[Senate Hearing 115-593]
[From the U.S. Government Publishing Office]
S. Hrg. 115-593
OPPORTUNITIES IN GLOBAL AND
LOCAL MARKETS, SPECIALTY CROPS,
AND ORGANICS: PERSPECTIVES
FOR THE 2018 FARM BILL
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HEARING
BEFORE THE
COMMITTEE ON AGRICULTURE,
NUTRITION, AND FORESTRY
UNITED STATES SENATE
ONE HUNDRED FIFTEENTH CONGRESS
FIRST SESSION
__________
JULY 13, 2017
__________
Printed for the use of the
Committee on Agriculture, Nutrition, and Forestry
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://www.govinfo.gov/
__________
U.S. GOVERNMENT PUBLISHING OFFICE
29-639 PDF WASHINGTON : 2019
COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY
PAT ROBERTS, Kansas, Chairman
THAD COCHRAN, Mississippi DEBBIE STABENOW, Michigan
MITCH McCONNELL, Kentucky PATRICK J. LEAHY, Vermont
JOHN BOOZMAN, Arkansas SHERROD BROWN, Ohio
JOHN HOEVEN, North Dakota AMY KLOBUCHAR, Minnesota
JONI ERNST, Iowa MICHAEL BENNET, Colorado
CHARLES GRASSLEY, Iowa KIRSTEN GILLIBRAND, New York
JOHN THUNE, South Dakota JOE DONNELLY, Indiana
STEVE DAINES, Montana HEIDI HEITKAMP, North Dakota
DAVID PERDUE, Georgia ROBERT P. CASEY, Jr., Pennsylvania
LUTHER STRANGE, Alabama CHRIS VAN HOLLEN, Maryland
James A. Glueck, Jr., Majority Staff Director
Jessica L. Williams, Chief Clerk
Joseph A. Shultz, Minority Staff Director
Mary Beth Schultz, Minority Chief Counsel
(ii)
C O N T E N T S
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Page
Hearing(s):
Opportunities in Global and Local Markets, Specialty Crops, and
Organics: Perspectives for the 2018 Farm Bill Examining the
Farm Economy: Perspectives on Rural America.................... 1
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Thursday, July 13, 2017
STATEMENTS PRESENTED BY SENATORS
Roberts, Hon. Pat, U.S. Senator from the State of Kansas,
Chairman, Committee on Agriculture, Nutrition, and Forestry.... 1
Stabenow, Hon. Debbie, U.S. Senator from the State of Michigan... 3
Witnesses
Dallmier, Kenneth, President and Chief Operating Officer,
Clarkson Grain Company, Inc., Cerro Gordo, Illinois............ 6
Crisantes, Theojary Jr., Organic Specialty Crop Farmer and Vice
President of Operations, Wholesum Harvest, Amado, Arizona...... 8
Johnston, Haile, Director, the Common Market, Philadelphia,
Pennsylvania................................................... 9
Halverson, Eric, Potato Farmer and Chief Executive Officer, Black
Gold Farms, Grand Forks, North Dakota.......................... 11
Meyer, Dean, Livestock and Crop Producer and Executive Committee
Member, U.S. Meat Export Federation, Rock Rapids, IA........... 13
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APPENDIX
Prepared Statements:
Crisantes, Theojary Jr....................................... 32
Dallmier, Kenneth............................................ 37
Halverson, Eric.............................................. 44
Johnston, Haile.............................................. 49
Meyer, Dean.................................................. 54
Document(s) Submitted for the Record:
Stabenow, Hon. Debbie:
Ten Hens Farm, Bath, MI, prepared statement for the Record... 60
Crisantes, Theojary Jr.:
Attitudes Towards Container Growing.......................... 65
Container Picture............................................ 99
Farm Picture................................................. 100
Question and Answer:
Crisantes, Theojary Jr.:
Written response to questions from Hon. Debbie Stabenow...... 102
Written response to questions from Hon. Patrick J. Leahy..... 103
Written response to questions from Hon. Sherrod Brown........ 112
Dallmier, Kenneth:
Written response to questions from Hon. Pat Roberts.......... 114
Written response to questions from Hon. Debbie Stabenow...... 115
Written response to questions from Hon. Steve Daines......... 117
Written response to questions from Hon. Patrick J. Leahy..... 118
Written response to questions from Hon. Sherrod Brown........ 126
Halverson, Eric:
Written response to questions from Hon. Pat Roberts.......... 129
Written response to questions from Hon. Debbie Stabenow...... 129
Written response to questions from Hon. Steve Daines......... 130
Written response to questions from Hon. Patrick J. Leahy..... 131
Johnston, Haile:
Written response to questions from Hon. Pat Roberts.......... 138
Written response to questions from Hon. Debbie Stabenow...... 138
Written response to questions from Hon. Patrick J. Leahy..... 142
Written response to questions from Hon. Sherrod Brown........ 145
Written response to questions from Hon. Michael Bennet....... 147
Meyer, Dean:
Written response to questions from Hon. Debbie Stabenow...... 151
Written response to questions from Hon. John Boozman......... 152
Written response to questions from Hon. Patrick J. Leahy..... 153
OPPORTUNITIES IN GLOBAL AND
LOCAL MARKETS, SPECIALTY CROPS,
AND ORGANICS: PERSPECTIVES
FOR THE 2018 FARM BILL
----------
Thursday, July 13, 2017
United States Senate,
Committee on Agriculture, Nutrition, and Forestry,
Washington, DC
The committee met, pursuant to notice, at 9:30 a.m., in
room 328, Russell Senate Office Building, Hon. Pat Roberts,
Chairman of the committee, presiding.
Present or submitting a statement: Senators Roberts,
Boozman, Hoeven, Ernst, Grassley, Thune, Daines, Stabenow,
Brown, Klobuchar, Bennet, Gillibrand, Donnelly, Heitkamp,
Casey, and Van Hollen.
STATEMENT OF HON. PAT ROBERTS, U.S. SENATOR FROM THE STATE OF
KANSAS, CHAIRMAN, U.S. COMMITTEE ON AGRICULTURE, NUTRITION, AND
FORESTRY
Chairman Roberts. I call this meeting of the Senate
Committee on Agriculture, Nutrition, and Forestry to order.
Over the last several months we have been laying the
groundwork for a new farm bill, and as Chairman of this
Committee I have repeatedly said we must listen to our farmers,
ranchers, and growers first, and that is exactly what Senator
Stabenow and I have been doing, and we will continue to do
that. We are well into the process of collecting the advice and
counsel of the farmers and ranchers and growers, those for whom
this farm bill tolls and is meant to work. We will continue to
conduct a thorough review of the farm bill programs that
provide certainty to those across the country who are facing
very tough economic times. We are in a rough patch.
In these tight budgetary circumstances, unfortunately we
have no choice but to find ways to do more with less, to make
every dollar count. When seeking to provide assistance to our
producers, and throughout this process, there is one word that
I am hearing in nearly every farm bill hearing, summit,
meeting, roundtable, whatever we attend, and that is ``trade.''
Trade, trade, trade. Well, first crop insurance but then trade,
trade, trade.
I have worked on six farm bills. I do not know anybody else
that has asked for that task, but this is number seven. I can
tell you that each one is unique, but one thing has not
changed. Whether you are an apple grower in Washington or a
dairy farmer in Wisconsin or a cattle rancher in Texas, you
need a strong and reliable market to sell what you produce.
That is absolutely essential. That is the benefit of farm bill
trade programs. With an excellent return on investment, these
public-private partnerships help the full range of our
producers, from commodities to specialty crops.
Programs like the Market Access Program, or MAP, allow
producers to partner with the Department to market and promote
their products to all corners of the globe. For example, in
2015, the California Walnut Commission used MAP funds to
support efforts in India to promote the health benefits of
walnuts. In that year, shipments to India increased tenfold.
Just think of that.
Another farm bill export program, the Foreign Market
Development Program partners with the Foreign Agriculture
Service and U.S. agriculture cooperators to promote our
commodities overseas. For example, in Egypt, the U.S. Wheat
Associates have utilized the Foreign Market Development Program
to promote U.S. hard red spring wheat to be used as a pasta
ingredient. As a result, an Egyptian food and beverage company
imported 30,000 metric tons of hard red spring wheat in 2015
and '16, and need to do it again this year.
There are countless examples demonstrating the benefit U.S.
agriculture receives through partnerships with farm bill export
programs, and the variety of agriculture industries tapping
into these programs has continued to grow.
We are going to hear today from the beef and potato
sectors, but there are many others such as cotton, dairy,
poultry, rice, sunflower, citrus, lumber, sorghum, dry beans,
and corn, just to name a few.
As I have said in past hearings, we have our work really
cut out for us with this next reauthorization. We will need to
find ways to do more with less to reduce the burdens of
overregulation, and ask the tough questions as we re-examine
programs to determine their effectiveness and if they are
serving their intended purpose.
There are 39 programs from the 2014 Farm Bill that do not
have a baseline after fiscal year 2018. The Foreign Market
Development Program and the Technical Assistance for Specialty
Crops Program fall under that category.
More and more, we are facing barriers to trade from other
countries. In addition to developing and growing new markets,
these programs play an important role in helping U.S. producers
compete on the proverbial level playing field. In addition,
some changes need to be made to ensure that our organic
producers are competing on that level playing field and that
our own regulations and processes are not holding people back.
A recent Washington Post article highlighted the issue of
fraudulent organic imports, but my constituents in Kansas
brought this issue to my attention a year ago. We pushed the
Department of Agriculture at that time to do something, and it
is clear that if it takes this long to get action, something
needs to change. As I continue to repeat, with this tight
budgetary environment, we need to ensure that overregulation
and antiquated government processes are not preventing
businesses from succeeding.
Farmers from rural American can choose organics, not
necessarily because they believe there is anything wrong with
conventional production, but because they recognize organics as
a value-added opportunity. They are responding to a market
signal and increasing their margins, and, boy, is that market
segment working today. However, it seems that uncertainty and
dysfunction have overtaken the National Organic Standards Board
and the regulations associated with the National Organic
Program. These problems create an unreliable regulatory
environment and prevent farmers that choose organics from
utilizing advancements in technology and operating their
businesses in an efficient and effective manner. Simply put,
this hurts our producers and our economies in rural America.
So I look forward to hearing about these issues and
learning from those that have first-hand experience in the
success of farm bill trade programs and the challenges
associated with outdated processes.
With that, it is my pleasure and privilege to recognize the
Senator from Michigan, Senator Stabenow, for any remarks she
may have.
STATEMENT OF HON. DEBBIE STABENOW, U.S. SENATOR FROM THE STATE
OF MICHIGAN
Senator Stabenow. Thank you so much, Mr. Chairman, and
thank you for holding this important hearing on two very
critical titles of the farm bill. First let me say that while
we do not want to export our jobs, we sure want to export our
products, and agriculture needs markets, and so it is
incredibly important that we have this title on trade in the
farm bill and that we have the new position on trade in the
USDA that we created in the last farm bill.
As we well know, the farm bill supports and celebrates the
diversity of American agriculture, and that is what we are
talking about today. Whether you are from a multi-generation
farm family, a young person learning about urban agriculture,
or even a returning veteran looking to start a career in
agriculture, the farm bill helps all farmers access new markets
and new opportunities in their hometowns as well as throughout
the world.
The strength of the U.S. agriculture sector is, in part,
due to its diversity. In Michigan, we grow over 300 varieties
of crops, ranging from carrots, celery and asparagus to our
world-famous cherries, apples, and blueberries. These specialty
crops not only supply our communities with healthy fruits and
vegetables, they are also an economic powerhouse supporting
jobs and fueling our economy. Nationwide sales of specialty
crops total nearly $65 billion a year. That is because
consumers seek out American-grown products in local grocery
stores, and all around the world as well.
Programs in the 2014 Farm Bill, including specialty crop
research, pest and disease management, and nutrition incentives
have been critical in helping farmers increase productivity and
drive demand for these crops here and abroad. Take the example
of the small but mighty cherry, one of Michigan's top crops.
Our cherry capital, Traverse City, just held its annual
festival, celebrating this special fruit. On average, Michigan
grows over $90 million worth of cherries each year. Our
cherries can be found in farmers markets, school lunches in
Michigan, and on grocery store shelves, in Michigan as well as
China, Germany, and the U.K., thanks to key programs in the
farm bill.
From marketing assistance to credit access, the farm bill
creates export opportunities that connect our farmers to
consumers around the world. As a result, our agricultural
exports add over $8.4 billion to the U.S. economy each year,
while supporting more than 1 million American jobs, on and off
the farm.
We are also seeing incredible growth in organics, as the
Chairman mentioned, in the local economy that connect our
farmers to new opportunities. U.S. retail sales for organic
products have skyrocketed in the last decade, growing from $13
billion in 2005 to more than $43 billion today. Local food
sales have more than doubled from 2008 to 2014, and industry
experts expect that value to reach $20 billion by 2019.
Through targeted organic research, assistance for farmers
transitioning into organic agriculture and enforcement of
organic standards, the farm bill is a critical tool to ensure
consumers have choices in the grocery aisle and confidence in
the organic products they purchase. We are seeing more and more
consumers who want to learn about their food and where it comes
from, and that is a good thing.
Farmers markets provide opportunities for new farmers to
get started. Food hubs, value-added production grants, and
supply chain support help these farmers to build stable
businesses that can thrive while expanding access to healthy
foods in areas that are, in many cases, food deserts. It is
hard to believe that specialty crops, local food, and organics
did not have a place in the farm bill until 2008. Although
these areas make up a small percentage of the farm bill budget,
compared to other titles, the impact of these investments has
been enormous.
I would like to submit testimony for the record, Mr.
Chairman, from Dru Montri, who is the owner of Ten Hens Farm
and Executive Director of the Michigan Farmers Market
Association who knows first-hand how important these efforts
have been to local farmers.
Chairman Roberts. Without objection.
Senator Stabenow. Thank you.
[The following information can be found on page 60 in the
appendix.]
Senator Stabenow. As we will hear today, these programs
have proven their effectiveness. It is critical that we
continue to support the diversity of American agriculture as we
write the next farm bill. The success of our agricultural
economy will require continued investment in markets and
opportunities for all of our farmers. Whether they are selling
locally to their neighbors or exporting their products
globally, and whether they are growing commodities, specialty
crops, or organics. The farm bill should continue to help all
of our producers do what they do best, put food on our tables
here and around the world.
Thank you, Mr. Chairman.
Chairman Roberts. I would like to welcome our panel of
witnesses. We have quite a few folks here so we will get right
to it.
Our first panelist is Mr. Ken Dallmier who joins us this
morning from Cerro Gordo, Illinois. He is the President and
Chief Operating Officer of Clarkson Grain Company, an organic
grain and oilseed supplier based in Illinois. Previously, Mr.
Dallmier held management positions with his family business,
Sturdy Grow Hybrids, as well as Syngenta Seeds and Agrible,
Inc. He currently serves on the board of Illinois Foundation
Seeds, Inc., and is a member of their Organic Trade
Association's Global Supply Chain Integrity Task Force. That is
a mouthful. Welcome, and I look forward to your testimony, sir.
Next we have Mr. Theo Crisantes, who is a farmer and owner
of Wholesum Harvest, an organic specialty crop operation in
Arizona. Mr. Crisantes is the Vice President of Growing
Operations, and has worked in the family business since 2000.
While working in operations management at Wholesum, he has
employed various certified organic agriculture production
methods, including high-tech glass greenhouses and container
growing. Welcome, and I look forward to your testimony, sir.
I now turn to Senator Casey--that is quite an entrance,
Bob.
[Laughter.]
Chairman Roberts. I now turn to Senator Casey to introduce
our next witness----
Senator Casey. Mr. Chairman, thank you very much.
Chairman Roberts. --Mr. Haile Johnston.
Senator Casey. Do not worry. I have a fully written
statement here. It will take a little while. You do not mind,
right? No?
Thanks very much and thanks for accommodating my schedule.
I am here to introduce Mr. Johnston. He is a Philadelphia-based
father of four young children who works to improve the vitality
of rural and urban communities through food systems reform and
policy change. Along with his wife Tatiana, he is the co-
director and a founder of The Common Market, a nonprofit
distribution enterprise that connects communities in the Mid-
Atlantic region to sustainable, locally grown farm food. The
two have also teamed up to found the East Park Revitalization
Alliance in their community of Strawberry Mansion in
Philadelphia, where they have resided for 11 years.
He is a graduate of the University of Pennsylvania's
Wharton School of Business, where he concentrated on
entrepreneurial management, and is proud to have recently
served as a food and community fellow with the Institute for
Agriculture and Trade Policy, and to be a current Draper
Richards Kaplan Foundation entrepreneur. He serves as a trustee
of the Jessie Smith Noyes Foundation, and as an advisory board
member of the National Farm to School Network.
Mr. Johnston has extensive experience utilizing a number of
important USDA programs, including Local Foods Promotion
Program and the Farm to School Grant Program. These programs
strengthen rural communities and increase access to healthy
food, and I am grateful that he has offered to be here today to
share his experience with us.
Mr. Chairman, thank you for that time.
Chairman Roberts. Thank you, Senator Casey. You have a
great sense of timing.
Our next witness was to be introduced by Senator Hoeven.
Senator Hoeven is busy rewriting the health care bill so cannot
be with us this morning at this particular time.
Mr. Eric Halverson is among the fourth generation of
Halversons involved with Black Gold, and hails from Grand
Forks, North Dakota. He is the Chief Executive Officer of Black
Gold Farms, which began raising potatoes clear back in 1986,
and now grows more than 20,000 across 10 states. Mr. Halverson
also represents North Dakota on the Administrative Committee of
the U.S. Potato Board. Welcome, and I look forward to your
testimony.
Now it is my distinct pleasure to turn to Senator Ernst to
introduce our final witness.
Senator Ernst. Yes, thank you, Mr. Chair. The Committee
invited Mr. Dean Meyer to testify. Mr. Meyer has been farming
in Lyon County, Iowa, for 33 years, where he owns swine and
cattle finishing operations and raises corn, soybeans, and
alfalfa. He is currently serving his third year on the U.S.
Meat Export Federation Executive Committee and is also a
director for the Iowa Corn Growers Association.
Unfortunately, Mr. Meyer experienced travel complications
and so will not be able to join us this morning. He is not
rewriting the health care bill. He was just unable to join us.
So on his behalf, we have Mr. Gregory Hanes, and Mr. Hanes
will be reading Mr. Meyer's testimony. Mr. Hanes is currently
the Assistant Vice President of International Marketing at the
U.S. Meat Export Federation, located in Denver, Colorado, and
Mr. Hanes, thank you for filling in today on such short notice.
We really do appreciate it.
Thank you.
Chairman Roberts. Welcome, Mr. Hanes. You can be the stand-
in, or simply you can be Mr. Meyer, either one. Take your pick.
Let us get to the first witness, Mr. Dallmier, please.
STATEMENT OF KENNETH DALLMIER, PRESIDENT AND CHIEF OPERATING
OFFICER, CLARKSON GRAIN COMPANY, INC., CERRO GORDO, ILLINOIS
Mr. Dallmier. Chairman Roberts, Ranking Member Stabenow,
and members of the Committee, thank you for the opportunity to
discuss the impact of imported organic grain into the U.S. food
and feed supply chain.
As Chairman Roberts so graciously introduced me, I am Ken
Dallmier, the President and Chief Operating Officer of Clarkson
Grain Company, of Cerro Gordo, Illinois. Clarkson Grain
specializes in developing identity preserved supply chains for
some of the most respected consumer brands, with the most
exacting specifications of organic and non-GMO grain crops.
Today I will briefly highlight the situation and offer some
suggestions for concrete actions this committee can take to
mitigate the risks highlighted in the recent Washington Post
article.
The USDA organic label is highly trusted, with over 82
percent of households across the United States purchasing some
organic products. Leading U.S. organic demand has been organic
poultry and dairy products, but supplies of domestic organic
grains have fallen short. In 2016, over 50 percent of the
organic corn and over 70 percent of the organic soybeans used
in the United States were imported. This represents 1 million
acres and over $410 million in incremental lost revenue.
In our written statement we outline five recommendations to
mitigate the risk of fraudulent organic shipments. For brevity,
sir, I will concentrate upon three during this statement.
Number one, utilize existing USDA programs to support the
expansion of domestic organic grain supplies. Congress should
instruct the USDA to finalize the USDA Certified Transitional
seal with associated process verification programs, or PVPs. In
2015, Clarkson Grain designed and submitted to the USDA a PVP
aligned with the requirements to transition land into organic
production. Since then, innovative brands such as Kashi have
developed private PVPs and have successfully introduced a
certified transitional line of cereal. As a result, Kashi is
one of the few growing brands in a mature cereal segment.
Secondly, increased transparency through the supply chain
using physical tracking mechanisms that are robust to withstand
grain transport while being easily removed from the grain
stream at the final destination. A start-up company through the
University of Illinois, Amber Ag, has developed a radio
frequency transmitting puck, similar in size to what I am
holding here, about the size of a key fob, that can be inserted
into a bag of grain at the field or a truck or container, which
is readable throughout the supply chain, through to the end
user. This will eliminate reliance upon paper documentation
that are easily misrepresented.
Finally, personal and corporate accountability and
responsibility must be introduced throughout the import supply
chain. The current NOP mandate is to monitor the process while
it limits penalties to the revocation of USDA organic
certificate. By imbedding NOP staff at specially designed
ports, and making them accountable to U.S. law, the consumer
has a final guard at the gate. Shipping lines must be
accountable for the validity of the cargo that they carry,
through maritime laws, and finally, end users of fraudulent
grain should face product recall liability when product does
not meet label requirements. In short, organic livestock must
be fed organic feed.
Again, thank you for allowing me to provide our
perspectives on this topic. I appreciate the interest of the
Committee and look forward to answering your questions. Thank
you very much.
[The prepared statement of Mr. Dallmier can be found on
page 37 in the appendix.]
Chairman Roberts. You are very welcome. Thank you so much.
Our next witness, Mr. Crisantes.
I do not think my introductory remarks about you really
fulfill an appropriate introduction. You started, or your
agriculture roots started as a young man spent in the tomato
fields of Mexico, right?
Mr. Crisantes. That is correct, sir. Yes, we started in
Mexico and moved to the United States to grow tomatoes here as
well.
Chairman Roberts. You have got quite a trajectory of
success. You are responsible for 600 acres of organic
production, pioneering, and water conservation.
Mr. Crisantes. Correct, sir.
Chairman Roberts. I would like to talk to you personally
about that, especially with drip irrigation. You have about
1,500 fair trade employees, and the one thing that I want to
mention is that you have dedicated your time and effort to is
the protection of organic standard in the farm bill through
advocacy and commitment, ensuring that the USDA certified
organics speak to the quality, the mission, and the
availability of healthier organic produce.
Mr. Crisantes. Correct, sir.
Chairman Roberts. So with that extra introduction, please
proceed.
STATEMENT OF THEOJARY CRISANTES JR., ORGANIC SPECIALTY CROP
FARMER AND VICE PRESIDENT OF OPERATIONS, WHOLESUM HARVEST,
AMADO, ARIZONA
Mr. Crisantes. Thank you, sir. Good morning, Chairman
Roberts, Ranking Member Stabenow, members of the Committee.
Thank you for the opportunity to provide testimony on the
organic industry. My name is Theo Crisantes and I am the Vice
President of Operations at Wholesum Harvest, an organically
family farm with operations in Arizona and in Mexico. I am here
today as an organic grower and a member of the Coalition for
Sustainable Organics, which promotes the continued use of
containers and hydroponics in the National Organic Program. I
am also a member of OTA, Western Growers, and United Fresh.
My farm, Wholesum Harvest, is a true success story. We have
been selling fresh produce into the United States since 1940,
and in 2012, we significantly expanded our operations in
Arizona. We currently grow organic tomatoes, cucumbers,
eggplant, peppers, and squash on 600 acres in the United States
and in Mexico. We are the largest producer of organic tomatoes
on the vine in the United States.
We started using containers and greenhouses because we
found that it was the best way to create a sustainable and
thriving organic system. This picture of containers of my
prized tomatoes are in your packets and right here, to the
right. We have reduced water use by 80 percent and increased
the efficiency of our beneficial insect program.
Greenhouses and container production now account for 23
percent of organic retail sales of tomatoes, 44 percent of
peppers, and 37 percent of cucumbers. These methods are also
supported by consumers. Ninety-one percent of consumers support
policies that allow farmers to grow organic produce in
containers. In short, consumers want our organic products,
which is why we have been a proud participant in the USDA
organic program since 1995.
However, the future is unclear and my business is facing
significant uncertainty, as a National Organic Standards Board,
a federal advisory committee to USDA, considers a proposal to
eliminate containers and hydroponics from organic
certification. I am concerned that NOP's structure is showing
its weaknesses, and if not corrected could jeopardize the
organic industry.
I will identify three issues for consideration.
First, with only 15 members, sourced from an extremely
diverse industry, NOSB can only represent a small segment of
that industry. For example, the four growers represented
currently on the board have a combined total of only 120
farmable acres.
Second, the board does not allow enough public input,
especially when you consider their influence. I have invited
NOSB members to visit our operations, but there have been no
visits. Besides three-minute public comment slots at biannual
board meetings, there are no other ways to interact with these
decision-makers.
Finally, the priorities of the organic industry are not
reflected in the priorities of the board. While industry
involvement in setting organic standards is of critical
importance, USDA should be empowered to take more initiative
over the direction of the NOSB and drive more communication on
the front end of policy-making, to give businesses like ours
the confidence necessary to grow.
Demand for organic continues to increase. Therefore, we
must ensure all growing methods that are organic remain
organic. While containers and hydroponics may be in the hot
seat now, other technologies may be next.
As you prepare for the next farm bill, it is important to
note that the organic industry no longer caters to a niche
market. We are a $50 billion-and-growing industry with
significant challenges such as research and crop insurance
availability. Previous farm bills have made significant down
payments in our industry, and CSO looks forward to working with
the Committee to propel organics to the next level.
Thank you for the opportunity to testify today. I will look
forward to answering any questions that you may have.
[The prepared statement of Mr. Crisantes can be found on
page 32 in the appendix.]
Chairman Roberts. We thank you, sir, for your most
pertinent testimony. Mr. Johnston.
STATEMENT OF HAILE JOHNSTON, DIRECTOR, THE COMMON MARKET,
PHILADELPHIA, PENNSYLVANIA
Mr. Johnston. Good morning, Chairman Roberts, Ranking
Member Stabenow, and members of the Senate Agricultural
Committee. Thank you for the opportunity to testify on behalf
of the farmers and communities we serve in the Southeast and
Mid-Atlantic regions. I am Haile Johnston, a co-founder and co-
director of The Common Market, a nonprofit food distributor,
and I hope to convey some of the many positive outcomes
resulting from investing in stronger local agricultural
markets.
I believe our shared interest is to ensure the health and
economic well-being of all Americans. At The Common Market, we
build infrastructure to support regional food systems that
facilities wholesale market access for small and mid-sized
farms, while improving the accessibility of local food for all
people. We are particularly focused on improving economic
opportunity and health outcomes for the most vulnerable in
rural and urban communities. We see our work and partnerships
as vital to removing barriers to success for farmers and the
barriers to better food access for all. Primary among our
partners in this work has been the USDA, through its various
agencies and programs.
Since our first sale in the summer of 2008, we have
delivered over $16 million of local fruits, vegetables, yogurt,
eggs, meat, and grocery items from over 150 small and mid-sized
sustainable farms, to more than 500 schools, hospitals,
eldercare communities, colleges and universities, grocery
stores, community organizations, and restaurants. By
facilitating local trade, we are able to return more of the
food dollar to local farmers and rural economies. This work has
translated to nearly $30 million of regional investment by The
Common Market in the last nine years.
The Common Market arose from urban agriculture and
nutrition education programming during the emergence of the
``farm to school'' movement more than a decade ago. Retailers,
schools, hospitals, and other institutions were beginning to
express a strong desire to invest in local economies and better
health through food purchasing, yet many local farmers and the
regional supply chains lacked capacity to meet wholesale
institutional demand and food safety requirements.
Our model evolved to assist farmers in building capacity
and infrastructure to meet these demands, while developing the
relationships, logistics, and facility to connect their product
to re-emerging market opportunities. We have helped all of our
growers in the Mid-Atlantic achieve USDA Good Agricultural
Practices, or GAP, certification, and this has happened
alongside other model interventions in retail and community
food access, which have demonstrated profound impact in
supporting economic empowerment and health.
After proving the viability and impact of our work in the
Mid-Atlantic states, The Common Market launched a new chapter
two years ago in Atlanta, partnering primarily with farmers
from rural Georgia and Alabama, and while our model and
approach is similar in the Southeast, the needs and historical
challenges facing our growers there are markedly different.
The Common Market is connecting our partners with resources
to improve food safety, working toward GAP certification,
invest in farm infrastructure to improve post-harvest handling,
and assist in crop planting to better anticipate opportunities
within wholesale markets. All of this translates to growth in
income for farmers, increased acreage in agricultural
production, job and wealth creation for rural economies, and
the generational transfer of agricultural practices and land. I
am happy to share that after successful replication in Georgia
we are partnering with growers in Texas to offer a similar
program.
We have had the good fortune to work in direct partnership
with the USDA through the Local Food Promotion Program, the
Food LINC value chain coordinators initiatives, the Outreach
and Assistance for Socially disadvantaged Farmers and Ranchers
and Veteran Farmers and Ranchers Program 2501, the Community
Food Projects program, and Farm to School grant program. It is
critically important that the next farm bill continue to
support these and other local food programs to build on our
efforts and to support new local and regional food systems
across the country.
According to our recent farmer survey, our growers are the
stewards of nearly 21,000 acres and employ more than 1,050
rural workers. Again, this is translated to nearly $30 million
in direct investment in the communities where we work and more
than 1,000 jobs. These are real jobs and real food with real
impact.
I thank you for the honor of sharing our story and I
implore you to sustain USDA programming supporting local food
systems, and I look forward to answering your questions.
[The prepared statement of Mr. Johnston can be found on
page 49 in the appendix.]
Chairman Roberts. Thank you, Mr. Johnston. I appreciate
your remarks, as do all members of the Committee.
We how have Eric Halverson, who graduated from North Dakota
State University, a school that no Division I team wants to
play.
[Laughter.]
Chairman Roberts. I understand, Eric, that you have four
daughters--Lucy, Stella, Ruby, and Lola. Do you carry a big
stick to drive the young men off of your front porch?
Mr. Halverson. They are not quite that old yet, but it is
coming.
Chairman Roberts. Yes. Stay ready. Please proceed.
STATEMENT OF ERIC HALVERSON, POTATO FARMER AND CHIEF EXECUTIVE
OFFICER, BLACK GOLD FARMS, GRAND FORKS, NORTH DAKOTA
Mr. Halverson. Chairman Roberts and Ranking Member
Stabenow, thank for the Committee's work in preparation for the
2018 Farm Bill.
I am Eric Halverson of Black Gold Farms and am testifying
today on behalf of the National Potato Council and the United
Fresh Produce Association.
Black Gold Farms is a fourth-generation, family-owned
farming organization started in North Dakota's Red River Valley
more than 80 years. We now have operations in Florida, Indiana,
Louisiana, Maryland, Michigan, Minnesota, Missouri, North
Carolina, North Dakota, and Texas.
The potato industry is a long-time participant in USDA
export programs that enhance our ability to compete in foreign
markets. These activities are conducted through the National
Potato Promotion Board under the trade name Potatoes USA.
As a potato producer and marketer, my comments are largely
focused on potatoes. However, I would like the Committee to
understand that the benefits from these export programs are
also utilized by many other commodities in the specialty crop
family.
Our industry joins our counterparts in the produce sector
in strongly supporting enhancement of these vital programs in
the next farm bill. The recent study by Texas A&M indicating a
28-to-1 return on investment validates that increased resources
in export promotion will immediately generate results for
farmers and consumers. In general, one in every five rows of
potatoes that are produced in the United States are destined
for export markets.
These foreign markets are vital for maintaining the
economic health of my industry. Foreign competitors
aggressively promote their specialty crops, often with
government programs that have substantially larger resources.
Additionally, various government programs lower the cost of
production for foreign potatoes to levels that American
producers cannot match. Coupled with favorable exchange rates,
these foreign government policies make for an increasingly
competitive marketplace for fresh and processed potatoes.
Despite these challenges, U.S. potato exports returned to
positive growth last year, overcoming the obstacle of lost
sales due to the West Coast port shutdown and the strong
dollar, to reach their second-highest level on record. These
results would not be as positive without the support of USDA's
export programs and MAP, in particular. It should be noted
these programs are cost-sharing. The potato industry matches
its MAP funding substantially greater than the 1-to-1, and that
ratio may be larger for the other specialty crops.
In terms of specific results, exports to potato industry
targets markets in Asia, Mexico, and Central America outpaced
export growth in the world, raising a collective 10 percent by
value last year.
The TASC program serves complementary but distinctly
different function than MAP. One of the main ways the potato
industry has utilized TASC is in providing resources for
foreign plant health officials to inspect U.S. production as
part of the process of opening their markets to American
exports.
Specifically, TASC resources led directly to the opening of
the Vietnamese and Philippines markets to fresh potatoes, and
the opening of Brazil and the Dominican Republic to seed
potatoes. These valuable farm bill programs obviously work in
concert with U.S. trade policies that reduce tariffs and non-
tariff barriers in key export markets. Simply put, the U.S.
cannot afford to fall behind in its pursuit of trade agreements
that benefit American agriculture.
We took note last week that the EU and Japan have completed
a free trade agreement that intends to fill the void left by
the stalled TPP. Japan is the single-largest export market for
my industry and the tariff concessions that are EU competitors
have just gained there will make for a more challenging market.
Additionally, the potato industry has taken great interest
in NAFTA renegotiation, as Canada and Mexico are the second-and
third-largest potato export markets. We cannot afford to lose
access to their markets in the review of the 25-year-old
agreement.
My comments today have been focused on USDA's export
programs but I do want to also mention how other important
programs, such as the Specialty Crop Block Grant program, the
Specialty Crop Research Initiative, and vital pest and disease
funding work hand in hand in keeping our industry competitive.
Though small in the overall scheme of the farm bill, they
provide a vital resource to areas that continue to increase in
importance.
Chairman Roberts and Ranking Member Stabenow, we respect
that the Committee is just beginning the process of considering
all of the various programs of the 2018 Farm Bill. As that
review continues, the National Potato Council and the United
Fresh Produce Association would be pleased to provide
additional information on the impact of these valuable
programs.
Thank you.
[The prepared statement of Mr. Halverson can be found on
page 44 in the appendix.]
Chairman Roberts. Thank you for your testimony.
Mr. Hanes for Mr. Meyer.
STATEMENT OF GREG HANES, ASSISTANT VICE PRESIDENT OF
INTERNATIONAL RELATIONS AND MARKETING, U.S. MEAT EXPORT
FEDERATION
Mr. Hanes. Thank you. Good morning, Chairman Roberts,
Ranking Member Stabenow, committee members. As you mentioned,
my name is Greg Hanes. I am not Dean Meyer but you can call me
that and I will do my best impersonation of him as I can. It
probably will not be very well.
But as you heard, Dean is a member of the USMEF, U.S. Meat
Export Federation Executive Committee. He is a Director on the
Iowa Corn Growers Association. I am actually very disappointed
that he is not here because I think Dean really exemplifies
what the U.S. Meat Export Federation is about. He feeds cattle.
He finishes hogs. He grows corn. He grows soybeans. Those four
industries, along with lamb, are all the key core stakeholders
of USMEF that work together to increase the exports of red meat
internationally.
At USMEF I am responsible for working with our
international offices as we implement the international
marketing programs globally, but today I would like to really
stress the vital role that funding from USDA's Market Access
Program and the Foreign Market Development program play in
building the demand for U.S. red meat exports and to ask for
the Committee's continued support to fully fund these programs
through the 2018 Farm Bill.
As you know, it is a very competitive global market out
there. USMEF's long-standing presence in these leading export
markets, really made possible through that sustained commitment
from the MAP and FMD programs, has sent a clear message to our
customers and buyers in the markets that the U.S. industry is
committed to them in supplying the most wholesome, healthy
products available.
MAP and FMD funding have also been critical to our ability
to attract and build financial support from our industry
partners here in the U.S. USDA's ongoing financial commitment
and support serves as a vote of confidence in USMEF's programs
to investors in the U.S. production and marketing chain.
So having worked at our headquarters in Denver and also as
a director in our largest market, Japan, I fully understand the
effectiveness and the impact these programs have on our
exports. A good example of our approach is rebuilding
confidence after the crisis that we had with the first case of
BSE in December of 2003. With these support of these programs
we were able to conduct carefully calibrated and integrated
messaging campaigns to restore the buyer confidence in most of
these markets, which had actually been closed completely to our
products.
Another example of our strategies is building demand for
U.S. pork products among processing companies in markets around
the world. So we are able to hold one-on-one, specific seminars
with companies to educate them on the attributes of the
products, but also to introduce new methods and new product
ideas on how they can utilize our products as well.
In all these cases, USMEF's strategies are paying dividends
in the form of increased exports and strong returns to the
cattle and swine producers. More than 13 percent of the beef
and beef variety meats we produce in this country are now
exported, and exports account for more than 25 percent of the
pork produced. During the first half of this year, exports
added an average of $270 per head for every steer and heifer
slaughtered in this country, and $55 to the value of every hog.
As a producer, that can be the difference between being in the
red and the black.
Beef and pork exports have also increased the returns on
corn by an estimated 45 cents per bushel. So these well
designed and executed market development programs, supported by
MAP and FMD, really are a fundamental element of building the
global demand for U.S. red meat products globally.
This was concluded in the study that was completed by
Informa Economics last year, which as, I think, Mr. Halverson
mentioned, brings a return of over $28 for every dollar
invested. They also figured that these investments produce an
average annual increase in net farm income of $2.1 billion,
while creating nearly 240,000 new full-and part-time jobs.
So in closing, I would like to thank the Committee for this
opportunity to be here today and testify about the benefits of
the MAP and FMD programs, and how they support the America's
red meat industry and the producers throughout the country
here. USDA, through the MAP and FMD programs, has been a
reliable and invaluable partner to USMEF and our industry, so
we ask for your continued strong support of these two vitally
important programs through the 2018 Farm Bill.
So thank you very much for your time.
Chairman Roberts. Thank you, Mr. Haynes. We will turn to
questions now.
We are going to have about an hour and 10 minutes here. I
do not know how many people are going to stay or leave, but at
any rate, we are going to have to move in an expeditious
manner.
Mr. Crisantes, you mentioned your concerns with the status
of the National Organic Standards Board, and my question to you
is with regard to recommendations relating to organic
regulations. What opportunities do you see for the Department
of Agriculture to clarify the roles of both the National
Organic Standards Board and the National Organic Program in
determining appropriate organic regulations for the industry?
Mr. Crisantes. Thank you, Mr. Chairman. I think the NOSB
has served very well the interest of the industry so far, but I
think moving forward the NOSB board needs to evolve. I think
having better clarity of what the goals of the NOSB should be,
having better communications with USDA and the National Organic
Program is a must. I think so far the communication has been
one-sided and I think there has not been a real exchange of
information between the board and USDA.
So I would ask you, the Congress, to create a new NOSB in
which this board would be more diverse, have better
transparency, and have better communications with USDA.
Chairman Roberts. I appreciate that.
Mr. Halverson and Mr. Hanes, you have already touched on
this with regards of both of you indicating how your industries
utilize export programs like the Market Access Program and the
Foreign Market Development program. We are going to have to
make some very tough decisions in the farm bill as it relates
to spending.
Imagine, instead of sitting here before Senator Stabenow
and myself and other members of the Committee that you were
talking to Mick Mulvaney, the head of the OMB. Tell us what you
would tell him, why these export programs are worth protecting
as we move toward reauthorization.
Mr. Halverson, why don't you give it a shot?
Mr. Halverson. Yes. I would start by the importance of
trade, obviously, and the Market Access Program allow us, as
producers, to really get our toehold, or get our toes, or get
our foot in the door in some markets that maybe we would not be
in without a little extra help. Trade is so important, and
exporting is so important to the potato industry that, we
really feel like investing in things that are working, which
the Market Access Program is, is really some of the low-hanging
fruit in terms of hard choices from an allocation standpoint.
So we feel real good about how it has impacted the potato
industry.
Chairman Roberts. Mr. Hanes.
Mr. Hanes. I think there are two key words here. One of
them is ``customers'' and the other is ``jobs.'' So as we know,
we have 96 percent of the world's population outside of the
United States. That is where our customers are. The middle
class is growing at a phenomenal rate globally. If you look at
where we will be in the end of the next decade, you will have
probably about 70 percent of the middle class in Asia. They
will have the money. They have the resources to purchase our
products. We need to be able to go out there and reach them.
So obviously it is a very, very competitive market. We are
not the only ones playing here. So you have all our competitors
that have similar programs that are trying to attack, and gain
market share, and push us out. So we need to be very, very
aggressive in that case, show the quality of the products that
we have and the ability to supply them the reliable products
that they are looking for.
I think the other issue is jobs. So in our industry, the
red meat industry, we have producers in every state, and most
of these are rural jobs in rural areas. So these programs that
export are not just supporting those producers. There is a
whole network infrastructure at jobs supporting the powers in
those rural areas as well. You have to have truck drivers that
are moving the animals from the farms to the feed lots to the
packing plants. You have the packing plants. You have storage,
cold storage. You have the exporters. You have the packers, all
this. All these add value to the products and are actually
bringing value to the producers and the industry and creating
these jobs in areas where there may not be a lot of other jobs
available.
Chairman Roberts. I appreciate that. I apologize to my
fellow Senators for going over time but I want to get this in.
Mr. Dallmier, it is obviously evident that fraudulently
imported organic grain significantly undercuts our domestic
producers. It seems that the organic demand has far outpaced
the ability of the National Organic Program to adopt to this
situation.
How has the system design of the National Organic Program
been outpaced by the rapid growth of the organic industry, and
what can we do about it?
Mr. Dallmier. So, Senator, I believe the design of the NOP
did not include sufficient enforcement power to combat
fraudulent--to combat in the event of fraud, whether it be
domestic or foreign. The idea was to promote trade, with the
premise that people are inherently good.
However, as the world commodity prices declined, as the
margins to be gained and the risk to be paid came out of
balance, that premise did not necessarily hold. The NOP should
have been more aggressive in developing a transition program
that was designed to build the U.S. supply.
So the organic production potential needs to be at scale,
so that we are not reliant on those imports. By providing the
same programs to organic and transitional producers that
conventional producers have, with the recognition of the higher
revenue potential that we have been discussing, that could have
been accomplished much sooner, which I believe would have
averted the temptation and the benefit of such fraudulent
imports.
Chairman Roberts. I want to emphasize to the witnesses that
the Committee is going to continue to look into this, and we
really appreciate your suggestions.
Senator Stabenow.
Senator Stabenow. Well, thank you, Mr. Chairman, and thank
you to each of you for your testimony and input this morning.
Mr. Johnston, I wanted to start with you because your local
food work started at the community level and evolved to working
with schools, farmers and community members to increase food
access and build integrated regional food systems. I wondered
if you might talk a little bit about how your work has improved
connections between urban and rural communities.
Mr. Johnston. Sure. Thank you, Ranking Member Stabenow. I
appreciate the question.
Yes. Our work very much did begin doing urban agricultural
work in communities, nutrition education programming, and
helping to build a greater connection to food within
communities that have been struggling to access for quite some
time. I think the exciting part of that is that evolution of
our work, recognizing that access to food really is a regional
food system issue. It is not just about community-scale
agriculture, although that is a tremendous opportunity, it is a
tremendous way to introduce folks to regional food systems and
to greater opportunities in agriculture.
Most recently, work that we have done with the 2501 grant
program, I think, is a great example of this, where we have
been working with folks who have been working in urban ag,
training to build skills there, and connecting them to
incubator farms in rural areas, helping them scale their
experience, get on to larger tracts of land, and create viable
enterprises, actually bringing new farmers into agriculture in
our region.
So building those connections and bridging voids between
urban and rural communities has been a big focus, and I think
success, of our work.
Senator Stabenow. Great. Thank you very much.
Mr. Halverson, we know how important the specialty crop
industry is to our economy in this country, and certainly in
Michigan specifically. We now have a farm bill title, which we
did not have before 2008. But specialty crops do not receive
more traditional support through commodity programs.
They rely on programs like Specialty Crop Block Grants,
Plant Pest and Disease Management programs and the research
initiatives. Could you talk more about why these programs are
so important as the way that we support this large part of our
agricultural economy?
Mr. Halverson. Sure. I would love to. You know, as we
talked about how the trade is important and the market is so
important, one of the things, just to stay competitive, is
growers in the U.S. and in Michigan. So when we have issues,
challenges like pest and diseases, it is really important we
have got somewhere to turn to help solve those issues.
I think of one thing in particular. In North Dakota we
have--we are fighting this disease called Dickeya, and there
was a grant that was approved, and there are a couple of
professors at North Dakota State then are working on how to
identify this disease--it is a seed-borne illness--so it does
not get into our seed system. It is something that hit us in a
couple areas of operation.
So that is an example of these things so we can stay
competitive and manage some of the production risk, from a
specialty crop thing, where you do not have the investment like
you do in typical corn and soybean type, big acreage crops. It
really gives us a boost in the arm, in terms of fighting some
of those issues that come our way.
Senator Stabenow. It seems like we keep seeing new issues
all the time, I find. I am sure that you are always wondering
what is around the corner.
Mr. Halverson. It seems--yeah, there is a new bug or
something around the corner every day.
Senator Stabenow. Yes.
Mr. Halverson. It feels that way. Sure, it does.
Senator Stabenow. Yes. So thank you.
Mr. Crisantes, in your testimony you talked about some of
the existing challenges and limitations of the current organic
system in meeting the needs of a rapidly expanding organic
sector, in part due to a historic deficit of organic research,
which remains far behind marketplace trends and industry needs.
So I wondered if you might explain why dedicated organic
research funding is critical to the success of your business
and to the organic industry.
Mr. Crisantes. Thank you very much for that question.
Senator, for example, I will talk a little bit about variety
development on the specialty crops, similar--like tomatoes. So
in order for companies to develop varieties they do it using
conventional production practices. So the traits that they
choose are pretty much what is on the conventional production.
When you use those varieties and seed them in an organic
production practice, those traits might not show as is. For
example, on tomatoes, powdery mildew is a big problem, and then
it is easily controlled, or easier to control in conventional
agriculture, but in organic agriculture it is not. So if a
variety is very susceptible and it was chosen during
conventional screening, then it shows up in organic. So we
planted an organic and it does not work.
So I think a lot of dedicated research money is needed for
organic production because we have different tools and the
outlook is different between convention and organics.
Senator Stabenow. Thank you. Thank you, Mr. Chairman.
Chairman Roberts. Senator Heitkamp.
Senator Heitkamp. Thank you, Mr. Chairman, and thank you to
the panel. What an interesting group of people. What is always
remarkable for me is if you think that agriculture--the image
of agriculture, I think, in this country is a 1950s image, and
I wish everybody would sit and listen to what you do every day,
that is some of the most innovative and really scientific work
that is being done throughout the country. It makes me proud
that I represent a state, like North Dakota, that has great
people like Mr. Halverson, who is out innovating.
I do not think some of the members got a chance to see your
beautiful picture, but Senator Donnelly and I were talking
about how amazing it is, what you have been able to do, and we
look forward to reviewing the challenges that you have had,
bringing your tomatoes to market under a label that I think you
deserve and earned. So just know, even though we do not do that
much, although they are starting to do it in Bottineau, and we
see that as a real opportunity to look at providing fresh
fruits and vegetables, things that Mr. Johnston is talking
about, in a way that gives every state an opportunity to grow
these crops.
I want to turn to Mr. Halverson, of course. You guys, that
does not surprise anyone. You know, one of the great stories of
American agriculture has really been written in the land-grant
colleges. We say first it was better farming practices but also
research, and you mentioned the work that NDSU is doing.
I want to acknowledge that but I want to turn to trade,
because I think that right now we are in a period of transition
on trade. We walked away from TPP. That, in my opinion, gave
the EU an excellent opportunity to move into the Japanese
market, affecting certainly pork, but I think you made an
excellent point, Eric, about potatoes.
When you are working with your foreign buyers, when you are
working within your association, what are you hearing from our
trading partners across the globe about the challenges, and
what can we take back to the trading professionals so that they
better understand what our farmers and ranchers are hearing
direct, one to one, with their markets?
Mr. Halverson. Well, thank you for the question. What you
hear is the U.S. provides--we grow a really great potato, in
North Dakota and in other places in the U.S. Our potato has
value that exceeds potatoes grown in other areas. But that can
only--that only gets us so far, right, and people--so when we
come to the market with products that are, for whatever reason,
more costly to bring to the ultimate customer, it provides a
challenge.
I shared with the members, we have been able to gain back
some of ground of export, and that is on the back of our good
quality product, but we get resistance because of price. So
that price can be impacted by tariffs or by other subsidies or
things that people are doing outside of the U.S. that help
lower the cost to deliver the products to the market. So, I
mean, the good old-fashioned cost is a pretty big lever that
influences things.
Senator Stabenow. Yes. One of the things that we know, if
you look at bean farmers across North Dakota, people would be
surprised to see how often North Dakota farmers and farm groups
travel internationally. That is because a lot of this is about
one-on-one relationships, but a lot of this is supported by
USDA and USDA programs.
If we see those programs eliminated, programs like MAP, how
will we ever get that introduction that will allow us to
promote our much superior agricultural products into a market
that would like to have much superior products?
Mr. Halverson. Yes. It would be difficult. I personally
have been to Vietnam and to Central America, representing the
industry, trying to move potatoes, and it is just--there is not
enough margin in agriculture to take some of those steps. It
would be a lot more difficult. So those types of funds really
help us get out and get into markets where we might not
otherwise be, just to help us open those doors.
Senator Stabenow. Yes. I just want to make the point that I
know, personally, many farmers who have had, and still maintain
great relationships with their buyers. It becomes almost like
family. But that can only go so far, that relationship
building. If the tariffs are reinstated, or uncompetitive, if
we are not doing the work to promote the outreach, we will not
be successful in agriculture. We cannot be successful in
agriculture at the current margins without trade.
So we are going to work on that. We are going to work on
all of these issues. But thank you so much. What an interesting
panel you have put together, Mr. Chairman.
Chairman Roberts. Thank you, Senator.
Senator Hoeven.
Senator Hoeven. Thank you, Mr. Chairman. I want to welcome
all of our witnesses this morning, particularly, Mr. Halverson,
I want to welcome you. I had hoped to be here sooner and give
you a big introduction, but it is just great to have you, the
CEO of Black Gold Farms, and, as you said, raising quality
potatoes not only in North Dakota but in many other places as
well. So, again, thanks to all of you.
I am going to pick up on the trade issue. Talk about the
MAP program a little bit, will you, Eric, and tell us what you
think of it, and its importance.
Mr. Halverson. Yes. The MAP program is really important to
the potato industry. We, the potato industry, utilizes
somewhere in the neighborhood of $5 million, I believe it is,
of course, leveraging our own industry dollars. A lot of that
is through the Potato Promotion Board, Potatoes USA. So we put
on programs and do things to help obviously encourage other
countries to buy our potatoes. One in five--as I said, one of
five rows of potatoes are exported out of the country.
So utilizing those programs, getting us into those foreign
markets is vital to maintaining a healthy balance, healthy
supply and demand balance of potato production in the U.S.
Senator Hoeven. So as we work on the farm bill, that is an
important program for you that needs to be included and funded.
Mr. Halverson. Absolutely. Absolutely.
Senator Hoeven. Then I think you saw that Secretary Sonny
Perdue has created a position, Under Secretary of Trade, which
was something that we authorized in the last farm bill. Talk a
little bit of how--any recommendations for that Under Secretary
of Trade position in USDA?
Mr. Halverson. No. I--looking at it from my position, to me
it highlights the emphasis and focus on trade, and anything
that we can do that does that, that highlights the emphasis and
focus on trade, I think is a positive step. So I am really
encouraged by that.
Senator Hoeven. Some other programs that we will look at in
the farm bill that I would like you to comment on, the
Specialty Crop Block Grant program, and also the Specialty Crop
Research Initiative. Just kind of talk about those two, their
importance, as we work on the new farm bill.
Mr. Halverson. Yes. So I just mentioned the one project at
North Dakota State, about Dickeya. They are doing other things
there that are part of the Specialty Crop Block program. There
is an app they are developing that helps forecast potato
blight, which is a pretty bad disease.
These things, research and development in specialty crops,
are really important, and as I mentioned earlier, the specialty
crops do not get the--they do not get the focus that our
commodity crops friends so. So it is really vital to help us
and to provide a little bit of extra support in protecting
ourselves from the production risks out there.
Senator Hoeven. The research initiative, very important for
you in terms of disease and productivity?
Mr. Halverson. Yep. Yes. No, absolutely.
Senator Hoeven. What foreign markets are potato growers
looking at? Are there certain markets you are looking at?
Mr. Halverson. Well, so Japan is our number one market,
followed by Canada and Mexico, but a lot of focus in the potato
industry has been in Asia.
Senator Hoeven. Okay. Any renegotiation on NAFTA, we have
to be careful to make sure it is good for agriculture when we
are talking about Canada or Mexico. Correct?
Mr. Halverson. Absolutely.
Senator Hoeven. Very important for the potato growers.
Mr. Halverson. Absolutely.
Senator Hoeven. Any opinion, thoughts that you have in
regard to the strong dollar? I mean, one of the challenges we
find with not only exporting crops but livestock is the strong
dollar. It makes it hard to compete. Have you had any dialog in
the industry about ideas, thoughts, things we could do to help
there?
Mr. Halverson. Yes. I mean, that gets difficult, and so
what we have to do as producers is back to focusing on the
quality of the products we do and the productivity we have in
growing those products. So if we can be more efficient and have
a higher-quality product, that helps us, and that would circle
back to some of that research discussion we had, and things we
can do just to be better farmers are going to help us compete,
even with the strong dollar, because we are going to be better
at it.
Senator Hoeven. Who are your strongest competitors in
international export--in exports?
Mr. Halverson. Canada, and there are some European
countries--Holland, and Germany and those countries--that are
competing. Certainly Canada.
Senator Hoeven. Any other priorities you have, particular
for the next farm bill?
Mr. Halverson. I feel like that trade is just the number
one. So I just--it is kind of the 80-20 rule, and that is the
more emphasis we can put on trade and helping us be efficient
and productive farmers, from a research standpoint, the better
off we will be.
Senator Hoeven. Again, thanks for being here and for what
you do.
Mr. Halverson. Thank you.
Senator Hoeven. Greet your family.
Chairman Roberts. Thank you Senator and Mr. Halverson. Let
me underscore that you have no need to worry with regards to
this Committee in the recognition of the importance of
specialty crops. You cannot serve with the distinguished
Senator from Michigan without understanding the cherry trees,
and then there are cherry trees, and then there are cherry
trees.
[Laughter.]
Chairman Roberts. So do not worry.
Senator Gillibrand.
Senator Gillibrand. Mr. Chairman.
Chairman Roberts. If you could hit your mic there, please.
Senator Gillibrand. Can I please concede my minutes to
Senator Van Hollen?
Senator Van Hollen. I thank the Senator. Mr. Chairman, I
just want to say unfortunately I am being called to the
Appropriation's Military Construction Appropriations Markup,
but Maryland has a big interest in specialty crops, organics,
and all the things that we are discussing. So with your
indulgence I will submit my questions for the record.
Thank you, Mr. Chairman, and thank the witnesses.
Chairman Roberts. Well, thank you, Senator, and when you go
and consider that military construction, if you can get the
Marines out of Quonset huts into something better I would
appreciate it.
Senator Gillibrand.
Senator Gillibrand. Thank you, Mr. Chairman. Thank you
Madam Ranking Member. Mr. Johnston--no, I want to do this one
first. Mr. Crisantes, all of us on the Committee have heard
about the tremendous growth of the organic industry and about
how growers struggle to meet consumer demand. This has created
a great opportunity for many young farmers in New York to begin
or transition to organic farming.
I worry that the pace of research and extension services
for organic growers may limit this potential growth. Do you
think that USDA funding for organic research and extension is
adequate and keeping pace with the industry?
Mr. Crisantes. Thank you very much for that question. I
certainly think we should be able to strengthen those programs.
Research is extremely important, as it is in all specialty
crops. But in organics, the lack of tools for us to be able to
produce and be more productive--it is a small handicap. So
research, it is a very important tool that we have for us to be
able to succeed and to become more and more productive.
Senator Gillibrand. Have you struggled to find the right
types of seeds adapted to your production system?
Mr. Crisantes. We certainly do, because, like I said
before, a lot of these varieties are selected under
conventional production, and if we were to have specified
research for organics then a lot of that could be complemented
and be able to produce and select seeds on organic production
practices.
Senator Gillibrand. Mr. Dallmier, in your testimony you
talked about the need to increase the oversight of imported
organic products to reduce fraud and preserve consumer
confidence in the integrity of the organic seal. What can the
Committee do to support more domestic organic production so
that our market is less reliant on imports?
Mr. Dallmier. So thank you, Senator, for the question. I
believe that we need to encourage more scalable farming
operation to incorporate organic production into their business
plans. We are at that transition period between where organic
production was generally considered a small-scale enterprise.
If we were to then make the leap into--so that we are not
reliant upon those imports we need to get to scale. So how do
we go about doing that? It is about the research that you were
talking about, the extension that you were talking about. We
also need to think about pushing that research not only to the
land-grant universities but to the regional and the community
colleges as well, because they have actually the face-to-face
touch that many of the land-grant universities have lacked.
We also need to utilize and expand upon the existing USDA
programs to encourage that transition period between convention
and organic farming. Some examples that I would like to
highlight are the Soil Health and Protection Initiative, or
SHIP, the Conservation Stewardship Program; the Environmental
Quality Initiatives Program, on the conservation side, as well
as the financial backstops that are currently involved, such as
crop insurance, revenue insurance, et cetera, so that those
would take into account the higher revenue stream and the
higher revenue potential of specialty crops and organics. So
those risk mitigation tools can be utilized effectively as this
becomes a large-scale business.
Senator Gillibrand. Do you think that organic transition
certification could help more commodity producers obtain full
organic certification?
Mr. Dallmier. Absolutely, ma'am. As our markets are
requesting more knowledge, more transparency within those
marketplaces, the Certified Transition Program allows a level
playing field and a level set of standards to build upon that
market, going forward. Yes, ma'am.
Senator Gillibrand. Thank you. Mr. Johnston, I recently
toured Capital Roots, a great organization in Troy, New York,
that helps farmers bring their goods from fields to city, a
community garden program that spans four counties and makes
fresh produce available to elderly, low income, and disabled
residents. They received the Local Food Promotion Program grant
that helped them to develop their food hub and double the
amount of locally grown produce they buy direct from farmers.
I know that you have experience with LFPP programs, and
because I am out of time perhaps you can comment, for the
record, on how this program has worked to improve food systems
in your region. He can submit it if you want to move on. Okay.
Go ahead.
Mr. Johnston. Thank you for the question, and I also want
to share that last week began our first deliveries into New
York City and the beginning of our partnership with New York
farmers, and it sounds like the project in Troy is very similar
to the work that we are doing.
LFPP program for us, effectively, what it allowed us to do
is invest in cold storage and post-harvest handling practices
with some of our rural Amish farmers, and help them improve the
quality and shelf stability of the product they were bringing
to market, and especially with brassicas. So it allowed them to
expand the acreage that they were growing, focusing--actually,
broccoli was one of the key products--and really help them grow
their farm enterprise.
So, in short, LFPP has created market opportunity for rural
growers and helping them create jobs and economic vitality.
Chairman Roberts. Senator Klobuchar.
Senator Klobuchar. Thanks very much to you, Mr. Chairman,
and Senator Stabenow for holding this important hearing. As
many of you have mentioned earlier, I have heard from our
staff, export markets are essential to our ag sector. I
certainly know that in my state. The importance of those
markets is what makes trade disruptions so concerning.
One example is the dairy industry which was hit hard by the
recent creation of a new Class 7 pricing scheme, that hurt U.S.
exports to Canada. This was something that came out of Canada.
What tools are available to address foreign policies that
threaten to derail exports, in a case like this? Anyone can
answer it.
Should I start calling on people, like law school?
Mr. Halverson. Well, I think some of the tools are--in the
potato industry, that we use our--they basically revolve around
our production capabilities and then our working with our
associations and so forth to help guard against that--
understand what is going on and guard against it. I mean, that
is the potato answer.
Senator Klobuchar. Okay. Anything else? Okay. Anyone?
Mr. Dallmier. Ma'am, I think, as merchants, and thinking
about trade, we are much more interested in stability and
continuity and predictability as we engage in our trading
partners. I would encourage the policymakers to investigate and
to think about how that stability has been affected as we
renegotiate NAFTA, as we pull out of TPP, and some of the----
Senator Klobuchar. How about Cuba and the recent move to go
backwards on Cuba? I carried the bill to lift the embargo.
Mr. Dallmier. Yes. All----
Senator Klobuchar. That would be inconsistent with the way
we were headed.
Mr. Dallmier. --all trading partners are, I think, valid at
that point.
Senator Klobuchar. Mr. Halverson, do you want to comment on
Cuba? As you know, we--the recent move was to not change the ag
provisions, but, of course, when you limit a foreign visit from
Americans you are going to hurt ag as well, and that is why the
Chamber came out so strongly against the move. I am just
curious about your view on that.
Mr. Halverson. Well, again I would--all--we are looking for
every opportunity to move our products, and I think we are--I
know we are supportive of any of those efforts and Cuba would
be one of those, as far as a place that we are not able to go
now, so that is a new market for us to move our products. So
anything that can be done to help open that up is good.
Senator Klobuchar. In your testimony you talked about
seminars, technical support, training, promotion, all of this
helps develop the U.S. brand. Can you elaborate on some of the
specific efforts within the Market Access Program and how they
support U.S. commodities in maybe newer markets?
Mr. Halverson. Sure. One that comes to mind right away is
that the U.S.--Potatoes USA has a program called Why Buy U.S.
So they take a bag of U.S. French fries and they put it in a
column, next to some of our competitors' French fries, and it
shows the better quality of U.S. potatoes, and in this case
potato French fries. So that is just one quick example of how
that--as they are doing that in some of these markets, how it
is demonstrating the superior nature of our products.
Senator Klobuchar. Very good. You brought up NAFTA, Mr.
Dallmier. Thank you. Do you want to just talk a little bit
about how that fits into the ag export market? I know Secretary
Ross has been working on some of the issues, including sugar,
that we worked with him on, and we were pleased with the
result, some of the things that he wants to get done before it
gets to the renegotiation. Do you want to talk about the
importance to ag?
Mr. Dallmier. Certainly. I think across all of the ag
sectors our number one and number two exports markets are
Mexico and Canada. Those markets, as they are--I can talk
perhaps a bit to Mexico within the corn and soybean realm. One
of our key clients directly imports our organic corn for chips
into Mexico. As the discussions around NAFTA were coming to a
head, we started getting a lot of phone calls. You know, what
do you see? How do you see it? What is the impact? They were
starting to look at South American supplies.
So in the organic world, South American supplies, we get
into very much the same questions as we do in current import
supplies. So it could very well hurt the brand recognition of
U.S. products in certified organic.
Senator Klobuchar. All right. Thank you very much. I
appreciate all of your work.
Mr. Dallmier. Thank you, ma'am.
Senator Klobuchar. Thanks.
Chairman Roberts. Senator Grassley. Senator Grassley, Dean
Meyer from Rock Rapids, Iowa, in Lyon County, could not be
here. Mr. Hanes gave his testimony. I do not know what happened
with regards to Mr. Meyer not being able to make it.
Senator Grassley. Airplane problems.
Chairman Roberts. So that crop-duster that you fly from
Iowa to here just did not fly, or what?
Senator Grassley. I think it was the airplane. Can I go
ahead and ask my questions?
Chairman Roberts. Yes, sir. Yes, sir.
[Laughter.]
Chairman Roberts. Certainly.
Senator Grassley. I am surprised you have been talking.
[Laughter.]
Senator Grassley. I just have one question and it is for
Mr. Dallmier.
Mr. Dallmier. Yes, sir.
Senator Grassley. It may--it is more for my own personal
information, but if there is a public policy issue connected
with my question that you think we ought to consider, you make
that decision and tell me what you think it is.
But it is my understanding, from USDA figures on the price
of organic corn at $8, and $17 for soybeans, that then I
presume some justification for that is the fact that certain
period of time land has to lay fallow before you can start
growing organic, and I do not know exactly how long that is.
But is that price that I just quoted to you enough to encourage
people to get into it?
Then also you have got to consider the unpredictability of
prices down the road, after they have let their lay idle so
that they can put it into this crop. Then every farmer puts up
with that, but I just wondered if--how that comes to
incentivize people to get into it.
Mr. Dallmier. Thank you for the question. The prices that
you are quoting are accurate, and several years ago the price
of an organic bushel of corn was about three times the price of
a conventional bushel of corn. The price of organic soybeans
was about two and a half to three times that as well. So those
are primarily quality and supply constraints, as well as the
transition period from--and it happens to be three years--from
conventional to organic.
How do we incent people to come into that transitional
period? That is where much of the uncertainty, both on a
cropping strategy as well as financial strategies, come
together. I think the Certified Transition Program that we have
asked USDA to finalize, that program comes into play because
that then builds markets for the crops that are a part of those
three years, and it is more than just hay and different other
crops. It can be such things as sunflowers, or small grains,
unique places in those high-value areas.
That is where the conventional risk comes. That is where
the financial risk comes. Once you get through those transition
periods into selling your certified organic grains, in our
case, that is where the revenue stream comes to play. That is
also where the increased number of jobs comes to play, because
it takes more people per land area for an organic production
than it does for conventional agriculture. Those are real jobs,
and in many cases those jobs, as well as the increased revenue
and increased profitability, are what are allowing people to
remain on the farm, as well as the infrastructure that was
talked about earlier today, as far as the logistics, the
market, and so on, that infrastructure as well.
I hope I have answered your question.
Senator Grassley. Any policy considers for us as we go into
the next farm bill, in regard to what you just said?
Mr. Dallmier. Certainly. I think we can build upon the crop
risk--the crop insurance, revenue insurance. Those financial
pieces, we start to bring scale into organic production. We
also need to be mindful of the RMAs organic--the value of the
organic production. These are very similar to--in the state of
Iowa you have seed corn fields, seed soybean fields that have a
different revenue structure, a different price structure than
conventional row crops.
So the structure and the framework around what could be
done with insurance and other market programs are already
there. They just need to be incorporated and transferred into
an organic specialty crop.
Senator Grassley. Thank you. Thank you, Mr. Chairman.
Chairman Roberts. Thank you, Senator. I understand that
Senator Ernst is going to be back with us, on the Committee. Is
that the case?
Mr. Dallmier, you have been giving excellent testimony. I
understand your company does not import much organic grain, but
I understand you source from a great number of states,
including from Leoti, Kansas.
Mr. Dallmier. Yes, sir. That is correct.
Chairman Roberts. That is a little northwest of Garden
City, way out there. It is not the end of the Earth but you can
see it from there.
Mr. Dallmier. On a windy day you can throw a rock.
Chairman Roberts. From what other states do you source?
Mr. Dallmier. So we source organic grain across the eastern
United States, from the Rockies to the Southeast, from the Gulf
to Canada. A brief list would be the Dakotas through Iowa,
Minnesota, Nebraska, as you stated Kansas, Texas, Missouri,
Illinois, Wisconsin, Indiana, Ohio, Kentucky, Tennessee, and
throughout the Southeast.
So the interesting part about the organic and specialty
industry is the quality of the material and the revenue--or the
quality of the material and the requirements of our clients
allow those crops to travel much greater distances. So it is
not uncommon, sir, for, say, an organic blue corn to travel
from Nebraska to Illinois to be cleaned, then shipped again to
an organic chip maker in a different state. Or we were talking
about cross-country trade. It is also not uncommon for a corn
crop from Kansas or Iowa to come to Illinois, then go to, say,
British Columbia, going across to Canada, for organic products
as well.
Chairman Roberts. That is a rather incredible swath of
territory.
Mr. Dallmier. It keeps our merchandisers quite busy.
Chairman Roberts. You are like Hank Snow. You have been
everywhere, man.
[Laughter.]
Chairman Roberts. You and I are the only, probably, two
people who----
Mr. Dallmier. Yes, I agree with you.
Chairman Roberts. --even know what I am talking about. But,
at any rate, there was one other question, I think, that--and
since I have the time and while we are waiting for Senator
Ernst, Mr. Crisantes, some in the organic industry have a
tendency to narrow their focus to overly specific issues,
determined by parochial interests of activist groups. As a
thriving organic business, what do you see as the most
significant, overarching issue facing the organic industry?
Mr. Crisantes. Sir, for example, right now we are
discussing our production practices and everybody here notes
that the requirement to have a transition standard, and that is
not being discussed right down at the NOSB. So I think there is
a disconnect between the priorities of the industry and the
priorities of the National Standards Board.
I think that is a key role that NOP and the USDA can play,
and leading the communication in the front end between USDA and
the NOP to guide the NOSB to provide feedback on policy.
Chairman Roberts. I appreciate that. Thank you very much.
Senator Ernst, thank you for returning.
Senator Ernst. Thank you, Mr. Chair, and thank you again
for everybody for attending today.
Mr. Hanes and Mr. Halverson, you both mentioned in your
testimony the importance of MAP and FMD funding for promoting
our agricultural bounty abroad, which is great. As you know,
the President's budget proposal zeroed out both of these
programs, and, additionally, there is a bill on the House side
that would double the annual funding for both MAP and FMD.
What do you believe is the right funding level that will
give us the biggest bang for our buck and still be aware of our
current budget constraints?
Mr. Hanes. Obviously that is a tough question because I
think these programs are incredibly important. The impact they
have is huge. The leverage they have within the markets is
incredible too. I mean, the funding we get from these programs
actually is leveraged with funding we get in-market with
customer companies that we are working with, so the market
impact grows and grows.
I would love to see a doubling of the program, because I
think that it could be well utilized and would have a
significant impact in the markets. I think the MAP and FMD
programs are really key, because regardless of what is
happening politically, they have been the bedrock of our
international activities and show the U.S. industry commitment
to our trade partners. We are currently facing different trade
issues and are renegotiating trade deals which is causing
concern among the international trade buyers. We need these
programs in order to alleviate any concerns and demonstrate the
consistent level of commitment of the U.S. industry.
So without that commitment, you raise among our trade
partners, which opens the door for our competitors to get in
there and grab market shares. In this global market, the more
active and more aggressive we can be, them more successful our
programs will be for our industries.
Senator Ernst. Great. Mr. Halverson?
Mr. Halverson. Yes. I would add to that in that there is a
28-to-1 return from the study through Texas A&M of our
investments in Market Access Programs. So, to me, you want to
invest money as much as you can into things that are working,
and certainly for the potato industry the MAP funds, the MAP
programs are working. I also believe that, as was mentioned,
leveraging grower dollars, essentially--so there is skin in the
game from a grower's standpoint--really helps to make sure we
are investing those dollars in places that are going to
generate those higher returns.
Senator Ernst. No, I would tend to agree. It is always good
when we can leverage those dollars, and it is so much better
for our producers.
Your testimony had also touched on how the recently
completed bilateral trade agreement between Japan and the
European Union will put us at a competitive disadvantage on
certain ag and food products, and in the wake of the Trump
administration's withdrawal from the TPP, the Trans-Pacific
Partnership, can you speak to the importance of the U.S.
negotiating our own bilateral deal with Japan, and what kind of
lost market share in beef, pork, and potatoes are we talking
about with the Europeans beating us to the punch in Japan? If
you can address that as well.
Mr. Halverson. Yes, just quickly, for Japan we export over
$300 million worth of potatoes. It is our number one export
market. So there is a concern. I believe it is an 8 + percent
tariff. There is a concern if others do not have the same type
of obstruction that we do then obviously they will be more
competitive in that marketplace. So it is significant for
potatoes.
Senator Ernst. Very good.
Mr. Hanes. The same on the red meat side. So, obviously,
Japan is our largest market for both beef and pork. If you look
at beef, the TPP would have had a huge impact there. We pay a
38 + percent duty in Japan right now. That would have gone down
to 9 percent. With it already being our largest market at
almost 39 percent duty, if you bring that down to 9 I think
that would have really spurred consumption and growth there.
You also look at Australia. They have a free trade
agreement with Japan now, so their duty rates are already 11 to
12 percent lower than what we are paying and will continue to
drop to 19. So we have got that hurdle that we have to really
push.
So the sooner we can do some type of trade agreement I
think is critical. You know, the TPP framework, I think, was
excellent for agriculture in the red meat industry. If we can
do a bilateral with that, or maybe make some kind of changes to
the existing TPP and re-enter that. You know, the TPP 11 is
continuing. Japan has already ratified TPP, so they are looking
at moving forward with those countries that are already
engaged, and we cannot afford to be left out. So it is
critical. It is our highest margin, highest value market.
Senator Ernst. Absolutely. I am running out of time, but I
am going to get on my soapbox. I firmly believed in TPP as far
as our agricultural commodity products, and getting those into
those countries that we believe could be very good trade
partners for us. I just came from an Armed Services Committee
meeting, and so not only do I see this as a great trade
opportunity with those nations but I also see it as a national
security issue, because if we are not participating in trade
with these nations there certainly is another country in that
region that will step in, and that country is China, and we do
not want to see any additional influence of China in some of
those countries. At least that is what they have stated to me
as well. I believe that good trade partners make great friends.
So thank you very much. I appreciate it. Thank you.
Chairman Roberts. Thank you, Senator. We do face a very
unique challenge, a very difficult challenge with regards to
trade policy, because it is more than just saying that we want
a robust and predictable trade policy.
I was privileged to meet with the President about 10 days
ago with regards to crop insurance, and I think we will not
have a problem with that. But trade also became the subject
matter. I am very pleased that the President's Cabinet weighed
in, more especially Sonny Perdue, but also General McMaster
with regards to national security, and our Secretary of
Commerce, Secretary Ross, and Secretary Tillerson. That might
have been quite a meeting. But we are not in the business of
terminating--that is a bad word--with regards to NAFTA. That
has shifted to renegotiate, modernize, improvement, whatever
adjective you want to use. So we look forward to that with our
trading partners that have been--we have been doing that for
quite a while.
With regards to those three letters that we do not say
anymore--we just say Pacific Rim countries--that helps. It has
been seven years we have been working with those countries. I
think that also has national security impacts. I am pretty
confident the President understands that, and so I am looking
forward to working with the Administration to achieve that, and
I again give a lot of credit to our new Secretary of
Agriculture in making sure that this happens.
I am also worried about the talk about the possibility of
tariffs on imported steel. If you just look at the countries
that are being talked about, those are the same countries that
we have all talked about in terms of agriculture trade. So we
do have some challenges out there.
Thank you all for coming. This will conclude our hearing
today. To each of the witnesses, a special thanks for taking
time to share your views on trade programs, specialty crops,
and organics. I want to assure you your testimony provided
today has been invaluable for the Committee to hear.
For those in the audience who want to provide additional
thoughts on the farm bill, we have set up an e-mail address on
the Senate Agriculture Committee's website to collect your
input. Please go to ag.Senate.gov and click on the Farm Bill
hearing box on the left-hand side of the screen. That link will
be open for five business days following today's hearings. Keep
your tweets at a reasonable level.
To my fellow members, we would ask that any additional
questions you may have for the record be submitted to the
Committee Clerk five business days from today, or by 5:00 p.m.
next Thursday, July 20th.
The Committee stands adjourned. Thank you very much.
[Whereupon, at 11:17 a.m., the committee was adjourned.]
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