[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]


       SUPPORTING THE NEXT GENERATION OF AGRICULTURAL BUSINESSES

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

                                HEARING

                               BEFORE THE

      SUBCOMMITTEE ON RURAL DEVELOPMENT, AGRICULTURE, TRADE, AND 
                            ENTREPRENEURSHIP

                                 OF THE

                      COMMITTEE ON SMALL BUSINESS
                             UNITED STATES
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED SIXTEENTH CONGRESS

                             FIRST SESSION

                               __________

                              HEARING HELD
                             JULY 25, 2019

                               __________

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]                              

                               

            Small Business Committee Document Number 116-039
             Available via the GPO Website: www.govinfo.gov
             
                              __________
                               

                    U.S. GOVERNMENT PUBLISHING OFFICE                    
37-114                     WASHINGTON : 2019                     
          
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                   HOUSE COMMITTEE ON SMALL BUSINESS

                 NYDIA VELAZQUEZ, New York, Chairwoman
                         ABBY FINKENAUER, Iowa
                          JARED GOLDEN, Maine
                          ANDY KIM, New Jersey
                          JASON CROW, Colorado
                         SHARICE DAVIDS, Kansas
                          JUDY CHU, California
                           MARC VEASEY, Texas
                       DWIGHT EVANS, Pennsylvania
                        BRAD SCHNEIDER, Illinois
                      ADRIANO ESPAILLAT, New York
                       ANTONIO DELGADO, New York
                     CHRISSY HOULAHAN, Pennsylvania
                         ANGIE CRAIG, Minnesota
                   STEVE CHABOT, Ohio, Ranking Member
   AUMUA AMATA COLEMAN RADEWAGEN, American Samoa, Vice Ranking Member
                        TRENT KELLY, Mississippi
                          TROY BALDERSON, Ohio
                          KEVIN HERN, Oklahoma
                        JIM HAGEDORN, Minnesota
                        PETE STAUBER, Minnesota
                        TIM BURCHETT, Tennessee
                          ROSS SPANO, Florida
                        JOHN JOYCE, Pennsylvania

                Adam Minehardt, Majority Staff Director
     Melissa Jung, Majority Deputy Staff Director and Chief Counsel
                   Kevin Fitzpatrick, Staff Director
                   
                   
                            C O N T E N T S

                           OPENING STATEMENTS

                                                                   Page
Hon. Abby Finkenauer.............................................     1
Hon. Jim Hagedorn................................................     3

                               WITNESSES

Mr. Matthew Keesling, Farm Manager, Bures' Organic Family Farm, 
  Deerbrook, WI, testifying on behalf of the Dairy Grazing 
  Apprenticeship.................................................     6
Mr. Jason Grimm, Owner, Grimm Family Farm, Williamsburg, IA, 
  testifying on behalf of the National Young Farmers Coalition 
  and the Eastern Iowa Young Farmers Coalition...................     8
Ms. Meri Lillia Mullins, Farm Manager, Lighthearted Ranch, 
  Longmont, CO, testifying on behalf of the Flatiron Young 
  Farmers Coalition..............................................    10
Mr. Rodney Hebrink, President & CEO, Compeer Financial, 
  Lakeville, MN, testifying on behalf of Farm Credit.............    11

                                APPENDIX

Prepared Statements:
    Mr. Matthew Keesling, Farm Manager, Bures' Organic Family 
      Farm, Deerbrook, WI, testifying on behalf of the Dairy 
      Grazing Apprenticeship.....................................    26
    Mr. Jason Grimm, Owner, Grimm Family Farm, Williamsburg, IA, 
      testifying on behalf of the National Young Farmers 
      Coalition and the Eastern Iowa Young Farmers Coalition.....    28
    Ms. Meri Lillia Mullins, Farm Manager, Lighthearted Ranch, 
      Longmont, CO, testifying on behalf of the Flatiron Young 
      Farmers Coalition..........................................    34
    Mr. Rodney Hebrink, President & CEO, Compeer Financial, 
      Lakeville, MN, testifying on behalf of Farm Credit.........    37
Questions for the Record:
    None.
Answers for the Record:
    None.
Additional Material for the Record:
    Statement from Hon. John Joyce...............................    48

 
       SUPPORTING THE NEXT GENERATION OF AGRICULTURAL BUSINESSES

                              ----------                              


                        THURSDAY, JULY 25, 2019

                  House of Representatives,
               Committee on Small Business,
    Subcommittee on Rural Development, Agriculture,
                                Trade and Entrepreneurship,
                                                    Washington, DC.
    The Subcommittee met, pursuant to call, at 10:06 a.m., in 
Room 2360, Rayburn House Office Building, Hon. Abby Finkenauer 
[chairwoman of the Subcommittee] presiding.
    Present: Representatives Finkenauer, Crow, Craig, Hagedorn, 
and Chabot.
    Chairwoman FINKENAUER. Good morning. The Subcommittee will 
come to order.
    I just first want to say thank you again to our witnesses 
here today who took time to come to Washington to testify in 
front of this Committee. You know, this is an issue that is 
vitally important not only to my home State of Iowa but to 
farming communities across the country. I greatly, greatly 
appreciate you guys taking the time and really look forward to 
everything we are going to hear today and all of your expertise 
as well. So thank you again.
    You know, having grown up in northeast Iowa, I know how 
important agriculture is to our way of life in Iowa and that 
farmers are quite literally the backbone of our economy. And, 
you know, in Iowa, agriculture contributes to over $9 billion 
annually to our State GDP and accounts for most of our top 
exports.
    In my congressional district, nearly 14,000 people are 
farmers or work in agribusiness, while countless others, like 
our manufacturers and small-business owners, rely on a strong 
agricultural economy, like our UAW workers who make those John 
Deere tractors in my district.
    I am very excited about our hearing today on ways we can 
support new and beginning farmers. See, I grew up in Sherrill, 
a little bit north of Dubuque, where I represented in the State 
house. It is a town with more cows than people, which I was 
always--I am still very proud to say. You know, my parents 
still live back there.
    My friends grew up on their families' farms. In fact, when 
I would spend the night at their house, it was a thing; it 
wasn't even negotiated: You got up in the morning and you did 
chores. And I still know how to make a mean bottle of milk 
replacer to go feed the calves.
    But, again, it was a way of life and still is that I am so 
proud to have grown up around and been a part of. And it is 
something that we have to make sure that we are protecting in 
Iowa, not just for our economic security but also for who we 
are and our values.
    And, you know, I also think of my sister and her husband, 
who are corn and soybean farmers. You know, they have 500 acres 
and a 2-year-old and now--I think he is 4 weeks old, or he will 
be on Saturday, a little guy at home. And I have heard 
firsthand from them and folks across the district just how 
tough things can be and are right now because of an ongoing 
trade war that has been happening for over a year and a half.
    And so there is a lot going on in the agricultural economy, 
and we need to be making sure we are doing everything we can 
here in Congress to hear from the folks on the ground living it 
day to day and making sure that Iowans in my generation and the 
generations after mine are able to live their dreams and take 
over family farms and invest in new ones to start their own 
dreams.
    You know, again, our way of life continues to be at risk 
given what we have seen in the past 20 years. Iowa has lost, 
actually, over 10,000 farms, many of them small and medium-size 
farms. It isn't just Iowa, though; this is happening across the 
country.
    The farming community is aging. The average age of the 
American farmer is around 58 years old. And in Iowa, farmers 
over the age of 75 have increased by 28 percent since 2012. To 
ensure the continued success of American agriculture, we must 
facilitate the transfer of skills, knowledge, and land between 
this generation and the next one.
    The problem continues, again, to be bigger than that. 
Again, while farming has never been easy--you don't go into it 
because it is easy--but the increasing cost of production, low 
commodity prices, again, exacerbated by this ongoing trade war 
coupled with unpredictable weather patterns, such as flooding 
we have experienced this spring in Iowa, have made it difficult 
for farmers like my friends that I grew up with in Sherrill and 
folks all across my district.
    And as I am sure we will hear from our witnesses today, 
aspiring and beginning farmers are facing significant 
challenges, and some of them are much different than some of 
our parents' generations.
    There are things we can do, though, and we should do to 
step up with these new and beginning farmers to help success. 
We should explore new ways to help farmers access the capital 
they need to not only invest in the land and equipment but 
offset some production costs when they are first starting out.
    Another great way for young farmers to get started is with 
infrastructure and livestock facilities. I am happy to be 
working on legislation that would help beginning farmers access 
capital for ag infrastructure.
    We know that new and beginning farmers, like many 
Americans, including myself, are also saddled on top of all 
this with student loan debt. We should examine how that impacts 
their choices and opportunities when it comes to starting a 
career in agriculture.
    We should also help these farmers access emerging markets 
both at home and abroad. We also need a smart trade policy that 
helps, not hurts, American agriculture.
    As weather becomes, obviously, increasingly unpredictable, 
like we saw with the floods in the spring, farmers also need 
strong infrastructure from the Federal Government when it comes 
to natural disasters.
    The future of a rural economy truly depends on the next 
generation. Just like our teachers, police officers, and small-
business owners, farmers are part of the fabric of our rural 
communities. They make places like my hometown somewhere where 
people can work hard, raise a family, and have a good life.
    And I am so fortunate to work with my Ranking Member, Dr. 
Joyce of Pennsylvania, on these issues day-in and day-out--and 
I am happy Mr. Hagedorn is stepping in today for a few 
seconds--which, I know, obviously, are equally important to 
your district as well. I am glad that we share this priority 
for supporting our farmers in our rural communities, and I look 
forward to continuing our bipartisan work on this Subcommittee.
    I want to, again, just thank the witnesses for being here 
for what I hope will be a very productive discussion.
    I would now like to yield to the Ranking Member, Mr. 
Hagedorn, for his opening statement.
    Mr. HAGEDORN. Madam Chair, appreciate that. Thanks for 
holding this hearing. Wonderful to be with you today.
    I say as someone who represents southern Minnesota, in the 
First District, also serve on the Ag Committee, this is a 
critical hearing. These are issues we really want to get to the 
bottom of and talk about how you are helping out with our 
generational farmers in the future, not just the ones that we 
have had in the past, but building up farms and operations as 
we move forward.
    I would say that, you know, in the farm country, for the 
last 5, 6 years, it has been tough. It hasn't been just since 
the trade disputes or, if you want to say, the resetting of our 
trade agreements. It has been tough. You know, regulations have 
been driving up costs. ObamaCare has been a big cost for our 
farmers. And things have--like energy. You know, farmers depend 
on low-cost energy, and when you drive up the cost needlessly, 
it makes it tough.
    So sustaining agriculture, our rural way of life, 
critically important. What you are going to talk about today 
and what you are doing is a big part of that. And we appreciate 
all the witnesses for being here.
    You know, communities in my district and across the country 
rely on the 2.2 million farms in the United States. And of 
these, 88 percent are small. They are not all big operators out 
there. Only 20 percent are operated by new and beginning 
farmers, however, and ranchers. So that is what we are talking 
about today and why we need to explore these areas and see how 
we can continue along that path.
    One U.S. farm will feed about 165 people annually. And when 
you think about the wonder of agriculture, agribusinesses we 
have today, you know, people know, the next day, when they walk 
into that grocery store, those shelves are going to be stocked 
with an array of choices at affordable prices. It is really one 
of the great wonders of all the world as to how this works each 
and every day. It isn't like that in every country. There is 
one down in South America where the people have lost 25 pounds, 
on average, because there is no food in the grocery stores.
    And I tell folks that we have to keep our farmers moving 
forward, because you can have a pocketful of hundred-dollar 
bills or EBT cards or the things that we do to make sure that 
people have an opportunity to feed their families, but if there 
is no food on the shelves, we are in a lot of trouble. So we 
appreciate our farmers and what you are doing in that regard.
    You know, with a projected global population of 9.7 billion 
by the year 2050, the world's farmers will need to grow 
approximately 70 percent more food in order to feed the world. 
And our farmers do feed much of the world. We export a lot, and 
we need to export more. And I think that is what we are all 
working toward.
    In the State of Pennsylvania, which Dr. Joyce represents, 
over 6,100 farms have been lost in the last 5 years. And we 
want to make sure we keep those generational farms in business, 
because when they sell out to bigger operators--and bigger 
operators are not bad folks--it means fewer people holding the 
land, working the land, living in our small communities, going 
to our schools, shopping on Main Street at our small 
businesses. And we need to make sure that we don't put undue 
pressure on our small, rural communities. We want them to grow 
and thrive.
    And so, with that, today's witnesses will discuss their 
experiences in the farm industry and give us some insight into 
what programs work best for new and beginning farmers and 
ranchers.
    I look forward to your testimony.
    And, with that, Madam Chair, I yield back. Thank you.
    Chairwoman FINKENAUER. Thank you, Mr. Hagedorn.
    The gentleman yields back.
    And if Subcommittee members have an opening statement 
prepared, we would ask that they be submitted for the record.
    I would now just like to take a minute to explain the 
timing rules. Each witness gets 5 minutes to testify, and the 
members get 5 minutes for questioning.
    There is a lighting system right there in front of you to 
help you out. The green light will be on when you begin, and 
then the yellow light comes on when you have 1 minute 
remaining. The red light comes on when you are out of time. And 
we ask that you stay within the timeframe to the best of your 
ability.
    I would now like to introduce our witnesses.
    Our first witness is Mr. Matthew Keesling, the farm manager 
at Bures' Organic Family Farm in Deerbrook, Wisconsin. Mr. 
Keesling served in the United States Army for 24 years as an 
enlisted soldier and an officer, including three tours in Iraq 
and two in Afghanistan. He retired as a major in 2017.
    Mr. Keesling earned a bachelor's of science degree from 
Kansas State University and an MPA from Webster University. He 
is currently an apprentice with the federally recognized Dairy 
Grazing Apprenticeship and is also the veterans liaison for the 
program, where he works to aid his fellow veterans entering 
agriculture.
    Mr. Keesling is active in his local 4-H and is looking 
forward to purchasing the farm that he has apprenticed for the 
past 2 years.
    Welcome, Mr. Keesling.
    Our next witness is Mr. Jason Grimm, a third-generation 
Iowa farmer from my congressional district. He started his farm 
enterprise in 2011, where he raises dry beans, poultry, and 
produce on his farm near Williamsburg, Iowa.
    Mr. Grimm earned degrees in landscape architecture and 
environmental studies from Iowa State University.
    In addition to farming, Mr. Grimm is the deputy director at 
Iowa Valley Resource Conservation and Development in Amana, one 
of the most beautiful towns, actually, in the First District.
    He is also a leader in Iowa's local and regional food 
systems. Mr. Grimm has more than a decade of experience in 
community food systems. He cultivates local and statewide 
networks and coordinates farm-to-business supply chains. He has 
led more than 20 workshops, sharing his knowledge with over 250 
beginning farmers.
    Mr. Grimm has developed a statewide Iowa Farm to School 
Toolkit and acts as a value chain coordinator, connecting 
producers to each other, to viable markets, and institutions, 
and cultivates relationships within the food system.
    Thank you for all that you do, and welcome, Mr. Grimm. 
Thank you for being here.
    Our third witness is Ms. Meri Lillia Mullins. Ms. Mullins 
is the farm manager at Lighthearted Ranch in Longmont, 
Colorado. Ms. Mullins works on rangeland management, animal 
husbandry, and herd management.
    In addition to working as a farm manager, she is also an 
engineer, working on public safety and road maintenance.
    Welcome, Ms. Mullins. We are very, very happy to have you 
here.
    I now yield to the Ranking Member, Mr. Hagedorn, to 
introduce our final witness today.
    Mr. HAGEDORN. Well, thank you, Madam Chair.
    Our final witness is Rod Hebrink, president and CEO of 
Compeer Financial, a proud member of the Farm Credit System. 
Mr. Hebrink is responsible for leading the Compeer Financial 
team in providing loans, leases, risk management, and other 
financial services to farmers and rural communities, including 
Blue Earth, Minnesota, my hometown, where you have an office.
    Under Mr. Hebrink's leadership, Compeer has provided a 
spotlight for young farmers through their Groundbreaker of the 
Year award recognizing standout small-operation farmers. And, 
furthermore, through a company commitment to rural America, his 
team has assisted in administering millions of dollars in 
grants to upgrade county fair facilities, emergency response 
equipment, scholarships to high school seniors, and to support 
local 4-H and FFA groups. And they were just in our office this 
week. I can tell you how important that is.
    Mr. Hebrink holds a bachelor's degree in agricultural 
business administration from the University of Minnesota and a 
graduate degree from the University of Wisconsin-Madison 
Graduate School of Banking. Mr. Hebrink recently testified 
before the House Appropriations Subcommittee on Agriculture.
    And thank you for coming back to D.C., Mr. Hebrink. We are 
looking forward to hearing about your clients' stories and 
looking forward to your testimony.
    Thank you. I yield back.
    Chairwoman FINKENAUER. Thank you, Mr. Hagedorn.
    Mr. Keesling, you are now recognized for 5 minutes.

 STATEMENTS OF MATTHEW KEESLING, FARM MANAGER, BURES' ORGANIC 
   FAMILY FARM, DEERBROOK, WISCONSIN, ON BEHALF OF THE DAIRY 
GRAZING APPRENTICESHIP; JASON GRIMM, OWNER, GRIMM FAMILY FARM, 
  WILLIAMSBURG, IOWA, ON BEHALF OF THE NATIONAL YOUNG FARMERS 
 COALITION AND THE EASTERN IOWA YOUNG FARMERS COALITION; MERI 
  LILLIA MULLINS, FARM MANAGER, LIGHTHEARTED RANCH, LONGMONT, 
 COLORADO, ON BEHALF OF THE FLATIRON YOUNG FARMERS COALITION; 
   AND RODNEY HEBRINK, PRESIDENT AND CEO, COMPEER FINANCIAL, 
                      LAKEVILLE, MINNESOTA

                 STATEMENT OF MATTHEW KEESLING

    Mr. KEESLING. Thank you, and good morning.
    A little bit about the Dairy Grazing Apprenticeship. Thank 
you for the introduction. DGA is in 12 States, with 180 
approved master dairy grazers. Forty-five of those are paired 
with apprentices. We have 30 journey grazers, who are graduates 
of the program, and over 100 apprentice candidates that are 
looking for the right opportunity to enter the dairy industry.
    Personally, on the farm, we are members of a cooperative, 
Organic Valley, and we are set to purchase the farm within the 
next year. The farm has been with Organic Valley since 2005, 
and the value added from this co-op has been one key reason for 
the farm's success and survival.
    I would like to thank the members for holding such a 
hearing and gathering information to help shape programs and 
legislation for the next generation of farmers.
    There are three things I would like to bring to the 
members' attention that I have had experience with as I have 
worked towards being a businessowner and dairyman, and those 
are: Federal programs that I have attempted to use and the 
outcomes of those, with a focus on the Farm Service Agency 
within the USDA; education and training offered for dairy and 
agriculture versus what is actually needed; and, finally, the 
concept and importance of community-based agriculture and 
mentorship for anyone entering the agriculture industry.
    In 2012, as I became eligible for retirement from the Army, 
I visited with the FSA in Emporia, Kansas, to discuss financing 
in order to start a dairy from scratch. Over the previous 4 
years, we had purchased the land and some necessary equipment; 
discussed necessary permits with local and county agencies; 
selected our herd, freestall, and parlor design; and secured a 
feed source and milk processor.
    I worked with three local dairymen that were close to 
retirement through this process and spent numerous hours on 
their farms learning the finer points of being a dairyman. I 
worked with Small Business Administration and SCORE to develop 
and finalize my business plan even though the mentor was not in 
agriculture.
    That day in Emporia, I was told that even though I had 
taken these steps and the business plan was solid, I did not 
have enough education in agriculture. I took this information, 
stayed in the Army instead of retiring, and started to look for 
ways to meet the education requirements that lenders were 
asking.
    In 2017, I finally retired and I had entered into the Dairy 
Grazing Apprenticeship program and relocated to Wisconsin. 
Where better to learn to dairy than the dairy State itself?
    Early on, I visited with the FSA office in Wausau, 
Wisconsin, to ensure that I was on the right path to buy an 
existing dairy farm. Again, I was met with resistance and 
informed that, even after graduation from the DGA, I would not 
have met the requirement for experience. I would need another 3 
years of managing or owning/operating a dairy to qualify for a 
beginning farmer loan.
    With all the areas and/or categories that I thought I had 
qualifications in--veteran status, being a beginning farmer, 
years of management experience in the military, and education 
from both a university and through an apprenticeship program--
nothing translated to agriculture and dairy, so I would have to 
go find a job and work in a management position for 3 years 
before I could be seen as an acceptable risk to the FSA.
    Existing Federal support programs brief well, but they are 
far from where I believe they were intended to be. There is a 
need to provide clearer guidance to Federal program offices if 
this is truly the case.
    I would like to go back to 2012 now and share some of the 
searching that I did to try to meet the education requirements. 
I already had education and management. I was still on Active 
Duty, so I was trying to provide knowledge and gain knowledge 
while I met my military obligation.
    Even though there were several online programs, there were 
none that matched the experience piece. Dairy Grazing 
Apprenticeship was the only real option to gain both while not 
postponing desire to own and operate for another 3 to 5 years.
    Along this path, I learned that mentorship is critical when 
entering a new industry. The Beginning Farmer and Rancher 
Development Program has been there since we started DGA, and 
maybe their focus could be on supporting the trainer as well as 
the trainee. SBA and SCORE were not able to support 
agricultural businesses. They were more into tech, retail, and 
consulting, and one size does not fit all. DGA has since found 
mentors and enlisted them to be prepared to train the next 
generation of farmer. With the new dairy concept through DGA, 
we have the potential to mimic this nationwide.
    As you are all aware, there are always needs for a 
beginning dairy farmer, and they are: access to capital, access 
to a market, and a network of community of dairy farms to learn 
and grow.
    In closing, I would ask that you all invest in a model that 
is proven to work--apprenticeships. Protect the grants that are 
currently available, and allocate them to better serve 
nonprofits. Universities study, but apprenticeships do. Allow 
incentives for trainers and mentors as they grow the next 
generation of farmers. Limit vertical integration of the dairy 
industry and regulate to protect the ``ag of the middle'' to 
ensure that the next generation at least has an opportunity to 
enter this fine example of being a true entrepreneur.
    Thank you for your time and listening to my testimony 
today. Go Packers.
    Chairwoman FINKENAUER. Go Pack go. Absolutely. Yes. I grew 
up in Sherrill, close to Dubuque, obviously, where you are 
either a Packers fan or a Bears fan. And I, luckily, grew up a 
Packers fan. So I am going to tick off half the people in my 
district by just saying that, but forgive me.
    Anyway, thank you, Mr. Keesling.
    And, Mr. Grimm, you are now recognized for 5 minutes.

                    STATEMENT OF JASON GRIMM

    Mr. GRIMM. Good morning, Committee and staff. Thank you for 
this opportunity to share my experiences as a young farmer. 
Congresswoman Finkenauer, thank you for inviting me, 
specifically, to represent the First District as well.
    My name is Jason Grimm. I am 33 years old. I am a beginning 
farmer from Williamsburg, Iowa. I began farming 8 years ago and 
started with a specialty crop of black beans, very unique to 
Iowa, on my family's cow and calf operation.
    In addition to farming, I am cofounder and treasurer for 
the Eastern Iowa Young Farmers Coalition and a member of the 
National Young Farmers Coalition, Practical Farmers of Iowa, 
and Iowa Farm Bureau.
    However, I also work full-time off the farm as deputy 
director of Iowa Valley RC&D, a nonprofit located in Amana, 
where I have worked for 10 years. I started the organization's 
Regional Food Initiative in 2009 to address systematic change 
in Iowa's food system.
    My farm, Grimm Family Farm, is a small farm business that I 
started in 2011 with the help of my wife and family. My two 
young boys, Emmet, age 2, and Elliot, age 6, are already 
incorporated into the farm. Elliot loves to feed the chickens, 
and Emmet loves to go to tractor rides with his grandpa. Soon, 
they will be big enough to open gates to our farm fields while 
riding along on the tractor, like I did, during harvest.
    I started my farm business because I love the challenge of 
agriculture, I enjoy being outdoors, and I have an 
entrepreneurial spirit. I also believe that farming can 
strengthen community, and farming is a tradition in my family.
    Continuing that tradition, I began renting a few acres of 
my family's land in 2011 to raise pastured poultry and grow dry 
beans, potatoes, and produce. When I first began farming, I 
sold primarily to family and friends. Today, I sell these crops 
throughout eastern Iowa to grocery stores, restaurants, 
caterers, school districts, and colleges.
    Now in my eighth growing season, like so many other young 
farmers across the country, I found myself limited by the 
instability of growing a business on leased land without an 
opportunity to build infrastructure and earn equity through 
ownership. Federal programs like the Beginning Farmer and 
Rancher Development Program, the Farm Service Agency's 
microloan program, and the Farm to School Grant Program have 
helped me grow my business and access new markets.
    My customer list grows every year, and my need to increase 
production of my crops has led me to pursue purchasing some of 
my family's land or relocating my family to purchase land 
nearby. Owning rather than renting would enable me to build a 
facility to properly store and operate the equipment needed to 
clean and bag my dry beans. Such a facility could help me 
expand my production capacity to grow my business to support a 
career full-time on the farm.
    In 2013, I approached my grandparents about buying a tract 
of their land but hit a roadblock. My grandparents, now in 
their mid-80s, are hesitant to sell the land because of 
financial advice warning them about high capital gains taxes.
    As a third generation, I did not expect access to be so 
difficult. I thought I just needed a viable business plan and 
everyone would be happy to have the land stay in our family. I 
thought I had the best-case scenario.
    In the last couple years, discouraged with the set of 
circumstances that my grandparents face, I have turned my 
attention to other land that may be nearby my home. I have 
approached landowners, but many of these landowners do not want 
to go through a multiyear process of transitioning land to a 
beginning farmer. When landowners do want to sell to a 
beginning farmer, the cost of land is out of reach for my farm 
business, especially considering my monthly student loan debt.
    I believe that, had I been able to purchase part of my 
family's farm 6 years ago or any year since, my business would 
be a lot different today. I would have grown my line of dry 
beans to include three varieties. I could be contracting other 
farmers to grow beans from me. Today, I market my beans from 
Iowa City to Omaha, but with access to more land, I would 
probably be selling to the larger Midwest market and possibly 
even have two value-added products.
    Recently, I connected with one landowner about an hour away 
from my family. She has been operating her farm for 25 years. 
We have discussed transitioning the land, but selling outright 
would be challenging for her, as well, because of the taxes 
incurred through the sale.
    Also, my wife and I are unsure we want to relocate to 
another community. The school district our oldest son attends 
is the same one that I grew up in, and many of our family and 
friends attend that school as well. Plus, our church community 
is located in our hometown.
    I urge you to explore creative solutions to this land 
transition challenge. Examples include State tax provisions for 
land sold or rented to beginning and socially disadvantaged 
farmers or a tax break related to capital gains taxes incurred 
on farmland sold to beginning farmers and socially 
disadvantaged producers. These tax incentives would help level 
the field for us when we are purchasing land and give us more 
negotiating power as well.
    America needs more young farmers. I hope that farming can 
be an option for young people now and into the future. Thank 
you again for this opportunity and the opportunity to represent 
Iowa beginning farmers. I look forward to your questions and 
continuing the discussion.
    Chairwoman FINKENAUER. Thank you, Mr. Grimm. And I thought 
you were going to end saying, ``Go Cyclones.'' ISU, their 
mascot is the Cyclones. But that is really contentious in the 
area that you live in, though.
    Mr. GRIMM. Yeah, it is pretty tough.
    Chairwoman FINKENAUER. I was going to say, so close to Iowa 
City and the Hawkeyes. But thank you again, Mr. Grimm. I 
appreciate you being here.
    And I would now like to recognize Ms. Mullins for 5 
minutes. Thank you.

                STATEMENT OF MERI LILLIA MULLINS

    Ms. MULLINS. First, thank you, Chairwoman and Ranking 
Member and other members of the Subcommittee, for this 
invitation to testify here today. Thank you for holding this 
hearing and for the opportunity to provide a perspective on the 
challenges and opportunities that we face in the next 
generation of farmers and ranchers. This work is extremely 
critical, and I really, really appreciate the opportunity to be 
here.
    My name is Meri Lillia Mullins. I am a first-generation 
farmer in Longmont, Colorado. In exchange for room and board, I 
manage a 42-acre farm, where I raise goats, chickens, 
honeybees, and grow vegetables.
    In addition to farming, I also work full-time off-farm, and 
I volunteer for a local nonprofit, Mad Agriculture, who works 
with farmers to restore soil health through farm planning and 
policy work. I am also a member of our local chapter of the 
Flatirons Young Farmers Coalition and the National Young 
Farmers Coalition, where I participate in local policy work and 
regular education events.
    I have a great desire to make farming my life's work, which 
started with my passion for reconnecting urban communities to 
food while I was in college.
    I have a bachelor's degree in chemical and environmental 
engineering from the University of Toledo. I decided farming 
was the most meaningful way that I could use my technical 
degree. I began seeking farm labor opportunities to gain more 
hands-on experience in agriculture.
    I quickly realized farming was not as romantic as it 
seemed. In many cases, farm internships in my area included a 
$400-a-month stipend with no health insurance. I simply could 
not afford to learn how to farm while covering my living 
expenses and paying down my student debt. The cost of farmland 
and the availability of financing is well out of reach for 
anyone with student loans.
    Farming full-time was no longer a possibility for me, which 
led me to working full-time for a manufacturing company and 
managing the ranch. While this is a wonderful learning 
opportunity, managing the ranch full-time while working full-
time really takes its toll. And the sad truth is, I am not 
unique in working and farming to make ends meet. Over 60 
percent of U.S. farmers have off-farm incomes.
    Unfortunately, due to student debt, I am unable to farm 
full-time. I need my current day job to pay my $500-a-month 
student loan payment along with other living expenses. My 
current workload managing a farm and working full-time is just 
not sustainable long-term. I spend many evenings and weekends 
working on the farm and keeping up with things on top of my 
full-time job.
    I am faced with a few options. I am currently facing 
burnout from working in farming full-time. I could farm full-
time and forego any health insurance and retirement planning 
while incurring more interest on my loans. I could incur 
massive debt on top of my student loans by purchasing my own 
farm to attempt to defy all odds in making a living farming for 
myself while paying off my debt. Or I could quit farming 
altogether, just keep my day job. And none of these are viable 
options that lead to a successful career and long-term career 
in agriculture.
    Without any financial cushion or inheritance, the chances 
of me quitting my engineering job to pursue farming full-time 
at this point are pretty slim. And that really deeply saddens 
me.
    While the barriers to entry into a agricultural career are 
high for the next farmers in the new generation, one way that 
you all can support beginning farmers is through student loan 
forgiveness. My student loan debt is currently my largest 
obstacle in my pursuit of farming. This is the reality for many 
talented, passionate, young individuals across the country.
    And there is not a shortage of young people that want to 
farm in this country. Without congressional support, our aging, 
rural farm community is at risk of losing these gifted young 
farmers to other industries.
    We need to ensure that we have a strong population of young 
and beginning farmers in this country. They feed our 
communities and are stewards of our land. Currently, the 
average age of a farmer in Colorado and nationally is 
approaching 60, and only 6 percent of farmers are under 35. 
Those numbers are pretty scary to me.
    Farmers provide a valuable public service. Agriculture 
meets one of our most basic needs: They produce food for our 
families and our communities. They also steward our land--
nearly 1 billion acres under agricultural cultivation in the 
U.S., which is half of the land in the United States; provide 
valuable ecosystem services; and protect natural resources. 
Lastly, we support rural communities and economies, providing 
jobs and income that have helped these communities weather 
population decline and the Great Recession.
    As the Nation faces a crisis of attrition within the 
agricultural sector, it is essential that we help the new 
generation of growers succeed. I urge you and I hope that you 
can do everything in your power to support the next generation 
of farmers by addressing student loan debt and land access for 
farmers such as myself.
    Thank you again so much for the opportunity to be here, and 
I look forward to your questions.
    Chairwoman FINKENAUER. Thank you, Ms. Mullins. I appreciate 
you being here and for your insight.
    And I would now like to recognize Mr. Hebrink for 5 
minutes.

                  STATEMENT OF RODNEY HEBRINK

    Mr. HEBRINK. Good morning, Chairwoman Finkenauer and 
members of the Committee. My name is Rod Hebrink, and I am the 
president and CEO of Compeer Financial.
    Compeer is a proud member of the Farm Credit System. We 
provide financing, risk management, and financial services to 
farmers in rural communities in Illinois, Minnesota, and 
Wisconsin.
    Compeer is a cooperative owned by our customers and focused 
on championing the hopes and dreams of rural America. Our 
mission connects us with thousands of farmers who are 
passionate about agriculture and determined to pursue their 
dreams of exploring niche agriculture, launching 
entrepreneurial businesses, or entering the industry for the 
first time.
    We appreciate the Committee's focus on young, beginning, 
and small farmers. These farmers are an important part of our 
mission in support of agriculture and rural communities. 
Seventy-two percent of Compeer's loans are with young, 
beginning, and small farmers, who we call YBS farmers.
    Like all other Farm Credit System lenders, Compeer offers 
special programs to meet the needs of YBS farmers. From 
educational programs to special underwriting criteria, to 
discounted rates, we work hard to find creative ways to get 
farmers started and to ultimately succeed.
    For example, Living Greens Farm in Faribault, Minnesota, 
grows fresh greens and herbs aeroponically in a controlled 
environment. Aeroponics is revolutionary. There are no 
pesticides and no soil, just a nourishing mist spritzed on the 
roots of plants.
    Dana Anderson launched Living Greens Farm in 2012 after 
working out of his garage for 3 years. Dana struggled to find 
capital because he was looking for cash-flow-based financing 
versus asset-backed lending. SBA and USDA programs were not 
viable options due to the cost of accessing the programs and 
his limited collateral. Fortunately, Compeer helped him to find 
equity capital to move forward, but, unfortunately, equity 
capital is much more expensive.
    Today, Living Greens Farms employs 30 people, marketing 
their produce to local retailers. They are profitable and 
completed their first expansion last October.
    Matthew Wayrynen is a beginning farmer who expanded his 
business despite challenges obtaining financing. The 37-year-
old logger and beef farmer lives in McGregor, Minnesota, with 
his wife and 2-year-old son. They have a 100-acre farm with 40 
head of cattle and rent another 200 acres for hay. Matt is an 
entrepreneurial-minded fourth-generation farmer and third-
generation logger.
    Logging is Matt's main source of revenue. Two years ago, 
Matt switched from conventional tree-length logging to cut-to-
length logging. Logging is a capital-intensive industry, and 
Matt needed to make a new $250,000 capital investment. He would 
have been a perfect candidate for the 7(a) SBA program, 
benefiting from the lower interest rate that comes with the 
guarantee. However, the high fees offset the program's intended 
benefits. Compeer provided a traditional loan without a 
guarantee from either SBA or USDA. An interest-rate reduction 
was not available for Matt at a critical stage of growing his 
business.
    Reginaldo Haslett-Marroquin operates a 40-acre experimental 
research and training farm in Northfield, Minnesota. Last year, 
Reginaldo and three local farmers started Regeneration Farms 
with $100,000 of their own equity and an operating loan from 
Compeer. Regeneration Farms initially applied for a loan 
through SBA, but they didn't qualify because they were 
considered a startup with no financial history and insufficient 
collateral.
    In 2018, Regeneration Farms contracted with producers to 
raise chickens that they sell under their Tree-Range brand. One 
year later, they are expanding because of an opportunity to 
produce, freeze, and ship chickens to the West Coast. To meet 
this demand, they worked with Compeer for another operating 
loan. While this works for now, their business is challenged 
with limited options for affordable financing to expand and to 
create the brand awareness that they need to grow.
    I have shared some of the obstacles with the SBA loan 
guarantee programs. I hope these stories shed light on the 
challenges young and beginning farmers face. We also have 
customers who have benefited greatly from the SBA programs, and 
we are asking you to address some of the barriers: high fees, 
difficult requirements, and time-consuming processes.
    Thank you for the opportunity to testify, and I look 
forward to your questions.
    Chairwoman FINKENAUER. Thank you, Mr. Hebrink. I really 
appreciate, again, you being here as well.
    And now we are going to start the question portion of this. 
And with that, I am going to recognize myself for 5 minutes.
    Mr. Grimm, I would just like to start with you. You grew up 
in a farm family. You have had the incredible opportunity to 
work closely with your father and your grandfather. With their 
land and equipment, you were able to start a very successful 
operation that you run today. You have now been a farmer for 8 
years and become a leader in our State when it comes to local 
and regional food systems. Thank you, by the way.
    However, you mention that, you know, you weren't always 
interested in farming. And, you know, what advice do you have 
for young people from farm families and communities like yours 
who actually maybe are not considering a career in farming 
right now, especially given everything that we are seeing with 
the ongoing trade war and the weather patterns, you name it? Do 
you have any advice for those that are either on the fence or 
not sure if they want to go into it?
    Mr. GRIMM. Well, farming, just like other industries, is a 
business. So I took farming, to me, as an entrepreneurial 
opportunity and looked at what are opportunities to grow and 
produce new crops and things for in Iowa.
    So I feel like the biggest opportunity for younger 
generations to come back to their family farms is through 
diversification, whether that is making value-added products on 
a dairy farm to raising new crops like small grains for wheat 
and flour products.
    So my advice to other farmers that are unsure if they want 
to come back to their family farm is to spend time to 
understand other types of agriculture than what we have in Iowa 
and find a niche for your family farm so you can diversify and 
add new revenue streams for your farm and family's business.
    Chairwoman FINKENAUER. Thank you.
    And I know both Mr. Grimm and Ms. Mullins, you guys both 
mentioned student loan debt. And as someone who also has 
student loan debt--and I grew up, you know, in a State where I 
am a first-generation college graduate--there are a lot of 
folks, actually, in the First District who fall under that. 
And, you know, it wasn't always easy, and that is fine.
    But at the same time, you know, I have been watching sort 
of what has been happening across our country, especially in 
Iowa or in places with lower populations, where we keep 
continuing to lose populations, not keep the next generation, 
and have been starting to have discussions about how do we 
address some of that. And whether that is when we are looking 
at student loan debt and helping folks with that, how do we 
incentivize folks to move to areas that need population or in 
areas that we need more folks, you know, practicing in certain 
areas like farming.
    Would you be able to talk, Mr. Grimm, just how important 
something like that would be to you, in particular, or to the 
friends that you know, to get them to either stay in Iowa or 
move back home?
    And then I would like to hear Ms. Mullins' take on it as 
well.
    Mr. GRIMM. Well, I have paid off almost $30,000 of my 
student loans. Still have more than $10,000 to go.
    Chairwoman FINKENAUER. Yep.
    Mr. GRIMM. But a smaller payment each month or no payment 
at all would allow me to invest in land and a mortgage or more 
equipment capital loans as well.
    It would also just, I think, give an opportunity for 
students to want to go into agriculture or to go into actual 
production agriculture, not work in an agribusiness place where 
the salaries and stuff are much higher than on the farm. Sadly, 
we as the farmers usually take the price and don't set the 
price.
    Chairwoman FINKENAUER. Yeah.
    Mr. GRIMM. So if I would have really taken the career path 
that I thought I was going to do after high school, I would 
have been earning twice the income that I am today. But I 
wanted to stay in Iowa, and I wanted to be close to family.
    Chairwoman FINKENAUER. I hear that. I know a lot of folks 
feel the same way in the First District, and we have to do more 
to bring more folks back home.
    Ms. Mullins, would you like to touch on that?
    Ms. MULLINS. Yeah, sure. I will just add, too, I am from 
rural Michigan, so----
    Chairwoman FINKENAUER. Yep.
    Ms. MULLINS.--a lot of the same stuff going on there.
    Chairwoman FINKENAUER. You get it.
    Ms. MULLINS. Yeah, I think that, you know, the biggest 
challenge that we face with student loans--me, personally, I am 
a first-generation farmer. I don't come from a family of 
farmers that I could learn from generations and generations, so 
I am in learning phase. And to try to learn to farm and to have 
farm internships and apprenticeships that pay little to nothing 
and try to get into farming with my student loan debt is 
literally impossible without, like, my loans going under.
    So just having incentives and education, I think, is what 
is really important to me and just supporting those programs. 
Having loan forgiveness so that I could actually pursue 
learning farming before I were to purchase my own farm, which 
is what I would really like to do, would be really helpful.
    Chairwoman FINKENAUER. Yeah. Well, thank you, Ms. Mullins 
and Mr. Grimm.
    And thank you all again for being here.
    With that, my time has expired, so I would like to 
recognize Mr. Hagedorn for 5 minutes for questions.
    Mr. HAGEDORN. Thank you, Madam Chair. I appreciate that.
    And I would acknowledge our Ranking Member, Mr. Chabot, 
here today.
    Steve, do you need to--you are okay?
    Chairwoman FINKENAUER. Oh, there he is. He snuck in on me.
    Mr. HAGEDORN. Very good. Yeah.
    Great to have you, Steve.
    And thank you for your testimony. Really appreciate it.
    Mr. Keesling, appreciate your service to the country, what 
you have done for our country. I am sorry that right now the 
bureaucracy doesn't quite understand some common sense in these 
areas. I think if you look back after World War II, Korean War, 
many of our soldiers came back and they were the ones that 
became the farmers that are the generational farmers today with 
their families. And so I sure hope we can do what we have to do 
in order to make sure folks like you can get into the business 
and we can support you any way possible. So, again, thank you.
    Mr. Hebrink, I have toured that facility in Faribault, the 
Living Green Farms. It is quite fascinating. What made you get 
involved in that? And what are some of the benefits, long-term, 
for the country of that type of farming, just off the top of 
your head? I am curious.
    Mr. HEBRINK. Well, Compeer and other members of the Farm 
Credit System, we support agriculture of all types, and whether 
it is young, beginning farmers and entering into 
entrepreneurial niches. Living Greens Farms is a good example 
of that, both a young producer but also a producer with a new 
approach to agriculture.
    We are seeing a lot of investment in urban agriculture, and 
in locally grown agriculture. Living Greens Farms meets both of 
those criteria. It is a new approach to agriculture, one that 
is sustainable and one that I think many consumers are 
interested in seeing thrive.
    Mr. HAGEDORN. Yeah. You save on the transportation 
expenses; you have a freshness quality that lasts a little bit 
longer in the local stores. So I think that is wonderful.
    One of the things that I think your group at Compeer and 
some of the others in the farm credit industry probably don't 
get enough credit for is that you are out there making loans 
and helping the communities with projects that are very 
critical. It could be healthcare-related projects. It could be 
things, like you said, with the county fairs and all that.
    But you look at these other areas, with the broadband and 
the infrastructure that we need in order to make sure that we 
have quality living for folks, and we want to have people in 
the rural areas. Do you have some other examples of those types 
of projects that you have been working on?
    Mr. HEBRINK. Well, yes. And thank you for the question, 
because we do see a strong connection between the health of 
agriculture and the health of rural communities. Each of the 
other witnesses today have talked about their roles in coming 
back to the farm and building their local communities, but you 
have to have a community that offers other options and interest 
to attract people to come back to the community.
    We have been providing financing for things like critical 
access care facilities, rural hospitals, and nursing homes that 
help provide the necessary services for all of the rural 
communities, whether it is farmers directly involved in 
agriculture or other citizens of those rural communities.
    You mentioned broadband, which is one of those areas that 
is really lagging in rural communities and is one of those core 
utilities, like electricity was in the 1930s and 1940s, that 
needs to be built out in rural communities to continue to 
attract businesses.
    The Farm Credit System has some authorities in building 
local infrastructure, in telecommunications, in water and sewer 
systems, and we look forward to those public-private 
partnerships. Compeer has worked closely with the USDA programs 
in public-private partnerships, working with community banks to 
invest in the healthcare facilities. Those are some of the 
examples that the Farm Credit System can bring capital from 
outside rural communities and reinvest in rural communities.
    Mr. HAGEDORN. I am glad to hear that you are working so 
cooperatively with the community banks and others in these 
rural areas, and it sounds like a win-win-win-win-win. That 
sounds good for our rural folks.
    You know, I had the luxury of growing up on a family farm 
in southern Minnesota, and my father and grandfather, great-
grandfather, all southern Minnesota farmers. We had hogs and 
grain. And, you know, it was a wonderful experience.
    It is not for everybody, but those people that--especially 
when they grow up on a farm, we want them to continue along, 
but the people in the cities that have that dream, and others, 
do everything possible in order to give them an opportunity to 
go out there and be part of this system of agriculture. It is 
high-risk. It is high-capital. It is not always high-reward. It 
is hard work.
    And I wish you well. And I hope you are able to get in the 
industry. I appreciate all you are doing to help our farmers in 
our rural communities.
    With that, I will yield back.
    Chairwoman FINKENAUER. Thank you, Mr. Hagedorn.
    And, with that, I would like yield to Rep. Jason Crow, 
Chairman of the Subcommittee on Innovation and Workforce 
Development.
    You are recognized for 5 minutes.
    Mr. CROW. Thank you, Madam Chair.
    And thank you to all of you for being here.
    Mr. Hebrink, I appreciate your reference to Berry Patch 
Farms earlier, in my district. My kids have actually been on 
numerous field trips out there, and it is a wonderful place.
    Ms. Mullins, thank you for representing the 40,000 farmers 
of Colorado and for sticking with it, because it is a very 
noble pursuit. And I hope you continue to stick with it.
    I wanted to begin with Mr. Keesling. I am a fellow veteran, 
and I am particularly interested in the intersection of 
veterans issues and small business and agriculture. And as my 
colleague Mr. Hagedorn pointed out, you know, there is a long 
history in America of our veterans going into agriculture and 
farming, and I appreciate you continuing that tradition.
    And I would like to know what more we can do to help 
integrate the efforts of the V.A., some of the benefits that 
you might have received through the V.A., with the SBA? Because 
I know oftentimes things get siloed in this town, in 
Washington, and the left hand doesn't know what the right hand 
is doing. And if there are opportunities to better integrate 
the veterans benefits that you may have availed yourself of 
with some SBA or USDA resources--and, basically, what more we 
can do to make that more efficient for you.
    Mr. KEESLING. Thank you. That could be a very difficult 
question, so I will keep it simple and state that most veterans 
coming back will have some sort of educational benefit, and 
through SBA and SCORE, there are educational opportunities that 
they won't be able to use those benefits to attain.
    So, similarly to Dairy Grazing Apprenticeship, where we are 
considered on-the-job training, so as I go through this program 
it doesn't allow to pay for the tuition, my GI Bill can't cover 
the tuition for the related instruction, as well as the housing 
stipend that I receive decreased every 6 months that I was in 
the program.
    So everything that I had as a veteran to maximize would be 
to go to a regular university, go to a job. It did not bring me 
to agriculture at all, and it didn't bring me into being a 
business owner at all, because any of those educational 
opportunities that are offered were not covered through my 
educational benefits.
    So that would be the biggest thing that I hope you leave 
here with, is that GI Bill needs to be applicable to anything 
that gets, you know, a veteran starting a business and joining 
the agriculture industry.
    Mr. CROW. As a followup to that--and this would be a 
question for the other panelists today here as well. You know, 
in the work I have done in the veterans space after leaving the 
service, before becoming a Member of Congress, you know, we 
found that working in greenhouses, working in agriculture, 
working outdoors actually has a tremendous benefit in 
addressing PTS and other ailments with our veterans. And there 
are a number of nonprofits that focus on that. And I also know 
that workforce development, finding qualified workers, is a 
real challenge in agriculture.
    So thinking about, you know, solving two problems at once, 
are there opportunities, tax incentives or otherwise, that 
would help you all connect with veterans that are interested in 
getting involved, working for you, with you, in the industry?
    Mr. HEBRINK. Well, you are absolutely right, Congressman, 
that labor is a critical issue for agriculture, and there are 
shortages of labor to support lots of different types of 
agricultural production.
    And so, yes, if there are training programs for veterans 
and tax incentives for producers who would hire veterans to 
help bring them back into the labor pool for rural communities, 
I think that would be advantageous to our farmers.
    Mr. CROW. Mr. Grimm, is that something that----
    Mr. GRIMM. I was just----
    Mr. CROW.--your farm would----
    Mr. GRIMM. I was just going to comment. I think it would be 
important to look at programs--I think the Young Farmers 
Coalition in Colorado helped to pass legislation that actually 
helps pay the trainer for their time to train, in this case, 
the veteran that is coming back to agriculture. Because it 
takes a lot of time for us out of our farm business to also 
train the next generation. So any way to support those farmers 
that are the trainers, in that case, to help them train the new 
farmers.
    Mr. CROW. That is a good idea.
    Ms. Mullins, do you have any thoughts on that?
    Ms. MULLINS. Just something quick to add in support of 
that. We have a veterans group that works locally that is 
trained by other folks and is a contract group of veterans that 
travels frequently to different farms in our area that we have 
worked really closely with.
    So I know that there are programs that are there and that 
they are really beneficial and other farms, like the farms in 
my area, are using them. So it is a good thing to continue 
supporting.
    Mr. CROW. Thank you. That was very helpful.
    And thank you for all your testimony today.
    I yield back.
    Chairwoman FINKENAUER. Thank you, Mr. Crow.
    And now I would like to recognize Ranking Member Chabot for 
5 minutes.
    Mr. CHABOT. Thank you, Madam Chair.
    Mr. Hebrink, I will begin with you, if I can. We have 
already discussed a little bit about aeroponics. I had an 
opportunity to tour a facility in Cincinnati a year ago, year 
and a half ago, something like that, and was very impressed 
with it.
    And could you kind of explain the difference between 
aeroponics and aquaponics and hydroponics and maybe some of the 
pros and cons of those, and also just some of the challenges 
that in aeroponics they have nowadays, like perhaps the high 
energy costs that you have to be concerned about? There are 
ways around that. And if there are any tax advantages that 
somebody in that industry might have and are they temporary or 
not? Just anything in those areas that you might like to 
discuss.
    Mr. HEBRINK. Congressman, I don't pretend to be an expert 
in the production of aeroponics----
    Mr. CHABOT. You are the closest thing we have here today, 
so we are----
    Mr. HEBRINK.--but my understanding of the difference is 
that, as we mentioned, in the aeroponics, the roots are 
actually suspended in air and they are misted or sprayed with 
the nutrients, as opposed to aquaponics, where they are 
actually immersed in liquid.
    But I think the challenge along the way is, whenever we 
venture into a new dimension of agriculture, which might be 
viewed experimental at some point in time--and certainly Mr. 
Anderson, as he began to put together his business plan, there 
weren't like operations in the area for us to draw on to 
compare and to know whether his was going to be a successful 
venture. So he was going into a new type of agriculture and had 
to market his produce in a unique manner.
    That is one of the challenges for small businesses 
beginning, regardless of the type of venture, is to not only 
put together that business plan but then to convince a lender 
and someone else to have confidence in the plan that they put 
together and that they will ultimately be able to succeed. And, 
fortunately, he has been very successful in his venture.
    Mr. CHABOT. Thank you very much.
    And I will open this up to any of the members of the panel 
that might like to comment about it. Could you discuss, 
perhaps, access to land, the challenges that there are there, 
kind of the cost of it? And how does one get started? And is it 
necessary to be in a family where there is a history of this? 
And that sort of thing. So anybody who would like to take that 
on would be--yes, ma'am.
    Ms. MULLINS. I will just comment on that. Not coming from a 
family farm and having land to inherit, it is very challenging 
for me to even, you know, look at financing options with 
student loan debt in addition.
    But just the opportunities that are there to transition 
land from farmers, like you mentioned, that are being 
disincentivized through taxes not to even sell to family 
members or outside of their family is something that can really 
be looked at. So I guess that is my only comment.
    Mr. CHABOT. Thank you.
    Yes, Mr. Keesling.
    Mr. KEESLING. I would add to that that I have been in the 
same community where we are planning to live for, you know, 
going on 3 years now. A lot of agriculture land isn't even 
advertised. And that that is advertised is advertised as a 
business, and it is going to be a whole operation, and it is 
going to be well into seven figures. And, you know, no one at 
this panel is ready--well, three of this at this panel aren't 
ready to do that.
    So that land that is advertised is recreational, is 
hunting, is wherever they can get the most value out of that 
land. And rarely do they see that as going to someone that is 
trying to pursue a career in agriculture, even if it currently 
stands as agricultural land.
    I see a lot of farms being sliced up, 40 acres at a time, 
to support a retirement portion for that farmer or to 
supplement them as they are trying to transition and pay those 
capital gains taxes that were mentioned earlier.
    Mr. CHABOT. Thank you. Yeah.
    And related to the capital gains taxes, et cetera, that you 
just mentioned, would any of you want to touch on or have any 
experience or background or knowledge relative to our current 
Federal estate tax laws and how it can be challenging for 
passing a farm from one generation to another.
    And those tend to be one of the areas where the existing 
Tax Code really ought to be reformed to encourage it going from 
generation to generation rather than having to sell it off to 
pay the taxes.
    Yes?
    Ms. MULLINS. It is my understanding that the estate tax 
that is there disincentivizes those farmers from selling their 
land before they pass on. And so it is meant--you know, they 
are encouraged to keep it in the estate so they don't have to 
pay the taxes.
    One way around that is to have a capital gains tax 
exemption for land that is being passed on to young and 
beginning farmers, which the National Young Farmers Coalition 
has a proposal for. So something like that could help 
incentivize rather than decentivize farmers that are, you know, 
older and don't have anybody that they are wanting to pass 
their land on to or are not going to because of, you know, tax 
reasons.
    Mr. CHABOT. Thank you.
    My time has expired. Thank you.
    Chairwoman FINKENAUER. Thank you, Ranking Member Chabot.
    I would now like to recognize Representative Angie Craig 
from Minnesota for 5 minutes.
    Mrs. CRAIG. Thank you, Madam Chair.
    Mr. Hebrink, thank you again for being here today on behalf 
of farm credit. I am excited to have yet another Minnesotan in 
Washington testifying before one of our committees and sharing 
your story, especially as it relates to farm economy and young 
and beginning and small farmers.
    You mention in your testimony a number of YBS stories 
around farm country in Minnesota, including Regeneration Farms, 
which has operations in Northfield and Faribault; the Hmong 
American Farmers Associations, with farms in my district that 
grow and sell food directly to area restaurants.
    In the case of Regeneration Farms, they initially applied 
for a loan through the SBA but didn't qualify because the 
business was considered a startup with no financial history and 
insufficient collateral. So Compeer stepped in to help them get 
the business running.
    Can you give us a little more detail about that financing 
experience with Regeneration and the Hmong Farmers Association, 
how you think those examples can guide this Committee to make 
those SBA loans more accessible?
    Mr. HEBRINK. You know, many pure production agricultural 
loans are more FSA-oriented as opposed to SBA-oriented. When 
you get into the case of Regeneration Farms, it is that 
processing aspect of their business that qualifies them for the 
SBA loans.
    I mentioned that they are having difficulty continuing to 
access the total amount of capital that they would like to 
continue to grow their business, because we are operating 
within conventional underwriting standards as opposed to what 
we would expect to be more relaxed underwriting standards 
through an SBA-type program.
    You mentioned the Hmong American Farmers, and Compeer 
supports the Hmong American Farmers. In the Twin Cities 
metropolitan area, we have Latino farm associations, Asian farm 
associations. And they become a critical part of local farmers 
markets. It is a microloan program that we help to get those 
farmers started. We have grants to help train them in their 
business activities, to help with their business planning and 
tax preparation. Through those types of programs and in 
conjunction with the USDA, we have helped those communities of 
immigrant farmers become a mainstay in the farmers markets in 
the metropolitan area.
    Mrs. CRAIG. That is great. Thank you so much.
    And I assume access to more capital would just mean 
business growth for these entrepreneurs, correct? More 
marketing?
    Mr. HEBRINK. Yes. That is oftentimes one of their greatest 
struggles. They can get access to a certain level of capital 
based on the equity or the cash flow that they have, but they 
need additional sources of capital to continue to grow their 
businesses. And I think that has been--the testimony this 
morning from the other witnesses supports that exact challenge.
    Mrs. CRAIG. Thank you so much.
    I want to turn to Mr. Keesling at this point.
    Mr. Keesling, you may know that my district actually ranks 
in the top 50 dairy-producing congressional districts in the 
Nation. But it is a really tough time right now for dairy 
farmers.
    Despite these market forces, why are you choosing to take 
this leap right now? And what sets your business apart? How 
could your practices and financing structures benefit other 
struggling dairy farmers?
    Mr. KEESLING. Well, thank you for your contribution to the 
dairy industry.
    I would go back to the Chairwoman's opening remarks, in 
that it was both not just economics but the social structure of 
the family farm. I am kind of putting my military retirement 
funding as my off-the-farm income up to bat to fund this farm 
and provide it for the next generation. My daughter is behind 
me. So hopefully she will be there with my children.
    And what sets ours apart is that the family that I am 
purchasing this farm from did not fall victim to ``get big or 
get out'' in the 1980s and into the 1990s. Their operating 
loans were kept low, their families were kept large, and their 
ability to do manual labor did not disappear.
    So I think if you have the drive and you want to work hard 
and you are willing to do that, you will be successful. If you 
find the right mentorship and you find the right program, as I 
did, you will be able to take over a farm and you will be able 
to carry it into the next generation.
    Mrs. CRAIG. Thank you so much. And thank you for your 
contribution, and to all of you.
    With that, Madam Chair, I yield back.
    Chairwoman FINKENAUER. Thank you, Representative Craig.
    And, with that, I am going to do just another round of 
questions for anybody up here who wants to ask them, just given 
the smaller group here today. So, with that, I will recognize 
myself for 5 minutes.
    Mr. Hebrink, as you know, we are experiencing right now a 
downturn in the agricultural economy. I have seen it firsthand 
in my district. We have been all over, whether it is, you know, 
the small town of Manly, where we have had listening sessions 
with farmers in regards to, my goodness, the attacks on, you 
know, ethanol with refinery waivers that have hurt our corn 
growers, whether it is seeing that biodiesel tax credit expire 
over 18 months ago now or more that should have been passed 
last Congress, which I am very hopeful we can get through this 
Congress to help our soybean producers, or whether it is this 
ongoing trade war that we have seen now the retaliatory effects 
for over a year and a half. You know, I just saw, actually, 
this morning, before I came in, there was a notice that there 
is an ethanol plant over in western Iowa that is shuttering its 
doors because of the ongoing trade war with China.
    And I am concerned every single day. I know we are hearing 
from folks dipping into 401(k)s. We had a woman actually 
testify in front of this Subcommittee earlier this year saying 
she is telling her three sons not to go into farming. These 
are, you know, not unique stories.
    And, you know, on top of all of this, we are seeing folks 
file for bankruptcy. I know, right now, Iowa, our farmers are 
holding more debt than farmers even in California. We just 
surpassed them this year, which is not something we, you know, 
want to do. And, obviously, farm bankruptcies across, you know, 
many farming regions are at the highest point in over a decade. 
In some places, in 2018, farm bankruptcies actually doubled 
from the previous year.
    I am proud to be a cosponsor of the Family Farmer Relief 
Act. This bill raises the Chapter 12 operating debt cap to $10 
million, allowing more family farmers to seek relief under the 
bill. It is bipartisan, bicameral, both support from our 
Senators, actually, in Iowa as well, and something, you know, 
we need to be dealing with.
    And with the net farm income down 50 percent since 2013 
and, obviously, like I said, debt at the highest level since 
the 1980s farm crisis, family farms and the future of many 
rural communities are in jeopardy.
    You mentioned in your testimony how some young farmers have 
encountered issues when trying to access, on top of all of 
this, financing programs through the Small Business 
Administration and USDA.
    How do you think we can improve these programs and increase 
flexibilities to make sure that they are helping our new and 
beginning farmers navigate these new and very trying economic 
times?
    Mr. HEBRINK. Well, thank you for the question.
    As I mentioned, some of the challenges with the SBA 
programs has been the fees. The fees can be very substantial. I 
think they are over 3 percent for loans of $150,000 and up. 
That is not a very large loan in many small businesses. Those 
loans are intended to help support small businesses, but those 
kind of fee levels really offset the benefits of the 
guarantees.
    We also understand that the SBA programs are very time-
consuming. Whatever we can do to streamline those programs and 
relax some of those standards to meet the financial realities 
of a beginning business would be very helpful.
    Chairwoman FINKENAUER. Thank you. Thank you for that 
insight. I appreciate that.
    And, Mr. Grimm, I will just end with you too, just if there 
is anything else you want to make sure that Washington hears 
and that this Committee hears. Because these stories that I 
have heard from Iowa I know you are hearing from your friends 
back home as well. And, again, just the need to get this trade 
war with China figured out and move on.
    Is there anything you would like to say to us and to the 
administration while you are here in Washington?
    Mr. GRIMM. Help us take the risk out of farming. That is 
primarily what the tariffs are doing right now. It is hard for 
us to make decisions on how to run our farms when we don't know 
the real future of agriculture. And those tariffs are part of--
they make it hard for us to make decisions, so--and the 
uncertainty for our communities.
    Chairwoman FINKENAUER. Yeah. Thank you, Mr. Grimm.
    I appreciate it, again, for you taking the time to come all 
the way out here. I know you guys took time away from your 
farms and your operations to be here, and I, again, just can't 
thank you enough.
    And, with that, I will recognize Mr. Hagedorn for a second 
time as well. Thank you.
    Mr. HAGEDORN. Yeah. Thank you.
    I would just give a little bit different perspective. I 
mean, in the farm country, the farmers who I have spoken with, 
it has been tough for 5 and 6 years. This hasn't been just 
since we tried to reset these trade deals, for instance.
    And, you know, in the last administration--you know, 
agriculture goes up and down. It is farming. We get that. But 
some of those regulations that they were looking to put on our 
farmers were going to make it pretty tough. And I think some of 
the things that have been done in the last couple years by, 
frankly, the President and some of the folks in my party 
getting rid of that--Waters of the United States. If we didn't 
do that, we would have farmers every day talking about how 
onerous that is and how it is driving up their cost.
    ObamaCare has been a tough deal. You know, we have farmers 
out in our district, their premiums are through the roof, but 
the deductibles are so high, the insurance is worthless. And 
you start taking $25,000, $30,000, $40,000 out of a farmer's 
income year-in and year-out, 4 and 5 years, for nothing--
because they hope never to have to use it--that is a tough deal 
on the bottom line.
    And, you know, the tax reform bill, I think that helped. It 
allowed a lot of farmers to expense their items in current 
years. And I haven't talked to any farmers yet that want that 
repealed. They think that was a good thing.
    And energy prices. You know, there are some policies, I 
think, that have been changed, that were anti-U.S. energy, 
driving up the costs. And for farming and agribusinesses, that 
is critical. Forty percent of the cost of producing a bushel of 
corn is energy, so when the price goes up, guess what? The 
farmer is going to be a little less productive, a little less 
efficient. It puts the squeeze to him.
    But on trade, I agree with you. Let's expand trade. Let's 
make sure that we pass the United States-Mexico Free Trade 
Agreement. Because when we do that, it is not just going to 
help farmers, agribusinesses, machinery, mining, everybody, 
right? It is going to create jobs. But it is going to give us 
that momentum we need to look at those other countries that we 
are dealing with, like Japan and China and the United Kingdom 
and others, and say, we can have better agreements, we can pass 
these things, and we can build momentum for those deals.
    And the bottom line, we want to drop down those barriers 
for farmers, we want to expand our markets. Because our 
agribusinesses and farmers are the best in the world. They can 
compete with anyone. But they need a fair deal. And those folks 
in China have been cheating us for a long time in a number of 
areas--dumping steel. They are dumping quartz in our district. 
They have been hurting agriculture. And some of it is--you 
know, it is not all tariffs. But I hope we can get a deal. I 
hope we can expand it forward. I hope we can work together on 
that.
    With that, I would yield back. Thank you.
    Chairwoman FINKENAUER. Thank you, Ranking Member Hagedorn.
    Appreciate you all being here today. Again, obviously, 
there is a lot on your mind here today that are coming to 
testify. There is a lot on the minds of our farmers and folks 
all across the district, in my hometown, who are worried every 
day right now about their future.
    And I have to tell you, last night I was able to smile. I 
keep up with a lot of folks back home--friends, family, 
neighbors--by Facebook. It is great to see the pictures that 
they are posting. And one that really made me happy, there is a 
young girl that lives next-door to where I grew up. That is 
where their family farm is. They actually live on her 
grandparents' family farm. And her dad works at John Deere. Her 
mom works for the school district as a teacher, like my mom was 
a--my dad is actually a union pipefitter/welder, and my mom 
worked for the school district in Dubuque. And her name happens 
to be Abby as well. And so I love keeping up with little Abby.
    And yesterday I saw she won--it was her first big 
competition with 4-H showing cattle, and she won the novice 
showmanship award. And, you know, I thought of her as I was 
going into this meeting as well and just how much we just have 
to put differences aside and put our districts first, put the 
things that we are hearing in our district front and center 
when it comes to the future of both our ag economy and then 
rural areas in this country in general. Oftentimes they have 
been ignored.
    And the fact, again, that you guys took the time to make 
sure that you were heard loud and clear, it means the world to 
us. You know, as we have heard, obviously new farmers and 
ranchers face some very significant challenges. But there are 
opportunities for the next generation to be part of the 
solutions to revitalize our rural communities and to make a 
life for their families and to provide a service to our 
country.
    As older farmers leave, we know we need younger ones to 
take their place, maybe even little Abby one day. And we 
applaud each of you for doing your part to ensure that the next 
cohort of agriculture business can continue to produce the 
food, goods, and fuel that our country relies on.
    We look forward to seeing how the USDA sets up the 
Beginning Farmer and Rancher Coordinator position that Congress 
called for in the 2018 farm bill. And we will do our part to 
ensure that the USDA and SBA improve their outreach and 
assistance to agriculture entrepreneurs.
    I would now ask unanimous consent that members have 5 
legislative days to submit statements to the record for 
supporting materials.
    Without objection, so ordered.
    And, again, thank you all. We have a lot of work to do. And 
I am excited to get back home during the district work period 
in August and continue to hear from folks in my district.
    And, hopefully, I might even get to see you, Jason. That 
would be great.
    But thank you again for taking the time.
    And without any further business to come before the 
Committee, we are adjourned. Thank you.
    [Whereupon, at 11:19 a.m., the Subcommittee was adjourned.]
                            A P P E N D I X

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

               Opening Statement of Ranking Member Joyce


      Subcommittee on Rural Development, Agriculture, Trade, and 
                            Entrepreneurship


 Hearing: ``Supporting the Next Generation of Agricultural Businesses''


                    Remarks as Prepared for Delivery


                             July 25, 2019


    Thank you, Madam Chairwoman. Today, our subcommittee will 
examine the difficulties affecting America's new and beginning 
farmers.

    In my home state of Pennsylvania, we are proud of our 
agricultural sector. I am pleased to say that my district alone 
is responsible for 18% of Pennsylvania's agriculture sales and 
is home to over 8,000 farms. 97% of the farms in my district 
are family farms, but many are struggling with the decision to 
either pass their farm down to the next generation or encourage 
their children to explore other careers which may have an 
easier path.

    I am impressed by the entrepreneurial spirit of the 2,741 
new and beginning farmers in my District, but we need to see 
that number grow. PA-13 is the number 1 Congressional District 
in the state for milk from cows; sheep and goats' wool and 
milk; total cattle; and market value of fruits, tree buts, and 
berries. We rank in the top 100 of Congressional Districts for 
total number of producers and total number of farms, market 
value of agriculture products sold, total sales of livestock & 
poultry, the value of sales of poultry & eggs, and the number 
of cattle, calves, sheep, and lambs. Even more impressively: we 
are in the top 50 Congressional Districts for the value of 
sales of fruits, tree nuts, berries, milk from cows, sheep and 
goats' wool and milk, total number of milk cows, and land in 
orchards by acres.

    But our future as an agricultural districts jeopardized by 
the fact that of the over 14,000 producers in my district, not 
even 2,100 of them are under the age of 35 and nearly 4000 of 
them are 65 and older.

    Communities in my district and across the country rely on 
our nation's 2.2 million farms. Of these, 88 percent are small, 
and only 20 percent are operated by new and beginning farmers 
and ranchers. One U.S. farm will feed about 165 people 
annually. With a projected global population of 9.7 billion by 
the year 2050, the world's farmers will need to grow 
approximately 70 percent more food than they are currently 
producing. Yet my state alone lost over 6,100 farms over the 
last 5 years. Mounting demand for food, population flight from 
rural areas, and an aging farm population prompts a fresh 
evaluation of opportunities and support systems available to 
new and beginning farmers.

    Today's witnesses will discuss their experiences in the 
farm industry and give us some insight into what programs work 
best for new and beginning farmers and ranchers. I look forward 
to their testimonies.

    With that, Madam chairwoman, I yield back.

                                 [all]