to farmers' vested interest in their farm 
            operation data and continue, with like-minded individuals 
            and organizations, to establish the precedent that growers 
            should (and must) own and control the data related to their 
            agricultural operations.

  (2)  Offer its farmer-members (and future members) a secure digital 
            platform that functions as a central repository for all of 
            the grower's operational data, while providing governance 
            of how that data is treated through the cooperative model.

  (3)  Return value back to its farmer-members as the digital platform 
            grows in both users and information.

    GiSC has faced a myriad of challenges raising the capital necessary 
to architect a robust digital platform, especially given the premise 
that ownership of that platform resides with its members. In spite of 
those challenges, GiSC stands on the precipice of bringing its vision 
to reality. GiSC is working with Ag Simplicity, LLC to integrate GiSC's 
licensed Authenticated Information Exchange platform with the 
information technology applications Ag Simplicity is currently 
developing. The integrated system, to be offered as AgSimpTM 
through GiSC to its members, provides key components for a robust, 
comprehensive digital platform solution. These components include:

   A simple on-farm data collection solution that provides 
        real-time operational data capture with little effort or time 
        from farm operators;

   A secure, cloud based Farm Information Management System 
        with the capabilities to:

     Interface with other technology tools and services 
            utilized in a farm operation, collecting the data generated 
            from those tools and services;

     Synchronize all data sources for the most complete 
            picture of an operation's activity; and

     Organize growers' information geo-spatially, tagging 
            information to its related farms/fields; [and]

   An agri-data exchange information and sharing platform that 
        facilitates the Coop's farmer-members sharing data with trusted 
        third parties, with member control over sharing capabilities.

    The future vision for GiSC and the AgSimpTM platform 
solution is to provide additional value back to its members through 
data analysis as the wealth of information in the system grows.
The Future of Farming: The Opportunity of Digital Ag
    From my experiences working with growers and industry leaders, I 
would say there is much evidence that the clear majority of farmers are 
not using data in any sort of systematic approach. This concept of 
utilizing farm data as a real operational toolset has been used in a 
million slide presentations to say that data-driven decision making is 
the next ag revolution, and Ag 2.0 (Ag Tech) heading to Ag 3.0 
(Internet of Things) will feed the ever-growing world with less arable 
land. However, nobody has cracked this nut; the opportunity is the 
grandest of visions, but it has not been proven at any scale.
    Ultimately, these circumstances should encourage us, not deter us, 
in the attempt to get a handle on this huge opportunity. Oh yes, the 
opportunity is real to utilize data to decrease costs and increase the 
efficiency of farming practices and make each field, the crop factory, 
perform to its potential, and we should view the current state of 
digital utilization on the farm as a blank slate: ripe for deploying 
the most powerful, yet cost effective, technologies available.
The Future of Farming: The Challenges of Digital Ag
Adoption Issues
    I want to take these few moments to cover the topic that I know 
best: the practical use of agricultural technology in my operation 
under ``in the field'' conditions. As a farm operator, I am in the 
middle of the pack regarding ag technology adoption, putting me in a 
similar position to most U.S. farmers in the market today. I am always 
searching for morsels of value: actual uses of technology to solve real 
problems in my operation. This is tough investigative work when the 
industry is fixated on the buzzwords of ``big data'' and ``game 
changing platforms''. The truth is ``you have to crawl before you 
walk.'' For all the ``game changing platforms'' flooding the market, 
there is not enough data captured in a useable format to create any 
real and usable analytics in the industry at any scale, much less the 
``big data'' answers. I think this is shocking to most people that are 
not inside of the daily operations of a farm.
    This is the dirty little secret in this data revolution: an actual 
shot has not been fired and the adoption of the current data solutions 
is at best defined as anemic. There has been a rash of ``soft-
adoption'' in the past 2 years as Ag Tech start-ups offered farmers 
free chances to try the tools. Evidently however, farmers are for the 
most part not attracted to ``cool tools'' or the latest fad. They don't 
want any tool that takes more time to learn and use than the perceived 
value any such tool garners. The second part of the problem is the huge 
data gap from operating in equipment-centric solutions that capture 
data with equipment, yet doesn't interact effectively with the 
operator. The operator has many ``points of light'' in his little black 
book, and these data points are often not captured in equipment-centric 
solutions. For example, the seed variety and chemical cocktail used at 
planting may never be entered to the controller. My guess is the most 
widely planted variety of corn, as it is labeled in the controller, is 
just ``CORN''.
    There are a multitude of reasons why this data is not entered into 
the controller. One of those reasons that should not be discounted is 
the concern over who else is able to use that data if the data are 
captured on a piece of equipment with telematics transferring that data 
directly into a vendor's cloud. Last, the real problem is that growers 
do not see the value in collecting this data, so they do not slow down 
to put the needed information it in the controller. This is a classic 
``the chicken or the egg'' problem because the value comes from 
recommendations based on the analysis of good data. The data is not 
fully collected and most data sets have tremendous gaps in the 
necessary components to make them valuable without much post collection 
operations.
    I have people say to me that it is impossible to have farmers 
purchase something they don't know they need. This is a challenge, but 
I am hopeful that we will see the adoption by growers. There are a 
couple anecdotes about Texas Instruments (TI) overcoming ``adoption'' 
challenges that I love. The first involved transistors. Pat Haggerty, 
then CEO of TI, realized that if he could create a radio small enough 
that it be carried on a person, these small radios would become a fad, 
developing a dynamic market for the transistor radio. He was right, but 
it was not just size: creating demand for the product meant getting the 
price point right too. A decade later Pat Haggerty challenged Jack 
Kilby, a TI lead engineer, to create a market for microchips by using 
them in ``pocket'' calculators. Pat wanted them small enough to fit in 
a shirt pocket and cheap enough to buy on impulse. The rest is history: 
people, who had previously not realized they needed or wanted such a 
product, began to buy the calculators. Turns out, almost everyone had a 
need, and was willing to pay, for the convenience of on the spot 
addition, subtraction, multiplication, and division. These markets were 
born out of TI's innovative approach. Not only its approach to 
technological innovation, but also, and maybe more importantly, its 
marketing innovations.
    We are at a similar place in the ag tech sector. There are obvious 
adoption challenges to overcome, but the answers are in sight. Solving 
the adoption dilemma is going to be defined by a product or set of 
products that solve real farm problems, especially problems which are 
either time consuming or expensive to solve today, and, much like the 
TI examples, the solutions must be packaged to attract grower's 
attention and their price points must be fair and reasonable in the 
grower's eyes. Second, as emphasized above, farm operation data is 
actually intellectual property and the grower must feel that the 
service provider has not overstepped in the use of the farmer's data 
nor violated his privacy rights. The challenges are daunting but I see 
a bright future for innovation that keeps in mind the value and the 
trust needed to handle the grower's data.
Time Factors
    The challenges that make data collection in agriculture such a 
difficult task is just the nature of the process. Data collection, if 
it is done well, is a time-consuming task that must be carried out 
systematically, but farmers are under constantly changing pressures: 
prioritizing, and then re-prioritizing the work for the day. Farming is 
a highly time sensitive occupation. If you were to ask me what 
differentiates the most profitable farmers from the least profitable 
farmers, I would say the differentiator is not any one farmer's land, 
equipment, education, or even technology. The most critical element to 
thriving in a farming business is ``timing''.
    Timing is everything, and it makes farming a race from start to 
finish. Timing in land preparation, seeding, fertilization placement, 
insecticide application, tillage, herbicide application, harvest, and 
marketing separates farmers into categories of failing, simply 
surviving, or thriving. Farming is a never-ending battle with the 
forces of nature and markets, and performing and making decision within 
these timing windows is difficult. External events outside the grower's 
control, such as weather, can at times humble the very best farm 
managers. This year, for me is just such an example: the cotton growing 
regions around Lubbock have been the most challenging in my 35 year 
career. Technology has helped me to compensate for the challenging 
year, but its benefits cannot overcome the forces beyond my control: 
hail, blowing sand, and other adverse conditions. However, it can help 
me analyze and diagnose my current situation and help me decide the 
most opportune direction to move to salvage the year.
    The point is a farmer is deciding at any given moment what activity 
will make the biggest difference, when the year is over, to the bottom 
line. Effective data analysis from effective data collection will make 
a difference, but, for farmers, questions remain. Will it make as big a 
difference as getting this field harvested before an approaching storm 
system blows down my grain as it is ready to be harvested? Will it make 
a difference if the approaching rains ``string out'' my beautiful white 
field of cotton and lower the quality and then the price? These sort of 
situations is how gaps in data collection happen and this is one reason 
why farmers are not going to commit to time-consuming and costly 
processes, platforms, or services. We are looking for the ``biggest 
bang for the buck'' in both real dollars and time invested in the 
process.
    However, I always am reminded of a recent statement of Jeremy 
Wilson, Technology Specialist at Crop IMS: ``At the end of the day you 
only get one chance to collect data accurately and if you miss it when 
that machine goes through the field, you cannot get it back.'' Jeremy 
is a good friend and a great proponent of precision ag. I know he is 
right. I also know if we don't collect harvest data in 2017, then the 
next chance we will have to collect harvest data is another year away. 
A farmer is going to need to see the real, useable value that can be 
garnered from this collected data for him to slow down any and do the 
necessary data collection, accurately and in real-time.
Ag Tech Hype
    One of the most significant challenges that is yet to be overcome 
by any single technology, or integrated technologies, in today's ag 
tech world is to create a product that: (1) solves a myriad of real 
pain points in agriculture, and (2) does so at a price point and time 
utilization metric that is attractive to growers. Both factors are 
needed to create value. Farmers are hopeful and are waiting, but the 
reality has not matched the hype. Technology companies, for the most 
part, have over promised what their ``game changing platform'' will do 
for the grower. Farmers, as a result, have become extremely skeptical 
about technology and how to incorporate it in their operations. I love 
a term used by Jason Tatge, CEO of Farmobile. He calls it ``Ag-Tech 
Fatigue''. Farmers have tried to see the value in the products offered, 
but the promises were over blown and using these products often became 
a leach on the grower's time. In many cases, even if the time consumed 
to use the product were not excessive, the actual cost of the product 
would be out of line with a farmer's expectation once the trial period 
was complete. Last, given the amount of time and money are acceptable, 
the grower may still be uncomfortable with using the product. That 
discomfort stems from questions regarding who owns the data collected 
and what rights technology providers have to use the data. At the end 
of the day this is the value proposition I am trying to find: I want to 
pay a fair and reasonable price for a product that delivers real 
information for making decisions on my farm in a timely manner and 
without the fear of my data being used by others without my express 
permission or in a way that may be ultimately detrimental to my farm or 
my neighbor's farms.
Ownership Concerns
    GiSC is trying to understand this complex world of data and its 
use. The issue is complicated, and one problem is that one size does 
not fit all. Deciding on a piece of data collecting equipment, based on 
its capabilities and features, is challenging enough, much less without 
the challenge involved in understanding the legalese. The fine print in 
an end-user license agreement (EULA) regarding my data is very complex. 
The various EULAs used in the market are so different and diverse that 
I could not even do justice to the discussion. In some instances, I own 
the raw data until it is on the provider's servers, but then once the 
data is stored on those servers, it becomes the provider's data. The 
provider, in many cases, will promise to never disclose my identity via 
a process known as anonymization. In many cases these EULAs will 
include phrases such as: ``the grower grants (the service provider) a 
perpetual worldwide license to the use of any data stored in the 
system.''
    GiSC is trying to understand what all this means. Let me be plain 
when I say that we may need to decide if we, as growers, can accept 
these EULAs, and the treatment of our data under them, as they are 
typically structured today. I have tried to hold to an altruist view of 
what a farmer's rights are in respect to data, but we may need to 
further investigate if there is potential value by coming to a new 
conclusion. GiSC and its grower members must decide the data model that 
brings the most value to the grower's bottom line and is the least 
disruptive to our world and our trusted partners.
Disruption Concerns
    Another challenge facing farmers and the ag tech space are the new 
players with little understanding of the grower's ecosystem and his 
network of advisors. An often overused term among technology startups 
is industry disruption. Technology focused magazines and journals are 
filled with examples of new companies with game changing platforms that 
are destined to disrupt entire industries. Disruption is a common theme 
in tech start-up pitch decks shown to investors as the start-ups seek 
funding. In the ag tech space, claims such as this or that start-up is 
going to be the ``Amazon of Agriculture''. This sounds great to 
investors, but in truth, most great ideas did not uproot an industry to 
gain a foot hold. The ``old guard'' are not the farmer's enemies; they 
are his support system: the seed dealer, fertilizer dealer, crop 
insurance agent, banker, equipment salesman, agronomist, entomologist, 
et cetera. This list represents people that the farmer knows on a 
personal level and contribute to farm's profitability. When problems 
arise on the farm, farmers can call their agronomist at 10 p.m. or 6 
a.m., and he will take their call. Farmers, and the businesses that 
serve them, are intertwined in a sonnet to produce a crop in a timely 
manner and at a cost that has them back next year to make new purchases 
from the vendor. Therefore, we must be cautious when we make blanket, 
reflexive statements, calling disruption ``good''. Peter Thiel, PayPal 
founder and venture capitalist offers this advice in his book ``Zero to 
One'':

          ``Silicon Valley has become obsessed with `disruption.' 
        Originally, `disruption' was a term of art to describe how a 
        firm can use new technology to introduce a low-end product at 
        low prices, improve the product over time, and eventually 
        overtake even the premium products offered by incumbent 
        companies using older technology . . . . However, disruption 
        has recently transmogrified into a self-congratulatory buzzword 
        for anything posing as trendy and new . . . . But if you truly 
        want to make something new, the act of creation is far more 
        important than the old industries that might not like what you 
        create. Indeed, if your company can be summed up by its 
        opposition to already existing firms, it can't be completely 
        new . . . .''
Industry Fears
    I am borrowing this often-said phrase from others because it is 
true: ``Ag is a small room, but I would not want to paint it.'' I 
proceed with caution here, even though a part of me would like to hit 
``reset'' and start over with ag digital technology, including data 
creation, data collection, data storage, and data analyzation. GiSC has 
tried to work closely with crop protection companies, input providers, 
and others with growers as customers, growers who would benefit from 
utilizing their data and aggregated data, improving those operations 
through benchmarking and other analytical tools.
    I have frankly been confounded by the fact that many, if not most, 
of these trusted partners of growers are not very open to the idea of 
their customers integrating the data captured and created via services 
offered by those trusted partners with other data related to the 
grower's operation, much less integrating that data in anonymized, 
aggregated data sets of multiple growers. In fact, many such services 
require the data captured/created from the service be stored within the 
service provider's system and only be utilized with the particular 
service provider's tools. The Ag Tech world is littered with those that 
live in fear of what a farmer might be able to do with better data. 
Therefore, most try to create a stand-alone data ecosystem, in which 
the farmer's data is stored for post-season analysis and creating next 
year's recommendations. This creates the ``data silos'' mentioned 
earlier. That data is never benchmarked against anything, and 
therefore, the potentially most significant value of such data derived 
from groups of farmers working together never materializes. In my 
opinion, if current farm groups don't find a way to move beyond this 
fear, then Silicon Valley will eventually have a heyday in the ag 
world, and the disruptions I cautioned against above, will become 
reality.
Rural Broadband and Connectivity
    The last challenge I need to mention involves the continuing need 
to address the inadequate communications infrastructure in rural areas. 
While population continues to become more concentrated in the most 
urban, populated areas, the simple fact remains that those populations' 
food and fiber continue to be supplied by farms in rural America. The 
dirt cannot move to town, and we need the means to move the data 
captured, created, and collected on the farm to ``clouds'', where the 
proper analysis can be performed. The rural communications initiatives 
in the U.S. need to be strengthened if we are going to be part of 
feeding the world.
    I would encourage Congress to continue, and even increase, support 
of FCC's initiatives including Connect America Fund and Mobility Fund. 
I understand that serving rural areas requires higher costs, but those 
costs pale in comparison to the cost of failing to assure adequate 
communications in rural areas, the price of which is the inability to 
meet the objective of feeding the world. The current trajectory of 
total-factor productivity gains in agriculture is inadequate to fill 
the gap between food production capacity and demand. According to 
knowledgeable sources, the current gap implies starvation of at least 
500M people by 2050, an alarming and totally unacceptable figure. 
Precision Agriculture advances and other technologies are required to 
fill that gap, but without new generations of fixed and mobile 
communications services in the rural areas that produce that food, 
those productivity gains will not be possible. We must have fast 
broadband available in rural homes and offices and wireless broadband 
at the field level with the capability of moving information to and 
from the cloud for processing, analytics and better decision making.
    There is great potential for innovation and entrepreneurship in 
rural America (Ag and other) but it requires fast Internet connections 
and 4G wireless services--the same tools that nourish entrepreneurship 
in metro areas. I make a plea that we cannot afford to deny our 
potential entrepreneurs and farmers the tools required to assure the 
maximum contribution to our economy.
Challenges of Digital Ag--Rabobank Summary
    I would like to conclude addressing the challenges of digital ag 
with a profound synopsis of the issue made by Rabobank Senior Research 
Analyst Kenneth Zuckerberg. In May 2017 Rabobank's RaboResearch issued 
a report titled ``Bungle in the Ag Tech Jungle, Cracking the Code on 
Precision Farming and Digital Agriculture.'' The full report is 
attached as an addendum to this written testimony with the permission 
of Rabobank Mr. Zuckerberg's summary is as follows:

          ``Agriculture has, over the course of its history, embraced 
        new technologies that improve productivity. 'Digital 
        agriculture' represents the latest wave of sector innovation--
        and while it offers many promising new technologies, farmer 
        adoption has remained quite modest. The consensus view is that 
        growers will not invest in new/unproven technologies during a 
        cyclical downturn, but there seems to be a bigger limiting 
        factor at work here. This nascent industry has been trying to 
        attract customers before the ecosystem has been properly 
        constructed. What we believe is missing is a standardized way 
        to gather and interpret data, and then translate actionable 
        insights to commercial users--insights which then, in turn, can 
        deliver value to growers. We believe that a standardized system 
        is necessary to drive farmer adoption of digital agriculture 
        serv-
        ices . . . Yet without a common data platform and operating 
        system, it is unlikely that growers, or the vendors providing 
        precision farming services, will fully capture the value 
        associated with digital agriculture.''
The Future of Farming: Innovation and Excitement
    I can complain every day about all the things that are wrong in the 
space, but that does not create what I need in my farm operation. The 
point is that even with problems that seem at times overwhelming, there 
are nuggets of gold; I find these nuggets all the time as I meet 
passionate founders of ag tech companies, pioneers who are trying to 
make a difference. They certainly are capitalist: they want to bring 
value to the grower and get paid for the value. I am also encouraged by 
ag groups such as AgGateway and the Open Ag Data Alliance (OADA) who 
are working to overcome the digital challenges growers face, and am 
especially encouraged as the ADC and GiSC continue working on behalf of 
the grower as a vanguard, allowing growers to focus on what they do 
best--producing a crop.
    Innovation is the engine of ever increasing agricultural 
productivity. As the founder of GiSC, I have the pleasure of seeing 
innovation happen in exciting new places. On my operation, I have 
tested many innovative products such as Farmobile's Passive Uplink 
Connection (PUC), which lets you collect data and seamlessly move it to 
a cloud regardless of the color of your equipment. For instance, just 
last week at my farm Blue River Technology tested its ``See & Spray'' 
technology, which utilizes computer vision and artificial intelligence 
to treat weed problems in the field. I see innovation from major 
technology companies. IBM, as an example, is recruiting and employing 
highly competent people with expertise in the agriculture industry and 
has developed powerful weather analytics that can be integrated into 
digital platforms. Major cellular service providers are also working on 
applications that leverage their networks to deliver digital tools to 
growers.
    Last, without a doubt, innovation is about to take ``front and 
center'' stage around the Internet of Things (IoT), as data collection 
in ag becomes almost automatic. The handheld computer we all carry 
around, the smartphone, enabled by IoT sensors on the farm, will 
provide a leap in the data acquisition landscape. The day of a farmer 
spending a couple of hours at the end of the day entering data will be 
a thing of the past; data capture and acquisition will just ``happen'' 
as we go about our daily business as farm operators. I am thankful to 
be seeing the beginning of Ag 3.0, and I would suggest you all stay 
tuned, because ``you ain't seen nothing yet''.
Last Words
    Somewhere, somehow, in this complex vast world of data utilization, 
an ecosystem will get built that will overcome the digital ag 
challenges: the value challenge, the time/resource constraints, and the 
trepidations of both growers and their trusted partners. Ultimately, 
this digital ecosystem must be grower-centric and provide for the 
exchange of information and knowledge, a world where information is not 
in ``data silos'' but is available to growers and growers' trusted 
advisors.
    Thank you for the opportunity to speak to you about a topic that I 
am very passionate. I believe unless we, as farmers, have ``stock'' in 
the data we create, in the next decade our world will completely 
change, or be lost completely. GiSC is a proponent Section 1619 of the 
2008 Farm Bill. We are not asking you to make it easier for others to 
access our USDA information. We appreciate that you understand that 
there is a right to privacy in our farm locations and our CLUs. 
Therefore, it would be beneficial to continue to guard the CLU (Common 
Land Unit) to protect the privacy of America's farmers. Please continue 
to be supportive of more digital solutions at FSA/RMA, including 
automating data delivery from USDA to the grower. GiSC is a willing 
partner in the task, and we will continue to work hand in glove with 
FSA to try and understand how to keep the grower in control of this 
digital world. Last, thank you for all the hard work you do for the 
American Farmer.
                                Addendum
RaboResearch
Bungle in the Ag Tech Jungle: Cracking the Code on Precision Farming 
        and Digital Agriculture
May 2017
Summary
---------------------------------------------------------------------------
     RaboResearch, Food & Agribusiness, far.rabobank.com. Kenneth S. 
Zuckerberg, Senior Research Analyst, +1 212 916 7998; Dirk Jan Kennes, 
Global Sector Strategist, +852 21032423.
---------------------------------------------------------------------------
    Agriculture has, over the course of its history, embraced new 
technologies that improve productivity. `Digital agriculture' 
represents the latest wave of sector innovation--and while it offers 
many promising new technologies, farmer adoption has remained quite 
modest. The consensus view is that growers will not invest in new/
unproven technologies during a cyclical downturn, but there seems to be 
a bigger limiting factor at work here. This nascent industry has been 
trying to attract customers before the ecosystem has been properly 
constructed. What we believe is missing is a standardized way to gather 
and interpret data, and then translate actionable insights to 
commercial users--insights which then, in turn, can deliver value to 
growers. We believe that a standardized system is necessary to drive 
farmer adoption of digital agriculture services--and within this 
report, we offer our take on how digital agriculture can add value to 
production agriculture. Yet without a common data platform and 
operating system, it is unlikely that growers, or the vendors providing 
precision farming services, will fully capture the value associated 
with digital agriculture.
Agricultural Innovation
The Four Waves
    The complex process of crop and livestock farming has evolved over 
the course of thousands of years, and digital agriculture is simply the 
latest wave of innovation. Advances in farming have historically 
followed the growth and prosperity of civilization, with mechanization 
playing an especially prominent role throughout history. The invention 
of the horse-drawn seed drill in 1700 by Englishman Jethro Tull was 
notable in that it allowed farmers to plant crops in rows more 
efficiently than could be done by hand.
    Several other useful farm machinery innovations came after the seed 
drill, namely the cotton gin, reaper/binder, combined harvester-
thresher, and gasoline-powered tractor. Collectively, these advances in 
machine technology fall into a category that we call the first wave of 
agricultural innovation.
    A second wave began in the 1940s, as chemicals used during the war 
years were repurposed for use in production agriculture. The associated 
yield benefits of applying nitrogen fertilizer and pesticides 
incentivized many U.S. farmers to focus on growing few types of crops, 
but on a much larger scale, abandoning the tradition of farming both 
crops and livestock. This wave also marked the birth of new farming 
practices--termed the `green revolution'--that helped improve crop 
productivity through more effective usage of synthetic fertilizers and 
crop production chemicals, as well as field irrigation.
    A third innovation wave started in the 1980s and 1990s, a period 
considered to be the birth of `precision farming,' a precise 
sustainability-oriented approach to farming that sought to produce more 
with fewer inputs and lower environmental impact. The third wave also 
included gains in plant breeding through genetic engineering and 
controlled pollination, genetics-based animal breeding, the use of 
global positioning systems (GPS) on tractors, as well as remote sensing 
technologies utilizing satellites, drones, and other UAVs.
    Digital agriculture is the fourth, and latest, wave of agricultural 
innovation--and one that has been largely funded by venture capital 
(VC) investors, along with the VC units of several major F&A and 
equipment companies. Since the beginning of 2014, over USD $6.5bn of 
capital has been invested in new precision farming and data-oriented 
technologies seeking to modernize farming for the digital age. These 
technologies have taken many shapes, forms, and sizes. These range from 
cloud-based software tools to hybrid hardware/software products that 
are 'smart' in that they can communicate with other connected devices 
wirelessly and digitally, with minimal human intervention.

           Table 1: The Four Waves of Agricultural Innovation
------------------------------------------------------------------------
              Wave                              Description
------------------------------------------------------------------------
First wave                        Mechanization (seed drill, cotton gin,
                                   reaper/binder, combined harvester-
                                   thresher, tractor)
Second wave                       Ag chemistry (nitrogen fertilizer,
                                   pesticides)
Third wave                        Precision farming (biology, plant and
                                   animal genetics, GPS)
Fourth wave                        Digital agriculture (smart hardware,
                                   analysis of temporal layers of
                                   spatial data, weather, and remote
                                   sensing to evaluate crop conditions)
------------------------------------------------------------------------
Source: Food and Agricultural Organization of the United Nations, USDA,
  Rabobank 2017.

    Another dimension of smart farming involves algorithms, artificial 
intelligence (AI), and machine learning, which, in essence, combines 
mathematics, data analytics, and predictive modeling to produce 
customized recommendations designed to help growers farm more 
efficiently, sustainably, and profitably.
Figure 1: Investments in Ag Technology (excluding food e-commerce), Q1 
        2014-Q4 2016
        
        
          Source: AgFunder AgTech Investing Report (Year in Review 
        2016) 2017.

    These customized recommendations are intended to be precise and 
prescriptive (building upon the original tenants of precision farming) 
in that they provide specific advice for managing critical tasks that 
occur throughout the growing/production season. For crop farmers, the 
prescriptions conceptually include instructions on what to plant, where 
and when to plant, what to apply to the soil and the plant (in the form 
of water, nutrients, and crop protection chemicals), how to most 
efficiently apply those inputs (e.g., on a variable rate basis), and 
when to harvest. For dairy and livestock farmers, the prescriptions 
offer direct guidance on when to feed the animal, provide vitamins and/
or medicine, guidance on when to milk and/or when to slaughter, and 
other herd management matters.
The Promised Value
    Digital agriculture offers the promise of greater income and lower 
volatility, utilizing data, mathematics, and logic to add value to farm 
decisions by removing human emotion and bias. In crop farming, the 
`promised value' for growers consists of optimal financial risk-
adjusted returns on the capital used to farm. The idea here being that 
improved agronomic practices, coupled with more precise field decisions 
(e.g., the timing and type of nutrient applications) tailored to local 
field and intra-field conditions, can create the promised value through 
higher crop yields and lower input costs (for example, lower and more 
precise nutrient and ag chemical applications), as well as operational 
efficiencies and time management (automatic, rather than manual 
collection of helpful data to drive decisions can allow farmers to 
complete tasks which cannot be automated). Another consideration is 
better grain quality and consistency, which results in additional value 
to midstream and downstream buyers.
    Below is a partial list of precision and digital technologies 
currently in use in the global farming community.

           Table 2: Leading Precision and Digital Technologies
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Auto-steering and guidance systems   Remote sensing (drones, UAVs)
Farm data management software        Satellite imagery (high-resolution)
Crop sensing/measurement             Variable rate technologies
Global positioning systems (GPS)     Yield monitors
Milking robots                       Yield maps
Precision irrigation & water usage   Wireless weather stations
 monitoring
------------------------------------------------------------------------
Source: Rabobank 2017

Barriers to Adoption
    Despite the strong conceptual foundation for using data-intensive 
tools in agriculture, farmer adoption has been quite low. While there 
are numerous reasons for this, we highlight five reasons that have been 
validated in our field research over the past 3 years with growers and 
data scientists:

   First, many new software technologies lack a clearly 
        articulated value proposition and, in fact, are not `proven' in 
        terms of demonstrating a calculated return or payback on 
        investment. This contrasts with the situation that occurs when 
        new seed technologies come to market, a process in which field 
        trials over multiple growing seasons culminate in a proof of 
        concept, helping to ensure customer trust and subsequent 
        product adoption. Furthermore, we have observed that certain 
        start-up companies and investors have an imperfect 
        understanding of telemetry, artificial intelligence (AI), and 
        data analytics. For example, just because a piece of equipment 
        used in farming is smart--it can collect data and transmit 
        data--such data must be further analyzed before it can be 
        translated into an actionable insight.

   Second, many farms actually lack the necessary technological 
        infrastructure (enterprise-grade business computing networks, 
        with proper/secure cloud storage and backup), beyond the 
        missing proof of concept, required to interact digitally with 
        industry farm management software systems offered by vendors 
        such as Conservis, Farmers Business Network, Granular, or SST. 
        Trying to get farmers to purchase both IT hardware and software 
        is hard enough in a favorable commodity price environment, as 
        farmers are typically resistant to change, given the `family 
        tradition' and experience-based nature of farming. Trying to do 
        this during a downturn in the crop cycle (which the industry 
        has been experiencing since commodity prices and farmer income 
        peaked in 2012/13) is, and has been, nearly impossible.

   Third, selling software as a service (SaaS) to financially 
        strapped farm customers has been a very difficult revenue 
        generation strategy, given these dynamics. Perhaps a better 
        strategy could be to provide growers basic software without 
        charge, to encourage use and adoption, while selling premium 
        add-on products and services to independent agronomists and 
        crop consultants who advise the growers.

   Fourth, data ownership and privacy has been a heated, widely 
        debated topic ever since big data entered the global farming 
        conversation. The matter is actually part of a larger consumer 
        privacy conversation involving medical records, web browsing 
        activities, and the resale of consumer data for use in 
        marketing. An innovative idea to ensure greater privacy is 
        creation of a farmer not-for-profit data cooperative, owned or 
        operated by growers or by an unbiased third party such as an 
        agricultural university. The industry has already seen examples 
        of these ideas in the form of Grower Information Services 
        Cooperative (GiSC) and Ohio State University's Agricultural 
        Data Corporative in the United States. Similar ideas have 
        gained traction in Europe, especially the Netherlands, among 
        both farmer cooperatives, as well as other groups, with a 
        notable example being the Farm-Oriented Open Data in Europe 
        (FOODIE) project in Spain, the Czech Republic, and Germany.

   Fifth, digital agriculture lacks a universal operating 
        platform in which to connect the entire ecosystem. At present, 
        digital farming lacks a standardized operating system and/or 
        data platform in which the value chain can upload, store, 
        validate, refine, cleanse, and analyze data and in which 
        relevant stakeholders can easily communicate with each other. 
        Based on our research interviews with data scientists from 
        various enterprise software and business analytics firms--
        including EMC, IBM, and Verisk--we believe that a data 
        warehouse and data analytics structure (which connects all 
        stakeholders: farmers, software vendors, equipment 
        manufacturers, and data analytics companies, and can enable 
        data sharing) is critical for digital agriculture to add value.
A Framework for Adding Value
    Creation of a universal data platform is critical. However, going 
from the `concept' stage to the `blueprint' stage is a complicated 
exercise. How this happens and who pays for it will depend on which 
party/parties take leadership in organizing and aligning the industry, 
and how much capital is set aside for building, testing, and 
maintaining required systems. Although it took 2 decades for electronic 
commerce to evolve after Internet access became available to the 
general public, we would expect creation of the necessary platforms for 
digital agriculture to occur much faster.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

          Source: CEMA 2007.
Concluding Thoughts
    Digital agriculture represents the newest--and perhaps the most 
promising--wave of industry innovation that, in our opinion, can help 
production agriculture operate more efficiently and sustainably, both 
in terms of long-term financial success and continued environmental 
stewardship.
    While this report approaches the subject of digital agriculture 
largely from the perspective of upstream farming (crop and livestock) 
and farm inputs (seeds, crop protection chemicals, fertilizer, and 
machinery) companies, a common operating system for data gathering, 
collaboration, and analytics is of critical importance to other players 
along the value chain.
    Midstream food companies and their supply chains (such as 
processors, storage, and transportation companies) are increasingly 
demanding more data and information. This is largely driven by the end-
consumer who demands greater transparency about the origin of 
commercially sold food. In our opinion, consumer sentiment and 
regulations governing the interest of consumers will ultimately guide 
the further evolution and adoption of digital agriculture.

 
 
 
Imprint
 
RaboResearch
 
    Food & Agribusiness, far.rabobank.com.
    Kenneth S. Zuckerberg, Senior Research Analyst,
 [email protected], +1 212 916 7998.
    Dirk Jan Kennes, Global Sector Strategist,
 [email protected], +852 21032423.
     2017--All rights reserved.
    This document is meant exclusively for you and does not carry any
 right of publication or disclosure other than to Cooperative Rabobank
 U.A. (``Rabobank''), registered in Amsterdam. Neither this document nor
 any of its contents may be distributed, reproduced, or used for any
 other purpose without the prior written consent of Rabobank. The
 information in this document reflects prevailing market conditions and
 our judgement as of this date, all of which may be subject to change.
 This document is based on public information. The information and
 opinions contained in this document have been compiled or derived from
 sources believed to be reliable; however, Rabobank does not guarantee
 the correctness or completeness of this document, and does not accept
 any liability in this respect. The information and opinions contained
 in this document are indicative and for discussion purposes only. No
 rights may be derived from any potential offers, transactions,
 commercial ideas, et cetera contained in this document. This document
 does not constitute an offer, invitation, or recommendation. This
 document shall not form the basis of, or cannot be relied upon in
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 in this document is not intended, and may not be understood, as an
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 This document is governed by Dutch law. The competent court in
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 Agribusiness.
 


    The Chairman. Thank you, Mr. Tiller. Very well said.
    Mr. Janzen, you are recognized for 5 minutes.

     STATEMENT OF TODD J. JANZEN, J.D., PRESIDENT, JANZEN 
             AGRICULTURAL LAW LLC, INDIANAPOLIS, IN

    Mr. Janzen. Good morning, Chairman Crawford, Ranking Member 
Nolan, and Members of the Subcommittee. My name is Todd Janzen. 
I am President and attorney of Janzen Agricultural Law LLC, 
which is a law firm based in Indianapolis, Indiana. And we 
serve the needs of farmers, agribusiness, and also ag 
technology providers.
    You are going to hear a lot today about agricultural data 
and this movement of data from on-farm into cloud-based 
platforms. Yield data is a good example of that. In the past, 
farmers always kept this data on their farms, and now we are 
seeing a real movement towards moving that into third-party 
platform providers that host this data somewhere else.
    And together with this movement of data off the farm into 
the possession of third parties have come a lot of concerns. 
And groups like American Farm Bureau Federation have taken 
numerous polls about how farmers feel about this. And in my 
materials, I have more detail, but I would summarize it by 
saying there are really three concerns that I see. First, is a 
lack of trust among farmers in these ag technology providers, 
because they are giving up part of what makes up their 
livelihood. Second, is a loss of control to these companies. 
And third, would be frustrations with the complexity of the 
legal agreements they are asked to sign.
    And, of course, farmers are no strangers to contracts. They 
sign things all the time. But now they are being asked to check 
an ``I accept'' box that has some pretty important consequences 
for what happens to their data, followed by pages and pages of 
legal type that they may or may not read.
    American Farm Bureau Federation really led an effort a few 
years ago to come up with some ground rules for how companies 
should use and control ag data, and this culminated in a 
document called the Privacy and Security Principles for Farm 
Data, which I refer to as the Core Principles for farm data. 
And 37 companies signed onto these and said they were going to 
implement these core principles in their contracts with 
farmers. I was fortunate to be involved in those discussions 
and be part of that as that document came to be.
    But just creating Core Principles isn't really enough, 
because if companies don't follow these Core Principles, we 
need some way to verify that. And so that is one of the things 
I want to talk about today.
    Farm Bureau, National Farmers Union, and commodity groups 
for corn, soy, wheat, soybeans, sorghum, and potatoes all came 
together and formed an organization that could help verify 
whether or not companies were being transparent with farmers' 
data. And what they came up with was a way to recognize those 
companies after going through a certification process. And this 
is the seal of approval that this organization provides to 
companies that says Ag Data Transparent. And a company that 
goes through a certification process can obtain use of that on 
their marketing materials.
    The seal really recognizes companies that have been through 
a certification process. And in order to get the seal, ten 
questions are asked of these companies, such as what data are 
you collecting from farmers, how are you using that data, and 
then can a farmer retrieve that data back from this company at 
a later date if they want to.
    My role at Janzen Agricultural Law is to administer this 
project, and that is one reason I am here today. We review 
these companies' submissions when they fill out these ten 
question forms, and we check to see are they really being 
transparent with how they use farmers' ag data.
    I am proud to say that eight companies have already been 
through this certification process and been awarded the Ag Data 
Transparent seal. In fact, MyAgData, Deb Casurella's company, 
was the very first one to obtain use of the seal. But there are 
still many more that could go through and become certified, and 
we hope that they do.
    We also post the answers to these ten questions when 
companies go through the process online at 
agdatatransparent.com, and in my materials I have a lot more 
detail about that.
    I will just conclude by saying there is still a lot of work 
to be done here. There are still a lot of companies that should 
go through the certification process but haven't as of today. 
There are still a lot of complex, complicated contracts that 
farmers are asked to sign, and we can do better as a legal 
community to address that as well.
    I hope that when different companies come before you as a 
Committee you will ask them, do you have the Ag Data 
Transparent seal? Or if companies have been through the 
process, you will congratulate them for achieving that.
    I am honored to speak with you here today about this effort 
and the work that I do, and I welcome your questions later 
today. Thank you.
    [The prepared statement of Mr. Janzen follows:]

     Prepared Statement of Todd J. Janzen, J.D., President, Janzen 
                 Agricultural Law LLC, Indianapolis, IN
    Good morning, Chairman Crawford, Ranking Member Nolan, and Members 
of Subcommittee. My name is Todd J. Janzen, I am the President and 
attorney with Janzen Agricultural Law, LLC, a law firm based in 
Indianapolis, Indiana that serves the needs of America's farmers, ag 
technology providers, and agribusinesses.
    One of the reasons we founded Janzen Ag Law in 2015 was that we 
wanted to be at the forefront of the changes that have been occurring 
on the farm for the past few years. Farms are becoming more digital 
every day, and together with that digitalization is a movement of 
agricultural data stored on computers in the farm office to cloud-based 
data storage devices. Agricultural data (ag data) can be many things, 
including yield data, soil data, planting information, weather data, 
financial data, etc. This marks the first time in history that the 
majority of the information that farmers generate and use on their 
farms has been moved into the hands of companies outside the farm.
    As a result, we are seeing a digital land-rush occurring across the 
United States. The past few years have seen millions of dollars pour 
into ag data startups from Silicon Valley to Kansas City. Historic 
legacy agricultural companies, such as John Deere, are also at the 
forefront of this movement by expanding their product offerings to 
include cloud-based data storage platforms. All of these companies are 
scrambling to get the most acres of data into their platforms so that 
when consolidation of ag technology providers (ATPs) begins, they are 
in the strongest position.
    In the race to the cloud, we must also be cautious so that the 
American farmer is not left behind. Today I will address the issues 
facing farmers as digitalization occurs and how the industry has begun 
to address these issues.
Issues Facing Farmers as Ag Data Moves into the Cloud
    American Farm Bureau Federation (Farm Bureau) conducted a poll of 
over 400 farmers in 2016 to understand their issues concerning ag data 
privacy, security, and control. The poll highlighted what are 
essentially three issues that continue to come up when asking farmers 
about ag data concerns:
1. Lack of Trust
    Seventy-seven percent (77%) of farmers expressed concern about 
which entities can access their farm data after the data is uploaded to 
cloud-based servers. The same percentage expressed concern about 
whether uploading the data could cause it to be used for regulatory 
purposes.
    Sixty-seven percent (67%) of farmers said they consider how outside 
parties will use their ag data when deciding whether to entrust their 
data with a certain ATP.
    A farmer's lack of trust can come from many sources, but I 
speculate it originates in two places. Many ag data companies are new. 
Ag data startups lack the goodwill that older agricultural companies 
have spent years building. They have new sales associates who are 
strangers to the farm, or in some instances, strangers to agriculture. 
They are viewed as outsiders.
    Older, long-established agricultural companies do not suffer from a 
general lack of trust with the farmer, since they have spent years 
building that relationship. But when a seed company, equipment 
manufacturer, or ag retailer begins offering an ag data platform to 
store the farmer's ag data, farmers often are skeptical about whether 
the storage provider is trying to help the farmer raise a better crop 
or using the ag data to sell the farmer more or higher-priced goods and 
services. This skepticism may erode a farmer's trust.
2. Concern with Losing Control
    Farmers are also concerned that uploading their ag data to cloud-
based platforms means they will lose control over downstream uses. 
Sixty-six percent (66%) of respondents in the Farm Bureau poll believe 
farmers should share in the potential financial benefits from the use 
of their data beyond the direct value they may realize on their farm.
    Farmers raised concerns that ATPs could use their ag data to gain 
an unfair advantage in the marketplace. Sixty-one percent (61%) of 
farmers expressed worry that ATPs could use their data to influence 
market decisions.
    These concerns arise from a fundamental legal truth about ag data--
there are no laws that specifically protect farmers' privacy and 
security concerns. Ag data is not typically ``personally identifiable 
information,'' such that it would be protected by state laws which 
prevent misuse of personal information like name, address, and phone 
number. Nor does ag data fit into a class of data that Congress has 
chosen to protect legally, such as medical information (HIPAA). 
Finally, ag data does not neatly fit into existing legal protections 
for intellectual property, such as patents, trademarks, or copyrights. 
Ag data ultimately may be deemed a trade secret under existing state 
and Federal trade secret laws, but that will depend upon whether courts 
interpret existing statutes to include information such as agronomic 
data.
    These uncertainties mean that the contracts between farmers and ag 
tech providers are very important. These contracts will determine 
farmers' rights in the ag data their farms create.
3. Frustration with Complexity of Current Legal Agreements
    Fifty-nine (59%) percent of farmers were confused about whether 
current legal agreements allowed ATPs to use their ag data to market 
other services, equipment, or inputs back to them. Zippy Duvall, 
President of Farm Bureau, said: ``This indicates a higher level of 
clarity and transparency is needed to secure grower confidence. One of 
the topics I hear most about from farmers on the data issue is having a 
clear understanding about the details of `Terms and Conditions' and 
`Privacy Policy' documents we all sign when buying new electronics. You 
should not have to hire an attorney before you are comfortable signing 
a contract with an ag technology provider.''
    Our experience as a law firm working in this area confirms that 
this is a real problem for farmers and ATPs. There is no standard 
agreement that governs ag data transfer, use, and control by ATPs. 
Instead, technology companies have adapted other forms of legal 
agreements to try to address the issues associated with moving ag data 
into cloud-based platforms, but with limited success. A farmer seeking 
to compare two similar products today might find that they are governed 
by two very different sets of contracts.
    This only adds to a farmer's confusion. If we want to make 
technology easy to embrace and use--and we do--then we need to simplify 
the contracts farmers sign when implementing new ag data technology on 
the farm.
How the Industry Is Addressing Farmers' Concerns
1. The Privacy and Security Principles for Farm Data
    Farm Bureau, National Farmer's Union, and national commodity 
organizations for corn, soybeans, wheat, and sorghum, led an effort in 
2014 to establish fundamental principles for companies working in the 
ag data space. These organizations held a series of meetings where 
roundtable discussions occurred among industry stakeholders, such as 
John Deere, CNH Industrial, AGCO, Monsanto, DuPont Pioneer, Beck's 
Hybrids, Dow Agrosciences, Farmobile, and other ag technology 
providers. The culmination of these efforts was the drafting of the 
``Privacy and Security Principles for Farm Data,'' also known as ag 
data's ``Core Principles.''
    The Core Principles address thirteen key elements related to ag 
data. These include:

   Education.

   Ownership.

   Collection, Access and Control.

   Notice.

   Transparency and Consistency.

   Choice.

   Portability.

   Terms and Definitions.

   Disclosure, Use, and Sale Limitation.

   Data Retention and Availability.

   Contract Termination.

   Unlawful or Anti-Competitive Activities.

   Liability & Security Safeguards.

    After releasing the Core Principles in 2014, Farm Bureau asked 
companies to voluntarily ``sign on'' to the document. As of July 2017, 
the following organizations and companies have agreed to implement the 
Core Principles into their contracts with farmers.

 
 
 
AGCO                     DuPont Pioneer           National Farmers Union
Ag Connections, Inc.     Farm Dog                 National Potato
                                                   Council
Agrible, Inc.*           Farmobile LLC *          National Sorghum
                                                   Producers
AgSense                  Granular *               North American
                                                   Equipment Dealers
                                                   Assoc.
AgWorks                  Grower Information       OnFarm
                          Services Cooperative
Ag Leader Technology     GROWMARK, Inc.*          Raven Industries
American Farm Bureau     Independent Data         Reinke Manufacturing
 Fed.                     Management LLC *         Co., Inc.
American Soybean Assoc.  John Deere               Syngenta
Beck's Hybrids *         Mapshots, Inc.           The Climate
CNH Industrial           National Assoc. of        Corporation--a
                          Wheat Growers            division of Monsanto
Conservis *              National Barley Growers  USA Rice Federation
                          Assoc.
Crop IMS                 National Corn Growers    Valley Irrigation
                          Assoc.
CropMetrics              National Cotton Council  ZedX Inc.
Dow AgroSciences LLC
 
* Company certified to be Ag Data Transparent. For more information,
  visitwww.agdatatransparent.com.

    A copy of the Core Principles is attached as Exhibit A.
2. The Ag Data Transparent Effort
    Having the Core Principles in place was a great starting point for 
the ag data industry to address farmers' concerns with ag data privacy, 
use, and control. However, the Core Principles are only guidelines, and 
only valuable if companies incorporate the Core Principles into their 
contracts with farmers. Therefore, following the release of the Core 
Principles, several farm groups and industry stakeholders worked 
together to create an independent verification tool that could help 
farmers determine if ag tech providers are abiding by the Core 
Principles. This tool is called the Ag Data Transparency Evaluator. It 
is a simple three-step process:

   Participating companies must answer ten questions about how 
        they store, use, and transfer ag data.

   The ten question answer form is reviewed by an independent 
        third party for transparency and completeness.

   If the evaluation is acceptable, the company is awarded the 
        ``Ag Data Transparent'' seal of approval for use on its future 
        marketing materials.

    Participation is voluntary, but all companies that signed onto the 
Core Principles have been asked to participate in the Ag Data 
Transparent effort as well.
a. The 10 Question Evaluation
    Here is a list of the ten questions that each participant is asked 
to answer as part of the evaluation:

------------------------------------------------------------------------
 
-------------------------------------------------------------------------
1. What categories of data does the product or service collect from me
 (the farmer)?
2. Do the Ag Technology Provider's (ATP's) agreements address ownership
 of my data after my data is transferred to the ATP?
3. If the ATP contracts with other companies to provide data related
 services, does the ATP require these companies to adhere to the ATP's
 privacy policies with me?
4. Will the ATP obtain my consent before providing other companies with
 access to my data?
5. After I upload data to the ATP, will it be possible to retrieve my
 original complete dataset in an original or equivalent format?
6. Will the ATP notify me when its agreements change?
7. Will the ATP notify me if a breach of data security occurs that
 causes disclosure of my data to an outside party?
8. Upon my request, can my original dataset be deleted when my contract
 with the ATP terminates?
9. Do the ATP's agreements establish how long my original datasets will
 be retained?
10. Do the ATP's agreements address what happens to my data if the ATP
 is sold to another company?
------------------------------------------------------------------------

    Answers to all questions except for question 1 are ``yes'' or 
``no,'' but companies are also given space to explain their answer.
b. Reviewing the 10 Question Evaluation
    After an ag tech company completes the ten question evaluation 
form, the company submits its answers to an independent third party 
evaluator to determine compliance. Janzen Agricultural Law LLC is the 
law firm that has been selected to conduct the evaluations. After 
reviewing a company's answers, we typically go back to that company 
with suggestions for improving its contracts and policies to bring into 
compliance with Core Principles. Companies then make those revisions to 
their contracts and policies and resubmit their ten question form. Once 
a company's answers align with the Core Principles, we send an official 
letter designating the company as ``Ag Data Transparent'' and 
authorizing use of the seal of approval.
    The final, approved ten question answer forms are posted on the Ag 
Data Transparent website at www.AgDataTransparent.com Farmers can 
research and review companies' answers online. The website requires no 
log in and is free to use. An example of the home page is attached as 
Exhibit B.
c. The Ag Data Transparent Seal of Approval


    Companies that undergo evaluation and are approved as ``Ag Data 
Transparent'' may then use the seal of approval on their websites and 
marketing materials. To date, eight companies have completed the 
evaluation and been approved as ``Ag Data Transparent.'' These eight 
companies are:

   AgIntegrated, Inc.

   Agrible, Inc.

   Beck's Hybrids.

   Conservis Corporation.

   Farmobile.

   Granular.

   GROWMARK.

   Independent Data Management LLC.

    The participants are diverse, from a Silicon Valley ag tech 
startup, to a Midwestern seedcompany, to one of the nation's largest 
farm cooperatives and ag retailers. These companiesmay use the Ag Data 
Transparent seal on their websites, denoting their compliance with 
theCore Principles. Farmers who see the seal of approval will know the 
company went through thetime and effort to certify its contract.
    The Ag Data Transparent process addresses farmers' three main 
concerns with ag data. First, the process instills trust. No company 
submits its contracts to a voluntary evaluation unless the company is 
willing to revise its contracts, as necessary, to bring them into 
compliance with the Core Principles. Second, loss of control is 
addressed by requiring tech providers to obtain farmer consent before 
transferring data to third parties. Finally, farmers' complexity 
frustration is addressed by condensing all of a tech provider's 
contracts into a ten question form that answers the questions farmers 
want to know. The Ag Data Transparent process makes contracts better.
d. Who is behind the Ag Data Transparent effort?
    The Ag Data Transparent effort is governed by a nonprofit 
corporation, the Ag Data Transparency Evaluator Inc. The corporate 
bylaws create two classes of directors: (1) farm organizations that are 
made up of farmer-member organizations; and (2) diverse ag technology 
providers, referred to as ``industry partners.'' The farm organizations 
are American Farm Bureau Federation, American Soybean Association, 
National Corn Growers Association, National Farmers Union, National 
Sorghum Producers, National Association of Wheat Growers and National 
Potato Council. The industry partner board members are ag technology 
providers ranging from large corporations, medium-sized companies, and 
ag tech startup organizations.


    Janzen Agricultural Law LLC, which serves as the administrator of 
the program and conducts the evaluation reviews, is not a board member.
3. The Ag Data Use Policy
    Our law firm also drafts terms of service, license agreements, 
privacy polices, and other contracts for ag technology providers. This 
work has confirmed many concerns facing farmers today when it comes to 
ag data. We see how companies struggle to communicate clearly how they 
intend to store, use, and transfer ag data.
    For these reasons, we have encouraged companies to draft ``data use 
policies'' or ``data use agreements'' for their farmers. In a data use 
contract, the technology provider addresses all of the issues raised by 
the ten questions and the Core Principles. For example, a data use 
policy will explain what information the provider collects and what 
permission is required before the provider transfers that data to 
another party.
    From our standpoint, the Ag Data Transparent effort has helped 
drive more technology providers into creating data use policies. Thus, 
the effort has paid dividends even for some companies that have not 
participated in evaluations because it has caused them to rethink how 
they are contracting with farmers.
Conclusion
    The Ag Data Transparent effort is great step towards bringing 
transparency to ag data contracts between farmers and their technology 
providers. Wider participation would certainly help the effort, but 
that is up to the industry. Out of the dozens of ag tech providers with 
cloud-based platforms on the market today, only eight have embraced the 
process. To be fair, others are in the process but adoption could still 
be faster and better.
    Farmers should ask their technology providers why they have not 
earned that Ag Data Transparent seal. This Subcommittee should ask 
technology providers this question as well when they come before you to 
testify.
    Thank you, Mr. Chairman, for your time and attention to this 
important issue. I look forward to answering any questions you may have 
for me.

Todd J. Janzen, Janzen Agricultural Law LLC.
                               Exhibit A
Privacy and Security Principles for Farm Data
(Ag Data's Core Principles)
November 2014

    The recent evolution of precision agriculture and farm data is 
providing farmers with tools, which can help to increase productivity 
and profitability.
    As that technology continues to evolve, the undersigned 
organizations and companies believe the following data principles 
should be adopted by each Agriculture Technology Provider (ATP).
    It is imperative that an ATP's principles, policies and practices 
be consistent with each company's contracts with farmers. The 
undersigned organizations are committed to ongoing engagement and 
dialogue regarding this rapidly developing technology.
    Education: Grower education is valuable to ensure clarity between 
all parties and stakeholders. Grower organizations and industry should 
work to develop programs, which help to create educated customers who 
understand their rights and responsibilities. ATPs should strive to 
draft contracts using simple, easy to understand language.
    Ownership: We believe farmers own information generated on their 
farming operations. However, it is the responsibility of the farmer to 
agree upon data use and sharing with the other stakeholders with an 
economic interest, such as the tenant, landowner, cooperative, owner of 
the precision agriculture system hardware, and/or ATP, etc. The farmer 
contracting with the ATP is responsible for ensuring that only the data 
they own or have permission to use is included in the account with the 
ATP.
    Collection, Access and Control: An ATP's collection, access and use 
of farm data should be granted only with the affirmative and explicit 
consent of the farmer. This will be by contract agreements, whether 
signed or digital.
    Notice: Farmers must be notified that their data is being collected 
and about how the farm data will be disclosed and used. This notice 
must be provided in an easily located and readily accessible format.
    Transparency and Consistency: ATPs shall notify farmers about the 
purposes for which they collect and use farm data. They should provide 
information about how farmers can contact the ATP with any inquiries or 
complaints, the types of third parties to which they disclose the data 
and the choices the ATP offers for limiting its use and disclosure.
    An ATP's principles, policies and practices should be transparent 
and fully consistent with the terms and conditions in their legal 
contracts. An ATP will not change the customer's contract without his 
or her agreement.
    Choice: ATPs should explain the effects and abilities of a farmer's 
decision to opt in, opt out or disable the availability of services and 
features offered by the ATP. If multiple options are offered, farmers 
should be able to choose some, all, or none of the options offered. 
ATPs should provide farmers with a clear understanding of what services 
and features may or may not be enabled when they make certain choices.
    Portability: Within the context of the agreement and retention 
policy, farmers should be able to retrieve their data for storage or 
use in other systems, with the exception of the data that has been made 
anonymous or aggregated and is no longer specifically identifiable. 
Non-anonymized or non-aggregated data should be easy for farmers to 
receive their data back at their discretion.
    Terms and Definitions: Farmers should know with whom they are 
contracting if the ATP contract involves sharing with third parties, 
partners, business partners, ATP partners, or affiliates. ATPs should 
clearly explain the following definitions in a consistent manner in all 
of their respective agreements: (1) farm data; (2) third party; (3) 
partner; (4) business partner; (5) ATP partners; (6) affiliate; (7) 
data account holder; (8) original customer data. If these definitions 
are not used, ATPs should define each alternative term in the contract 
and privacy policy. ATPs should strive to use clear language for their 
terms, conditions and agreements.
    Disclosure, Use and Sale Limitation: An ATP will not sell and/or 
disclose non-aggregated farm data to a third party without first 
securing a legally binding commitment to be bound by the same terms and 
conditions as the ATP has with the farmer. Farmers must be notified if 
such a sale is going to take place and have the option to opt out or 
have their data removed prior to that sale. An ATP will not share or 
disclose original farm data with a third party in any manner that is 
inconsistent with the contract with the farmer. If the agreement with 
the third party is not the same as the agreement with the ATP, farmers 
must be presented with the third party's terms for agreement or 
rejection.
    Data Retention and Availability: Each ATP should provide for the 
removal, secure destruction and return of original farm data from the 
farmer's account upon the request of the farmer or after a pre-agreed 
period of time. The ATP should include a requirement that farmers have 
access to the data that an ATP holds during that data retention period. 
ATPs should document personally identifiable data retention and 
availability policies and disposal procedures, and specify requirements 
of data under policies and procedures.
    Contract Termination: Farmers should be allowed to discontinue a 
service or halt the collection of data at any time subject to 
appropriate ongoing obligations. Procedures for termination of services 
should be clearly defined in the contract.
    Unlawful or Anti-Competitive Activities: ATPs should not use the 
data for unlawful or anticompetitive activities, such as a prohibition 
on the use of farm data by the ATP to speculate in commodity markets.
    Liability & Security Safeguards: The ATP should clearly define 
terms of liability. Farm data should be protected with reasonable 
security safeguards against risks such as loss or unauthorized access, 
destruction, use, modification or disclosure. Polices for notification 
and response in the event of a breach should be established.
    The undersigned organizations for the Privacy and Security 
Principles of Farm Data as of April 1, 2016.

 
 
 
AGCO                     DuPont Pioneer           National Potato
                                                   Council
Ag Connections, Inc.     Farm Dog                 National Sorghum
                                                   Producers
Agrible, Inc.*           Farmobile LLC *          North American
AgSense                  Granular *                Equipment Dealers
                                                   Association
AgWorks                  Grower Information       OnFarm
                          Services Cooperative
Ag Leader Technology     GROWMARK, Inc.*          Raven Industries
American Farm Bureau     Independent Data         Reinke Manufacturing
 Federation               Management LLC *         Co., INC.
American Soybean         John Deere               Syngenta
 Association
Beck's Hybrids *         Mapshots, Inc.           The Climate
CNH Industrial           National Association of   Corporation--a
                          Wheat Growers            division of Monsanto
Conservis *              National Barley Growers  USA Rice Federation
                          Association
Crop IMS                 National Corn Growers    Valley Irrigation
                          Association
CropMetrics              National Cotton Council  ZedX Inc.
Dow AgroSciences LLC     National Farmers Union
 
* Company that has also certified its policy is compliant with the Ag
  Data Transparency Evaluator. For more information, visit
  www.agdatatransparent.com.

                               Exhibit B
Ag Data Transparent Homepage (www.AgDataTransparent.com)
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

    The Chairman. Thank you, Mr. Janzen.
    Ms. Casurella, you are recognized for 5 minutes.

        STATEMENT OF DEBORAH CASURELLA, CHIEF EXECUTIVE
           OFFICER, INDEPENDENT DATA MANAGEMENT, LLC,
                           HUDSON, WI

    Ms. Casurella. Thanks for the opportunity to be here today. 
I am going to talk about production agriculture, also known as 
precision ag, its impact on farmers, the USDA, and crop 
insurance companies.
    A key way to help farmers, the government, and taxpayers 
realize the benefits of precision ag technology is to open the 
third-party channel and allow producers to report from home. 
This can be done with commercial software, much like the IRS 
did in 1986, by allowing taxpayers to use products like 
TurboTax to report their acres.
    To me, the most impressive pieces of precision ag are the 
sensors connected to control systems that run the equipment. 
This technology allows farmers to achieve better yields, use 
fewer resources, and reduce the impact on the environment, and 
ultimately meet world food demand.
    The adoption rate is increasing. Estimates say that 
precision ag is already used on 70 percent of acres. A 
significant byproduct is data. Farmers and ranchers are 
collecting all sorts of information, but they are last to the 
trough to get benefits from their own data.
    Both FSA and crop insurance agents require farmers to 
submit an annual report of farm acres, but we don't make it 
easy for them. Farmers who use precision ag start with an 
electronic version of their planting information, including the 
exact geographic location of each and every seed in the ground. 
The current reporting process will see that data translated 
somewhere between three and eight times back and forth between 
tabular data and maps, from electronic to paper and back, all 
to end up in electronic form where it started, but in 
government systems.
    For 7 years, the USDA has been working on a new system to 
share common information electronically between agencies. For 
the past 3 crop years, farmers have been able to report the 
common information just once, either to the FSA or their crop 
insurance agent, and have that information electronically 
shared with the other. This is a good step and a direct result 
of the Acreage Crop Reporting Streamlining Initiative, ACRSI, 
which was reauthorized in the 2014 Farm Bill.
    The reporting standards for RMA and FSA include geospatial 
data, the map, along with crop and acreage information, but 
much of that information is not required, which causes two 
problems. First, even if a crop insurance agent collects the 
geospatial data, and many do, they don't provide it to the FSA 
because it is not required. And second, FSA and RMA don't 
exchange that optional data, the maps, with each other. Because 
the data is incomplete, the other agency doesn't use it.
    Frustrated farmers must still visit both the FSA county 
office and their crop insurance agent and share the same 
information to complete reporting. Three main reasons for the 
visit. First, farmers must validate and sign their acreage 
report in each office. Second, farmers must provide program-
specific information to the second agency that wasn't collected 
by the first agency. And third, farmers need to complete their 
maps.
    The USDA knows it is a problem and is actively working on 
it. In 2015, as part of the ACRSI initiative, FSA conducted a 
pilot for electronic acreage reporting using precision ag data. 
One of the things the pilot tested was allowing farmers to use 
third-party commercial software to report their acres. 
Independent Data Management, using MyAgData, was selected to 
test that channel, and the pilot was an overwhelming success. 
MyAgData was a bridge, because it included words, numbers, and 
maps, not just the required data but also the optional data, 
and one report could be used for both FSA and RMA.
    Because the data was more precise, participants reported an 
average of 4.7 percent fewer acres. That means a lower 
insurance premium for the farmer, decreased premium subsidy 
funded by taxpayers, lower indemnity for crop insurance 
companies and the RMA, and a reduction in claims because yield 
was not diluted across unplanted acres.
    Think of the numbers with expanded use. If 25 percent of 
the acres were reported using a grower's actual field 
boundaries, and the average reported acres were 4.7 lower, 
producer premiums and taxpayer subsidies could be reduced by up 
to $179 million annually. That is a conservative number, but 
$179 million is a reasonable number to expect with 25 percent 
of acres.
    And that is only insurance premiums. What are the savings 
on indemnities? What if this also applied to farm programs?
    Again, just using map tools to do reporting changed the 
agency's visit length from hours to minutes, and despite the 
success the third-party channel remains closed.
    USDA can accept the standard. They share it between 
agencies today. Both FSA and RMA understand the benefits, and 
the FSA union supports it. All that is required are minor 
system changes.
    Farmers plant fields. Let them report what they plant. It 
is more accurate. It saves time and money for farmers and the 
agencies and it saves taxpayer dollars.
    Complete accurate data is the lifeblood of farm programs, 
crop insurance, and conservation programs. The data is already 
being collected. Let's use it.
    Thank you.
    [The prepared statement of Ms. Casurella follows:]

   Prepared Statement of Deborah Casurella, Chief Executive Officer, 
              Independent Data Management, LLC, Hudson, WI
    The company was founded in 2012 and funded primarily by farmers to 
provide technology to make it easier for farmers to submit acreage 
reports to the USDA. That sounds pretty simple, but like many things in 
agriculture, it is a bit more complicated than it appears.
    We started with software that could take data from a wide variety 
of precision ag equipment (about 110 different formats), translate that 
data into usable annotated maps, overlay the government's description 
of the field called a Common Land Unit (CLU) on the map, give the 
farmer tools to review and fill in any missing data and print documents 
that the farmer could take to their crop insurance agent or the Farm 
Services Agency (FSA) and report. We've grown into a full function 
acreage reporting suite of tools including a mobile version that allows 
data capture in the field.
    I have over 30 years of hands on experience delivering practical 
operations and information technology solutions to solve real business 
problems. I have worked in environments ranging from small startups to 
large multinationals in insurance (including crop insurance), 
transportation and health care.
    I chaired the AgGateway data privacy policy committee that, 
together with American Farm Bureau Federation produced the first widely 
recognized set of privacy standards for ag data. AgGateway is a leading 
ag industry group. Those privacy standards have been largely adopted by 
more than 50 ag technology companies.
    I am going to talk about precision agriculture (precision ag) 
technology, how that technology has impacted farmers and their 
interactions with government programs, USDA and the crop insurance 
companies and I will suggest that a key way to help farmers, the 
government and the taxpayers realize some of the potential benefits 
that have been unlocked is to open the third party channel for acreage 
reporting and give farmers the option to report from home using 
commercial off-the-shelf (COTS) software much like the IRS did in 1986 
by allowing taxpayers to use products like Turbo Tax and other third 
party software to report income tax.
    In 2009, I became CIO of an Approved Insurance Provider (AIP) and 
was surprised at the widespread use of technology in farming. Most 
impressive are the control systems that run the equipment and the 
precision agriculture instrumentation that guides them to allow farmers 
to achieve better yields, use fewer resources, and reduce the impact on 
the environment.
    The adoption rate of this technology is increasing. Some estimates 
say precision ag is already used on close to 70% of crop acres.
    One of the significant by-products is data. Farmers and ranchers 
are collecting all sorts of information about their operation, but they 
are last to the trough to get benefits from their own data. The ``big 
ag'' companies and equipment manufacturers find ways to collect and 
aggregate data and use it to their advantage but the application of 
farm data to directly benefit the average farmer is rare.
    When I refer to tabular data, I mean words and numbers. When I talk 
about geospatial data, think maps.
    The Farm Service Agency (FSA) requires farmers and ranchers 
participating in their programs to submit an annual report on all 
cropland use on their farms. Crop insurance agents for providers 
approved by the USDA Risk Management Agency (RMA) also require these 
reports. But we don't make it easy for the farmer. For years, farmers 
and ranchers have been required to enter the common information from 
their acreage reports at both the county FSA office and at their crop 
insurance agent's office.
    Farmers using precision ag start with an electronic version of 
their planting information including the exact geographic location of 
each and every seed in the ground. The current reporting process will 
see that precise data translated somewhere between three and eight 
times, back and forth between tabular data and maps and from electronic 
formats to paper and back, all to end up in electronic form (where it 
started) in the government systems.
    For the past 7 years, USDA has been working on a new system to 
better collaborate and streamline the collection of common information 
that can be securely and electronically shared between FSA and the Risk 
Management Agency (RMA). For the past 3 crop years, farmers and 
ranchers been able to provide the common information from their acreage 
reports just once--either to FSA or to their crop insurance agent--and 
have that common information securely and electronically shared with 
the other. This is a direct result of USDA's Acreage Crop Reporting 
Streamlining Initiative (ACRSI) which was reauthorized in the 2014 Farm 
Bill.
    The reporting standard for both RMA and FSA includes geospatial 
data (maps) along with regular crop and acreage information but much of 
it is not required. This causes at least two problems. First, even if a 
crop insurance company collects the geospatial data (and some do), they 
don't provide it as part of their report because it is not required. 
And second, FSA and RMA do not require the exchange of optional data 
with each other. This means that the interagency exchanged data is 
usually ignored because, to use the data, each agency requires some of 
the optional data. The end result is that frustrated farmers must visit 
both the FSA county office and their crop insurance agent's office and 
share the same information to complete reporting.
    There are three main reasons for this:

  1.  Farmers must validate and sign their respective acreage reports 
            in each office. Electronic signature is accepted in crop 
            insurance, but not yet in FSA reporting.

  2.  Farmers must provide the program-specific information to the 
            second agency that was not required to report to the first 
            agency.

  3.  Farmers must complete maps (the geospatial data).
    USDA knows this is a problem and has been actively working on it. 
In 2015, as part of USDA's Acreage Crop Reporting Streamlining 
Initiative (ACRSI), the FSA conducted a pilot for electronic acreage 
reporting. One of the things the pilot tested was allowing farmers to 
use third party commercial software to report their acres. Independent 
Data Management, using MyAgData' participated as the 3rd 
party software provider and the pilot was an overwhelming success on 
several levels:
    Farmers that reported using precision ag data saw an average of 
4.7% fewer acres reported. The increased accuracy of precision ag data 
meant a lower crop insurance premium for the farmer, decreased premium 
subsidies funded by taxpayers, lower indemnity for crop insurance 
companies and the Risk Management Agency (RMA), and a reduction in 
claims as yield was not diluted across unplanted acres. Ultimately this 
will result in higher guarantees for a producer. Think of the numbers 
with expanded use. If 25% of acres were reported using a grower's 
accurate field boundaries and the average was a reduction of reported 
acres of 4.74%, producer annual premiums and taxpayer subsidies could 
be reduced by up to $179M. That's only crop insurance premium. What are 
the savings on indemnities? What if this also applied to farm programs?
    The third party software provided the bridge because its reporting 
included not just the required data, but also the optional data and one 
reporting could be used for both FSA and RMA.
    Just using map-based tools to do either precision ag based 
reporting or electronic manual reporting provided a big reduction in 
the effort involved to report for the farmers and for USDA.
    Despite this success, the third party channel remains closed.
    USDA can accept electronic transmissions from any third party. The 
standards have been out to the ag industry for a year and used for 3 
years by the agencies. The FSA and Risk Management Agency (RMA) both 
understand the benefits. The National Association of FSA County Office 
Employees (NASCOE) has been supportive of ACRSI. All that is required 
are minor system changes and a policy change to open the third party 
channel for reporting.
    Farmers plant fields. Let them report what they plant. It is more 
accurate, saves them time and money, saves the agencies time and money 
and saves taxpayer money. And the more accurate data helps not only 
current programs, but future ones be more effective and more efficient 
saving even more time and money.
    Thank you.
Fields as Planted by a Producer
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

          Taxpayer paid subsidies and benefits for crop insurance and 
        farm programs could bereduced by 4.73% if acres were collected 
        using a producers['] electronic field boundaries.
Producer Fields & Common Land Units (CLUs)
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

          While lines are the producer's CLUs.
          Yellow represents planted corn, dark green is beans, red 
        hashing is crop planted outside of a CLU, light green is idle 
        ground with a CLU.
 [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

    The Chairman. Well done, Ms. Casurella.
    Mr. Royse, you are recognized for 5 minutes.

 STATEMENT OF ROGER ROYSE, J.D., FOUNDER AND OWNER, ROYSE LAW 
              FIRM, PC AND ROYSE AgTech INNOVATION
                    NETWORK, MENLO PARK, CA

    Mr. Royse. Thank you very much. Thank you for having me 
here today. I appreciate the opportunity to be at the table and 
not on the menu, at least for today.
    My name is Roger Royse. I am the founder of the Royse Law 
Firm. We are a Silicon Valley law firm, a full-service firm.
    I also founded a group about 5 years ago called Silicon 
Valley AgTech, which has since morphed into the Royse AgTech 
Innovation Network. And originally, I founded that group to 
address the problem that Mr. Tiller pointed out, and that is 
seeing a lot of very smart technologists in Silicon Valley come 
up with a lot of cool gadgets that nobody cared about. We have 
put the technologists together with the farmers, and with the 
venture capital community, to try to make things happen, and we 
have been pretty successful at that.
    In our law firm, I represent almost all technology 
startups. A lot of them are what we call ATPs, agriculture 
technology providers, a few VCs, but for the most part the 
people that are creating the technology that is being used in 
the field. And I am here to tell you that we are very 
interested in anything that will encourage innovation and not 
hinder it.
    I know today that we are going to talk about precision 
agriculture, especially about data, and it comes down to really 
three big issues: privacy, security, and ownership. And I hope 
we have an opportunity to dive into that, because as a lawyer, 
I can tell you that this definition of ownership is a 
relatively complex thing. It is not as simple as it might seem, 
especially when we get into data.
    I have been doing this for 5 years in the agriculture 
community now, and I have heard all these concerns about all 
these complex legal provisions that have to be negotiated, to 
which I reply, ``Welcome to my world.'' This is the way the 
rest of the world operates. This is how businesses operate. We 
negotiate these deals. And I would hope to encourage that 
Congress take a light hand here when it comes to reshuffling 
economic decks that have been negotiated by the parties.
    Having said that, I applaud these efforts to create 
standards and to create transparency and certification, but 
let's keep in mind that not all data is created equal, and all 
of these agreements will have to be customized to some extent.
    Now, a couple of things I do want to mention. We do have 
some law here. We have section 5 of the FTC Act, which 
prohibits unfair and deceptive practices. I acknowledge it is 
not likely to be applied in an agricultural setting. Hopefully, 
somewhere down the road the USDA may be empowered or enabled to 
enforce provisions similar to the FTC Act.
    I have heard some discussion about applying principles 
similar to HIPAA and Gramm-Leach-Bliley, which require privacy, 
disclosure, and security on collectors of data in healthcare 
and in financial services. Having suffered through Gramm-Leach-
Bliley in my practice, I don't think that is appropriate in the 
agricultural setting.
    I do think we can take some instruction from the securities 
laws. I do a lot of securities financings, and securities is 
about disclosure. A lot of what we are agonizing over here 
could be solved with very good disclosure rules.
    In sum, again, I hope that Congress treads lightly on this. 
I hope that other than enabling the USDA to perhaps enforce 
some standards and remove bad actors from the market, I really 
hope that we will continue to respect the idea of freedom of 
contract, as a lawyer, and to allow the market to sort this 
out, and to let the industry work on these standards.
    With that, I am going to cede the rest of my time, and I 
welcome your questions.
    [The prepared statement of Mr. Royse follows:]

 Prepared Statement of Roger Royse, J.D., Founder and Owner, Royse Law 
      Firm, PC and Royse AgTech Innovation Network, Menlo Park, CA
Introduction
    Thank you for the opportunity to present my testimony and share my 
view from Silicon Valley and beyond on the AgTech Revolution and the 
potential role of Congress in its development. My name is Roger Royse. 
I grew up in western North Dakota, where my family has been (and still 
is) involved in the produce business since 1948, both in trucking 
produce from around the country to the Midwest as well as sales of 
produce to the public. I now reside in northern California and am the 
founder of the Royse Law Firm, PC, a business law firm based in Silicon 
Valley with offices in San Francisco and southern California. The Royse 
Law Firm conducts one of the premier AgTech law practices in the 
country, helping tech companies with legal transactions including 
entity formation, financings, commercial contracts, and M&A.
    Five years ago, as an adjunct to our AgTech law practice, I started 
an AgTech group in Silicon Valley. That program has since evolved into 
the Royse AgTech Innovation Network. Our mandate has been to promote 
the growing field of AgTech through conferences, events, webinars, 
white papers, and facilitated meetings between tech companies and the 
farmers, big Ag and Food, investors, and potential partners. The 
Network sponsored an accelerator for AgTech companies recently and has 
taken its message worldwide. I can report that we have been 
spectacularly successful in our mission, as many of our constituents 
have launched from our platform, found funding, gained customers, and 
struck deals with partners. We are on the web at www.royseAgTech.com 
and www.svAgTech.org.
    I am here today to give you my view of this developing movement 
that I call the AgTech Revolution, including where it is, where it is 
going, and how you can help.
Background
    American agriculture has undergone several eras of technological 
innovation. Agriculture was transformed by an industrial revolution 
through the transition to new manufacturing processes, a green 
revolution that increased agricultural production worldwide in the 
latter part of the last century, a genetic revolution that increased 
crop and livestock production, an information revolution that realized 
the value of data, and now an AgTech revolution that pushes every acre 
to its maximum potential. The current AgTech Revolution will be no less 
significant or sudden than any technological change that has come 
before it, and Congress has an opportunity to pave the way for this new 
day by reviewing existing law, considering new incentives and in some 
cases allowing the market to sort it out.
    Numerous factors have enabled the AgTech Revolution, and I 
summarize a few of them here:

  1.  Food Security. Climate change, a growing global population, 
            rising food prices and environmental pressures are factors 
            that have impacted people's physical, social, and economic 
            access to sufficient, safe, and nutritious food. Such 
            pressures prompted a revolution in the agricultural 
            industry that embraces technological innovation to optimize 
            food safety and production.

  2.  The Rise of Consumerism. The ``Grow Local Movement,'' fueled by 
            the growing middle class' desire for convenience and year-
            round food, has encouraged development for technologies in 
            urban and vertical farming, waste, transport, and 
            packaging. Additionally, there has been increased consumer 
            support for transparency in the supply chain and GMO and 
            gene editing practices, as well as environmental 
            sustainability.

  3.  The Declining Labor Market. Farm labor shortages and rising wages 
            have resulted in increased labor costs, which then 
            contribute to increased investments in technologies that 
            would replace the manual labor part of the farming process. 
            The average farmworker in California is middle aged, and 
            the problem will get worse before it gets better.

  4.  The Changing Agricultural Markets. A comparison of agricultural 
            production patterns in the U.S. between 1920 and 1995 shows 
            that harvested cropland has declined from 350 to 320 
            million acres, and the agricultural labor work force has 
            decreased from 26 to just 2.6 percent. In spite of this, 
            agricultural production in 1995 was 3.3 times greater than 
            in 1920 to account for greater demand, demonstrating that 
            productivity has increased and agricultural production 
            methods have changed. Likewise, as the world population has 
            more than doubled between 1950 and 1998, grain production 
            per person has increased by about 12 percent to keep up 
            with the greater world demand.

  5.  Increased Rural Internet Connectivity. The adoption and 
            application of AgTech rests on the availability of the 
            Internet. Due to the accelerating development of AgTech, it 
            is the new rural driver for Internet utilization. As of 
            2012, about 70% of farms in the U.S. had Internet 
            connectivity.

  6.  The Introduction of Venture Capital. AgTech startups raised more 
            than $320 million this year so far as a result of an uptick 
            in rounds of Series B financings. Funding recipients, 
            equipped with a diverse range of investment themes, are 
            backed by willing and active venture investors who have 
            become more comfortable with this space.

  7.  The Rise of Big Data. Farm data includes site-specific data 
            (e.g., information about seeding rates, soil nutrients, 
            fertilizer, pesticides, water, yield data), meta data 
            (e.g., information about number of acres, inputs applied, 
            crops) and big data (i.e., the aggregation of farm data 
            from numerous operations). Technology now enables farmers 
            to utilize farm data to help inform their work decisions 
            and optimize production.
New Technologies
    A list all of the new technologies informing modern agriculture 
would fill a book, and I do not attempt to list them all here. However, 
it is worth pointing out a few of the new technologies that I have seen 
being developed or implemented in the field.

  5.  Precision Agriculture. Precision Ag refers to the suite of 
            hardware and software solutions that allow farmers to 
            optimize efficiencies, reduce inputs, increase production 
            and capture useful data. Precision Ag includes the sensors 
            that gather information, the devices that transmit 
            information, and the software programs that convert the 
            data to actionable information. Sensor tech and the 
            Internet of things (IoT) has gone from merely being able to 
            report information back to the farmer to being able to make 
            recommendations based on that data. The tech can make these 
            recommendations at the level of the individual plant, can 
            deliver that data to a handheld device, and now can even 
            automatically adjust an input to optimize production.

        Many companies have automated the process to a degree 
            previously not thought possible. Self-driving tractors, 
            robotic weeders and thinners, and artificial intelligence 
            (AI) and imaging enabled fruit sorters are in beta or in 
            use. The rise in labor costs have made automation a 
            necessity for farmers, and technology has stepped up to 
            fill the need.

  2.  GMO and Gene Editing. Almost none of our food today is made 
            independent of some form of genetic engineering. A carrot 
            today is a much different plant than a carrot of 100 years 
            ago. The same is true of grains, fruits, and vegetables. 
            The science of genetic engineering has now advanced beyond 
            its original applications, breeding, and GMOs. Recently, 
            genome editing (GEEN) has entered the marketplace. GEEN is 
            a type of genetic engineering in which DNA is inserted, 
            deleted or replaced in the genome using engineered 
            nucleases, or ``molecular scissors.'' GEEN technologies are 
            being developed for both plants and animals that change the 
            food we eat.

  3.  Controlled Environment Agriculture. Controlled environment Ag 
            (``CEA'') is also referred to as urban Ag, vertical 
            farming, and indoor Ag. The application of hydroponics, 
            aeroponics, solar tech, LED lighting and advanced building 
            techniques to agriculture has spurred an entire industry 
            designed to grow anything, anywhere at any time. Previously 
            CEA was challenged by high energy costs but advances in 
            technology are making CEA an environmentally friendly 
            solution to many of the world's problems in food 
            production.

  4.  Soil Health or Quality. Soil health (or soil quality) is the 
            capacity of soil to function as an ecosystem that sustains 
            plants, animals, and humans. Many technologies address soil 
            processes to increase productivity, resilience, and 
            environmental quality. Some technologies use biochar or 
            biomass to add nutrients to the soil and some use natural 
            agents to replace insecticides.

  5.  Water. California's recent drought has highlighted the need for 
            water tech. Many of the new technologies are aimed at 
            dealing with the next drought, and take new and innovative 
            approaches. Some of these technologies convert salty or 
            briny water to water that may be used for Ag, through 
            desalination or filtering. Other technologies pull water 
            from air, provide for transport, create water markets to 
            more efficiently distribute water, assist in storage, 
            prevent evaporation, or provide cheap access to 
            groundwater.

  6.  Food supply chain. Having been in the produce business, I have 
            seen in-person the large amount of waste, damage and loss 
            to food from the time it is harvested until it gets to the 
            consumer. Retailers today still rely on methods that 
            existed 50 years ago, but new and developing technologies 
            will monitor produce from field to table so that the ripest 
            product is sold first. E-commerce technologies provide new 
            efficiencies in the shipment and marketing of produce. This 
            is an area where information has real value in preventing 
            losses.
Farm Policy
    Today, I would like to propose a few areas where I believe the 
Federal Government can help agriculture solve the challenges facing it 
and assist the adoption of new technologies that are designed to help 
solve some of the problems described above.

  1.  Rural Broadband Access. Broadband access is the key to adoption 
            of AgTech. Farmers and their fields usually have reduced 
            accessibility to high-speed Internet provided by the 
            telephone or cable companies. We need Federal assistance to 
            bring high-speed Internet service to these farms that are 
            located in rural, sparsely-populated areas. Just as 19th 
            century railroads and 20th century interstate highways 
            played leading roles in American prosperity, high-speed 
            Internet is the factor that determines which rural 
            communities, and which farms, will enjoy economic growth 
            and prosperity in the 21st century.

        One way to implement a rural broadband infrastructure is 
            through FirstNet. FirstNet is the largest amount of Federal 
            funding available for broadband infrastructure. Its purpose 
            is to create a national system of emergency communications 
            between all first responders. We propose that Congress 
            ensure that FirstNet emergency communications are provided 
            to rural regions of the U.S. and not limited to making 
            urban population centers a priority like most broadband 
            infrastructure initiatives.
        Alternatively, or contemporaneously, the Federal Government may 
            implement a program that assists and encourages state and 
            local governments to invest in rural broadband 
            infrastructure. Congress can realize such a program by 
            offering states like California a match of Federal 
            resources. This way, from both Federal and state 
            perspectives, the public resources that are invested will 
            be leveraged. Notably, any leveraged public resources under 
            this program would need to be invested in the form of 
            grants in order to actually benefit the unserved and under-
            served areas of California. Successful funding models 
            include the Internet For All Now Act in California and the 
            broadband infrastructure in the state of New York.
        If we increase access to rural broadband in our nation's rural 
            areas, the same Internet platform used for farming in the 
            fields can be used to increase the overall prosperity and 
            quality of life in our nation's rural communities. For 
            example, broadband-enabled enterprises include health care, 
            education, job training, public safety, and technology. 
            Thus, funding rural broadband infrastructure is the single 
            most promising public resource investment the Federal 
            Government can make to provide unserved and under-served 
            regions of the country with economic prosperity, 
            opportunity, and technological innovation.

  2.  Specialty Crops in the Farm Bill. Specialty crops generally 
            consist of plants used by people for food, medicinal 
            purposes, and aesthetic gratification. They are defined by 
            the USDA as ``fruits and vegetables, tree nuts, dried 
            fruits, and horticulture and nursery crops (including 
            floriculture).'' The diversity of specialty crops and their 
            variety of uses make the task of developing policy in this 
            area particularly challenging. Federal funds can be used to 
            support projects ranging from food safety compliance to 
            distribution systems and marketing.

        Federal funds can also provide scientific advances that enable 
            our country to use the most efficient and environmentally 
            sound agriculture technology in the world. Funding this 
            research is imperative due to the industry's increasing 
            reliance on science and technology to maintain profitable 
            production. Likewise, labor dependency is an ongoing 
            concern in the absence of labor saving technology. Federal 
            support for specialty crops still differs in significant 
            ways from commodity crops. Farm bills have historically 
            focused on farm commodity program support for the staple, 
            non-perishable, and generally storable commodities such as 
            corn, soybeans, wheat, cotton, rice, and sugar until 
            specialty crops and organic agriculture were included in a 
            separate title in the 2008 Farm Bill.
        Federal investment in agriculture technology is a promising use 
            of farm bill funds to stabilize prices, reduce manual 
            labor, and create permanent jobs with higher income for 
            domestic workers. Thus, adequate funding for the research 
            and development of agriculture technology protects U.S. 
            crop production and keeps producers in business.

  3.  Privacy and Data Security in AgTech. A major issue that farmers 
            are concerned about is whether they have sole ownership of 
            farm data.\1\ Because farm data, if kept secret, is 
            information that derives independent economic value from 
            not being publicly known, it could possibly be accorded 
            trade secret protection. Aside from trade secret 
            protection, there are currently no other laws in place to 
            protect the data farmers transfer to AgTech companies.
---------------------------------------------------------------------------
    \1\ Digital data is data that represents forms of data, including 
elements of the physical world, by using specific machine language 
systems that can be interpreted by various technologies (e.g., 
conversion of a physical scene into a digital image). Digital data 
collected from farming operations becomes farm data. Farm data includes 
site-specific data (e.g., information about seeding rates, soil 
nutrients, fertilizer, pesticides, water, yield data), meta data (e.g., 
information about number of acres, inputs applied, crops) and big data 
(i.e., the aggregation of farm data from numerous operations). Farmers 
can utilize farm data to help inform their work decisions and optimize 
production.

        Existing legislation and regulations regarding privacy and data 
            security are applicable to personal information. In light 
            of the importance of maintaining the security and 
            confidentiality of farm data, Congress might consider 
            legislation to demand accountability and transparency for 
            AgTech Providers (``ATPs'') entrusted with managing farm 
            data.
        The American Farm Bureau Federation has said that big data can 
            do for agriculture what the Green Revolution and 
            biotechnology did for agriculture. While big data analytics 
            has resulted in improvements in farming, some farmers are 
            concerned that, unless restrictions are imposed on the 
            ATP's use and disclosure of farm data, ATPs might share 
            farm data, including farm research and specialist 
            practices, of one farmer with competing farmers or with 
            third parties, such as environmental and animal welfare 
            lobbies, in a manner disadvantageous to farmers. There is 
            also concern that ATPs might sell farm data to third 
            parties in connection with marketing such third parties' 
            own products and services without compensating farmers for 
            the revenue generated by the ATP from the sale of their 
            farm data.
        As a first step towards dealing with these concerns, a 
            coalition of certain farm organizations, including the 
            American Farm Bureau Organization, and certain ATPs, have 
            agreed to a set of non-binding ``Privacy and Security 
            Principles for Farm Data'' that they hope will be adopted 
            by other ATPs. The complete text of the Privacy and 
            Security Principles for Farm Data is available on the 
            American Farm Bureau Organization's website. It reads very 
            much like privacy and security principles for personally 
            identifiable information, including that the ATP must 
            provide farmers with notice that farm data is being 
            collected and about how the farm data will be disclosed and 
            used. Among other things, it requires that an ATP's 
            collection, access and use of farm data should be granted 
            only with the affirmative and explicit consent of the 
            farmer and that the ATP will not change the customer's 
            contract without his or her agreement.
        The above standards are not law, however, and farmers must 
            prioritize the availability and usability of big data over 
            their own privacy and security. Farmers must also negotiate 
            with data management companies regarding the use of their 
            farm data. There is precedent for Federal regulation of 
            data privacy, although not specifically directed at 
            farming.
        The FTC Act (section 5) provides the Federal Trade Commission 
            (the FTC) with broad discretion and authority to regulate 
            data privacy and protection practices of companies across 
            all industries.\2\ The FTC imposes sanctions on companies 
            that (i) disclose sensitive information (without consent); 
            (ii) fail to adequately keep consumer's personal 
            information secure; and (iii) fail to follow their own 
            privacy policies.\3\
---------------------------------------------------------------------------
    \2\ The FTC's primary legal authority to regulate consumer privacy 
and data security com[e]s from Section 5 of the FTC Act, which 
prohibits entities from engage in unfair or deceptive acts or practices 
in interstate commerce. It states in pertinent part: ``(1) Unfair 
methods of competition in or affecting commerce, and unfair or 
deceptive acts or practices in or affecting commerce, are hereby 
declared unlawful. (2) The Commission is hereby empowered and directed 
to prevent persons, partnerships, or corporations, [except certain 
specified financial and industrial sectors] from using unfair methods 
of competition in or affecting commerce and unfair or deceptive acts or 
practices in or affecting commerce.''
    \3\ California has regulations in place regarding privacy and data 
protection that Congress can adopt and apply to farm data. First, the 
California Online Privacy Protection Act requires operators of 
commercial websites and online services (including mobile apps) that 
collect CA residents' personally identifiable information through a 
website to conspicuously post their privacy policies. Second, S.B. 1386 
(the California Breach Notification Law) requires notification to 
affected individuals of an unauthorized acquisition of unencrypted 
computerized data that compromises security, confidentiality, or 
integrity of personal info of any CA resident. If applied to farm data, 
the provider of AgTech services would be obligated to notify all 
farmers whose data had been compromised.
---------------------------------------------------------------------------
        We suggest that, given the unique nature of agriculture, 
            Congress consider an enforcement regime for farm data that 
            is similar to that granted to the FTC under section 5 the 
            FTC Act.

  4.  AgTech Adoption Tax Credits. Despite the huge advances to be made 
            in agriculture through technology, there are still 
            challenges in its adoption. One of the first problems the 
            Royse AgTech Innovation Network encountered was the 
            disconnect between the technology entrepreneurs and the 
            farmers who would use their tech. There was and is, to be 
            sure, a difference between what technologists think farmers 
            want and what they actually can use, but that gap has been 
            closing as we reach out and involve the grower community in 
            our efforts. The much bigger hurdle is the fact that 
            investing in technology is risky for any business, but 
            especially so for farmers. A grower in California might 
            only have 50 harvests in his lifetime, and cannot gamble a 
            crop on an untested technology. In addition, a grower might 
            be presented with numerous similar technologies. How is he 
            or she to justify the investment in evaluating them all? A 
            partial solution may lie in the Internal Revenue Code of 
            1986, as amended (the ``Code'').

        The Code currently allows for a research and development credit 
            (``R&D Credit''), which was recently extended by the PATH 
            Act to benefit startups. The R&D Credit is a general 
            business tax credit under Code section 41 for companies 
            that incur research and development (R&D) costs in the 
            United States. While that credit incentivizes development, 
            it does not incentive adoption.
        The investment tax credit (ITC), by contrast, allows a taxpayer 
            to deduct part of the cost of installing certain types of 
            energy systems and has been effective in promoting the 
            adoption of solar technology. The ITC, however, is aimed at 
            only a handful of qualifying uses, some of which could be 
            called AgTech. We propose that the ITC be broadened and 
            modified to encourage a wider range of Ag Technologies.
        The Royse AgTech Innovation Network is in the process of 
            preparing a white paper on this topic, which will detail 
            how such a credit would work.
Conclusion
    Thank you for the opportunity to speak with you today and share my 
thoughts on the AgTech Revolution, current challenges, and possible 
solutions. I look forward to taking questions and continuing our 
dialogue

    The Chairman. Well done, Mr. Royse. I appreciate you being 
here.
    The chair would like to remind Members that they will be 
recognized for questioning in the order of seniority for 
Members who were here at the start of the hearing. After that, 
Members will be recognized in order of arrival. I appreciate 
Members' understanding. I would like to recognize myself for 5 
minutes.
    Mr. Janzen, I will start with you. You touched on something 
in your testimony. Farmers have a deep sense of mistrust where 
data is concerned, the idea of uploading their data into the 
cloud. And you mentioned that that kind of stems from the fact 
that there are no laws explicitly protecting that data.
    Let me ask you: do you think that an independent 
verification tool like Ag Data Transparent is sufficient to 
address the concerns of farmers that they have, or do you think 
Congress should look into developing data protection standards 
in the future?
    Mr. Janzen. Thank you.
    I think that we are definitely, through the Ag Data 
Transparency Evaluator, we are filling a gap there, because we 
are addressing those farmer concerns, that mistrust. If we have 
widespread participation in the industry, then I feel like we 
are addressing the farmers' concerns in a way that means that 
there is no need for any additional legislation that would 
protect farm data.
    Now, if the industry ends up looking the other way and not 
caring about this, and farmers continue to express mistrust in 
the future, then it is definitely worth taking another look 
about whether or not there is something that could be done to 
improve that situation.
    The Chairman. Mr. Tiller, your thoughts on that?
    Mr. Tiller. Well, I actually agree. As I am listening to 
Todd, I am thinking about what Mr. Royse said. I do think that 
farmers are astute businessmen. If they will take the time 
through the knowledge they will gain through things like the 
Transparency Evaluator, they will make contracts that make 
sense.
    I have always stood for farmers, if they knew what they 
were bartering. If I am bartering my data for tools, I would 
never want to take that away from them. Because I know farmers 
that do understand it, they say: ``I don't mind putting my data 
in an aggregated format, in other words, it be anonymized, my 
name is off it, to be part of a benchmarking set, when I get 
something in return.''
    All I can say to end it up is I just want to be careful 
that I don't, even with the cooperative, in trying to 
understand ownership and all these issues, I create a world 
where we can't be innovative, because sometimes innovative does 
create running out on the bleeding edge a little bit. And so 
that is where I would stand on that. I pretty much agree with 
Todd.
    The Chairman. Excellent.
    Let's talk about actual application of technology and how 
we can use data in a hands-on way.
    Mr. Tiller, Mr. Royse, Texas, California, both of you are 
having water problems, maybe different kinds of water problems, 
but water problems. How does big data factor into the better 
use of irrigation, managing finite water resources?
    I will start with you, Mr. Royse.
    Mr. Royse. Okay. Thanks very much.
    We know about water problems out in California. To start, I 
am seeing a lot of technologies around water that are attacking 
the problem from ways that are highly innovative and 
imaginative and sometimes unbelievable.
    But with respect to big data, I think that the tools now, 
the sensors are at the plant level. And we had heard a little 
bit about precision farming earlier. We are seeing the ability 
to provide some real conservation through these technology 
tools, again, highlighting why broadband is so important.
    It is important to note, by the way, that the technology 
has moved, that I have seen, to where each sensor is its own 
Internet user. In other words, it is not like a Christmas tree. 
It is not daisy-chained. Each sensor has to load up to the 
cloud. That requires a tremendous amount of Internet access. 
But through these sensors and through being able to provide 
just the right amount of water in the right place at the right 
rate, we are seeing data being used to reduce water usage and 
address our drought problem.
    The Chairman. Thank you.
    Mr. Tiller.
    Mr. Tiller. I would add a couple things there. I am in 
total agreement with what he is bringing up. But I spent a 
decade also as an ag lender, so profitability is everything in 
the end.
    What I would say is, it is about water use, but I can see 
farmers understanding profitability better and even changing 
crops, growing different things, being able to use their water 
in different ways, if they had the data to help them understand 
what is the most profitable crop on this piece of ground.
    Maybe I don't have a full pivot or circle of cotton. Maybe 
that 130 is now 60. What do I do with the other 70 acres? Those 
sorts of things data can help you understand.
    The Chairman. Thank you.
    I now recognize Ranking Member Nolan for 5 minutes.
    Mr. Nolan. Thank you, Mr. Chairman.
    I have just got one question, then I will yield to my 
colleagues here, and it is this: As ag data improves and has 
become more useful to farmers, there appears to be a widening 
gap among farmers, as well, that have access to this technology 
and those who don't. And oftentimes some of the best producers 
in the world are a mile or two apart from one another as 
opposed to downtown where every 50 feet there is a user. It 
makes it a little easier financially for businesses to provide 
those services.
    To be sure, as these technologies continue to grow, those 
who have access to it will grow and prosper and those who don't 
will suffer, even though they may very well be among our 
greatest producers.
    How do you expect the cost of getting these technologies to 
all the farmers, how do you expect those costs to go down? And 
what ideas or suggestions do you have for us to consider for 
getting those costs down to an affordable level where all of 
our farm producers will have access to them? Thank you.
    Whoever. Step up. Tell us what you think.
    Mr. Tiller. I will share a few thoughts, but I want to make 
sure I leave time for the other panel members.
    That is a vision of the cooperative, right? I mean, that is 
what we would be about, making sure all producers had access to 
the technologies that are developed in a fair and reasonable 
cost mechanism. Some of the price points of some of the best 
tools have been too high, but I have news for you, the adoption 
of those has been very low. It looks like there has been 
adoption, but even among some of the biggest growers, not what 
you would think. They are going to have to bring the price 
point down to prove the value even there.
    I would say I really think innovation and technology and 
broadband is actually going to be very helpful for a grower 
with 100 acres. He is going to be able to store data in ways he 
never could before because of the mobility of the smartphone, 
being able to carry that computer in his pocket. It takes so 
little cost of equipment to actually go out and implement these 
things. And these are very scalable technologies.
    I almost see it going the other way. Every grower will have 
access to tools to make decisions in ways they have never had 
it before.
    I think these sensors are going to get so cheap. I was 
looking at some Bluetooth technology that the sensor was $11, 
and you could utilize these. That is an example. I actually 
think it will go the other way.
    I will yield to the other panelists.
    Mr. Nolan. Real quick like, however, it is apparent that 
some of the companies look at this and they say: Well, I have a 
customer every 1\1/2\ mile, 2 miles, I am not going to invest 
in that. And they are not investing in it in many cases.
    You are right, the technology will lower the cost and 
increase the benefits and whatnot, but if you don't have the 
technology, how do we make sure we get it to everyone?
    Mr. Tiller. What are you calling technology? I am going to 
tell you----
    Mr. Nolan. Broadband is what I am talking about.
    Mr. Tiller. Okay. Now, there you go. I am in total 
agreement with you there. Most of the farmers, I am amazed, 
even with age, carrying the smartphone. I have seen this 
happen. Four years ago I could be in a meeting and you could 
carry it on. It doesn't matter what the age group, I can't 
carry on the meeting unless I ask them: Can we all silence our 
phones? I never thought that would be an issue because of the 
average age of the farmer.
    We have it. But you are right, connecting that and being 
able to stay connected, it is a criteria we really are going to 
have a gap to feed the world. If we don't close that gap by 
providing that infrastructure, that is something that is going 
to be missing.
    Yes, I do agree with that. That is kind of a third-party 
touch to the things I talk about. I don't develop that, but I 
have to have it.
    Mr. Nolan. Do you see an investment by the Federal 
Government in broadband expansion and infrastructure as being 
something we should consider?
    Mr. Tiller. What has driven out the rural growth of 
telecommunications all this time has been the support of the 
RUS, the Universal Service Fund, and that mentality. I don't 
know why we can't keep doing what we are doing.
    I was involved with telecommunications for over 20 years, 
served on a cooperative telecommunications board. Some of the 
RUS permitting that is required to get the loan that you have 
to do even before the loan is ready to be made and the cost 
involved, if some of that could be looked at, it would be much 
easier to get there.
    There are a lot of things that you guys could do from the 
Committee to actually help build that out. You could be the 
catalyst to really keep that moving.
    Mr. Nolan. Thank you.
    Mr. Chairman, my time is up. Thank you, Mr. Chairman.
    The Chairman. Hey, listen, I was watching the clock there. 
I didn't want to cut you off.
    Mr. Abraham, you are recognized for 5 minutes.
    Mr. Abraham. Thank you, Mr. Chairman.
    Mr. Royse, what are the protections in the agricultural 
sector for data, and how do they compare to other businesses as 
far as protection of data?
    Mr. Royse. Yes, so it is commonly said that there really is 
no law of farm data. There are general rules around data. There 
is no Federal law of farm data at this point. In California, 
where I am from, we have state law that protects the privacy of 
what we call personally identifiable information, which could 
apply to farm data. It doesn't always.
    But most of the time, farmers are going to have to rely on 
the law of trade secrets. And as you know, we now have a 
Federal trade secret law. But trade secret is a little tricky. 
It is not automatic for farm data. The information has to be 
proprietary, has to be valuable, has to be secret, and the 
owner has to take steps to keep it secret. It is very easy for 
somebody to lose trade secret protection for this data.
    The way that it is commonly protected these days is through 
contract, I mean, and that is why we are having a lot of these 
discussions, is because these contracts can be relatively 
complex and involved.
    Mr. Abraham. Thank you.
    Mr. Tiller, you said in your testimony, your written 
testimony, which I actually read, that all growers will be 
impacted by the information revolution, and I totally agree 
with that. We grow more cotton on my farm this year than we 
have grown in the last 10 years.
    What will be the biggest impact of those farmers that don't 
invest in the information revolution?
    Mr. Tiller. It is just very difficult to compete. I have 
never liked to think of myself as competing against my 
neighbor, because I am competing in a world market. Cotton 
price, it is a global economy. But in truth, as I do, there is 
a limited amount of land, and growers are trying to rent that 
land. The most efficient producer is going to do the best job 
of creating the yield off that farm.
    I think that the benchmarking that is there today, if we 
are not using data, just look at the varieties. Look at what 
has happened in cotton, as an example, in the last 10 years. I 
am amazed. I do cringe when I pay some of these technology 
fees, but, in truth, I have the best varieties I have ever had.
    Now, do they compensate for the difference in a $100 bag of 
seed and a $400? It is difficult. I did the math this year in a 
very rough cotton year, and I am questioning about what I have 
in the field.
    But if we don't continue to understand and be able to 
relate to those varieties and understand I should put this 
variety on this soil and these water conditions, I mean, I am 
not going to be as profitable as I can, and then I will be not 
as self-sustaining.
    Data helps us be more self-sustaining, so I can look to 
myself to help myself be shored up. And I can look to insurance 
when I have weather-related events that I have no control over, 
but I can control what variety I have in the field. That is an 
example.
    Mr. Abraham. I mean, knowledge is power and knowledge is 
money in the farming community. Thank you.
    Mr. Chairman, I yield back.
    The Chairman. The gentleman yields back.
    I recognize Mrs. Bustos, for 5 minutes.
    Mrs. Bustos. Thank you, Mr. Chairman.
    And thanks for our panel members for being here today.
    Mr. Royse, your testimony, which I read in advance, was one 
of the most fascinating agricultural pieces of information that 
I have read in a very long time. But, it is a very impressive 
group of people here. Thank you so much.
    My district starts in central Illinois and covers the 
entire northwestern part of the State of Illinois. Ag is our 
number one economic driver. I am very, very interested in what 
you are talking about today.
    I want to tell you a really quick story. We have a brand 
new company that started in a town called Galesburg. It is 
called Integrated Precision Agriculture. And what they have 
done is they have taken unmanned aerial vehicles, and they are 
using that for spraying and surveying crops.
    But what happened was they go to the state's Department of 
Agriculture and they encountered this issue where the state's 
Department of Agriculture struggled to understand the business 
needs. And so they pointed out that in order to get their 
pesticide license, they didn't know if they were sure of what 
kind of training they needed. Did they need ground training or 
did they need aerial training?
    And so I just bring that up to say there are some struggles 
here with new technology and how we are going to move forward. 
But, it is a story that illustrates that what do we need to 
deal with in government. My question really is aimed at all of 
you, maybe a couple questions.
    With regard to data and analytics, how can the Federal 
Government not only remain flexible, but also help usher in new 
technology? That is question number one. Is there a role for 
the USDA staff on the ground, or our university extension 
programs?
    Anybody can take that first. Nobody needs to repeat what 
the person ahead of them said. But whoever would like to 
address that first and then we will just kind of go through the 
list.
    And you have an Illinois connection, right?
    Ms. Casurella. I grew up in Illinois.
    Mrs. Bustos. Then you go first.
    Ms. Casurella. All right. I will take that. I moved out of 
Illinois when I was 16, though.
    Mrs. Bustos. Okay, then you get moved. Go ahead. You are 
all right.
    Ms. Casurella. In terms of ag data and analytics and how 
the USDA can provide a role, a big part of it is providing best 
management practices for farmers. And I will use an example 
that impacts the Central Sands of Wisconsin as well as northern 
Illinois.
    With potatoes grown in sandy soil, they are typically 
irrigated. And if you use the data collected on a combination 
of sensors, it is sensors that understand the nitrates coming 
through the soil to know when you need to apply your 
fertilizer, your pesticide. If you apply it right after or 
right before a rain, it is going to go right down through to 
the place, it is not going to affect the top 8" in water 
growth.
    County extension and county offices, specifically on the 
NRCS side, can definitely help farmers understand data, 
available options, and what farming practices they need to use. 
And I will couple that with add EQIP dollars to, in the case of 
irrigated potatoes in sandy soils, add EQIP dollars to help the 
producer pay for what could be a $50,000 investment in 
technology. But for potatoes, if you manage them correctly, 
your N2 stores go from eight truckloads to one 
truckload if you manage irrigation.
    There are a whole lot of benefits if there is the right 
research study and best practices that a farmer can use, plus 
funding, to help him get that technology in place. That is one 
example.
    Mrs. Bustos. Thank you.
    Anybody else have anything to add?
    Mr. Royse. I do. It is an interesting thing from the 
standpoint of the tech providers that I work with, is they are 
always very surprised--that example you just gave, I have a 
hundred like that--to find out just how highly regulated 
agriculture is. And we run into walls all the time. We run into 
business models and business plans that just don't work because 
of that.
    I love the idea of education. It would be nice to see some 
coordination possibly, but I don't know that I have any answers 
other than that, but to say that you put your finger on what is 
a real issue in this area and something that, I don't know if I 
would say it is stifling innovation, but it is one of those 
challenges we have to work through.
    Mr. Tiller. I want to make one last statement. You did 
mention the extension and the land-grant universities, and I am 
going to tell you, when I first started farming 35 years ago, 
they were unbelievably relevant; and they still are relevant, 
because they are the only agnostic view we may get.
    I think that digital agriculture will give them a new way 
to actually make their data visible. And so I am hoping that 
they can embrace that. They may need funding to do that.
    But I know it will be helpful, because they are not selling 
me anything. And to have them give me a view of the seed 
varieties or the secret recipes I should be using versus me 
trying to decide or have some company selling me something 
trying to tell me. I would definitely like you all to continue 
in that realm too.
    Mrs. Bustos. That is a great point.
    And with that, I am out of time. Thank you very much.
    The Chairman. The gentlelady yields back.
    And I recognize the gentleman from Nebraska for 5 minutes.
    Mr. Bacon. Thank you very much, Mr. Chairman.
    I appreciate you all coming in today and sharing your 
expertise and your testimony.
    Some of the questions I have you have touched on a little 
bit, but I just want to make sure I understand it. But before I 
do, since I was raised on a farm, we raised corn and soybeans, 
beef cattle, until I was 21, then I joined the Air Force for 30 
years, and that transformation over that 30 years is just 
incredible.
    When I was 20 years old driving on a tractor discing, my 
main concern was finding an AM radio station and trying to find 
a good baseball game for something to keep me amused. Today we 
have GPS on almost every piece of equipment. Our combines are 
pumping out maintenance data all over, yield data. Our 
irrigation systems know what part of the fields need more 
concentration than others.
    I was just at a ranch with 75,000 head of cattle. Every 
trough was computerized, every water tank, and based on the age 
of the cattle, different blends of feed. It was mainly 
computerized. Every head of cattle they had to analyze, so to 
maximize the output for each head of cattle.
    I just find it incredible where we have gone. I clearly see 
a need for broadband and big data. And I have seen different 
estimates what it is going to cost to fully put this out in our 
rural communities.
    Do any of you have a good estimate of what it will cost in 
the end to really do a rural broadband system for our country? 
A big question. What is the cost? Has anyone seen a good 
estimate?
    Mr. Tiller. I do want to say this. I wouldn't tackle that 
one, but back in the day when I was sitting on a 
telecommunication board when Internet was new, we took a poll 
of the board. We said: ``Who is going to want this?'' And I can 
remember some of the older guys on the board: ``Nobody.'' And I 
was one of the guys who said: ``Well, I want it.'' We thought 
out of the 1,800 alliance subscribers that maybe 100 would want 
it. Look what happened today, they all want it. And they don't 
want what? They don't want that little pipe carrying 2,400 
baud, they want a big pipe.
    What it is going to cost today it is hard to say, because 
technology is going to keep wanting more. It is going to have 
to feed the beast. But if we want to be effective, efficient, 
and productive, we have to do that. I don't know the cost, but 
I know it is necessary.
    Mr. Bacon. I just think it is probably good to start big 
picture. What is the cost to get broadband out there, and then 
we could strategize how to get there.
    Now, you touched on this a little bit. What can we do in 
the farm bill to make some progress there? You touched on it a 
little bit, but I just want to make sure we have clarity. Is 
there a way to partner with states and local governments and 
private industry? Because obviously people are going to make 
money on this as well, so it shouldn't be totally a Federal 
cost. But any thoughts on that? And I just open it up to the 
floor, because I am earnestly seeking answers here.
    Mr. Janzen. Perhaps grants to State Departments of 
Agriculture. I know, like in Indiana, we always hear about 
rural broadband and the need for that. And perhaps with some 
incentive money in a future farm bill, that would be enough to 
push those states to invest.
    Mr. Bacon. Incentives.
    Mr. Janzen. Yes. And I don't know the cost either of what 
this would be to make America's farms connected. But I have to 
think, when you look back in history, every major investment we 
have made in rural infrastructure has paid dividends for 
generations, rural water, rural electric, roads. I think this 
is the next big one.
    Mr. Bacon. If we get the broadband put out, I don't foresee 
that changing as much. The applications riding within it will 
change, clearly. If you get the infrastructure in getting to 
your point, Mr. Tiller, that the applications within it will 
change. But we need to get the infrastructure in place. I am 
just trying to figure out the best way to do it. I don't know 
if it is strictly a private endeavor or if there is a 
partnership there. I think there should be probably some kind 
of partnership.
    Mr. Tiller. The USF fund, that has been a private-public 
partnership all this time. I remember back in the day, I was on 
a farm board from 1986 really up to 2004. It is needed. I mean, 
that is that private-public partnership that goes on to make 
those things work.
    Bringing lending in different ways, through RUS, through 
the different funding mechanisms, that is the way you do it. I 
don't think the government would just go out and say: ``How do 
we take that?'' It would be these private partnerships.
    Mr. Bacon. I will just close. When I get feedback going 
around, I am from the Omaha district, so I have a county and a 
half, more urban than suburban. We have some farms on the west 
and north side and southwest and so forth. But we have a huge 
agri-industry, a lot of processing commodities and, I mean, 
transportation.
    But I get out a lot in Nebraska to learn on this, and the 
first issue is affordable crop insurance, I hear it all over. 
Second, foot-and-mouth disease concerns, what would happen, 
having an insurance plan there. Infrastructure, which is tied 
to broadband, is probably the fourth issue I hear. I think that 
is a common thing I hear.
    Anyway, thank you for your time.
    Mr. Chairman, I yield back.
    The Chairman. The gentleman yields back.
    Ms. Plaskett, you are recognized for 5 minutes.
    Ms. Plaskett. Thank you so much, Mr. Chairman.
    And thank you all for being here.
    I wanted to ask a couple of questions. We have had a really 
good discussion on both sides of the aisle about this issue, 
really coming at this in a bipartisan manner in how we can 
address the issues of broadband in rural areas.
    It is interesting, because yesterday the Committee held a 
hearing about innovations in the specialty crop industry, but 
much of the discussion today is around commodity crops. And so 
one of the questions I have, and this is to any of the 
witnesses, how can technologies that you work with help fruit 
and vegetable growers? And are there unique benefits of data 
technology and the discussion we have about increased broadband 
technology for specialty crops?
    Mr. Royse. I would like to just offer, one of the comments 
one of the panelists made, it is very true, is these 
technologies really do translate. And we see a lot of tech that 
originates in California in the specialty crop area, and almost 
immediately it is across the country. It is out in the 
commodity crops.
    In a way my viewpoint is that these are technologies that 
are going to be useful across a lot of different crops, 
especially the data.
    Ms. Casurella. What I would add to that is production 
agriculture, your row crops, is very different than your 
fruits, nuts, and trees in terms of how I would apply 
technology. If I were looking at fruits, nuts, and trees, I 
would focus more on your aerial imagery. I mean, the technology 
is such that you can count the number of tomato plants in a 
field very accurately using the automation, whether it is 3 to 
5 meter imagery or drones.
    The application of technology will vary, depending on the 
crops, but I also agree you can try to cross. But you are not 
going to put a tractor in an area where you are counting your 
trees and your fruit on those trees.
    Aerial imagery and some of those kinds of things are far 
more expensive than the production agriculture, but there are a 
lot of pretty neat things that are happening, I will call it, 
in garages and homes and those kinds of things, but not a lot 
that, as Billy said, is good for mainstream specialty growers.
    Ms. Plaskett. I know that you were talking before about 
fertilizer and the time in which to put that. I think that, for 
specialty crop growers, that is an issue as well.
    In the Virgin Islands we go from drought to heavy rains. 
And having technology to help the farmer support irrigation 
issues, which are really important for them, and how to 
regulate that would be something that this technology would be 
supportive of as well.
    Ms. Casurella. Yes. And there, you may want to start with 
sensors, soil sensors, and moisture flow as a pretty simple 
Internet-connected device to collect a lot of data.
    Ms. Plaskett. I know that our extension, the University of 
the Virgin Islands, the extension is doing a lot in terms of 
sensors. But the technology probably isn't going to come from 
the extension. It is going to come from other high-tech places 
and then being able to apply those or something that would be 
really helpful.
    My other question is for Mr. Tiller. We were talking about 
cooperatives. You noted that cooperatives are trying methods 
for farmers to come together to find greater market power, and 
you have been doing some work with farmers to do this in the ag 
data market.
    Could you explain how the Grower Information Service 
Cooperative is positioned to draw value for farmer members, and 
how would patronage return be generated from aggregated farm 
data?
    Mr. Tiller. That is a good question, and the reason it is a 
good question is today it hasn't been done. I always tell 
growers, let's be simple. Let's start out with what I call 
collect and store. Let's don't get too far down the road, 
because until we get the data into place where we can do 
something with it. Because I always sort of chuckle when this 
farm group says: ``We are doing all this stuff with data.'' And 
I always say: ``What data?'' They probably don't have much 
data, because it has been very difficult to bring in and 
collect.
    We want to use the platform initially so farmers would have 
a place to store that data. And then they could begin to share 
that with their agronomist, with people that work with their 
data, not looking at big data initially, doing simple things to 
create small data that would be actionable for their farms.
    An example would be in the vegetable industry, et cetera, 
we want to work there and here is why. I have groups from all 
over the world that call me about this data cooperative. And I 
have said: ``I can't see why we can't franchise this same idea, 
same platform, to create data communities. Because if you only 
have 80 or 90 growers, you don't really want to set up a 
cooperative, wherever that is at, and try to get into all the 
technicalities and the cost, but set up a data community.'' And 
we are trying to work with some groups right now of how that 
might look and be managed, managed on a similar platform to 
ours.
    So today I would say collect, store, but we have to 
analyze. Stored data is not worth anything to the farmer if we 
don't make a decision with it. I have sort of reached a point 
where sometimes in the industry there are groups that say: 
``Really, we don't want it shared outside of here because we 
don't really want anything else done with it.'' That doesn't 
work for a grower. I have to be able to make decisions with 
that data.
    Ms. Plaskett. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. The gentlelady yields back.
    The gentleman from Ohio, Mr. Gibbs, is recognized for 5 
minutes.
    Mr. Gibbs. Thank you, Mr. Chairman.
    First, I would make a couple of comments on broadband, the 
need in the rural area, absolutely, definitely. I don't know if 
that means, broadband means more fiber, more cell towers, I 
don't know how that interrelates.
    But I can tell you, working with one of my local companies 
in my district, fiber has come down, is cheaper now than 
coaxial cable. And this cable company, it is a privately owned 
company in several of my counties, is running fiber to every 
residence on their customer base. And the technology, how it 
all works, I had an interesting morning that day, I learned a 
lot.
    But I wanted to know, Mr. Tiller, your cooperative that you 
started, you say you have 1,400 members, when Mr. Royse talks 
about privacy, security, and ownership, what are your 
cooperative rules? How do you handle it? Because you would be 
like the miniature scale compared to nationally.
    Mr. Tiller. Well, we are still learning, but that is why I 
am so staunch about this. I appreciated Mr. Royse's comments 
that ownership is a complex issue. But when I am talking to a 
grower, they want to know that their data is within the 
contractual rights of the co-op they own the data that is 
placed in there. They could be part of aggregated data sets and 
they would be anonymized. But they would own that data. They 
could take their data at any point.
    Mr. Gibbs. What was that?
    Mr. Tiller. They could take their the data, it is portable. 
They would move it.
    Now, what could they do with it? That is the problem today. 
A lot of groups tell us: ``You can take your data. But if you 
can't do anything with it when you leave, and you really can't 
take it in a format that you can really put it into something 
else, you haven't left with a lot.''
    The beauty of this is, this is just a group of growers 
deciding what they want to do. If other growers want to join in 
that effort along those rules of understanding that; it is an 
evolving thing. Where we are at today won't be where we are at 
in 2 or 3 years. I believe we will have data sets that will be 
valuable to growers around benchmarking within the next 2 to 3 
years.
    Mr. Gibbs. And your 1,400 members, I am kind of assuming 
they are all different levels of capabilities.
    Mr. Tiller. They are all different crops, all different 
levels.
    Mr. Gibbs. Levels being able to collect data and how they 
are using the data, right?
    Mr. Tiller. Yes. I have farmers that joined the co-op that 
literally, they might have one tractor on their farm out of 
five that are using GPS. And I have asked them in the 
conversation, ``What made you want to join the co-op?'' Even 
some that don't even have that. And they are looking for the 
co-op to even be an educational force for them.
    I don't know what to do around data. We have always solved 
problems in ag, kind of joining together. There was a thought 
around that. We have had members join at that level.
    And then I wish the gentleman from Nebraska was still here. 
One of my most astute growers, Roric Paulman, out of Nebraska, 
I mean, this guy employs more technology. I learn more about 
how to employ technology when I go to his farm than anyplace I 
have ever seen. My example is, you are right, it is a spectrum. 
But it is all crops, too.
    Mr. Gibbs. Now, kind of an another thought. Data is 
collected, and let's say it is flying pesticide, herbicides, or 
fertilizer, whatever. What are your thoughts about a government 
agency being able to come in? For one aspect, a producer could 
use as protection: I have the actual records here, blah, blah, 
blah. But the other side, say the EPA or whatever. Has that 
conversation ever come up?
    Mr. Tiller. That conversation comes up a lot. You are from 
Ohio, you may know John Fulton, Ohio State. Those are 
conversations we have had with him because he is academia, 
doing research, taking grant money. I am very concerned that 
when there is grant money involved it might be FOIAble. And a 
grower might not want that data out there. Not doing anything 
wrong, just wants his privacy looked at in that way.
    At the co-op we think about that. We have never looked to 
take grants or bring in any dollars like that, we have used 
private money to fund us, because we do want to be a separate 
database owned by growers where they own this individually.
    Mr. Gibbs. That is one aspect, from that aspect. I am 
thinking about another aspect of being able to come in and, I 
guess, subpoena you, or a search warrant.
    Mr. Tiller. Well, I guess that can happen. Let's use some 
examples of things that are out in the tech industry like Box, 
Dropbox, these places that store data. If that could happen to 
us, it could happen to them.
    I think that is a much larger issue than in ag because we 
have tried to remain totally separate and private for those 
very reasons. We have had growers concerned about that, to be 
honest. I mean, what would keep EPA from wanting to just 
subpoena my records around if I am in a watershed and if we 
stored them there.
    And those are things that we are trying to work through now 
as we talk to growers, so there is a lot of caution being put 
there. But at the same time there is so much to be garnered 
when farmer's data are controlled and understanding that data 
so we can do the right things. We are good stewards of the 
land.
    Mr. Gibbs. I agree with that. It is a question of we have 
to be able to answer some of these questions so farmers have 
more confidence to do this.
    I yield back.
    The Chairman. The gentlemen yields.
    Mr. Dunn is recognized for 5 minutes.
    Mr. Dunn. Thank you very much, Mr. Chairman.
    Let me start by saying, I am not a framer, unlike General 
Bacon, who was sitting here to my right, and I didn't grow up 
on a farm. And I am fascinated by the sheer penetrance of 
information technology on today's farms. You hear about rural 
broadband, and you think: Oh, people want TV out in the small 
towns, too. No, that is not what they are talking about.
    I am really, really impressed. We have a very agrarian 
district, a lot of farmers, 300 miles across. It is the number 
one economic activity in my district. And I am learning a lot 
about farming very quickly.
    Let me ask, Mr. Tiller, I will start with you, first 
question. There are large swaths of my district that do not 
have broadband. What happened to these farmers who just at this 
point in time, and maybe going forward for a while, don't have 
access to broadband?
    Mr. Tiller. There are ways to collect data without 
broadband. You can actually store it on the phone, sync it 
later.
    Mr. Dunn. Walk the fields.
    Mr. Tiller. That is right. You do exactly what you have 
been doing. But my whole point, that is why we have to get 
there.
    Mr. Dunn. But they can't compete as well, and they like to 
export, too. There are some pretty big farms.
    Mr. Tiller. That is right. It is something you need to 
address. I mean, I am speaking for those farmers. I know they 
want better access to the technology of broadband. It is that 
simple.
    Mr. Dunn. I have spent a fair amount of time in the space 
launch programs, and I can tell you they want to put a lot of 
low Earth orbit satellites out there that they say will cover 
these areas. I don't know. I also spent a lot of time trying to 
get fiber out there. In fact, one of our space launch 
consortiums was making fiber in space for telecoms and then 
sending it back to Earth to plant in the ground. It is a 
confusing world.
    I do want to address the gentleman from Ohio's question 
about privacy of data, though. I think that that is really 
interesting. We get it that you can own your data, but your 
data has already been shared with some big growers consortium 
perhaps, or not, or not. But is your data private from, let's 
just say, the IRS?
    Mr. Tiller. Well, it is at this point. You would know that 
better than me. I mean, you all are making the rules. At this 
point I haven't had those----
    Mr. Dunn. That is a rule that would interest you?
    Mr. Tiller. That is where I am going to rely on you all to 
actually not protect just the farmers, you are going to want to 
protect everyone from those sorts of concerns.
    Mr. Dunn. But what are the privacy issues in agriculture, 
the secret issues? Are there secret competition issues?
    Mr. Tiller. That is never really the concern. Farmers, 
right now they are not even putting the data in a warehouse 
where it could be used.
    And I find that privacy is a concern. For most of them it 
is not the greatest concern. They want to know: If I want to 
share it, who can I share it with? They want to make sure they 
control those aspects. We are trying to really build a platform 
where they will have that control.
    The main concern farmers have is: How easily can I get it 
there? What value do I really have once it is there? Is there 
anything that can be done with it? Those are things that are 
important today, they weren't as important 5 years ago, but 
today that is the question. Most of them because they have seen 
all the social media, how things go, so they are more 
comfortable around data. But they want to know what value. If I 
put effort and time and money, what do I garner when I get to 
the end of the day?
    Mr. Dunn. I will say, in closing, that no conversation with 
a farmer in my district ends without some comment about access 
to broadband. And that, of course, is much more acute out in 
the farm country. And we want to be sure we address that in the 
farm bill, and we want to be sure that you help us address it 
properly.
    With that, Mr. Chairman, I yield back. Thank you.
    The Chairman. Thank you.
    And I recognize the gentlelady from Delaware for 5 minutes.
    Ms. Blunt Rochester. Thank you. And excuse me for having to 
step out for a moment.
    This issue is one that is probably really important and 
exciting to me, especially in my home State of Delaware. I had 
an opportunity to go around with some of our farmers and use 
some of their technology and see what is happening. And so 
hopefully my questions that I am interested in haven't already 
been asked.
    But one of the things that I was interested in is, I heard 
as I walked in about the issue of broadband, and right now 
there seems to be, just like in the past with the digital 
divide, you have sometimes those who get access to new 
technologies and others who don't.
    I am curious about whether you think the cost of some of 
this technology, when we can expect to see it become more 
available to a broader group of individuals, whether they are 
farmers that have great big companies versus the family farmer. 
Can you talk a little bit about accessibility and kind of 
bridging that divide?
    Mr. Royse. I will jump in just for a minute on one part of 
this. And that is, I am seeing that the cost of the devices is 
going down tremendously over the last 5 years. It is becoming 
very affordable and accessible.
    And you are absolutely right, cost is a very big issue with 
farms, a lot of which are very low margin businesses. And cost 
was a gating factor early on. But, that problem is being 
solved, at least at the device level, with regard to the 
Federal cost. The government cost of building the superhighways 
and the access, that I don't know.
    Mr. Janzen. I wanted to add that we are still at a place 
where farmers are trying to sort out what is the return on 
investment when they upload their data to all these cloud-based 
platforms. Right now most farmers are still paying to store 
their data in the cloud.
    But, the long-term hope is that eventually that value 
proposition flips and we start to see farmers getting paid to 
upload their data, because the companies are getting so much 
value out of that, that it is worth returning some of that 
investment back to farmers. And so that will bring the costs of 
these services down for farmers as well.
    Ms. Blunt Rochester. Got you.
    When you gave your testimony earlier, I heard different 
things about trust, about fear, some of the different concerns 
about who owns the data. And I guess my question would be, we 
have seen that the technology has been growing, but we have 
also heard some of the challenges.
    Can you each identify what you would say is the one major 
concern that you have in making use of the new technologies? If 
you had just one thing that really is that major concern, what 
would it be?
    And we can start with Mr. Royse.
    Mr. Royse. Well, okay. I would like to come back to the 
privacy issue, because I want you to imagine a scenario where 
somebody walks into my office and they say: ``I have this new 
technology. It is going to sit on a drone and it is going to 
gather yield data of a farm.'' Or maybe financially, I am going 
to figure out how profitable that farm is.
    And then I am going the take that data and I am going to go 
sell it to the companies that sell the inputs to the farm 
because they know how profitable the farm is. And by the way, 
in California a lot of the farm land is leased. Maybe I will go 
sell it to one of that farmer's neighbors so he can come and he 
knows what that farm is worth. Or maybe I will sell it back to 
the owner of the land.
    I think there really is a privacy issue here. Now, we deal 
with that, of course, through contracts, and in California we 
have this concept of personally identifiable information. But 
when I hear about trust issues, that is kind of the first thing 
I think about. It is not the only thing, but it is the first 
thing I think about.
    Ms. Blunt Rochester. I have 50 seconds.
    Ms. Casurella. Yes. What growers are most concerned with 
producers are two things. One is if they use their precision ag 
data, the data collected on their tractor for reporting, is the 
government going to get more than the government is supposed to 
get?
    What is on that card, what is in that data could be their 
seed planted in the ground and an as-applied fertilizer 
application. They only want to share the seed, they don't want 
to share the variety and the type. If it is corn and it is 
planted on this field with this parameter, they are happy to 
share that because it is required. They don't want anything 
else to go.
    The challenge is, how do you enable the use of the data 
without disclosing more than is required?
    Ms. Blunt Rochester. Thank you.
    Nine seconds.
    Mr. Janzen. My big concern is that farmers understand the 
contracts they are signing up for.
    Ms. Blunt Rochester. Got you. Thank you.
    Mr. Tiller. I would just reiterate, collaboration of all 
the things we have talked about, going back to when Mr. Royse 
was talking about literally even the drones. Let's take it from 
there even to the data level. If I shared data like Todd is 
talking about with a third-party company, do I understand what 
is going to happen to that data? Is it going to stay there? Are 
they going to share it with affiliates? Are those affiliates 
going to try to sell things to me based on what they learned?
    Ms. Blunt Rochester. Thank you. My time has expired.
    The Chairman. The gentlelady's time has expired.
    I recognize the gentleman from Georgia for 5 minutes.
    Mr. Allen. Thank you, Chairman.
    And thank you for sharing with us.
    Obviously, technology is critical to the continued 
operation of our farming industry. And, of course, we have made 
tremendous strides. And, of course, you all have been a part of 
that and I appreciate all your efforts in making these things 
work.
    We are working through the farm bill, the next farm bill. 
And in the 2014 Farm Bill, it was clear that USDA should allow 
producers or an agent of a producer to report data, including 
geospatial data, electronically or conventionally, to the 
Department. This provision was designed to reduce the 
administrative burdens and costs for producers.
    Ms. Casurella, do you have some insight on why this is not 
being done?
    Ms. Casurella. I am not even sure where to start. First, it 
is the----
    Mr. Allen. Well, we have 3 minutes and 55 seconds.
    Ms. Casurella. Okay. First, it is the uncertainty; well, 
no, first, the farmer doesn't even know it is happening to 
them. If you are going into the FSA or you are going to your 
crop insurance agent and the FSA sends the data, the crop 
insurance--and the crop insurance data through their crop 
insurance company sends the data to the FSA, the producer 
doesn't know it is happening.
    They also don't know it is incomplete data. And the whole 
farming industry is conditioned to have data match. When they 
go into the FSA county office and they get their form 578 and 
they report 32.78 acres, that equals their CLU. And then they 
go into their crop insurance acres and report 31.2 acres of 
insurable acres for their crop insurance.
    If there is a GAO audit or a compliance or a claim, what 
are valid acres? Is it the acres that they reported in crop 
insurance, that are probably the acres that they planted in the 
field, or the acres that they certified in FSA? I mean, there 
are still so much confusion on the impact to a farmer, the 
impact on the FSA program.
    If I report accurately, do my base acres change? Well, not 
in this farm bill. But will they in the next one?
    Mr. Allen. That is why we are talking about it. Again, we 
are working on the next farm bill.
    Ms. Casurella. Yes.
    Mr. Allen. And we need to get this solved.
    Do you or any of the panel have any idea how we can solve 
this issue?
    Ms. Casurella. I will say one thing. Let the farmers plant 
the acres they plant. Let the farmers report the acres they 
plant. It doesn't have to be farm tract field. It doesn't have 
to be common land unit. And let the government figure out then, 
if I plant a boundary and it covers 3 CLUs or within 1 CLU, 
come up with the rules for how to handle that data.
    But don't make the government report with boundaries that 
are set anywhere from 5 to 25 years ago that maximize producer 
benefits. Let the farmers report what they report, and give the 
agency the dollars to be able to adapt the program to collect 
actual data.
    Mr. Allen. Okay. Thank you so much for your feedback.
    Any other comments regarding that problem from the other 
members.
    All right. I have just a minute. It is my understanding 
that the NRCS, which is the Natural Resources Conservation 
Service within the USDA, is coordinating well with the 3D 
Elevation Program, or 3DEP. And my question is to everyone on 
this panel. How can USDA best leverage elevation data via these 
standard mapping technologies, such as LiDAR, to maximize farm 
management decisions? Does it go back to this same issue?
    Mr. Tiller. You were saying elevations.
    Mr. Allen. Right.
    Mr. Tiller. Repeat the question. I had trouble hearing you.
    Mr. Allen. It is where the NRCS service within the USDA is 
coordinating with the 3D Elevation Program within the U.S. 
Geological Survey in the Department of the Interior--in short, 
3DEP is the nationwide LiDAR, L-i-D-A-R Program, in its 
enhanced elevation data. And my question is, how can the USDA 
best leverage that elevation data to make it available?
    Mr. Tiller. Well, to make it available, maybe that could be 
a public data set. I would love to be able to pull that in to 
have that elevation data. As tractors are going through the 
field with the GPS on them, we get elevation data, too.
    Mr. Allen. Okay.
    Mr. Tiller. With that elevation data, you could actually do 
a lot to really check where you are at. Deb or one of the 
others might have a better feel for it. I don't really know the 
value yet. There are people around me that might. I don't feel 
like I could really get----
    Mr. Allen. Well, that is the concern that has been voiced 
to my office. I think it goes back with trying to solve this in 
the next farm bill.
    And, Mr. Chairman, I am out of time, I yield back. Thank 
you so much.
    The Chairman. The gentleman yields.
    The gentleman from Florida is recognized for 5 minutes.
    Mr. Lawson. Mr. Chairman, thank you for the opportunity.
    The biggest problem that I have is the way it happened in 
Congress is trying to do two or three meetings at the same time 
and read on my way coming here. I want to thank the Committee.
    I want to thank you all for being here. And I know that you 
already discussed the issue regarding the lack of broadband.
    But my question is different. Here in north Florida there 
is the issue with the lack of rural broadband and access. Can 
you elaborate on how the lack of rural broadband hinders the 
implementation of telematics among farmers and regions? Can 
anyone?
    Mr. Tiller. I would just reiterate for you, what it is 
boiling down to is this. Everything that is out there that 
really is trying to stream data through telematics into the 
cloud is going to need to use the broadband that is out there, 
the cell signal, or other things that could be put in place. 
Unless those are there, it is going to affect long-term the 
productivity and efficiency of our farms.
    There has to be an effort, because we may not get the 
private investment because they are not sure of the payback. 
But once it is there in its entirety, because the problem is, 
if you just do a little area, you are not going to get it, but 
if it is there in its entirety, and that is where you need the 
government. I think that is where you create those private-
public partnerships with the industry that is out there 
building telecommunications, because once it is all there the 
value to the United States is going to be tremendous.
    I think that is what we have to understand. All this cloud 
that we talk about, it doesn't have any data unless we bring it 
from that dirt, the sensors stuck in the dirt, we have to get 
it there. And there is no technology to get it there, I mean, 
other than me capturing the data off it with a USB stick, going 
to it. But we will never implement those technologies, there 
has to be ease in the automation.
    Mr. Royse. Sir, I would like to add that there are, as was 
mentioned, there are alternatives to broadband to capturing 
data, but they tend to be labor intensive, and we have one heck 
of a labor shortage out in California.
    And we are not going to be able to use it, there is the 
labor shortage that broadband helps address. But also the fact 
that the more we can take humans out of the equation and make 
this more automated and more machine based, the more reliable 
the data is going to be. There are some ancillary concerns to 
this.
    Ms. Casurella. What I will add to that is, right now it 
takes a technician to get the data. I will use an example of a 
farm in Illinois. It is all enabled with technology sensors, 
everything else, and the only time they are connected is when 
that tractor ends up back in the shed, they turn on their 
mobile device and stream that data. It is all after the fact.
    And it is there, it is just really hard to get at, and 
again, takes a technician to figure out how to get the data 
anywhere, it is complicated, instead of letting the sensors 
talk to the cloud, which provides the information to the 
producer.
    Mr. Janzen. And I would add as well that it is not just a 
matter of some farmers in the United States not being connected 
and others being connected. We should always keep in mind that 
our farmers are operating in a global market and other 
countries are making these investments in rural broadband so 
their farmers have a competitive advantage. And we need to make 
sure that all of our farmers have that same advantage here when 
they put goods out on the world market.
    Mr. Lawson. I have little time left, but I wanted to say 
one thing. When you mentioned about California, about the labor 
shortage, are other countries experiencing the same kind of 
problem that California would be, experiencing a shortage of 
the labor market?
    Mr. Royse. Are other countries experiencing? I don't know, 
but I do know that other countries, and we could talk a long 
time about what is going on in other countries. And we do a lot 
of work with China, India, and I was just recently in the 
Middle East, and they are in a race to implement technologies, 
including broadband, because they don't have the kind of 
agricultural infrastructure that the United States has. Other 
countries are becoming very automated very quickly.
    Mr. Lawson. Well, that is amazing.
    Mr. Chairman, with that, I yield back.
    The Chairman. The gentleman yields back.
    I recognize the gentleman from Texas for 5 minutes.
    Mr. Dunn. Thank you, Mr. Chairman.
    And I echo the sentiments from my colleague, Mr. Lawson, 
there are just too many things happening at the same time. My 
apologies, especially if I repeat questions or comments that 
have already been made. I certainly want to thank all the 
panelists for being here and for your insight.
    Utilizing data analytics, Billy, we talked about prior to 
this hearing, is a best practice across all industries. And I 
don't know that the ag industry, certainly ag producers, are 
fully utilizing those, and no telling what the gap is in terms 
of productivity and efficiency that we can gain.
    But there is the question of who owns the data. You 
mentioned that. It is frustrating for you, why shouldn't the 
producer own that data.
    What is government's role in being a data repository? I 
want the government in a very limited role. I want unleashing 
the market forces because that is where innovation happens. I 
don't think it happens a lot in the Federal Government. But the 
Federal Government has a role. Define that for me with respect 
to data.
    Mr. Tiller. Well, I am going to keep it simple. The role 
has to remain in the private-sector of how we store the data, 
who owns it, because it is going to get too complex.
    And I really think that most things work best when 
innovators innovate, and that is what has to happen. We can't 
have rules to make that happen.
    But I am going to say that the role that could really be 
played is how we interact with land-grant universities, how we 
interact with research that is going on, and how that data 
could be used. I mean, farmers are in fear of that becoming 
FOIAble, and all they are trying to do is help in a research 
project.
    That could be something you all could address, so that 
farmers could be part of a research project, help get to the 
real answers at the bottom, and not get in trouble just because 
they are trying to help others, because they might not even 
know they were wrong in what they have done.
    I have heard stories out of California where somebody was 
plowing some ground and got into a multimillion dollar lawsuit 
or something, and it is all because he shared some data. That 
makes farmers fearful. They are like, I would rather not play 
at all.
    The role has to be extremely limited. I think be very 
cautious. I would just caution, just like you said, just a 
little bit. We might need a little help and guidance.
    And I don't have an answer how we bring that together. We 
just have to continue to innovate, encourage the producers to 
really work with groups like ours. If they want to digitally 
report like Deb's tool there, any way that you all could 
innovate that, there are cost savings to the government out of 
things like that.
    Mr. Dunn. I can only imagine, as a bank board member, 
watching the burden and experiencing the burden of data 
collection that the government puts as a requirement because of 
deposit insurance and their regulatory role. I can appreciate 
why some would be very concerned about that, but someone has to 
have it.
    And I agree with you, if you are going to innovate and you 
are going to manage effectively, the co-op idea, is really a 
brilliant idea.
    This is for other panelists, and, Billy, please weigh in if 
you have an idea on this, but, in my role at Texas Tech, trying 
to bring research to market, ideas, to transfer them to 
something that will make a difference in people's lives, this 
is the value proposition for R&D at the Federal Government. I 
am a big believer in it. It has made us competitive, more 
competitive than we would be otherwise without that investment.
    But it is a very difficult endeavor to have early stage 
technology from government R&D to move through the process. You 
have to have the good idea that is patentable, marketable. You 
have to have capital, that is venture capital, angel investors, 
and other early stage money. And then you need to have 
entrepreneurs.
    How do we make that a more efficient and a more successful 
proposition? Because taxpayers really get that. Some of this 
fundamental research, which I believe that basic science is 
important, too, but the applied and the transferred technology 
out of research, every taxpayer gets that, from Google to the 
Gatorade to all these things that have benefited us.
    Tell me how we improve on that on this side of the ledger.
    Mr. Royse. If I may offer a few comments.
    Mr. Dunn. Please. Yes.
    Then I am going to yield back, Mr. Chairman.
    Mr. Royse. I know that Mr. Tiller doesn't like it when I 
use the word disruptive, but I will tell you that I have seen 
lots of very disruptive things. And just in business generally, 
that happens mostly at the startup level. I mean, big 
companies, publicly traded, they have shareholders to report 
to, they are not likely to swing for the fences like our small 
startup companies are, to come up with some really, truly game-
changing technologies. Anything that encourages startup 
companies is good for innovation.
    In my written comments I submitted a couple of proposals, I 
know it is not this Committee's purview, on some tax incentives 
that I think would go a long ways.
    In terms of what the USDA can do, this trust issue is a 
real issue, it is a real thing between the tech companies and 
the farming community. And what is government's role? It should 
assume that traditional role of removing bad actors from the 
marketplace in order that we can have an atmosphere of a little 
more trust.
    And we have a good model in the FTC Act. We just don't have 
an enforcement mechanism, that I am aware of, that applies to 
agriculture.
    That is one thing that I think the Committee might want to 
consider.
    The Chairman. The gentleman's time has expired.
    And before we adjourn, I would like to recognize the 
Ranking Member for any closing comments he might have.
    Mr. Nolan. Thank you, Mr. Chairman.
    I just want to thank the panel. It has been very revealing 
how important technology is for agriculture and the future of 
agriculture, and our ability to feed the world and to continue 
to grow and prosper. And I just want to thank each and every 
one of you.
    And thank you, Mr. Chairman, for bringing in this really 
outstanding panel, we get a lot of panels here, but this is one 
of the really outstanding panels that we have had. And I 
commend to all of our colleagues and anybody interested in food 
and agricultural policy to take the opportunity to read through 
their testimony. It is just excellent. Thank you so much.
    The Chairman. I thank my friend from Minnesota.
    And I will close. I just want to share a few observations 
and thoughts real quick.
    One of the recurring themes that we have heard, not only in 
this hearing, but in some listening sessions and prior 
hearings, was the need for broadband. And, obviously, that is 
going to continue to be a recurring theme.
    Just thinking out loud here, we need to identify the key 
players from a technology standpoint, who can deliver and who 
can deliver and address changing technologies on the fly, 
first.
    Second, who has the infrastructure to reach rural America, 
identify those.
    And then, third, financing this. How do we do that? How big 
of a role, as you mentioned, how big of a role should the 
government play? Or should we be looking at public-private 
partnerships?
    But I view this kind of like a three-legged stool. The 
technology is a big part of it. The infrastructure. Access, 
getting that technology delivered to the folks that need it. 
And then finally, the third piece of the pie here, the third 
leg of the three-legged stool, is financing. How do we pay for 
it? And that is going to be a struggle that we have to work 
toward collectively.
    Big data, addressing any concerns, as we have talked about 
the privacy concerns, some of the skepticism that is inherent 
in agriculture, particularly where the government overlap takes 
place. The legal, ethical concerns, those privacy issues.
    And then you mentioned this, Mr. Janzen, it is a marketable 
commodity, it really is. There is value in that data. How does 
the farmer realize the market potential to help improve his 
bottom line? There is definitely merit in exploring that and 
how you can monetize that data while protecting and 
safeguarding their privacy issues and things of that nature.
    And then, finally, something that didn't come up, but just 
briefly, you may have touched on this, drone use, and how folks 
are using that and acquiring data through drones, how they are 
using this on their farms.
    Folks are so innovative and creative out there. I have a 
group in my district that they are creating drones and 
different applications so fast that it is 4 months down the 
road this one becomes obsolete because they are advancing so 
quickly on the applications that they are finding for using 
unmanned aerial vehicles. And it becomes an issue with the FAA 
and FCC, potentially.
    These are some things that we have to explore, and big data 
is the key and at the heart of that.
    I just would associate myself with the comments that Mr. 
Nolan made. This is a great panel. And we begun a conversation 
here, but we didn't even scratch the surface on what the 
potential is for big data and how we can plug farmers into it 
in a more meaningful way.
    Thank you for being here.
    Under the Rules of the Committee, the record of today's 
hearing will remain open for 10 calendar days to receive 
additional material and supplementary written responses from 
the witnesses to any question posed by a Member.
    This hearing of the Subcommittee on General Farm 
Commodities and Risk Management is adjourned.
    [Whereupon, at 11:31 a.m., the Subcommittee was adjourned.]

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