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




 
   HEARING TO REVIEW THE IMPLEMENTATION OF FEDERAL FARM AND DISASTER 
                                PROGRAMS

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

                             JOINT HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
             GENERAL FARM COMMODITIES AND RISK MANAGEMENT,

                                AND THE

                            SUBCOMMITTEE ON
                   LIVESTOCK AND FOREIGN AGRICULTURE,

                        COMMITTEE ON AGRICULTURE
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED SIXTEENTH CONGRESS

                             FIRST SESSION

                               __________

                           SEPTEMBER 19, 2019

                               __________

                           Serial No. 116-18
                           
                           
                           
                           
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]                           
                           


          Printed for the use of the Committee on Agriculture
                         agriculture.house.gov
                         
                         
                         
                             ______
                          

             U.S. GOVERNMENT PUBLISHING OFFICE 
 37-920 PDF           WASHINGTON : 2020                         
                         
                         


                        COMMITTEE ON AGRICULTURE

                COLLIN C. PETERSON, Minnesota, Chairman

DAVID SCOTT, Georgia                 K. MICHAEL CONAWAY, Texas, Ranking 
JIM COSTA, California                Minority Member
MARCIA L. FUDGE, Ohio                GLENN THOMPSON, Pennsylvania
JAMES P. McGOVERN, Massachusetts     AUSTIN SCOTT, Georgia
FILEMON VELA, Texas                  ERIC A. ``RICK'' CRAWFORD, 
STACEY E. PLASKETT, Virgin Islands   Arkansas
ALMA S. ADAMS, North Carolina        SCOTT DesJARLAIS, Tennessee
    Vice Chair                       VICKY HARTZLER, Missouri
ABIGAIL DAVIS SPANBERGER, Virginia   DOUG LaMALFA, California
JAHANA HAYES, Connecticut            RODNEY DAVIS, Illinois
ANTONIO DELGADO, New York            TED S. YOHO, Florida
TJ COX, California                   RICK W. ALLEN, Georgia
ANGIE CRAIG, Minnesota               MIKE BOST, Illinois
ANTHONY BRINDISI, New York           DAVID ROUZER, North Carolina
JEFFERSON VAN DREW, New Jersey       RALPH LEE ABRAHAM, Louisiana
JOSH HARDER, California              TRENT KELLY, Mississippi
KIM SCHRIER, Washington              JAMES COMER, Kentucky
CHELLIE PINGREE, Maine               ROGER W. MARSHALL, Kansas
CHERI BUSTOS, Illinois               DON BACON, Nebraska
SEAN PATRICK MALONEY, New York       NEAL P. DUNN, Florida
SALUD O. CARBAJAL, California        DUSTY JOHNSON, South Dakota
AL LAWSON, Jr., Florida              JAMES R. BAIRD, Indiana
TOM O'HALLERAN, Arizona              JIM HAGEDORN, Minnesota
JIMMY PANETTA, California
ANN KIRKPATRICK, Arizona
CYNTHIA AXNE, Iowa

                                 ______

                      Anne Simmons, Staff Director

              Matthew S. Schertz, Minority Staff Director

                                 ______

      Subcommittee on General Farm Commodities and Risk Management

                     FILEMON VELA, Texas, Chairman

ANGIE CRAIG, Minnesota               GLENN THOMPSON, Pennsylvania, 
DAVID SCOTT, Georgia                 Ranking Minority Member
AL LAWSON, Jr., Florida              AUSTIN SCOTT, Georgia
JEFFERSON VAN DREW, New Jersey       ERIC A. ``RICK'' CRAWFORD, 
SALUD O. CARBAJAL, California        Arkansas
                                     RICK W. ALLEN, Georgia
                                     RALPH LEE ABRAHAM, Louisiana

                Mike Stranz, Subcommittee Staff Director

                                  (ii)

           Subcommittee on Livestock and Foreign Agriculture

                    JIM COSTA, California, Chairman

ANTHONY BRINDISI, New York           DAVID ROUZER, North Carolina, 
JAHANA HAYES, Connecticut            Ranking Minority Member
TJ COX, California                   GLENN THOMPSON, Pennsylvania
ANGIE CRAIG, Minnesota               SCOTT DesJARLAIS, Tennessee
JOSH HARDER, California              VICKY HARTZLER, Missouri
FILEMON VELA, Texas                  TRENT KELLY, Mississippi
STACEY E. PLASKETT, Virgin Islands   JAMES COMER, Kentucky
SALUD O. CARBAJAL, California        ROGER W. MARSHALL, Kansas
CHERI BUSTOS, Illinois               DON BACON, Nebraska
JIMMY PANETTA, California            JIM HAGEDORN, Minnesota

                Katie Zenk, Subcommittee Staff Director

                                 (iii)
                                 
                                 
                             C O N T E N T S

                              ----------                              
                                                                   Page
Conaway, Hon. K. Michael, a Representative in Congress from 
  Texas, opening statement.......................................     3
Costa, Hon. Jim, a Representative in Congress from California, 
  opening statement..............................................     5
    Prepared statement...........................................     7
Peterson, Hon. Collin C., a Representative in Congress from 
  Minnesota, opening statement...................................     4
Rouzer, Hon. David, a Representative in Congress from North 
  Carolina, opening statement....................................     7
    Prepared statement...........................................     8
Thompson, Hon. Glenn, a Representative in Congress from 
  Pennsylvania, opening statement................................     4
Vela, Hon. Filemon, a Representative in Congress from Texas, 
  opening statement..............................................     1
    Prepared statement...........................................     2

                                Witness

Northey, Hon. William, Under Secretary, Farm Production and 
  Conservation, U.S. Department of Agriculture, Washington, D.C..     9
    Prepared statement...........................................    11
    Submitted questions..........................................    47


   HEARING TO REVIEW THE IMPLEMENTATION OF FEDERAL FARM AND DISASTER



                                PROGRAMS

                              ----------                              


                      THURSDAY, SEPTEMBER 19, 2019

                  House of Representatives,
         Subcommittee on General Farm Commodities and Risk 
                                                Management,
                                             joint with the
         Subcommittee on Livestock and Foreign Agriculture,
                                  Committee on Agriculture,
                                                   Washington, D.C.
    The Subcommittees met, pursuant to call, at 10:03 a.m., in 
Room 1300 of the Longworth House Office Building, Hon. Filemon 
Vela [Chairman of the Subcommittee on General Farm Commodities 
and Risk Management] presiding.
    Members present: Representatives Vela, Van Drew, Costa 
(Chairman of the Subcommittee on Livestock and Foreign 
Agriculture), Brindisi, Hayes, Cox, Harder, Bustos, Panetta, 
Axne, Peterson (ex officio), Thompson, Austin Scott of Georgia, 
Allen, Rouzer, Comer, Marshall, Hagedorn, Johnson, LaMalfa, and 
Conaway (ex officio).
    Staff present: Lyron Blum-Evitts, Malikha Daniels, Emily 
German, Prescott Martin III, Isabel Rosa, Mike Stranz, Katie 
Zenk, Matthew S. Schertz, Ricki Schroeder, Trevor White, Dana 
Sandman, and Jennifer Yezak.

  OPENING STATEMENT OF HON. FILEMON VELA, A REPRESENTATIVE IN 
                      CONGRESS FROM TEXAS

    Mr. Vela. This joint hearing of the Subcommittees on 
General Farm Commodities and Risk Management and Livestock and 
Foreign Agriculture entitled, Hearing To Review the 
Implementation of Federal Farm and Disaster Programs, will come 
to order.
    Thank you and welcome to this joint hearing of the 
Subcommittees on General Farm Commodities and Risk Management, 
and Livestock and Foreign Agriculture. I am pleased to be 
joined by my colleague and fellow Chairman, Mr. Costa, as well 
as my esteemed Ranking Member, Mr. Thompson, and the Livestock 
and Foreign Affairs' Ranking Member, Mr. Rouzer. Welcome also 
to our Chairman, Collin Peterson, and my fellow Texan, Ranking 
Member Mike Conaway.
    This first joint hearing comes at a very important time for 
farmers. USDA, and in particular, the Food Production and 
Conservation mission area and the Farm Service Agency, is in 
the middle of a huge job. FPAC and FSA are currently at the 
helm of three critical but separate efforts to address the 
needs of farmers, ranchers and rural communities in our 
country. The Market Facilitation Program, which is meant to 
assist those farmers most directly harmed by the 
Administration's trade war, the expanded Wildfire and Hurricane 
Indemnity Program, or WHIP+, which will aid in rural recovery 
from natural disasters, and programs like ARC, PLC, DMC and 
other supports within title I of the farm bill, which provide a 
risk management framework for farmers and ranchers.
    It is our job on this Committee to ensure that these 
programs are structured and implemented in a way that can 
quickly, efficiently, and most directly serve the farmers, 
ranchers and small towns who need them right now. It is also 
our job to ensure that these programs are implemented in a way 
that is fair, transparent, and consistent with the law. We can 
absolutely get farmers the help they need while still 
conducting appropriate and necessary oversight.
    I do have concerns about the path that USDA is on, 
especially when it comes to staffing. I hear from farmers all 
the time about understaffed local FSA offices. Resources at FSA 
are stretched thin and I would like to hear today what plans 
USDA has to make sure these resources are managed effectively. 
On top of that, there are many media stories about software 
glitches and unprepared staff struggling to process these 
disaster payments.
    It is clear that USDA wants to find efficiencies, but is 
USDA prepared to make the changes needed to successfully 
deliver these important services, even if that means 
increasing, not decreasing, staff and resources?
    I look forward to hearing your testimony today, Mr. Under 
Secretary.
    [The prepared statement of Mr. Vela follows:]

 Prepared Statement of Hon. Filemon Vela, a Representative in Congress 
                               from Texas
    Thank you, and welcome to this joint hearing of the Subcommittees 
on General Farm Commodities and Risk Management, and Livestock and 
Foreign Agriculture. I'm pleased to be joined by my colleague and 
fellow Chairman, Mr. Costa, as well as my esteemed Ranking Member Mr. 
Thompson, and the Livestock and Foreign Affairs' Ranking Member Mr. 
Rouzer.
    Welcome also to our Chairman Collin Peterson and my fellow Texan, 
Ranking Member Mike Conaway.
    This first joint hearing comes at a very important time for 
farmers. USDA, and, in particular, the Food Production and Conservation 
mission area and the Farm Service Agency, is in the middle of a huge 
job.
    FPAC and FSA are currently at the helm of three critical but 
separate efforts to address the needs of farmers, ranchers, and rural 
communities in our country.

   The Market Facilitation Program, which is meant to assist 
        those farmers most directly harmed by the Administration's 
        trade war;

   The expanded Wildfire and Hurricane Indemnity Program, or 
        WHIP+, which will aid in rural recovery from natural disasters; 
        and

   Programs like ARC, PLC, DMC and other supports within title 
        I of the farm bill, which provide a risk management framework 
        for farmers and ranchers.

    It's our job on this Committee to ensure that these programs are 
structured and implemented in a way that can quickly, efficiently, and 
most directly serve the farmers, ranchers and small towns who need them 
right now.
    It's also our job to ensure that these programs are implemented in 
a way that is fair, transparent, and consistent with the law. We can 
absolutely get farmers the help they need while still conducting 
appropriate and necessary oversight.
    I do have concerns about the path that USDA is on, especially when 
it comes to staffing. I hear from farmers all the time about 
understaffed local FSA offices. Resources at FSA are stretched thin and 
I want to hear today what plans USDA has to make sure these resources 
are managed effectively. On top of that, there are many media stories 
about software glitches and unprepared staff struggling to process 
these disaster payments.
    It's clear that USDA wants to find efficiencies, but is USDA 
prepared to make the changes needed to successfully deliver these 
important services, even if that means increasing, not decreasing, 
staff and resources?
    I look forward to hearing your testimony today, Mr. Under 
Secretary.

    Mr. Vela. I now recognize Chairman Peterson for an opening 
statement.
    You waive? I recognize Ranking Member Conaway for an 
opening statement.

OPENING STATEMENT OF HON. K. MICHAEL CONAWAY, A REPRESENTATIVE 
                     IN CONGRESS FROM TEXAS

    Mr. Conaway. Thank you, Mr. Chairman. I appreciate you 
holding this really important hearing and having us focus on 
the way that USDA is going about its business of trying to help 
farmers and ranchers in rural America across this country, at a 
junction where it is really difficult where the Chairman 
mentioned everything that is going on.
    The process we have gone through the last 8 days on the CR 
is shameful. It is one thing for China to use our farmers and 
ranchers and rural America as a weapon against President Trump 
and those trade negotiations, but it is entirely something else 
to have the powers of this body be using those same good people 
as leverage because you simply don't like President Trump.
    Now, this Committee and the USDA have done yeoman's work 
trying to make sure that rural America is protected, that we 
eliminate the uncertainties that live out there. The way the 
Majority has gone about this CR and taking the CCC funding 
hostage is now using those folks as a weapon. Shame on us for 
allowing that to happen. It should never have happened.
    We are reducing this body to a terrible state. It is one 
thing for one of our colleagues to list donors of President 
Trump to try harass their businesses and hurt them financially. 
It is entirely different for this body, this body, to do the 
exact same thing with this funding mechanism that has always 
gone forward without impediments.
    Now, my colleagues on the other side of the aisle might say 
that this has been done before, the restrictions placed on this 
funding as a result of Blanche Lincoln and Vilsack's efforts 
affected future promises, not the current promises that were 
made at that point in time. These promises on the MFP payments, 
the disaster relief, have been made, and for us to threaten 
rural America that those payments would not go out under 
regular order is terrible. Shame on us for getting to doing 
that exact same thing.
    My colleagues will say we fixed it, but you didn't. You 
left restrictions on there. There is a report that USDA has to 
do. In the face of all of the things that the Chairman said 
they had to get done, now we have added another report due by 
October 30 or 31 to that workload. Shame on us for doing that.
    We have also not fully funded it. We have given it some 
sort of date-certain funding as opposed to moving it to the $30 
billion.
    From now on, congratulations. From now on, as my Chairman 
said yesterday on the radio, from now on, this process will now 
be a weapon that both sides can use to their advantage. And 
shame on us for doing that.
    I yield back.
    Mr. Vela. I recognize the Chairman, I recognize Mr. 
Peterson.

OPENING STATEMENT OF HON. COLLIN C. PETERSON, A REPRESENTATIVE 
                   IN CONGRESS FROM MINNESOTA

    Mr. Peterson. I want to tell Members that haven't been here 
29 years some of the history.
    This was put in place by the Republican party in 2010, and 
it was put in place, this restriction, because at that time, 
the Republicans thought that Secretary Vilsack was using the 
CCC to help Blanche Lincoln, who at the time was Chairman of 
the Senate Agriculture Committee, in her reelection because 
there was a disaster in Arkansas. And the Senate wouldn't do a 
disaster bill because she was up for election.
    What happened? What they did instead was they put a 
limitation on Vilsack so that he couldn't use the CCC to do it.
    You guys put it in place, not us.
    Mr. Conaway. On basis?
    Mr. Peterson. Well no, and so what has happened ever since 
is the Appropriations Committee has waived that provision. They 
didn't change it, but they waived it. Okay. So, this time it 
became an issue. There wasn't a single Member on this 
Committee, the Agriculture Committee, that had anything to do 
with this, period.
    And so, I object to making these kind of accusations that 
our Members somehow or another were complicit in this. We were 
not. And I found out this came from the Senate. It did not come 
from the House. This whole brouhaha came out of the Senate.
    My concern about this, and what I said on the radio 
yesterday is, this is legitimate. There weren't a handful of 
Members that understood what the CCC was before this all 
started. And that is not just this latest dust-up. The 
President using this fund for farmers has elevated this thing, 
and so now I have had people talk to me from the liberal side 
complaining about it. They never knew there was a CCC, never 
knew how it operated. And then yesterday, the Freedom Caucus, 
they are starting to weigh into this thing.
    That is what I am concerned about. But, nobody on this 
Committee had anything to do with that, and without this 
Committee, this thing might have happened. It wasn't the House 
that was pushing this, it was the Senate. That is where these 
troubles usually start.
    I just wanted to clear the record.
    Mr. Vela. I now recognize the gentleman from Pennsylvania, 
Ranking Member of the General Farm Commodities and Risk 
Management Subcommittee, Mr. Thompson, for his opening remarks.

 OPENING STATEMENT OF HON. GLENN THOMPSON, A REPRESENTATIVE IN 
                   CONGRESS FROM PENNSYLVANIA

    Mr. Thompson. Chairman Vela, Chairman Costa, thank you for 
holding this important hearing regarding implementation of the 
2018 Farm Bill provisions in disaster assistance. Thank you to 
Under Secretary Northey for your leadership, for attending, and 
for providing us an update on the status of these important 
policies.
    As those of us representing rural America know firsthand, 
times are tough in farm country. Over the past few years, it 
seems like there isn't a single region of the country that is 
immune from Mother Nature's devastation.
    Not only are producers having to grapple with extreme 
weather, they are also being buffeted by bad markets and an 
ever-changing landscape for global trade. Not to mention the 
policy uncertainty coming out of Washington.
    That is why it is so important to get the 2018 Farm Bill 
completed without the threat of extensions which would only 
have exacerbated the challenges facing farmers and ranchers.
    I am very pleased with the timely rollout from USDA of the 
key farm bill programs, despite having numerous other policies 
to implement, which I am sure we will hear more about today.
    The House Republicans were able to make some key targeted 
improvements to the farm safety nets, which should not be 
overlooked, and do not forget in conference, we were having to 
negotiate against the Senate bill which would have cut $700 
million out of the baseline of these critical programs. Talk 
about kicking farms and farm families when they are down. It is 
unconscionable to me that people would be advocating for the 
erosion of the safety net at a time when producers are looking 
for any lifeline available to keep their family farms in 
business.
    I am proud that we were able to hold the line and produce a 
conference report that provides improvements to all title I 
programs to the benefit of all crops and regions of the 
country.
    One additional area where Congress could act now to ease 
the concerns of the agriculture community would be to act 
swiftly to approve the United States-Mexico-Canada agreement, 
USMCA, which made key improvements to NAFTA and is expected to 
provide $2.2 billion in additional exports for our producers, 
particularly for dairy, the main commodity produced in my 
district.
    Beyond the access that it provides, USMCA also sends a 
signal to other trading partners currently in talks with USTR 
that United States has the wherewithal to follow through on 
commitments made, which will lead to other opportunities to 
expand trade, just like what we saw with the agreement and 
principle reached with Japan.
    Congress must approve USMCA now, and failure to do so will 
erode relationships between our negotiating partners, not just 
for this Administration, but for all future Administrations as 
well.
    Thanks again for holding this joint hearing, and I look 
forward to hearing from Under Secretary Northey about the 
actions USDA is taking to aid our farmers and ranchers.
    Mr. Vela. Thank you. I now recognize the gentleman from 
California, Chairman of the Subcommittee on Livestock and 
Foreign Agriculture, Mr. Costa.

   OPENING STATEMENT OF HON. JIM COSTA, A REPRESENTATIVE IN 
                    CONGRESS FROM CALIFORNIA

    Mr. Costa. Thank you very much, Mr. Chairman. I think it is 
important that these two Subcommittees meet together this 
morning. This hearing that deals with the review of the 
implementation of the Federal farm and disaster programs is 
fitting and appropriate, given the challenges that we are 
facing today in farm country. And for all of the Members that 
are participating, I thank you.
    I also want to note that it was important that Chairman 
Peterson clarify the history and the record as it relates to 
these activities that were most recently involved with the 
continuing resolution that we need to pass this week, and that 
we need to obviously have a budget, because frankly, it is 
irresponsible to shut down the government. I have always felt 
it is irresponsible, and past actions by previous Congresses to 
do just that for political agendas is inappropriate, period. 
And certainly, the President learned that lesson the hard way 
last year. At least, I hope he did.
    The history of the CCC, which as Chairman Peterson pointed 
out, is really not known by the majority of Members of Congress 
until this last week. It is important to note, because frankly, 
we should not be politicizing this. It is not part of this 
Committee. My sense is it really came from the Senate as well, 
but we have to deal with it.
    What we are dealing with today is to talk about where the 
safety net is. Where is the safety net for farmers and ranchers 
and dairy people across this country? And as the Chairman of 
the Subcommittee on Livestock and Foreign Affairs, I am very 
interested in overseeing that the new Dairy Margin Coverage 
Program that we worked so hard on in the reauthorization of the 
last farm bill, and the Administration's Market Facilitation 
Program is properly implemented. And that is why we have the 
Secretary here today, in part.
    The Dairy Margin Coverage signup for 2019 was set to end 
tomorrow. Now, it is important that we give dairymen and -women 
every opportunity to sign up for this program. We will be 
asking the Secretary where we are in terms of that signup and 
whether or not your numbers kind of coincide with the numbers 
that I have heard. I hope there can be a little bit of 
flexibility with that deadline tomorrow. This year, given that 
we have a brand-new program, but at the same time, I know you 
have the challenge, because we have the signup for the 2020 
program. I am sympathetic to the challenge that the Department 
is facing in that instance.
    But, it has been tough in dairy country across the land. We 
know with the large fluctuations and the amount of dairies that 
have gone bankrupt and have been sold in every region of 
America, and we certainly have lost our fair share in 
California. I know dairymen and -women that have been there for 
generations that now find themselves having to sell the dairy, 
and it is tough. And it has economic ramifications in the 
communities where those dairies have been.
    Nationwide, though, the program, in terms of success has 
triggered, I am told, over $1 billion in help--$\1/4\ billion, 
excuse me. Let me correct that, $\1/4\ billion in help to dairy 
farmers throughout the country, and that is good. That is 
obviously what the intention was.
    I have a difference with the Administration, with the 
President, on this tariff war. I have been clear about that. 
The President has said that farmers are better off with Market 
Facilitation Program payments than they were with the access 
they had to China before the trade war. In the USMCA we have 
made some headway with Canada on that Class VII. I can tell you 
the dairy market is very important for California and Mexico. 
Yet, when I talk to farmers, it is not just my disagreement 
with this that no one wins the tariff war, because everybody 
has leverage. But farmers in California are feeling the pain of 
it, and they agree. They think that it is important that they 
have access to markets and they maintain those markets, and 
they are very fearful when we lose these markets because of 
this current trade war, we may never regain them. And that is a 
concern I have.
    The Market Facilitation Program and how those monies are 
used for the payments really don't come close. I mean, the 
example in dairy, 12 per hundredweight. I mean, you are 
getting $16 to $18 per hundredweight, 12, it is in the 
margins. It may stave off a bankruptcy or a foreclosure by a 
bank for a certain time period, but 12 per hundredweight is 
not going to save a dairy.
    I don't know what the USDA leadership thinks. I am 
interested. I have a few questions on how the Market 
Facilitation Program was set up and how you are implementing 
it.
    But, Chairman Vela, thank you for agreeing to host this 
joint hearing with me. Secretary Northey, you have a farm 
background. You know how difficult it is in farm country, and 
we appreciate your participation here this morning to give us a 
sense of--with your testimony--where we are going with this.
    [The prepared statement of Mr. Costa follows:]

Prepared Statement of Hon. Jim Costa, a Representative in Congress from 
                               California
    Thank you for joining us today. I'm happy to hold this important 
joint hearing with the General Farm Commodities and Risk Management 
Subcommittee to evaluate the safety net the USDA provides for farmers.
    In my role as Chairman of the Subcommittee on Livestock and Foreign 
Agriculture, I am very much interested in overseeing the roll out of 
the new Dairy Margin Coverage program and the Administration's Market 
Facilitation Program, that are meant to help farmers of all types. The 
Dairy Margin Coverage sign-up for 2019 ends on September 20th. About 
\2/3\ of California dairy farms that have established production 
history with USDA have signed up for Dairy Margin Coverage so far. 
Nationwide, the program has already triggered over $\1/4\ billion in 
help to dairy farmers this year.
    When it comes to trade, the President has said that farmers are 
better off with Market Facilitation Program payments than they were 
with the access they had to China before the trade war. The farmers I 
talk to disagree and the conversations I've had with USDA leadership 
makes me think you might disagree as well. I've got a few questions to 
ask about how that program was set up and how you're implementing it 
now.
    Chairman Vela, thank you for agreeing to host this joint hearing 
with me. Under Secretary Northey, thank you for joining us. I look 
forward to your testimony.

    Mr. Costa. I now yield to the Ranking Member of our 
Subcommittee, my Subcommittee, Mr. Rouzer, for any remarks he 
wishes to make.

  OPENING STATEMENT OF HON. DAVID ROUZER, A REPRESENTATIVE IN 
                  CONGRESS FROM NORTH CAROLINA

    Mr. Rouzer. Thank you, Mr. Chairman. I have a prepared 
statement that I will just submit for the record, and I just 
have a couple comments for the second time, because I am 
interested in getting to the real meat of the matter here.
    But first, it is important that we recognize just how 
critical it is that we in agriculture stick together, 
Republican and Democratic. It is unfortunate that so many of 
our other colleagues that don't have the opportunity to 
represent rural areas. The lack of understanding of agriculture 
is significant. There is a wide gap there, and of course, that 
is not uncommon around the countryside either. Most folks have 
no idea where their food and fiber comes from. We take it for 
granted every single day of our lives, and so, it is really 
important that we as Republicans and Democrats on this 
Committee stick together and promote and educate and cajole and 
persuade as best we can our other Members of Congress so that 
they will understand the nature and the gravity of what we are 
doing here as it relates to production agriculture and clearly, 
a country that can feed itself and clothe itself is in a very 
enviable position. It enables us to be prosperous here at home, 
and strong abroad as well.
    The other thing I would like to mention--and I have been 
around agriculture and these debates for a long time, going 
back to my days on the Senate staff. And back then, I never 
understood why we didn't have some type of--in addition to crop 
insurance, some type of catastrophic fund of some sort so that 
when these disasters hit, we are not waiting on Congress for 8 
months or 12 months or 14 months or whatever it may be, but 
have a program in place similar to what we have with FEMA where 
Congress makes an appropriation every year, and you have it 
there. And when a disaster hits, you have a base. And then if 
you need to come back and supplement that Congress can.
    And very clearly, as valuable as crop insurance is, you 
take a situation in my home State of North Carolina, you have 
economic losses year after year after year. That is the 
hurricane of economics, so to speak, and then you have the 
weather, hurricanes coming through that absolutely devastate 
your areas. Farmers had millions and millions of dollars tied 
up in the ground. Hurricane hits in early September, and they 
don't even have an opportunity to get anything from that 
investment. And meanwhile, it comes at a time when they have 
lost all their equity due to the economic hardships that they 
have faced over a period of time. And then it takes Congress 
months to get any kind of disaster aid package across the 
finish line, for a variety of reasons.
    I just think we have to--and this has been an age-old 
problem. We have to come up with a better solution than what we 
have now. Crop insurance is very valuable. It is very helpful; 
but, there are so many times we face when, it is just not quite 
enough, and we have to have extra help. So, that is where we 
are.
    I look forward to your testimony, Mr. Northey, and look 
forward to questions and answers.
    Thank you. I yield back.
    [The prepared statement of Mr. Rouzer follows:]

 Prepared Statement of Hon. David Rouzer, a Representative in Congress 
                          from North Carolina
    Thank you, Chairman Vela, and special thanks to Under Secretary 
Northey for being here to discuss the implementation of Federal farm 
and disaster programs. House Republicans fought hard during the 2018 
Farm Bill to strengthen the farm safety net at a time when producers 
need all the help they can get.
    Uncertainty is problematic for any business, but especially for our 
farm families. Having a 5 year farm bill in place is critically 
important to provide at least some degree of stability for an industry 
that has always faced a wide variety of challenges and uncertainty.
    In addition to the enhancements made to ARC, PLC, the Marketing 
Assistance Loan, livestock disaster, and crop insurance, I was very 
happy that a provision that I authored made it in the conference 
report. Section 1104 of the 2018 Farm Bill ensures that producers who 
farm multiple small tracts of land are eligible to benefit from the 
farm safety net. I want to thank Ranking Member Conaway and his great 
team for working with us during conference to ensure that provision was 
adopted.
    Despite the good work done on the farm bill, positive news has been 
hard to find for farmers in North Carolina and the rest of the 
Southeast. Our producers have been hammered by multiple hurricanes in 
recent years. Hurricanes Matthew, Maria, Florence, Michael, and, of 
course, most recently Dorian, devastated the agriculture sector 
throughout the Southeast. This succession of storms has put enormous 
strain on producers, and years of economic losses have consumed any 
equity that farm families had. As we all know, farm income is down more 
than 50% during the course of the past 6 years.
    This is why it was so vital that Congress provided disaster 
assistance to help folks recover. While ad hoc disaster programs are no 
one's preferred choice to make ends meet, extraordinary times call for 
significant measures and our producers are still in great need.
    This underscores the need to constantly improve the insurance 
policies available to producers and be more forward looking about 
necessary coverage options.
    The 2018 Farm Bill certainly took a step in that direction by 
requiring that USDA look at options for providing additional coverage 
for losses from tropical storms and hurricanes, and we should continue 
to look for other improvements that will help reduce the need for ad 
hoc assistance.
    Mr. Northey, I want to commend you and the folks at FSA who learned 
from lessons in 2017 and used that experience to make modifications to 
WHIP+. Thank you for being here today and I look forward to your 
testimony.

    Mr. Vela. Thank you, each of you, for your views on the 
current conditions facing agriculture in your state and across 
this country. I would like to request that opening statements 
by other Members be submitted for the record so the witness may 
begin his testimony and to ensure that there is ample time for 
questions.
    We would like to welcome our witness, the Honorable Bill 
Northey, Under Secretary for Farm Production and Conservation 
at USDA. Mr. Northey is a fourth-generation farmer from Iowa, 
and served as Iowa's Secretary of Agriculture from 2006 to 
2018.
    Under Secretary Northey, please begin when you are ready.

   STATEMENT OF HON. WILLIAM NORTHEY, UNDER SECRETARY, FARM 
 PRODUCTION AND CONSERVATION, U.S. DEPARTMENT OF AGRICULTURE, 
                        WASHINGTON, D.C.

    Mr. Northey. Very good. Thank you. Chairman Vela, Chairman 
Costa, Ranking Members Thompson and Rouzer, and distinguished 
Members of the Committee, I am honored to be with you this 
morning to discuss the work USDA has accomplished and continues 
to deliver as we implement the 2018 Farm Bill.
    Thank you for your leadership in providing the programs and 
the funding authority that lets us support our nation's 
hardworking farmers, ranchers, and forest stewards. I am 
privileged to be the Under Secretary for FPAC, comprised of the 
three farmer-facing agencies of FSA, RMA, and NRCS.
    Since Congress passed and President Trump signed the 2018 
Farm Bill into law last December, one of our highest priorities 
has been implementing the Dairy Margin Coverage Program. Sign 
up for DMC began June 17 and FSA began making payments for the 
DMC on July 11. As of last evening, we had over 21,000 
producers enrolled in the Dairy Margin Coverage Program, with 
about $230 million being paid. To ensure that our producers 
have enough time to enroll, we are extending the deadline from 
September 20 to September 27, so 1 week.
    Our FSA offices have and will continue to make the extra 
effort to ensure producers are notified of the approaching 
deadline. We have made phone calls and sent out post cards and 
emails. Additionally, producer organizations and cooperatives 
have been important partners in sharing program information and 
deadlines, and we will continue to work with them to do so with 
this new deadline.
    FSA has implemented the 2018 Farm Bill changes to ARC/PLC 
as well. ARC/PLC sign up began September 3 for the 2019 
program, and will run through next March, and RMA has 
implemented key crop insurance provisions, including multi-
county enterprise units, and providing insurance options for 
grazing and harvesting of wheat. RMA will provide coverage for 
hemp in crop year 2020.
    On the conservation side, we have held sign-ups for 
continuous enrollment CRP, and the Conservation Reserve 
Enhancement Program, and FSA is planning a CRP general sign up 
in December, with our CRP grassland sign up to follow that.
    On September 3, we published an Announcement of Funds 
Availability for the Regional Conservation Partnership Program, 
and additionally, NRCS has implemented EQIP, CSP, and the 
Agriculture Conservation Easement Program in accordance with 
existing regulations as prescribed by the 2018 Farm Bill. New 
regulations will be published soon for implementation of those 
programs in Fiscal Year 2020.
    This past year has tested the resilience of America's 
farmers. Crop insurance, supplemental natural disaster 
assistance programs, and short-term trade mitigation programs 
have helped producers manage those challenges. To help 
producers who were unable to plant crops or had significant 
delays in planting, USDA increased some flexibility in some of 
the program rules and its delivery by allowing earlier harvest 
of cover crops on prevent plant acres, by extending the filing 
deadline for acreage reporting, by providing EQIP cover crop 
cost-share for prevent plant acres, and by deferring interest 
charges on crop insurance premiums. We took these actions based 
on comments we received from you, from farm organizations, and 
directly from producers.
    I also know there is a lot of interest in the 
implementation of the supplemental disaster relief bill. Last 
week, we announced FSA's WHIP+ Program, which provides payments 
to producers for natural disasters occurring in 2018 and 2019. 
We began accepting payments, but also included in that, in 
addition to the WHIP+, are payments for milk loss, for stored 
grain losses, and for 2017 peach and blueberry freeze losses. 
In addition, all producers with flooding or excess moisture-
related prevent plant claims in 2019 will receive a top-up 
payment of ten to 15 percent of their indemnity.
    We are providing relief through the Emergency Conservation 
Program, the Emergency Forest Restoration Program, and the 
Emergency Watershed Program, which were provided $1.5 billion 
in the disaster relief bill.
    The Market Facilitation Program, part of President Trump's 
support package for farmers, will provide up to $14.5 billion 
in direct payments to agriculture producers who have been 
affected by unjustified retaliatory tariffs on U.S. farm goods. 
Sign up began July 29, and will run through December 6. As of 
the beginning of this week, we have more than 346,000 
applications, and $4 billion have been paid to producers.
    In February 2018, USDA launched farmers.gov, a mobile-
friendly website, making it easier for producers to apply for 
programs, process transactions, sign documents, and access 
their information. They can also access a farm loan, a disaster 
assistance discovery tool there, and we began accepting debit 
card payments online as well. And there is more to come.
    Before I close, I would like to acknowledge this 
particularly challenging time, as you all have noted, for our 
agricultural producers. At FPAC, our agencies are working hard 
to ensure producers have what they need to help manage their 
risks and their land.
    I want to thank our thousands of USDA employees who serve 
our nation's farmers, ranchers, and forest stewards daily, for 
their hard work in implementing the 2018 Farm Bill and other 
programs.
    Again, thank you for the opportunity to testify this 
morning. I would be happy to answer any questions.
    [The prepared statement of Mr. Northey follows:]

   Prepared Statement of Hon. William Northey, Under Secretary, Farm 
     Production and Conservation, U.S. Department of Agriculture, 
                            Washington, D.C.
    Chairmen Vela and Costa, Ranking Members Thompson and Rouzer, and 
distinguished Members of the Committee, I am honored to be with you 
this morning to discuss the work we have accomplished and continue to 
deliver as we implement the 2018 Farm Bill, as well as how our programs 
provide critical safety net support for our farmers, ranchers and 
forest landowners when disasters hit and their livelihood is put at 
risk.
    As a farmer myself, I know first-hand how valuable these programs 
are and how important it is that the USDA delivers them effectively, 
efficiently, and using common sense.
    Within his first month on the job, Secretary Perdue established the 
farm bill-mandated Trade and Foreign Agricultural Affairs mission area, 
centered on the work of the Foreign Agricultural Service. That created 
an opportunity to establish a new common sense, farmer-facing mission 
area, Farm Production and Conservation (FPAC). By bringing together the 
sister agencies Farm Service Agency (FSA), the Risk Management Agency, 
and the Natural Resources Conservation Service (NRCS), USDA now has a 
single mission area that serves as a focal point for the nation's 
farmers, ranchers, and forest stewards as they work to conserve land 
for future generations and seek help in protecting their hard work and 
investment from the effects of bad weather and unpredictable markets. 
Together, the agencies work to support each other as we deliver our 
programs to serve our customers.
    The 2018 Farm Bill strengthened these partnerships in ways that 
will allow them to do an even better job on behalf of our nation's 
agricultural producers. We have been able to leverage the natural 
connections, unique resources and vast network of dedicated employees 
across the mission area agencies to implement the farm bill in a 
unified effort. As a result, we are working more effectively and 
efficiently than we could have if these agencies had to coordinate 
their work across multiple mission areas. A good example of this is the 
newly integrated nature of FSA and NRCS conservation programs that 
previously operated independently without strong alignment. The new 
mission area structure has helped to foster a level of communication 
and collaboration that our employees had not seen in their decades of 
working for those agencies.
    As you are well aware, our farmers and ranchers across the United 
States have faced--and continue to face--significant challenges from 
natural disasters. While the farm bill helped us improve programs for 
our producers, natural disasters continued to destroy crops and erode 
valuable resources. In addition to our standing safety net programs, 
the Additional Supplemental Appropriations for Disaster Relief Act of 
2019 provided funding for new programs to help our hardest-hit farmers 
recover. I would like to speak about our efforts to implement these 
programs today as well.
    Our agencies have a proven track record of delivering farm safety 
net and resource conservation programs, but unfair trade retaliation 
has affected the ability of our producers to sell their products 
overseas at a fair price. As a result, we have taken essential steps to 
mitigate those devastating impacts. Through the Market Facilitation 
Program, outlined in President Trump's Support Package for Farmers 
efforts, we have rolled out new tools to keep our rural economy and 
agriculture sector afloat. In fact, average net cash farm income for 
farm businesses is forecast to increase 11.4 percent to $81,900 in 
2019.
Farm Bill Implementation
    Last December, when Congress passed and President Trump signed the 
Agriculture Improvement Act of 2018 (2018 Farm Bill) into law, our top 
priority was to implement the programs quickly and effectively to meet 
the needs of our struggling farmers.
    The 2018 Farm Bill reinvented the Margin Protection Program for 
Dairy (MPP-Dairy) as the Dairy Margin Coverage (DMC) Program, providing 
a boost to coverage levels and a reduction in premiums. It is a 
voluntary program that offers protection to dairy producers when the 
difference between the national all-milk price and average feed cost 
(the margin) falls below a certain dollar amount selected by the 
producer. The program requires producers to contribute to this coverage 
of their financial risk through a premium schedule scaled by production 
levels.
    Signup began on June 17, 2019 and on July 11, the FSA began making 
initial payments, retroactive to January 1, to enrolled producers.
    As of September 16, 20,647 dairy producers have enrolled in DMC. 
Approximately $276.8 million has been paid out. Producers have until 
September 20, 2019, to sign up. To help them understand their options 
and make critical business decisions, we rolled out an online Dairy 
Decision Tool developed in partnership one of our land-grant 
universities--one of the many innovative ways we have been helping our 
producers learn about their new options and make decisions. Efforts are 
still underway in our FSA field offices to notify producers of the 
approaching deadline, including personalized phone calls, postcards, 
and emails by our staff and producer associations and cooperatives.
    The farm bill also addressed concerns of dairy producers faced with 
a decision between the Risk Management Agency's (RMA) Livestock Gross 
Margin (LGM) insurance option and the last year of FSA's old MPP-Dairy 
option. Instead of having to choose, dairy producers who elected to 
participate in LGM in 2018 were able to retroactively participate in 
the MPP-Dairy for 2018. This enrollment opportunity ended May 10. Over 
400 (414) participants retroactively enrolled and nearly $8.15 million 
has been paid to producers through this retroactive coverage.
    While not a farm bill program itself, RMA's Dairy Revenue 
Protection (DRP) insurance product works well with the new DMC to add a 
layer of risk protection our producers need when covering the costs to 
bring their products to market. During the several months since initial 
sales started, DRP has covered over 37 billion pounds of milk, which 
represents about 15 percent of total milk production.
    For our crop producers, crop insurance is a vital part of the farm 
safety net. RMA manages the Federal Crop Insurance Program, which 
provides effective, market-based risk management tools to strengthen 
the economic stability of agricultural producers. Total liability in 
the program is more than $105 billion on more than 372 million acres 
for crop year 2019. The farm bill recognized the importance of crop 
insurance by further enhancing products and available options.
    RMA has implemented key crop insurance provisions such as Multi-
County Enterprise Units, the Dual Use Option under Annual Forage, and 
has provided expanded coverage for industrial hemp eligible for 
coverage under Whole-Farm Revenue Protection. In addition, key 
provisions related to veteran and beginning farmers and ranchers have 
been implemented that make crop insurance more affordable with more 
robust coverage for those just starting out in agriculture.
    Providing effective risk management options for hemp producers was 
an important part of the 2018 Farm Bill. Just last month, we announced 
that RMA opened its Whole-Farm Revenue Protection policy to cover hemp. 
For the 2020 crop year, hemp can be insured under this program provided 
the producer has a contract and meets applicable Federal and state 
regulations. Whole-Farm Revenue Protection allows coverage of all 
revenue for commodities produced on a farm up to a total insured 
revenue of $8.5 million.
    To address initial concerns about developing eligible production 
records to include hemp under WFRP policies, RMA proactively issued 
guidance earlier this year that allows hemp to be grown without voiding 
a producer's existing WFRP for 2019.
    Implementing the 2018 Farm Bill also required RMA to quickly update 
its Annual Forage insurance policy to offer a Dual Use Option, which 
the agency began offering for the 2020 crop year in May for select 
counties of six Great Plains states. Producers who select this option 
can insure their small grains crop with both an Annual Forage Policy 
for grazing and a multi-peril Small Grains Policy for grain.
    NRCS, RMA, and FSA also developed new guidelines and policy 
provisions for the treatment of cover crops, which add more flexibility 
in determining the date when cover crops must be terminated in order to 
remain eligible for crop insurance. Producers can now be assured that 
their insurance will take effect at time of planting the insured crop. 
Cover crop management practices are covered by Good Farming Practice 
provisions, and the guidelines are no longer a requirement for 
insurance take effect. This effort is another example of the three FPAC 
agencies working together to provide more flexibility to farmers and 
ranchers.
    The 2018 Farm Bill also made changes to another set of critical 
risk management tools: the FSA-administered Agriculture Risk Coverage 
(ARC) and Price Loss Coverage (PLC) programs. ARC is an income support 
program that provides payments on historical base acres when actual 
crop revenue declines below a specified guarantee level. PLC provides 
payments on historical base acres when the effective price for a 
covered commodity falls below its effective reference price, set by 
Congress in the Bill. Covered commodities include wheat, oats, barley, 
corn, grain sorghum, rice, soybeans, sunflower seed, rapeseed, canola, 
safflower, flaxseed, mustard seed, crambe, sesame seed, dry peas, 
lentils, small chickpeas, large chickpeas, peanuts and, added in 2018, 
seed cotton.
    Though much of the main structure of the ARC and PLC programs was 
retained in the 2018 Farm Bill, a few mandatory and discretionary 
changes were made, and FSA has readily implemented those. The 2019 ARC/
PLC enrollment began September 3, 2019 and will run through March 15, 
2020. The 2020 ARC/PLC enrollment will begin Oct. 7, 2019, and run 
through June 30, 2020. Enrollment for subsequent years (2021-2023), 
will begin Oct. 1 of each year and run through March 15 of the 
following year.
    Access to credit is critical when commodity prices are low or 
market forces impact a producer's margins. FSA's Marketing Assistance 
Loans are critical tools for keeping our rural economy strong and our 
farmers continuing to farm. Marketing Assistance Loans provide 
producers interim financing at harvest time to meet cash flow needs 
without having to sell their commodities when market prices are 
typically at harvest-time lows. The 2018 Farm Bill increased loan rates 
for all loan commodities except minor oil seeds, wool, mohair, honey, 
peanuts and upland cotton. These loans are critical in certain 
commodities and certain regions where private lenders or processors may 
require producers to utilize them as a prerequisite to obtain secondary 
financing.
    While crop insurance is designed to cover a majority of crops, not 
all producers or crops are eligible for effective coverage. The FSA's 
Noninsured Crop Disaster Assistance Program, or NAP, provides financial 
assistance to producers of non-insurable crops when low yields, loss of 
inventory or prevented planting occur because of natural disasters. FSA 
implemented farm bill provisions to strengthen this vital option. For 
example, buy-up coverage under NAP is now part of permanent program 
authorization. Basic coverage has a payment limitation of $125,000 per 
person or legal entity, while the payment limitation for buy-up 
coverage is a separate $300,000. Service fees to apply for coverage 
have increased, while the premium amounts for buy-up NAP coverage 
remained unchanged. Beginning, limited-resource and targeted under-
served producers remain eligible for a waiver of the NAP service fee, 
and qualified veteran farmers and ranchers are now eligible for a 
service fee waiver and premium reduction if they meet certain criteria.
    In another example of how FPAC agencies have been working together 
to integrate program options for our producers, beginning in 2020, NAP 
indemnity payments may be collected in addition to RMA's Whole-Farm 
Revenue Protection indemnity payments when a producer is insured under 
both plans.
    Implementation of our conservation programs has been right on track 
as well. Sign-ups for continuous Conservation Reserve Program (CRP) and 
Conservation Reserve Enhancement Program were held June 3 to August 23, 
2019. FSA is still planning a CRP general signup in December 2019, with 
a CRP Grasslands signup to follow.
    NRCS' Environmental Quality Incentives Program, Conservation 
Stewardship Program and Agricultural Conservation Easement Program have 
continued operating under current regulations consistent with new farm 
bill provisions, ensuring customers had no lapse in service. Interim 
rules and associated policies are under development in preparation for 
fall (tentatively October) publication and fiscal 2020 program 
delivery.
    NRCS has made progress on implementing new provisions under the 
farm bill, including the Feral Swine Eradication and Control Pilot 
Program, a joint project with the Animal and Plant Health Inspection 
Service (APHIS) that directs $75 million to help control the runaway 
feral swine population plaguing much of the country. NRCS accepted 
project proposals June 20 to August 19. NRCS also announced $25 million 
available for On-Farm Conservation Innovation Trials, including a Soil 
Health Demonstration Trial. Through On-Farm Trials, NRCS and partners 
will collaborate to encourage the adoption of innovative practices and 
systems on agricultural lands. Sign-ups ran from May 15 to July 15, 
2019.
    And just recently, NRCS announced that it is accepting proposals 
for the Regional Conservation Partnership Program. Currently, we have 
375 active RCPP projects with close to 2,000 partners. Partners are 
leveraging nearly $1 billion in NRCS investmen[t] with close to $2 
billion in non-NRCS dollars.
Disaster Assistance
    Over the past year, USDA has responded to challenges that tested 
the resilience of American farmers, bringing together safety net 
programs with new initiatives to create economic conditions in which 
they can prosper. With the help of crop insurance, natural disaster 
assistance, and short-term trade mitigation programs, many producers 
are managing the stresses of these difficult times.
    As you know, many producers were unable to plant crops by a crop 
insurance final planting date or have experienced significant delays in 
planting that may affect their production outcomes. On August 27, FSA 
published its first crop acreage data report for 2019, which includes 
information on crops planted, prevented from planting and failed acres 
through August 22, 2019. Agricultural producers reported they were not 
able to plant crops on 19.56 million acres in 2019, which marks the 
most prevented plant acres reported since FSA began releasing the 
report in 2007.
    These are challenging times for farmers, and USDA is here to help--
by increasing flexibility in both program rules and delivery.
    Our actions have included: Deferring interest charges on crop 
insurance premiums for 2 months; extending the deadline to file acreage 
reports in 13 states that were heavily impacted; updating the haying 
and grazing date for producers who planted cover crops on prevented 
plant acres; offering special sign-ups in ten states through the 
Environmental Quality Incentives Program for assistance to plant cover 
crops; and providing a minimal payment through MFP for cover crops with 
the potential to harvest.
    More than 8,900 applications were received in the ten states that 
offered a special signup through the Environmental Quality Incentives 
Program for assistance to plant cover crops or implement other disaster 
recovery practices. Of those, it is anticipated that over 2,200 
contracts will be funded on over 300,000 acres with an investment of 
over $13 million.
    As of September 2, RMA has paid roughly $2.2 billion in claims 
related to prevented planting for the 2019 crop year.
    We are truly taking a cross-agency, customer-focused approach to 
make sure producers get the help they need.
Disaster Relief Act of 2019
    We also know there is a lot of interest in how USDA will implement 
its share of the Additional Supplemental Appropriations for Disaster 
Relief Act of 2019. Congress provided a total of $19 billion in 
assistance through the Disaster Relief Bill, including $3 billion to 
address agricultural losses.
    USDA's WHIP+ builds on the successes of the 2017 Wildfires and 
Hurricanes Indemnity Program (WHIP), authorized by the Bipartisan 
Budget Act of 2018. It will provide payments to eligible producers who 
suffered eligible crop, tree, bush and vine losses resulting from 
hurricanes, floods, tornadoes, typhoons, volcanic activity, snowstorms 
and wildfires that occurred in the 2018 and 2019 calendar years. In 
addition, assistance will be provided to producers who experienced milk 
losses, on-farm stored commodity losses, were prevented from planting 
in 2019, or whose harvested wine grapes were adulterated.
    We are chomping at the bit to implement this disaster aid package, 
and will do so in an equitable manner, working with state leadership to 
identify where the losses and needs are located in order to best serve 
our fellow Americans in need of a helping hand.
    In addition to the appropriations provided for crop losses, the 
same Act also provided nearly $1.5 billion in funding for the Emergency 
Conservation Program (ECP), the Emergency Forest Restoration Program 
(EFRP) and the Emergency Watershed Protection Program (EWP).
    ECP and EFRP, administered by FSA, provide financial and technical 
assistance to agricultural producers, ranchers and forest landowners 
with farmland (ECP) and nonindustrial private forestland (EFRP) for 
rehabilitation expenses when damaged by natural disaster events, such 
as flooding, hurricanes, tornados, wildfire and drought. Congress 
provided $558 million for ECP and $480 million for EFRP. As of August 
2019, $276.8 million in ECP assistance and $19.2 million in EFRP 
assistance was provided to help landowners recover from natural 
disasters.
    EWP, administered by NRCS, helps local communities recover after a 
natural disaster strikes. The program offers technical and financial 
assistance to help local communities relieve imminent threats to life 
and property caused by floods, fires, windstorms and other natural 
disasters that impair a watershed. As of July 2019, over $528 million 
in assistance was provided to states to help communities recover from 
disasters. In late July, NRCS announced an additional $200 million in 
funding for 11 weather-affected states.
Trade Mitigation
    The Market Facilitation Program, part of President Trump's Support 
Package for Farmers, will provide up to $14.5 billion in direct 
payments to agricultural producers who have been affected by 
unjustified retaliatory tariffs on U.S. farm goods. FSA opened signup 
July 29, 2019 and it runs through December 6, 2019. As of September 16, 
nearly 260,000 applications have been filed, $3.81 billion has been 
paid to producers and the webpage had 194000 visits. In the 2018 MFP, 
USDA helped more than 590,000 producers with $8.6 billion in assistance 
provided.
Farm Production and Conservation and Customer Service
    We have taken great strides at USDA toward making our programs 
faster, friendlier and easier. In February 2018, USDA launched 
farmers.gov, a dynamic, mobile-friendly public website combined with an 
authenticated portal where customers can apply for programs, process 
transactions and manage accounts. Since its creation, we've been 
working to expand the self-service options available to producers. Some 
of those highlights include:
    H-2A Visa Program page and interactive checklist tool that delivers 
a custom checklist with application requirements, fees, forms and 
timeline built around a producer's hiring needs.
    Farm Loan Discovery Tool that helps farmers find information on 
USDA loans that best fit their operations. Farmers who are looking for 
financing options to operate a farm or buy land can answer five simple 
questions about what they are looking to fund and how much money they 
need to borrow. After submitting their answers, farmers will receive 
information on farm loans that best fit their specific needs. The loan 
application and additional resources also will be provided.
    My Financial Information enables a USDA customer to view loans and 
financial information.
    Disaster Assistance Discovery Tool that walks each producer through 
five simple questions for a personalized list of USDA disaster 
assistance programs that might meet their business needs.
    And we just announced last month that FSA is expanding its payment 
options to accept debit cards and automated clearing house debit.
    This is just the beginning of a multi-phased roll-out of new 
payment options for USDA customers. Ultimately, payment option 
flexibility will be extended to allow farmers and producers to use 
debit cards and ACH debit payments to make payments for all FSA 
programs, including farm storage facility loan repayments, farm loan 
facility fees, marketing assistance loan repayments, Dairy Margin 
Coverage (DMC) administrative fees and premiums and Noninsured Crop 
Disaster Assistance Program (NAP) fees.
Conclusion
    Before I close, as I've described all the hard work that's being 
done in FPAC, it would be remiss of me not to thank our thousands of 
USDA employees who are working diligently to implement the 2018 Farm 
Bill and who work to serve our nation's farmers, ranchers and 
forestland owners daily.
    Again, thank you for the opportunity to testify this morning. I 
would be happy to answer any questions at this time.

    Mr. Vela. Thank you. Members will be recognized for 
questioning in order of seniority for Members who were here at 
the start of the hearing. After that, Members will be 
recognized in order of arrival. I appreciate the Members' 
understanding.
    I now recognize myself for 5 minutes.
    Mr. Northey, having just passed the farm bill, one of my 
primary concerns is assuring that all the programs we paid for 
are fully and accurately administered. I know this is a 
priority for you, as well, and providing excellent customer 
service for farmers and ranchers. I am aware that you have made 
a significant investment in a comprehensive workload analysis 
to determine the number of staff required for optimal 
efficiency, giving states the ability to make decisions 
regarding staff placement and office leases, for example.
    Right now, we know that field office staffing is down from 
11,000 in 2003 to about 8,500 employees currently. What is the 
target number of employees contained in the workload analysis, 
and are we even close?
    Mr. Northey. Overall, certainly one of the staffing--what 
the staffing model has allowed us to do to be able to look at 
those areas where we are the most short in staff, and for us to 
be able to fill those areas first. We are targeting every 
dollar that we have in salaries and expense from appropriations 
to be able to use that for staffing levels.
    Ideally, the model says we should have a lot more folks 
than what we have right now. We have a lot of work that is 
being done out there.
    I don't know that we will ever have the funding to be able 
to get back to the levels we were in staffing 8 or 10 years 
ago. We are going to be as efficient with those staff as we 
can. We are right now staffed across our three agencies about 
90 percent of what our ceiling is, about what the dollars are 
that we have for each of those agencies, and we are working 
hard to get that closer to the 100 percent.
    We are working to staff up. We certainly have burdened 
those folks with several activities, including activities in 
excess of the farm bill activities that you have had. But these 
are important programs to deliver. We have looked at trying to 
improve our software as well to be able to make sure that that 
works as easily as we can make it. As we looked at delivering 
the Market Facilitation Program, we looked at trying to make 
that as easy for our producers, as well as our staff, to be 
able to deliver. I think some of those things are helping. 
Certainly, some online activities--we don't expect all 
producers to use our services online, but having access to that 
allows producers to sign some documents, save some miles coming 
in, and save some time at the counter as well.
    Mr. Vela. What is that staff ceiling number?
    Mr. Northey. The staff ceiling number is about, I can get 
those numbers exactly for you, but it is about 10,000 for FSA, 
and we are around 9,000 right now for FSA.
    Mr. Vela. Fair enough.
    One last question. Can you explain the rationale for the 
timing of the Agricultural Risk Coverage and Price Loss 
Coverage election and enrollment process? As I understand it, 
farmers and landowners can go to their FSA county office today 
and make the election for 2019 and 2020. However, they can only 
enroll for the 2019 program right now, because enrollment for 
2020 does not begin until October 7. Is that the best way to 
describe the situation, or maybe more open-ended, can you 
describe what is happening in that regard?
    Mr. Northey. It is. We are taking sign up for 2019 right 
now. We will start sign up for 2020 in the midst of this, and I 
don't remember that date. I believe it is October, and so we 
will have folks that will be able to come in and sign up for 
both, but right now, we are taking that 2019 sign up.
    That sign up will continue through March.
    Mr. Vela. Thank you.
    I now recognize the Chairman of the full Committee, Mr. 
Peterson, for 5 minutes.
    Mr. Peterson. Thank you, Mr. Chairman.
    I have a couple questions, but one of the things you said 
has me concerned, that you are going to have crop insurance for 
hemp, and I guess that was ordered in the farm bill or 
something, or in some place?
    I have been investigating this, and I am going to be doing 
more in the next couple of weeks, but I don't see how in the 
world you are going to come up with a product for hemp, given 
what I have found out about it. Do you think you are going to 
be able to do this?
    Mr. Northey. Certainly, you handed out the challenge. The 
challenge is coming up with a product that fairly represents 
the risk, understanding how it should be priced.
    Mr. Peterson. Good luck.
    Mr. Northey. Right now, what we will offer for sure is the 
ability to include it in whole farm revenue protection. That is 
a policy that includes all crops on a farm, and in that case, 
we typically will just work with folks that have a history of 
growing it. And so, in that case, we would have some previous 
revenue from that farm.
    There are some folks that are looking at coming up with 
individual policies. They are diving in to some of the 
information coming from those areas where they have been 
growing hemp.
    Mr. Peterson. Well, after my next 3 weeks of the 
exploration, I will have a report for you. Okay?
    The question I have is about the staffing situation. As I 
understand it--and I don't understand it. Apparently, I have 
heard that you guys asked under the budget for additional 
resources or positions or something, or that the budget said 
that you should have additional positions or resources. But 
then when you asked for the appropriation, you did not include 
that.
    Going back in history, we had 11,500 people working at FSA 
offices in 2004. Today, we have 8,500. I would argue we have 
more work today than we had in 2004. In my area, I have people 
now that have turned their offices into kind of a part-time 
office and the CED, like in my county where I go, is now 
spending a day or 2 a week in the county next door because they 
have turned it into a part-time office that I think is only 
open a couple days a week. When he comes down from that other 
county to staff it, I think he even brings people from that 
other office with him, to staff it at the time.
    This county that has gone part-time is a completely 
agricultural county. There is nothing else there in the county, 
and I don't understand how all this happens. But my concern is 
that we don't have the staffing out there that we need. And I 
don't know if you asked for it and didn't get it, or whether 
you have some other plan going on here that we are not up to 
speed on. I don't see how this is going to work. Do you have 
some magic bullet here that I don't know about?
    Mr. Northey. There certainly is no magic bullet in being 
able to serve all the needs out there. We do use as much 
technology as we can, but, the budgeting process is a 
challenging process. It is about making lots of choices. You 
all deal with it as well, and being able to look at where you 
have funds available. We sure gladly would use more folks if 
there were more dollars to be able to get more folks.
    Mr. Peterson. Did you ask for more dollars, did the 
Administration ask?
    Mr. Northey. And lots of proposals inside and outside, and 
certainly, we have our process of being able to sort through 
the priorities at USDA and through the President's budget, as 
well as you all have your priorities and what you need to work 
through.
    We are looking to do everything we can to stretch the 
resources that we are given as far as we can.
    We do have----
    Mr. Peterson. I am sure you are.
    But you also have this Optimally Productive Office report 
that Accenture is doing something? They are doing some kind of 
study of your offices.
    Mr. Northey. Yes.
    Mr. Peterson. But that hasn't been completed yet, as I 
understand it.
    Mr. Northey. Yes, that is ongoing. We actually do time 
studies all the time to be able to understand what programs are 
taking the most time, what offices and areas are seeing an 
increase in time.
    Certainly, one of those challenges are disaster programs. 
Those occur infrequently. You can't really staff for those, so 
you end up really challenged in areas where you have disaster 
on top of the other programs.
    But this is a way for us to be able to measure the workload 
at each of those offices, look across the state, for example, 
across Minnesota, and see which offices are the most short in 
staffing and make sure that we staff there first with the 
available people that we have.
    Mr. Peterson. Well, somehow or another, we are going to 
have more people in these offices if we keep having disaster 
programs and facilitation programs. The workload for the new 
dairy program, I mean, it is a lot of things we didn't have 
before. And these studies, give me 1 more minute.
    We were up on the northern border because the Customs and 
Border Patrol did a study of the time, the people going across 
the border and all this stuff. And they went and closed my 
borders there on a U.S. highway. They went from closing at 
10:00 p.m. to 4:00 p.m. in the afternoon.
    I have people working on both sides of the border, now 
Canada is at midnight and we are at 4 o'clock in the afternoon, 
so people come to work and can't get back home. It is just 
crazy. And it was one of these studies that did that, that 
caused them, they claim, to make these changes. And they have 
nine places in North Dakota that have like 20 percent of the 
crossings that we have, they left them open until 10 o'clock. I 
don't know.
    I am skeptical of all these studies, but, I hope we can 
work together to get more people out there, because I think we 
are short.
    Mr. Northey. I appreciate that.
    Mr. Peterson. Thank you. Thank you, Mr. Chairman.
    Mr. Vela. I now recognize the Ranking Member of the full 
Committee, Mr. Conaway, for 5 minutes.
    Mr. Conaway. Thank you, Mr. Chairman. I appreciate that.
    I share Chairman Peterson's concerns over hemp. I am 
worried we have opened Pandora's box.
    As an example, as I understand it, if a hemp plant is 
stressed through drought or lack of water, the THC levels 
skyrocket, and so we are going to be insuring an illegal 
product if we are covered by crop insurance. And so, lots of 
unanswered questions in that.
    Mr. Northey, on the implementation side, in the 2014 Farm 
Bill, we allocated some extra $100 million specifically for 
implementation of the farm bill. Collin and I at the last final 
days of that effort worked really hard to get, we wound up 
maybe $15 million. The Senate was willing to go to zero, and 
Collin and I fought for some additional monies to help you get 
that.
    Can you talk to us a little bit about where the stresses 
and strains are with respect to the implementation of the 2018 
Farm Bill, and what areas you might need some help in?
    Mr. Northey. Thank you. Certainly, the $100 million was 
beneficial and used and needed, and mostly used for software 
and outreach, some additional staffing as well.
    In this case, having $15 million, we needed to go and use 
some of our other resources to do some of the IT work, and some 
of the staffing. We had some other activities we were working 
on that we needed to prioritize the farm bill implementation. 
Certainly needed to do the IT work for that, and so, we would 
reallocate resources to be able to try and get that done.
    Mr. Conaway. Can you talk to us about any specific area of 
the 2018 Farm Bill, where the choke points are right now 
remaining at this point?
    Mr. Northey. Yes. The farm bill was our priority, so we 
pulled things away from the other things that we were doing, 
other modernization of some of our software and other kinds of 
things.
    We haven't slowed any of the farm bill process down, but we 
had some ideas about other things that we were going to do that 
we needed to be able to use the resources for the farm bill.
    It is our priority to get out, and that is the number one 
activity.
    Mr. Conaway. But, what I am hearing, though, is you got 
other areas that should have been attended to in moving forward 
on your normal course of business that have suffered as a 
result of the lack of resources that our Senate colleagues were 
willing to pitch in.
    I want to publicly thank Chairman Peterson for his help on 
trying to get the $15 million that we got. It was hard to do, 
and dramatically short of the $100+ million that was allocated 
in 2014.
    Mr. Northey, I thank you for your work and the team you 
have in place. They work hours they don't get compensated for. 
They are incredible warriors on behalf of producers in this 
country. They are neighbors with those folks. They live next 
door to them, and FSA offices that I have visited, the folks 
love what they are doing and they go above and beyond what 
would normally be expected of a Federal employee to make sure 
that, to the extent that they can, that our farmers and 
ranchers are getting access to these programs that Congress has 
put in.
    Please convey our thanks to them for their hard work and 
their continued hard work, moving forward.
    With that, Mr. Chairman, I yield back.
    Mr. Peterson. Mr. Chairman, would the gentleman yield?
    Mr. Conaway. Yes, sir.
    Mr. Peterson. I just need 30 seconds.
    I forgot to ask you, you created this new business center 
apparently, that now is in the process for hiring. As I 
understand it now, the CED and the county and the county 
committee for FSA, they used to be able to hire people there 
locally. But now, as I understand it, they send this to this 
business center, and there is one person here in D.C. that has 
to approve that before it is sent back to the county for them 
to hire somebody.
    I don't think any of us here think that is a good idea to 
have Washington decide who should be hired in local FSA office. 
Would you look into that?
    Mr. Northey. Sure.
    Mr. Peterson. I mean, that is what I was told.
    Mr. Northey. The decision is still made locally, and in the 
State Directors, State SEDs have the authority to be able to 
decide what offices those go into as well.
    But we can----
    Mr. Peterson. They apparently fill out an electronic form, 
and that form gets sent to D.C., and then the person looks at 
it for uniformity, and if it is not uniform, they kick it out 
and it doesn't go back to the county. I don't understand why we 
are letting someone in Washington make decisions about who 
should be hired in a local county. If you could give me an 
answer, I would appreciate it.
    Thank you, Mr. Chairman.
    Mr. Vela. I now recognize the Ranking Member of the 
Subcommittee, Mr. Thompson.
    Mr. Thompson. Mr. Chairman, thank you so much. Mr. Under 
Secretary, good to see you again. Thank you for your leadership 
and your service. Please extend my appreciation to all the 
hardworking folks in USDA that are under your responsibility. I 
appreciate what they do. We obviously need, and our family 
farms depend on, that level of professionalism to be able to 
connect them with the resources that, quite frankly, this 
Committee makes available through our work with the farm bill 
authorizations and reauthorizations.
    I want to start out a little bit on dairy. You mentioned 
about 21,000 farms are signed up for the Dairy Margin Coverage, 
which I read was about 70 percent of the registered dairy 
operations. What is FSA doing, specifically, to ensure that the 
remaining operations are fully aware of the potential 
advantages to participate in a new program? I appreciate the 1 
week extension, obviously.
    Mr. Northey. You bet.
    We certainly got a lot of partners in reaching out to 
farmers. Last year, the sign-up for the Margin Protection 
Program was just a little over 21,000 as well. We are actually 
about 80 farmers short right now of where we were in sign up in 
2018, with 2 days of sign up to go. We think likely we will end 
up by the end of this week, and certainly by the end of next 
week, at more sign up for this program than we did for MPP.
    But as you suggest in the question, there are other 
producers out there that have participated in the past. Maybe 
they are not in business. Maybe they decided not to participate 
in this. Other producers that have dairy operations as well 
that are not participating, and we are trying to reach out to 
those, make sure that they understand the value of this 
program, how it works a lot better for our larger producers 
than it once did. It still ensures up to the 5 million pounds, 
but it works much easier for our larger producers. Certainly, 
we have some small producers that historically have not 
participated, and we are making sure that we reach out to them. 
Phone calls, emails, postcards, everyone got at least two 
postcards over this sign-up period. They have been contacted 
through their marketing organizations as well, whether it is a 
co-op or they are part of an association. We have worked with 
them all to reach out as well.
    We have done all that we can. We will continue to do that 
the next week, and we are hearing good reports that a lot of 
folks know. I assume we will see a significant bump in the next 
couple days, but it is important still to be able to give folks 
another week to make sure that if they have lost track of the 
date, that we get a chance to be able to touch in one more time 
and get them in to be able to make that conscious choice.
    Mr. Costa. Would the gentleman yield?
    Mr. Thompson. Sure.
    Mr. Costa. I think there is bipartisan support here. I 
don't know if you need a letter from us, but that flexibility, 
as I said in my opening comments, it is important for the 
Department to exercise.
    And so, what you are saying is that you are exercising that 
flexibility, but it is important, notwithstanding all the 
efforts you have made that you indicate you will be 
entertaining until the end of the month or whatever time 
period, makes sense.
    Mr. Northey. Right now, we are announcing today that 
extension for 1 week, and so from the 20th to the 27th. We do 
have to watch about getting much later than that, because we 
need to have sign ups start for the Dairy Margin Coverage 
Program for 2020 that first week of October, and we need to be 
able to get folks completed in this sign up period. So, that is 
our intention right now.
    Mr. Thompson. And each of us have a responsibility as well. 
I know the month of August, and it continues today, I take 
every opportunity, whether it is a Farm Bureau legislative 
session on a farm, I was at the All-American Dairy Show on 
Saturday in Harrisburg, about 2,400 head of cows there with 
kids showing them. The Dairy Summit, Secretary Perdue joined me 
for, just to encourage our farmers to sign up. This is a 
product that does work for everyone. It is affordable, and I 
appreciate it.
    In the few seconds I have left, and I am not really looking 
for a response, but I do want to reach out to the Department on 
our other big crop that I have in my district, and that is 
hardwoods. Our hardwoods have been hit hard with this tariff 
situation, yet there has been no relief. I think there are two 
things. We need to look at, first of all, we need to get these 
tariff deals done. That is a priority, but if anything extends 
for any period of time and there is a second round, we got to 
look at how we help these hardwoods. They have been at the tip 
of the spear of losses, and for those in the business that have 
contracts on our National Forests, or Army Corps of Engineer 
lands, one of the simple solutions is just to extend the 
contracts they may have for another 24 months, because they are 
being forced to harvest when the market, they are harvesting at 
one level and their market is not there.
    But, that is something I will follow up with the 
appropriate folks at USDA on.
    Thank you.
    Mr. Northey. Very good. Thank you.
    Mr. Vela. I now recognize the Chairman of the Livestock 
Subcommittee, Mr. Costa, for 5 minutes.
    Mr. Costa. Thank you again, Mr. Chairman.
    As I said in my opening comments, I don't really believe 
anyone wins trade wars, because everybody has leverage, and 
whether it is part of their strategy or for political reasons, 
certainly the Chinese recognize that. And the leverage they 
have chosen to use in not buying U.S. agricultural products has 
really hurt farm country. Of course, at any point in time, and 
the President is correct, the Chinese have been bad actors and 
this has been for 20 years, both as it relates to industrial 
theft as copyright issues, and even when we have won in the 
World Trade Organization, they haven't complied. They have been 
bad actors, and that was recognized in the Obama Administration 
and the Bush Administration before that. There have been 
different strategies used to try to deal with it.
    Certainly, they can buy more agricultural products because 
they need them and they have the money, but this is part of a 
strategy. You are not the trade ambassador. I don't hold you to 
that responsibility, but let me just tell you, when we are 
talking about California and specialty crops, a $50 billion a 
year ag industry in California, of which 44 percent, more or 
less, is dependent upon trade, it is hitting hard throughout 
the country, but especially in California. Pistachios, almonds, 
beef, citrus, table grapes, walnuts, plums, cherries, avocados, 
face now over 50 percent tariffs on exports to China. The 
California Walnut Commission estimates that their industry will 
lose nearly $100 million annually due to the Chinese trade 
dispute, and meanwhile, California farmers, to my numbers that 
we have come up with, have received about $80 million in total 
payments in the first Market Facilitation Program. You know, 
that doesn't cut it. I mean, you can go down the list: 3 a 
pound for almonds, 6 a pound for cherries. I mean, we think we 
have lost about 30 a pound on the almond market, 3 doesn't 
come close.
    I talked earlier about the 12 per hundredweight on dairy. 
Nationwide, the dairy industry estimates that they have lost 
more than $2.3 billion in revenue since the trade war began, 
and they have received about $200 million in the first round.
    Beyond these losses, we are losing market share, as I said 
earlier, to our competitors, and those relationships are tough 
to rebuild after, hopefully, we get past this.
    While I mentioned it is not your job to negotiate the 
treaties, the President said that he was making farmers more 
than whole, and the farmers are doing better than if China were 
buying. As I said, California farmers disagree with that.
    Mr. Under Secretary, do you agree with the President? Will 
the second round of trade aid make farmers more than whole, and 
are they better off with this than they would be with access to 
China's market or other markets?
    Mr. Northey. Everybody is working for a better trade 
situation, not only for the products we were exporting, but the 
products we were struggling to export. That is where the real 
gain will be.
    Our Market Facilitation Program was a bridge to get to 
that. It is certainly hard in that Market Facilitation Program 
to deliver exactly what a producer lost.
    Mr. Costa. Well, it is not possible.
    Mr. Northey. It is not.
    Mr. Costa. But, $16 billion, is that the current number 
with the two programs so far, or it is going to increase?
    Mr. Northey. It will be $14.5 billion for the----
    Mr. Costa. And you are spreading that around the whole 
country and in the Midwest, and you are talking about sorghum 
and wheat and corn and important commodities. The California ag 
industry is $50 billion. You try to spread $16 billion across 
the country and you talk about different states, I know farmers 
don't want subsidies. We have gone through this a whole lot 
over the last 20 years of farm programs. They want access to 
markets. They want level, fair trade, and with 44 percent of 
California's agriculture depending upon trade, I mean, it is 
the reason we need to get this USMCA agreement completed, 
because it is so important to our country, as well as to our 
neighbors to the north and to the south.
    What is the implementation going to be in this next round?
    Mr. Northey. We are still getting sign up for participation 
in this program up until December 6. We have told all producers 
that the first 50 percent of this second round of MFP is 
guaranteed. We will look to see whether the second and third 
payments are needed. If we get a trade deal, then we will 
reevaluate. We certainly hope that we get a trade deal before 
this----
    Mr. Costa. But it doesn't make up for the loss of markets.
    Mr. Northey. No.
    Mr. Costa. Okay.
    Mr. Northey. It certainly is a support for producers. It is 
important to be able to have something, and I think it is a 
recognition by the Administration how important trade is to 
agriculture. And it is a great reminder, and an appreciation 
for the role of trade and why there needs to be an active 
participation, and trying to get to that trade deal that is 
better on the other side.
    Mr. Costa. Thank you.
    Mr. Northey. Thank you.
    Mr. Vela. I now recognize the Ranking Member of the 
Livestock and Foreign Agriculture Subcommittee, Mr. Rouzer.
    Mr. Rouzer. Thank you, Mr. Chairman, and Mr. Under 
Secretary, thank you for being here with us today. I, too, want 
to commend the entire team at USDA and all those FSA employees 
out there that are working really hard, as well as all the 
other employees at USDA. They do a lot of very, very important 
work very, very well, and in many cases, with limited resources 
too.
    I want to focus in on the Disaster Relief Act. Roughly $3 
billion, those of us in the Southeast worked really, really 
hard, including my friend here to my left, Mr. Scott, on 
getting this disaster relief package across the finish line.
    What do you expect to pay for the losses in 2018? Do you 
have an estimate of what that is going to consume, and then a 
follow up to that is how much of that money do you think is 
going to be block-granted to the states? If you can talk about 
your plans and thoughts on that as well?
    Mr. Northey. It is a challenge to estimate what actual 
losses were, as we did in 2017 as well. Certainly, it is likely 
between $\1/2\ billion and $1 billion in losses that occurred 
from the hurricanes in 2018. We know that there was some 
coverage that was covered by crop insurance, but this is to top 
up some of the crop insurance losses as well, to try and cover 
some of those other losses.
    For block grants, we are still in discussions with the 
states as they continue to bring forward their thoughts in what 
block grants should cover. As you all outlined in the disaster 
bill too, this isn't designed to top up existing programs. This 
is designed to cover those things that are not covered in 
existing disaster programs, or in WHIP itself. And so, maybe 
timber and other kinds of things.
    We are still in conversations. It will be in the several 
hundred-million-dollar range, but it will depend what their 
proposals are, and what they conclude those losses are. And 
then, of course, the real proof is when you go out to the 
producers and how many producers have losses and are interested 
in signing up.
    We don't have a set number of what that dollar amount will 
be. Certainly, it is going to be very important to many of the 
producers.
    Mr. Rouzer. To follow up to that, when a producer goes in 
and he files his application, how long do you think it is going 
to take to turn that around?
    Mr. Northey. Well, depends how complex that application is, 
and we already have some producers that have completed 
applications. And so, in some cases, it is fairly 
straightforward. They have the information from their crop 
insurance information last year, and so they are able to 
complete it very quickly. In other cases, we have producers 
that have not participated in farm programs before, and so they 
have to establish eligibility first. They have to go get some 
of that information, and so there are other additional 
challenges for some producers out there. They don't have 
acreage reports to be able to look at history and to compare 
history to what the losses were in that year.
    For the most part, we think it is going to be fairly quick 
for most producers, but there will be some of the applications 
that will be more complex or cover things that have more 
questions and require more information from the producer.
    Mr. Rouzer. What about the timing of the payment, though, 
once that application is complete, everything is done 
correctly, et cetera? Are we looking at a month, or 2 weeks, or 
2 months?
    Mr. Northey. Right now, we are still making some final 
changes in software on that payment mechanism, so that should 
start pretty soon. And once a producer completes that 
application, it should be certainly within 2 weeks that they 
would be able to get a payment for that application, and 
hopefully less than that.
    Mr. Rouzer. Just for your awareness, and I don't know 
necessarily that this is why it spread, but I have gotten some 
feedback from producers that when they go to the FSA office, 
they are told that they have absolutely no idea what they are 
going to be eligible for, and maybe that is just a situation as 
it relates to the application process itself. But you know, 
producers walk out of there pretty dejected when they don't 
have any idea and they are told they are not sure what they are 
going to be able to receive. I don't know if that is an 
education issue in some of these offices where the employees 
have not been brought up to speed on exactly what is entailed 
in the disaster program, but I have heard that, so I just want 
to make you aware.
    Mr. Northey. I would love to be able to hear about those 
cases and where we can get more information out. For the most 
part, many of the places where that program is being 
implemented is around hurricanes and where areas that are very 
familiar with the software, since the software we are using is 
very similar to software and criteria that we used in the 2017 
program. For many cases, we have a lot of folks that had some 
experience implementing that program as well before, but then 
we have been able to have training. I sure would love to find 
out if there are some places that we missed that we need to be 
able to get more touch to some of our employees out there. We 
have both online and in-person training, train the trainer as 
well, and we need to make sure that it is such that when a 
producer comes in, they have competent, capable, and interested 
person across the counter to be able to help them walk through 
that application.
    Mr. Rouzer. My office will follow up with you on that.
    Thank you very much. I yield back.
    Mr. Northey. Thank you.
    Mr. Vela. I now recognize Mrs. Hayes from Connecticut.
    Mrs. Hayes. Thank you, Mr. Chairman, for holding this 
hearing, and thank you, Under Secretary, for being here.
    I represent Connecticut, and my questions are specifically 
about our dairy farmers. We have about 80,000 working acres of 
dairy farms, which account for about 4,000 jobs, so much 
smaller than some of the other districts that we have heard 
about, but I think that is the cause for so much of the concern 
in my community.
    In 2018 in Connecticut, we had about--actually, we had 110 
licensed dairy farmers, and as of Monday when my staff checked, 
only 66 of those farms had applied for the Dairy Margin 
Coverage. For a program that is guaranteed to provide 
protection and support in those margins, why do you think 
enrollment is not higher?
    Mr. Northey. I don't know in those cases. Certainly, 
outreach has been tried. In some cases, I don't know how 
Connecticut specifically compares to what its sign up was for 
MPP a year ago, and whether there are some producers that 
choose not to participate, there are certainly groups of 
producers that choose not to participate in any program at all.
    I, again, don't know specifically in Connecticut. I was on 
a beautiful dairy farm, modern and wonderful dairy farm in 
Connecticut a few months ago, and I know we have been reaching 
out to producers, both by postcards and emails and phone calls 
to be able to let producers know about it. We have another week 
to be able to reach out to folks. If you hear of reasons or 
producers that have not been contacted or not aware, we 
certainly want to be able to make sure that they are aware and 
understand.
    This is a great program. This is a program that is going to 
be very constructive. Right now, we know they will actually 
make money in 2019 because of that, but most importantly, in 
the long-term, this is a great risk management program. For a 
small amount of money for the future, a producer can know that 
they have a protected margin in that program. And so, we are 
seeing about half the producers sign up for 5 years of the 
program, a little short of half of the producers, and 
certainly, many of the folks that have signed up for previous 
programs are signed up. We continue to lose some dairy farms in 
all parts of the country, so compared to the long-ago history, 
we have less participation than what we have in some of those 
producers with historical production. In some cases, some of 
them were not able to stay in business, and we think we have 
reached out to all the folks, but we are glad to continue----
    Mrs. Hayes. Well, we have seen that in Connecticut.
    Mr. Northey. Pardon?
    Mrs. Hayes. We have seen it in Connecticut that some of 
these farms have gone under and they are not able to stay in 
production. And I agree with you that this is a great program. 
But, as I am hearing you talk about just ways of outreach, I 
know in my district specifically in Connecticut 5, broadband is 
tremendously unreliable. If we are using email as a method to 
communicate with people, I know on my staff, we have gone out, 
we have done roundtables. I have met with farms. I would have 
loved to have joined you on a farm just to really be face to 
face and talk to people and say this is what is available, 
because I fear that people are missing out on the opportunity 
because they don't know that it exists. If there is anything 
that Members of Congress can do to help you, because it sounded 
like when the Chairman asked about have you asked for increased 
staff, it didn't sound like a hard yes. But, I think that is 
something that we would all be willing to support, because I 
know it is life and death for my community that there are 
people on the ground to assist them in the process. If there is 
anything that we can do, I would love to engage in that 
process, because I think that when we have these large 
conversations, the small farmers feel left behind and are 
afraid of what the next step is or where they fall in this 
conversation. I think it is critically important.
    I know we go to the places where there are the most people 
and we make the most impact, but farming covers all 
communities, as you well know.
    Mr. Northey. Absolutely, and thank you for--many Members 
have done a great job in their own communication out to 
constituents as well as mentioned it at public events, reminded 
folks. We will give folks another week, another opportunity to 
be able to remind them that the deadline is a week from 
tomorrow.
    Mrs. Hayes. Have you used public radio?
    Mr. Northey. We have used radio and we have had our----
    Mrs. Hayes. Because my farmers love the radio. Well, not my 
farmers, your farmers too, I am sure. But with the radio I 
communicate with them a lot, and I know I send out mailers and 
people don't really read them. I am just thinking of anything 
that we could do to make sure the information is shared.
    Mr. Northey. I am glad to continue to reach out and do 
whatever we can to make sure that people hear about it.
    Mrs. Hayes. Thank you.
    Mr. Northey. Thank you.
    Mr. Vela. I now recognize Mr. Scott.
    Mr. Austin Scott of Georgia. Thank you, Mr. Chairman. I 
suppose my friend and colleague Congressman Bishop's district 
probably had more ag losses from 2018 than I did, but I believe 
that I am second of the 435 Members of the House with regard to 
the losses from storms for 2018.
    We know the old saying, the bigger you are, the harder you 
fall. Certainly, we recognize that is the case in agriculture. 
The payment for WHIP, the upper payment limit was reduced from 
$900,000 to $250,000 for the 2018 storms. It was $900,000 for 
2017. Can you tell me why that reduction was made, just 
briefly?
    Mr. Northey. Certainly, in discussions, both internal as 
well through across government, we had several conversations 
looking at how many folks would hit payment limits, as well as 
managing the dollars, recognizing that there is a limited 
number of dollars to be able to cover not only losses in 2018 
and losses up until now in 2019, but for the balance of 2019 as 
well. We don't know what further losses might be.
    Mr. Austin Scott of Georgia. Absolutely, and that brings me 
to the second point, and forgive me, on a 5 minute clock, I 
want to move fairly quick.
    We put $3 billion in. That $3 billion was for the 2018 
storms, and just for the other Members' knowledge, now that the 
2019 storms are going to be paid out of that $3 billion amount 
that was allocated for 2018, can you tell me how much you 
estimate the 2019 losses to be?
    Mr. Northey. We are going to agree here, no more 
hurricanes, right? No more disasters, but as you say, it is the 
balance of 2019, up until now, and going forward as well.
    Mr. Austin Scott of Georgia. What are the losses to date to 
be paid out of the $3 billion?
    Mr. Northey. We haven't had a large number of losses to 
date.
    Mr. Austin Scott of Georgia. We had the Midwest floods.
    Mr. Northey. What was that?
    Mr. Austin Scott of Georgia. The Midwest floods, do we not 
have an estimate on that yet?
    Mr. Northey. Much of the Midwest floods, the actual 
coverage will be through crop insurance, either prevent plant 
through crop insurance or other crop losses through crop 
insurance, so we will see a few payments going there, but most 
of the WHIP payments will go to hurricane areas.
    Mr. Austin Scott of Georgia. There is almost $1\1/2\ 
billion left over from the 2017 disaster payments, is that 
correct?
    Mr. Northey. There is.
    Mr. Austin Scott of Georgia. Just for the Committee's 
knowledge, I have asked that the 2017 money be appropriated for 
the storms of 2018 and 2019.
    Forgive me, Mr. Secretary. I know I am moving fairly fast. 
I have a lot of things I want to bring to your attention.
    The USDA gave an estimate on November 29, 2018 of the total 
losses for 2018 to date. The USDA requested a total of $1 
billion for Alabama, California, Florida, Georgia, Hawaii, 
North Carolina, South Carolina, and Virginia. We have not seen 
any updated estimates for the 2018 storms. Are you aware of any 
updated estimates from your economists for 2018 since November 
29, 2018?
    Mr. Northey. I am not. If there have been, I have not seen 
what a number would be.
    Mr. Austin Scott of Georgia. I am not either, and that 
concerns me greatly.
    And I, again, apologize for moving so fast, but for 
example, and I have the breakdown by commodity group by state. 
Your economists, USDA's economists, said that the Georgia 
cotton loss was $260 million. Indemnity estimate was $111 
million, and $148 million would end up as the net uninsured 
loss. According to our ag institutions, the University of 
Georgia, the land-grant institutions and their economists, 
while you have $260 million in that slot, we show it as $550 
million.
    I can go down to pecan trees. You show it as $70 million. 
We show it as $260 million. Again, these are land-grant 
institution economists that we have provided this information 
to the USDA and asked for updated estimates on what the losses 
are.
    My concern is when Congressman Bishop and I were arguing 
for the $3 billion for the storms, we had the information from 
the land-grant institutions. Georgia, Florida, North Carolina, 
and we could not get the USDA to move off of the $1 billion 
request. We effectively forced it, if you will, to the $3 
billion, and to this date, almost a year later, my farmers have 
not received any payments yet from the storms, as you know. Not 
your fault at all, but I don't understand why the estimates 
have not been updated from November of last year when we know 
they are not accurate. And I, quite honestly, think the $3 
billion will end up falling very short of what the actual 
losses were. I am talking about uninsured losses for the 2018 
crop year, now we are taking 2019 storms out of it, while at 
the same time, we have $1\1/2\ billion sitting over there in a 
lockbox that can't be touched.
    Any help from the Administration in moving that 2017 money 
into whatever we do in a continuing resolution or 
appropriations process so that it can be used for the 2018 and 
2019 storms, it is money that has already been appropriated. It 
just can't be used. But I am very concerned, and I appreciate 
you. I appreciate your experience in agriculture. I am 
concerned with the USDA's economists' estimates. I am 
concerned, and I would suggest that this cannot take a year the 
next time somebody goes through a storm the way the State of 
Georgia did. My people would not be farming today but for a 
loan program through the Georgia Development Authority that 
Governor Deal and the state legislature did in a special 
session, and then Brian Camp in our state legislature came back 
in and put more money in it, and they should not have to do 
that. But for them, my people would not be farming today.
    I look forward to the updated estimates from USDA's 
economists. Thank you, sir.
    Mr. Vela. I now recognize Mr. Cox from California.
    Mr. Cox. Thank you so much, Mr. Chairman. Great to have you 
here today, Under Secretary Northey.
    I have a question regarding the Pima Competitiveness 
Program. As you know, Pima cotton is not eligible for the 
traditional farm bill safety net programs, and one of the farm 
bill provisions important to many California cotton producers 
is the extra long staple, the ELS, or Pima competitiveness 
program (Special Competitive Provisions for Extra Long Staple 
(ELS) Cotton). And just like the majority of farmers and 
ranchers in my district, cotton producers are being harmed by 
the trade war with China, resulting in naturally lost markets, 
and pretty quickly declining market prices.
    My office and others have been working with the USDA and 
the cotton industry to make some needed updates to the Pima 
program, which the Secretary heard about from some growers in 
my area during his recent visit to California a couple months 
ago.
    But it is my understanding that the needed changes to the 
program are being held up by the OMB, so what can you and the 
Secretary do to help us get this done, and how can this 
Committee be helpful? Our Pima growers are suffering, and with 
this year's crop currently being harvested, we need those 
program updates as soon as possible.
    Mr. Northey. I appreciate that. I am restricted from 
conversations about activities at OMB and the actual proposals, 
but we continue to evaluate the inclusion of other varieties 
within that formula that would potentially impact the support 
through that program.
    Mr. Cox. Okay. I mean, anything that this Committee could 
be doing ourselves?
    Mr. Northey. Just continue to provide information about why 
there should be adjustments to that program from the point-of-
view of your producers is always valuable.
    Mr. Cox. Okay. Then I have a question regarding the Dairy 
Margin Coverage Program, and organic dairy farms are also 
eligible for the program. And I would like to hear about any 
specific outreach you have done to reach this section of the 
industry?
    Mr. Northey. We have reached out to all sorts of trade 
groups and trying to be able to reach out to their producers. 
We certainly can get you the information about what our touch 
has been specifically to organic dairy producers. But, their 
associations have been involved as well, and their marketers 
have been involved in reaching out to their producers, 
recognizing that they qualify for that program as well.
    We can get information about what has gone out. I am not 
personally as familiar with each of those outreach efforts.
    Mr. Cox. Okay. That is all I have, and I yield my time. 
Thank you so much.
    Mr. Northey. Thank you.
    Mr. Vela. I now yield to Mr. Marshall. Sorry, I now yield 
to Mr. Hagedorn, for 5 minutes.
    Mr. Hagedorn. Thank you, Mr. Chairman. Under Secretary, 
nice to see you again.
    I would just like to focus a little bit on the Market 
Facilitation Program, and some of the farmers out there, 
especially in southern Minnesota, have questions. I know you 
have answered this in the past, but I thought maybe it would be 
good to revisit it, as to why maybe people in counties in my 
district are receiving $60 or $70 per acre, whereas in other 
parts of the country could be upwards of maybe $150 an acre. It 
can vary based on ZIP Codes and counties and could be 
neighboring counties getting different numbers for the same 
crops. Could you just maybe go over that a little bit again, 
and help us with that and how the calculations were made?
    Mr. Northey. I can. Thank you, Congressman.
    The formula that was figured out to figure out, as you 
remember, we established the criteria for the payment for the 
Market Facilitation Program during planting, so we wanted to be 
able to not incent the growing of one crop versus another, so 
that is why we went to a county payment rate for whatever a 
producer was planting, they would get the same payment rate. 
And we would not influence those planting decisions. But then 
we had to figure out what that payment rate would be, and we 
looked at those crops that were grown in each of those counties 
and how those crops were being impacted by the trade. Some 
crops are being impacted by the trade tariffs to a greater 
degree than others. They, in some cases, export more of their 
products. In some cases, export more of it to China where we 
have had some issues. Obviously, in the first round, you saw 
some difference between corn and soybeans because they are 
impacted differently. Certainly, cotton is one of those that is 
impacted greatly. Some of the other products are impacted to a 
greater or smaller degree.
    What ends up in that final payment is the mix of the crops 
that are grown in that county, and the impact on the value of 
those crops based on the loss of the markets to both tariffs 
and historical non-tariff barriers as well. The Chief 
Economist's office looked back over the last 10 years to be 
able to look at when we had higher trading years and what non-
tariff barriers might have been added through the years as 
well.
    And so, the differences, there are some places where the 
average acre in that county, which is the mix of acres in that 
county, have a higher impact per acre than others in other 
counties.
    Mr. Hagedorn. I appreciate you clearing that up again.
    I know these subjects that I am about to bring up don't 
necessarily directly impact you, but you have some fine folks 
behind you that you all go back and talk to the Secretary and 
report to the White House and others. What has been going on in 
farm country for 5 and 6 years with the low commodity prices, 
high input costs, it is tough and it is having a cumulative 
effect as we go through the trade negotiations.
    There have been some good things done, and people miss 
that. Regulatory reform, the things that the Administration has 
taken on with some of the folks up here on the Hill, that has 
been excellent. Getting rid of that high cost energy and having 
U.S. energy independence, which is important to agriculture. 
The tax reform bill was good for our farmers. Obamacare and the 
Affordable Care Act, that has really crushed them, and we need 
to do better there and get that down.
    But on trade, my message is this. They understand that 
China has been cheating, and we have to do something. But they 
really want it solved as fast as possible, and I know that you 
are working on it, and the trade rep and the President and 
everybody else is committed to that. And so, we just continue 
to encourage to get a result as fast as possible that is good 
for the whole country.
    Second, on biofuels, you got to keep working in that area. 
I know they are looking at making some announcement hopefully 
in the near future, whether it is buying back the gallons. But 
we need that program implemented the way that Congress 
intended. You can't let the bureaucrats and others decide that 
they are going to reinterpret the statutes. We should be 
following the law of the land, and I hope we can get that 
worked out because it is critically important for our corn and 
soybean farmers in southern Minnesota.
    And last, this is just something to make sure that you stay 
apprised on. This African swine flu that has really crushed 
things in China, maybe half their hogs, obviously demand for 
soybeans would be down. We can't have that here, and I know you 
are working hard, the whole Department is, to make sure that we 
keep it out of the United States, keep it out of North America. 
But that would be devastating to farmers in an array of areas. 
And so, I appreciate your attention to that.
    Thank you.
    Mr. Northey. Thank you.
    Mr. Vela. I now recognize Mr. Van Drew.
    Mr. Van Drew. Thank you, Mr. Chairman, and welcome, Under 
Secretary. It is good to see you. I am from southern New 
Jersey, which is a lot different than northern New Jersey.
    When Secretary Perdue was before the full Committee in 
February, he told us he didn't think a second round of trade 
payments would be necessary or likely, but we, obviously, are 
in the midst of a second round.
    I want your opinion. Do you think at this point, from what 
you hear from the people you speak to; because, you are going 
to have to be ready. Do you think a third round of payments is 
likely at this point?
    Mr. Northey. I am still hoping that the second and third 
payments of the second round are not necessary, because we are 
back to a better trade environment in the short-term. Right now 
we are focused on being able to make these payments now for 
producers. I did not believe there was a likelihood of a second 
round. I thought it sounded to me that we were very close in 
agreement, and that certainly would have been preferable for 
everybody. But when an agreement could not be reached, it was 
important to be able to stand up for the producers, be able to 
support producers in this challenging time.
    Mr. Van Drew. Of course. I agree.
    Mr. Northey. I don't know. I wouldn't----
    Mr. Van Drew. I just hoped you had some inside info.
    Mr. Northey. No.
    Mr. Van Drew. No.
    There are significant differences between the 2018 Market 
Facilitation Program, the MFP, and the 2019 edition of the MFP. 
Most notable is the approach towards how payments are 
calculated, which is based on actual production last year, but 
this year is on a per acre basis. Can you offer the rationale 
or the reasoning or the decision making why that was done?
    Mr. Northey. That is a great question. In 2018, we 
established the Market Facilitation Program going into harvest, 
when we would be very close to be able to have harvest numbers, 
and we could look at actual production as producers could bring 
that information in to their FSA office and be able to provide 
that information.
    As we looked at 2019, we looked at a crop that was growing, 
or in some cases, not even planted yet. We wanted to make sure 
and not influence that planting decision, so we needed to be 
able to have a producer that was considering between two crops 
just look at what the market asked for, not look at a Market 
Facilitation Program payment, which would have been different 
than the first time around if we had instituted that in 2019.
    We wanted to go to an acre payment to be able to provide 
that continuity, and yet, predictability that there was support 
for producers that were impacted by the trade situation in 
2019.
    And so, that is why we went to the acre payment in 2019. 
Certainly, one of the criteria for both programs was to make it 
pretty straightforward for a producer to be able to come up 
with the information that they needed to comply, make it as 
straightforward as possible for our offices as well to be able 
to deliver it, because we were adding that onto the work that 
was being done in our offices and the work that a producer 
needed to go through. I think both met that test, even though 
they were delivered differently, because they were delivered at 
different times of the production year.
    Mr. Van Drew. And you believe by using that combination, 
varying on the circumstances, you achieve the maximum accuracy?
    Mr. Northey. I think so. It is a challenge to be able to 
predict what market impacts are of trade disruptions. The chief 
economists did a great job of being able to analyze that, get 
the information back. Certainly, there will always be 
disagreements of whether that was enough or not or whether it 
was balanced the right way. But I think we did, and then to be 
able to deliver it the way that we did also minimized the 
disruptions that the payment could have caused if we had gone 
commodity by commodity payment.
    Mr. Van Drew. Okay. This trade aid has created a situation, 
as you know, where some farmers are getting direct payments 
while others, like a lot of fruit and vegetable growers, 
particularly in my area, have to hope that the USDA's purchase 
of their products will be large enough to move their whole 
market.
    Can you share why some of the commodities that were 
impacted by the trade war received MFP payments, while others 
received purchases?
    Mr. Northey. As we looked at the commodities that were 
being impacted, you can look at certainly some of the specialty 
commodities that were being impacted. For some of them, we 
could replace that demand by creating new demand by buying them 
and having them offered through food banks. Hopefully that even 
creates additional customers in the future. In other 
commodities, that wasn't possible or we couldn't supply enough 
if it was dairy or pork. We did some purchases, but we also 
needed to make some direct payments. Of course, we didn't have 
any way with the larger commodities, cotton or corn or 
soybeans, to be able to offer purchase and have a place for 
those all to go.
    It made sense to be able to use the purchases wherever it 
could make sense to be able to offer that through other 
outlets, hopefully creating additional customers, and then 
provide direct payments to those that we were not able to 
provide purchases to.
    Mr. Costa [presiding.] The gentleman's time has expired.
    Mr. Van Drew. Thank you, Mr. Under Secretary.
    Mr. Northey. Thank you.
    Mr. Costa. I thank the gentleman.
    The chair will now recognize the gentleman from Georgia, 
Mr. Allen.
    Mr. Allen. Thank you, Mr. Chairman, and Mr. Under 
Secretary, thank you for being here today.
    We have already heard a lot about the situation in Georgia 
with the disaster, and crops being in direct path of the 
hurricane, and the losses from infrastructure and communities 
just devastated. It took a long time, but we now have a 
disaster relief package, and through this process I continue to 
hear from my constituents not only the need for immediate 
disaster assistance, but also the concerns of fixing the 
problems they experienced when signing up for the previous WHIP 
Program.
    To this, Mr. Under Secretary, what has FSA done to ensure 
that the new WHIP+ Program is being implemented effectively and 
efficiently throughout all the local FSA offices?
    Mr. Northey. As we have made sure that our staff is well-
trained in the program, we have made some IT improvements as 
well in the way that the program operates, including the 
payment mechanism being hooked directly to the program 
mechanism, so that allows a little more efficiency in the 
offices.
    It is a challenge for producers when we are looking at 
individual losses, and that is the way this program was 
designed, to be able to look at individual losses. If you and I 
are across the fence from each other and you suffered a 60 
percent loss, I suffered a 40 percent loss, and yet we are in 
the same neighborhood, we will pay based on the relative loss. 
And that requires a certain amount of paperwork. Often that 
information is already available from the crop insurance 
records. Again, that loads fairly quickly into the WHIP 
Program.
    Mr. Allen. Okay.
    Mr. Northey. Where we end up----
    Mr. Allen. Can you define relative loss?
    Mr. Northey. Pardon?
    Mr. Allen. How does relative loss work, are you balancing 
out the losses across a certain area, or how does that work?
    Mr. Northey. We take each individual operation's loss. We 
don't take a regional loss, we take an individual operation's 
loss, and then we take into account what that operation 
received for crop insurance payments as well, and then we have 
a formula to be able to have a higher amount coverage than crop 
insurance, but never more that what a full guarantee for crop 
insurance would have been.
    No producer in this case, even with these payments, is 
going to be better off than they would have been had they had a 
crop, especially those producers that had a really good crop 
coming, and we had that in some cases. They will only be 
insured or they will only be covered, or we only compare 
against what their expected normal crop would have been.
    Mr. Allen. All right, and I understand this became 
available last Wednesday. Is that correct?
    Mr. Northey. It did, yes, on the 11th.
    Mr. Allen. Okay, and you did comment about the software, 
and when will the software be readily available to the FSA 
offices?
    Mr. Northey. It is out there now and they are working. We 
have seen some applications back. Certainly, if you hear any 
different, I would love to be able to hear about that.
    Mr. Allen. Okay.
    Mr. Northey. But it is out there working. We had it 
available for folks. We are not now yet for those first 
operations making those payments. That will occur within the 
next few weeks.
    Mr. Allen. Right.
    Mr. Northey. Once that happens, then we will start making 
payments as soon as----
    Mr. Allen. In addition to the WHIP+ Program, I worked 
tirelessly to secure disaster assistance for our blueberry 
growers who suffered losses in the 2017 late season freeze. 
When do you think that the provision that was included in the 
disaster relief package made available funds to expanded 
coverage of the previous 2017 WHIP package? When will growers 
expect to receive this and how will this be distributed?
    Mr. Northey. Yes. That sign up started last week as well, 
so that started on the 11th as well. I assume we have producers 
that as soon as they are aware of that are coming in the 
office. Again, that is using the 2017 program, so the 2017 
software, payment limits, other things of 2017, and that is 
already available and we should have producers certainly 
possibly signing up for that program right now.
    Mr. Allen. Well, speaking of the trade situation, when 
Secretary Perdue came to his first hearing here, I said then, 
``Farm income was down 55 percent,'' and this was before we 
ever got into trade negotiations. And I said, ``What are we 
going to do about these low commodity prices?'' And he said we 
have bad trade deals. I don't know what the answer is. 
Obviously, lots of people have been impacted by these 
negotiations, but then again, the reason that we have terrible 
trade deals is we have an election in this country every 2 
years, and people who are in public service don't want to take 
the risk of trying to fix these things.
    And so, this President has taken it on and I just pray that 
we can get a quick resolution to this thing, and have a fair 
free trade, because our farmers can compete with anybody in the 
world.
    Mr. Costa. The gentleman's time has expired.
    The chair will now recognize the gentlewoman from Iowa, 
Congresswoman Axne. Welcome.
    Mrs. Axne. Thank you. Thank you, Chairman and Ranking 
Members. Thank you for the opportunity to join this joint 
Subcommittee hearing on disaster recovery, and thank you, Under 
Secretary Northey, for being here. You know it is always great 
to see you.
    As a fellow Iowan, you know as well as I do how devastating 
severe flooding can be, and how long the recovery process can 
take for our communities. Southwest Iowa, as you know, is still 
reeling from the massive flooding that occurred this past 
spring. Entire towns, such as Hamburg and Pacific Junction in 
my district went completely underwater, and have been estimated 
to lose billions of dollars in damages, and of course, 
agricultural losses throughout Iowa.
    But we all know that risk isn't over. In fact, western Iowa 
is currently experiencing another round of potentially severe 
flooding. I have been closely monitoring the situation and 
spoke with emergency management coordinators last night. But 
the current situation further underscores the urgency of what 
we are talking about here today. And when I traveled the 
district and, you and I have worked on this together and saw 
the damages in the spring, of course, what I was impressed with 
was the resiliency of Iowans. Of course, we didn't wait for the 
government to come in and do the job. We got to work themselves 
and they helped one another start that really difficult and 
long road to recovery.
    Church congregations were putting out meals for those who 
didn't have one. Neighbors helped muck out each other's 
basements, and farmers, of course, donated hay to each other 
for their cattle to graze.
    But the bottom line is, is that while Iowans got to work, 
we need to ensure that the Federal Government does its job. I 
heard from a lot of Iowans that said they didn't know what 
resources were out there, what the deadlines were, and how they 
could sign up. As you know, I invited this past June, Leo 
Ettleman, a producer from my district, to testify before a 
Subcommittee hearing, and he told us about the challenges that 
he and others are facing in obtaining the necessary information 
and resources through the flood recovery process.
    I am grateful that the President was quick to declare a 
disaster emergency and that Congress was able to pass our 
disaster supplemental. However, it is very clear to me that we 
need to do a better job of providing a streamlined set of 
processes and procedures that can go into effect immediately 
following a disaster. We have both talked about this issue.
    I have some specific questions that I hope that the USDA 
can help us with. Under Secretary Northey, I know you have long 
experience with flood recovery in Iowa in the Secretary of 
Agriculture during our floods of 2008 and 2011, we worked 
together when I was part of the sustainability task force to 
address that in 2008. Do you agree that it is important for the 
USDA to have prompt and effective communications with those 
that are affected by flooding?
    Mr. Northey. I certainly do, and it is a challenge. They 
are often very busy doing other things. Sometimes even the 
communication tools are down, whether it is internet or phones 
or other things. And so, it is a challenge to be able to 
communicate with folks, so we have to be even more aggressive 
in letting them be able to have easy access to that 
information.
    Mrs. Axne. And during your tenure at the USDA, what steps 
have you taken to improve USDA's communication to farmers 
affected by floods?
    Mr. Northey. We do extra outreach and training for staff 
that find themselves in a disaster situation. Sometimes in that 
area, some of those folks have dealt with emergency 
conservation programs before, and other programs that help 
clean up after a flood or pick up debris or rebuild fences. But 
in some cases, we have folks that have not been experienced 
with that, so sometimes we will send in jump teams as well from 
other areas to bring into those areas. They will have their 
experience and that outreach work, be able to go to community 
organizations, work with those existing outreach even through 
churches, but certainly through extension agents and 
cooperatives and other business partners out there that can 
help us reach out to producers. There are many different ways 
we are looking at trying to do the same thing on the NRCS side 
and providing maybe even almost more of a permanent jump team 
that can come in from outside to be able to help when we have 
disasters. In that case, it is the Emergency Watershed 
Protection Program, an infrastructure support program that is 
unique, that is different than our other tools, but we need 
people with experience, if possible, to be able to help folks 
locally implement those programs.
    Mrs. Axne. Well, I am so glad to hear you talk about this 
jump team, because you and I have talked about some of the 
issues we face trying to get communication to folks who were 
kayaking into their homes, and we talked about mail was being 
sent to them. Well obviously, that doesn't work out, or the 
fact that folks didn't think we needed congregational meals 
because we hadn't requested them. That is because the cattlemen 
stepped in, Farm Bureau, et cetera.
    Last question: Would you be willing to commit to work with 
my office on ways to help streamline that process and the 
communication between USDA and the folks on the ground?
    Mr. Northey. You bet. I would be very glad to.
    Mrs. Axne. I am looking forward to it. Thank you.
    Mr. Costa. I thank the gentlewoman. Her time has expired, 
and we all are sympathetic about the challenges that the states 
that have been subject to the flooding of the Mississippi 
River, and the impacts it has created there have been hard hit, 
those communities, and we appreciate your noting that, and all 
the good work you are doing.
    The chair will now recognize the gentleman from Kentucky, 
Mr. Comer, for 5 minutes.
    Mr. Comer. Thank you, Mr. Chairman, and Under Secretary 
Northey, it is great to have you back to the Committee. You are 
doing a tremendous job at USDA, and I applaud Secretary Perdue 
and the team he has put together. I just wanted to say that, 
and appreciate your good work and your friendship.
    I don't need to tell you, and it has been mentioned several 
times today, about the flooding conditions and the terrible 
planting season that we had. In western Kentucky, I represent 
four counties on the Mississippi River, very small counties in 
geographic area. But one of the counties, Hickman County, had 
over 8,000 acres that didn't get planted in anything. And I 
know that was the case in many areas of the United States along 
the river. And because of the terrible planting season, no 
doubt yields are going to suffer. Large amounts of acres 
weren't planted. When the August crop production report came 
out, a lot of farmers were surprised at the report that were 
projected on the fall harvest, and as a result, corn prices and 
other commodities went down quite a bit overnight.
    Can you describe what caused the differences in those 
reports, and also how farmers, grain elevators, and users of 
commodities can manage the price risk that they face in 
response to sudden changes in prices?
    Mr. Northey. It is really a big challenge in a year like 
this trying to get numbers right. We still don't yet know what 
the production levels will be out there. It partly depends on 
when the frost is and how much time there is for the rest of 
the season. We know it is uneven, production across the 
country. We certainly know that we have a lot of prevent plant 
acres. Across the country, we normally get about 2 or 3 or 4 
million acres that are prevent plant. This year it is 19 
million acres that are prevent plant across the country.
    As time has worked out, folks have looked at the acreage 
numbers. That was one of the concerns that folks had, and 
generally have believed that that fairly represents the actual 
amount of corn acres out there. There is still a lot of 
discussion of what the production levels should be, and I am 
certainly not in the production prediction business. We are 
there to be able to respond after that.
    But risk management tools, there are a lot of great ones. 
Through the companies, certainly crop insurance is one of the 
most important risk management tools that folks participate in, 
and then the revenue coverage has been very valuable to 
producers and we see high levels of participation in that.
    Mr. Comer. Well thank you.
    My next question and last question will be about hemp. I 
know that that has come up a couple times today, and as you 
know, when I was Commissioner of Agriculture, we were the first 
state, Kentucky, to implement a hemp program. It has been a 
huge success story. We have processors that are all over the 
state. Most of the newer ones are located in my Congressional 
district. We are very happy about that, and it has just been a 
great success story.
    As we move forward, I know that Senator McConnell put 
language in the--in Congress to require USDA to have hemp crop 
insurance, and I share Chairman Peterson's concerns about what 
that type of crop insurance product will look like. I just 
wanted to mention two things, and I have had several 
discussions with people at USDA. But I just want to go on the 
record with two things that I hope that the final product looks 
like or doesn't have.
    Number one, I don't want a product that creates absolutely 
no risk for the farmers which would encourage over-production. 
I think that is the concern that Chairman Peterson and Ranking 
Member Conaway have, as do I. And second, we don't want a 
product that is ripe for fraud. And I have always said that the 
best Federal crop insurance product that would prevent fraud 
would be one that says you can only insure what you have a 
contract to sell, whether that is tobacco or hemp; because, the 
overwhelming majority of farmers are honest. They utilize the 
crop insurance program. We need the Federal Crop Insurance 
Program. But there are always a few bad actors here and there, 
and I don't want to see a situation where a farmer has a 
contract to sell 30 or 40 acres of hemp, but they plant 100 or 
200 acres of hemp. Because hemp is a very expensive crop to 
produce.
    I just wanted to go on the record and express my concerns. 
I appreciate the work that you all are doing on industrial 
hemp. I know it is a lot to digest. We went through it in 
Kentucky, and you can put a bunch of zeroes on it, and that is 
what you all are going through now at USDA. But anything that I 
can do or my office can do to work with you on that final 
product, as you know, we are more than willing to do that. But 
I do appreciate the work you are doing and just wanted to 
express my concerns.
    Mr. Chairman, I yield back.
    Mr. Costa. The gentleman's time has expired, and your 
concerns are recognized. Thank you.
    Mr. Northey. Thank you.
    Mr. Costa. The chair will now recognize the gentleman from 
California who represents a great part of the California 
Central Coast, Congressman Panetta.
    Mr. Panetta. Thank you. Thank you, Mr. Chairman, Ranking 
Member Thompson, and of course, Under Secretary Northey. Thank 
you very much for being here. I appreciate not only your time 
today, your preparation for being here, but also your service. 
Thank you very much.
    As you heard, I come from the Central Coast of California, 
and in California, as you know well, we of course have a lot of 
agriculture. But unfortunately, we have some wildfires as well. 
And, last year the California delegation and I joined with my 
colleagues in sending a letter to the appropriators requesting 
that WHIP include assistance for grape growers and other 
producers whose harvests were tainted by wildfire smoke, the 
smoke taint, as you know well. And I got to say, I was pleased 
to hear this year of reports that WHIP+ is getting off to a 
pretty good start, and I know that a lot of my wine grape 
growers in California, who were affected by last year's 
wildfires and the smoke taint are actually pretty pleased with 
how that is going, so that is good to hear.
    But as we continue to roll out WHIP+ and FSA offices 
continue to do that, are you and your agency taking any 
specific steps to reach out to farmers who have been tainted or 
impacted by the smoke taint to ensure that they are aware of 
the assistance that they might be eligible for through this 
program?
    Mr. Northey. I believe that there is outreach. I don't know 
what that is, Congressman, and we certainly can make sure that 
that is true, and certainly will be glad to work with you to 
make sure that we are working with the organizations often, 
whether it is the wineries or others that can help us reach out 
to those producers. We want to make sure, since it has not been 
covered in the past in a sufficient way at all, that they are 
aware that there is now coverage for that.
    Mr. Panetta. Outstanding. Thank you very much. I appreciate 
that offer and we will take you up on that.
    Another thing that we also have in California is obviously 
we have organic crops and specialty crops, and a lot of 
producers in my district, they face a lot of barriers utilizing 
the USDA's crop insurance options, including whole farm revenue 
protection and the non-insured crop disaster assistance 
program, NAP. Given that crop insurance and the participation 
by these farmers is limited to access disaster relief, are 
there any steps being taken by your agency to make sure that 
the crop insurance, or NAP, is more accessible to organic and 
specialty crop producers?
    Mr. Northey. Certainly, it is available and we see some 
good participation, especially in specialty crops. Of course, 
NAP is available where there is not a crop insurance product 
for folks, and we see good participation in those specialty 
crop areas. Whole farm revenue protection is a great option for 
many of those farms with a diversified mix of crops that are 
hard to individually account for, but they can account for the 
revenue across that mix of crops.
    We see participation. We, certainly, provide outreach to 
encourage folks to be a part of it. We are hearing that they 
are good tools for many producers, always looking at ways that 
they can be better tools for producers, but are a very 
important mix of our products for those producers who are not 
producing common commodities in other places.
    Mr. Panetta. Yes, understood, and I appreciate your 
recognition of that.
    In regards to that, have you heard of, or are you 
implementing, any sort of continuing education requirements or 
any training for producers to make sure that they understand 
exactly how this works?
    Mr. Northey. We do provide outreach to producers and 
producer organizations. Certainly, our staff is available to be 
at other meetings to be able to share information as well, 
whether it is a grower meeting about something completely 
different, they can also--our staff will share information. We 
also, and this is delivered through private crop insurance 
agents, and those agents are often very active in the outreach 
that is done around those products as well. They will go ahead 
in service. They will be the ones that will make the 
connection, at least on whole farm revenue protection. The NAP 
is delivered through our FSA offices, and our county executive 
directors or others in that office will participate in some of 
those conversations at larger events, outreach, field days, 
other kinds of things.
    Mr. Panetta. Good. Thank you very much, Mr. Under 
Secretary. I yield back.
    Mr. Costa. The gentleman yields back, and the chair will 
now recognize the gentleman from Kansas, the Jayhawk State, 
Congressman Marshall.
    Mr. Marshall. Well thank you, Mr. Chairman, and good 
morning, Mr. Under Secretary. Thank you so much for being here 
today.
    I want to talk just for a second about high quality alfalfa 
and the Dairy Margin Coverage Program. Now, if I know anything 
about farming, it is alfalfa. I grew up, my main job in the 
summers from age 14 to 18 was hauling hay, and I always really 
kind of didn't look forward to those alfalfa days, because they 
were heavy bales, 90 to 100 pounds, and I remember complaining 
to my grandfather about the weight of those bales. And he said, 
``Look, we grow high quality alfalfa here, and those momma cows 
that are pregnant are going to love this high-quality protein 
they are getting. It is like molasses to them, and that is what 
got those cows through those hard winter days in Kansas.''
    As I understand it, we are working on this new Dairy Margin 
Coverage Program, and the price of that type of alfalfa is a 
little bit more expensive. How is FSA integrating in the 
information into the DMC formula? Is that going to help us have 
a more accurate effect on the cost side of this equation?
    Mr. Northey. It is. I grew up in Iowa baling small squares 
of alfalfa hay, but ours was beef quality hay, not dairy 
quality hay. I certainly know the wonderful smell of alfalfa in 
the summer.
    We did include, as the farm bill suggested, we should look 
at the price of high-quality hay and compare that to the 
average hay price that we were using in that Dairy Margin 
Coverage formula before, everyone is very familiar. You have 
the milk price and you subtract the feed costs, and the margin 
is what we are insuring. If that cost of feed by using dairy 
hay or high-quality hay is a little higher, your margin is a 
little narrower, and you will trigger a payment a little 
earlier.
    We did, after looking at that and seeing that there is an 
additional cost, we included in the hay portion of that feed 
cost 50 percent high quality hay and 50 percent all-hay price. 
And so that has narrowed the margin a little bit and allowed a 
more fair representation of what a dairy producer was actually 
seeing for their feed costs, and certainly, makes it an even 
better tool for producers to be part of that Dairy Margin 
Coverage Program.
    We have seen times where that premium quality hay will jump 
in price because of a shortage. That was not being covered 
before. That is a partial compensation now for those producers, 
and I think that is an improvement of that program.
    Mr. Marshall. Great. I appreciate your efforts on that.
    I want to talk about just a great job my FSA officers are 
doing back home. Now, maybe Kansans just don't complain as much 
as other states, but I am not getting many complaints, and I 
want to shout out to my executive director and a good friend, 
David Shem, as well as all those other FSA officers. And as a 
producer myself who interacts with those people once a year, I 
think they are doing an incredible job. They have already 
processed 112,000 applications for the Market Facilitation 
Program, and 30,000 applications so far for the MFP payments 
for 2019. I appreciate the great work that they are doing.
    One of the things that they are starting to ask me 
questions about is updating the IT systems between Risk 
Management Agency and the Farm Service Agency, and the producer 
data could be shared across agencies. Can you give us an update 
on how that is coming along, the Acreage Crop Reporting 
Streamlining Initiative, and a timeline when you think that 
might be available to producers?
    Mr. Northey. We continue to make progress there to be able 
to allow information. Right now, we have producers that are 
able to certify their acres at Farm Service Agency and have 
that information automatically transfer into their crop 
insurance agent, and vice versa. It is not where it needs to be 
in the longer-term, and we are also looking at improving the 
overall acreage reporting process, too. Right now, much of that 
is still paper driven at the counter, so to be able to put this 
together in a better electronic form would make it an easier 
process for producers at the counter, but also potentially 
decrease the number of contacts a producer needs to be able to 
make, because we have the information at FSA and it can 
automatically go to a crop insurance agent.
    We are making small steps. In the meantime, we are trying 
to get our programs out, and so we are looking to be able to 
make some bigger steps in the future.
    Mr. Marshall. Quickly, my last question has to do with 
WHIP, the Wildfire Hurricane Indemnity Program. Certainly, we 
understand what it typically covers. One of the concerns of my 
producers is on farm-stored commodities and the other thing I 
am hearing about is pivots, the irrigation pivots under water, 
8, 10 of water, and there is no type of coverage for them at 
a cost of several hundred thousand dollars. Any thoughts on 
either of those?
    Mr. Northey. On farm-stored commodities that were impacted 
by flooding are being covered, not within WHIP itself, but 
within the disaster program. That sign up started last week as 
well. And so, we have producers going in, just provide 
information about what a producer had for that stored 
commodity, whether it is hay or whether it is grain that has 
been lost, and we will cover 75 percent of the loss of that.
    Mr. Costa. The--go ahead. Are you done?
    Mr. Northey. And for irrigation pivots, we have some pieces 
to be able to touch that. Typically, that has been covered 
through casualty insurance rather than through our disaster 
programs, but we have some pieces of EQIP in some cases, ECP in 
some cases, but mostly has been covered in regular casualty 
insurance.
    Mr. Marshall. Thank you. I yield back.
    Mr. Costa. The gentleman's time has expired.
    The chair will now recognize the gentleman from South 
Dakota, Congressman Johnson.
    Mr. Johnson. Thank you, Mr. Chairman.
    I feel like I would be remiss if I didn't start with a 
thank you. Of course, we have had a wet year. That has come out 
time and time again as we have been talking about disaster 
response, but you know, Bill, you were so good at being willing 
to have conversations with us earlier in the spring about 
moving that haying and grazing date for cover crop. USDA did 
it. I could tell it took some work on your end to get it done; 
but, on behalf of South Dakota, thank you, because there are a 
lot of us who are a lot better off because of that flexibility 
that USDA showed, that leadership that you showed. So, thank 
you.
    I want to talk about CRP sign up. The last general sign up 
for CRP was in the final days of the Obama Administration, and 
from a South Dakota perspective, we only had a couple selected, 
even though there were thousands of applicants. I think that 
was because EBI pushed acres away from traditional areas. And 
so, I just wanted to get your thoughts on that about EBI, if 
any amendments or evolutions of that are needed, and if there 
are any particular pieces of advice I should give my producers 
in South Dakota as they look toward the next CRP sign up?
    Mr. Northey. Well, you are right we are scheduled for 
December for the next CRP sign up. One of the additional 
challenges CRP had in the last sign up is there are few acres 
that were able to be accepted. The cap was very tight to the 
number of acres that were available. We will likely see a lot 
more acres available this time around. We have expiring acres 
this year, and then for sign up in December, since that starts 
in October of 2020, we will have expiring acres in September 
30, 2020 as well. And so, that is a large number of acres that 
expire at that time.
    I think we will see a lot larger sign up than we have seen 
for many years. That will provide certainly more room for many 
producers. I assume there will be a lot of interest as well.
    The Environmental Benefits Index will be available to 
everybody. We are looking at making some adjustments. The next 
one will look just like this last one, so if there are 
concerns, we are certainly glad to be able to hear that. I 
don't know some of the specifics on whether it targeted other 
areas, so certainly glad to be able to talk through that if 
there are some additional concerns, and what that EBI will look 
like. But that Environmental Benefits Index will be available 
publicly, so each producer will be able to look at it and 
decide whether they want to plant a warm season grass instead 
of a cool season grass, or a native.
    Mr. Johnson. When you talk about EBI being the same, is it 
going to be the exact same mechanism or will it be 
fundamentally the same?
    Mr. Northey. It will be fundamentally the same.
    Mr. Johnson. Okay. So, now as we look at, because it has 
just been a record wet year, and good grief, we had some 
counties in South Dakota that got another 8" or 10" last week. 
These folks just can't buy a break. Some of them have been into 
a number of years of prevent plant already. Of course, they 
know they need another option for that continuously wet ground.
    CRP, is that much of an option for them? Is there any kind 
of a preference that is given to prevent plant type acres for 
enrollment into CRP?
    Mr. Northey. There is not a preference, per se, in looking 
back and seeing what was prevent planted the previous years, 
but it is certainly likely that those areas would qualify, 
especially for wetland program acres. And we have that through 
a program that is out there. We have a Wetland Reserve Program 
as well, and so sometimes connected directly to that general 
enrollment, but often connected in other ways. I would 
encourage folks to go both to their FSA, but their NRCS office 
as well, and have those conversations if they have an area that 
they have lost to too much water for several years and are 
thinking about that area is costing them too much to farm. 
There are some programs that will make good use out of that and 
good areas for public benefit out of that that they can retain 
ownership and be able to have some program participation in 
that.
    Mr. Johnson. Well, Mr. Chairman, I would just close by 
noting how good it feels to have somebody in this position who 
really understands what it is like to work hard outdoors, what 
it is like to have dirty hands, what it is like to sit down and 
try to figure out how do you run an operation with the kinds of 
really tight margins that modern production agriculture has. 
You are doing a good job, sir, in large part because you get 
it. Thank you.
    Mr. Northey. Thank you.
    Mr. Costa. Well, I thank the gentleman from South Dakota. 
There are a number of us who still actively farm, so I 
appreciate that.
    The last Member, and we will close the hearing following 
his 5 minutes, is the gentleman from California who represents 
a nice part of northern California, Congressman LaMalfa.
    Mr. LaMalfa. Thank you, Mr. Chairman. I appreciate it, and 
for having this hearing today to be able to go over these 
matters. Under Secretary Northey, I really appreciate you being 
here and the good work you are doing over there, so thanks.
    I will get through this. I am just about last, but just 
quickly. We grow a lot of amonds in California, or almonds. We 
say amonds. I have to clarify for those who----
    Mr. Costa. The old amond joke.
    Mr. LaMalfa. Yes. I won't tell the joke, but we still have 
an undistributed fund in the Market Facilitation Program from 
last fall. There was $63 million that was set aside by USDA for 
almond producers: $25 million of it has been distributed, 
leaving about $38 million that hasn't been issued for various 
reasons, some of it having to do with particular level of 
record-keeping and farm records that hadn't really been kept. 
My understanding, you already have in place for 2019 a remedy 
for that, so we do appreciate that. The growers appreciate 
that.
    Is there a way to recapture for the 2018 crop the still 
undisbursed $38 million and catch up on some of those needs 
that are still left behind?
    Mr. Northey. For our numbers, our projections of what our 
spending would be for 2018, there were certainly reasons, 
whether payment limits or AGI or other kinds of reasons folks 
did not participate in that program. We have some that 
participate at greater levels than what the dollars were, some 
were at less. What we waited for is for folks to come in and 
apply, and we certainly have the dollars available to do that. 
It is not a set aside of a certain amount of dollars for a 
certain crop, and I just encourage folks to come in and 
participate in this year's program. It is based on acres. It is 
certainly easier for some producers than a production-based 
program was for them, and certainly, we look forward to having 
those folks all participate in this year's program.
    Mr. LaMalfa. Right. Can we apply the acres test to the 2018 
for those that didn't have the farm records on that basis so we 
can again capture some of that that was left behind for those 
losses?
    Mr. Northey. We don't have any mechanism to go back and 
look at that. Sign up has closed on that and we are not looking 
back at change. I know it was a challenge to implement that 
program for lots of producers, as well as for us.
    Mr. LaMalfa. Certainly in the timeframe and such, right? 
Yes.
    Mr. Northey. To be able to get that done, yes.
    Mr. LaMalfa. All right, but you would still encourage them 
to come in and apply, and maybe those records could be built or 
something found satisfactory.
    Mr. Northey. Participate: The sign up for 2018 has closed.
    Mr. LaMalfa. Yes, it has.
    Mr. Northey. But, the signup for 2019 is now open until 
December 6.
    Mr. LaMalfa. Okay. December 6, okay. Thank you.
    And then in the area of the PLC, Price Loss Coverage, as it 
applies to rice and/or others that are applicable, but in rice 
particularly, the crop year being what it is, producers may not 
receive a payment until November or December, even though the 
marketing year ends in the summer, in July typically. What is 
being done to help with the timely issuance of payments to 
those producers, especially since the cash flow can be an issue 
for some?
    Mr. Northey. I don't know when the marketing year ends and 
when our information is available, so typically for us to be 
able to make an ARC or a PLC payment, we need last year's 
production and the marketing years average prices.
    We can check on rice and be glad to be able to work through 
that and be able to get that information to you, but I am 
assuming the timing is as early as it can be, considering when 
we are able to get that information on production and price. If 
it can be earlier and we can legally do it, we sure would love 
to be able to do it. I assume that is why it is that way, but I 
don't know in particular----
    Mr. LaMalfa. Yes, typically the harvest will land in early 
to mid fall, and it wouldn't be too long after that you would 
have certified production amounts. And so, it would seem that, 
taken in context with the marketing of that crop the following 
year, we are just looking for ways to speed up that timeline 
for the PLC to be available, because again, cash flow is a 
problem with all that. It is basically a year behind.
    Mr. Northey. Yes.
    Mr. LaMalfa. Is that something you think can be----
    Mr. Northey. We will certainly look at it. The price that 
we look at for PLC and ARC is the marketing year following that 
production. Often, just like the corn and soybean payments, we 
will make for ARC and PLC in October will be based on the 
prices from last harvest until this late this summer, this 
fall.
    Mr. LaMalfa. Does it have to be the entire crop have that 
done, or can it be on a more individual farmer basis, or----
    Mr. Northey. It is the entire crop. The average for the 
crop, not for the producer.
    Mr. LaMalfa. All right.
    Mr. Northey. But I still will have to, Mr. Congressman, I 
have to check on rice. I am less familiar with the mechanics of 
rice, and if there is something we can do in a more timely 
way----
    Mr. LaMalfa. We would be happy to have that. Thank you, and 
I will yield back, Mr. Chairman.
    Mr. Costa. The gentleman's time has expired. If you could 
please get back not only on the other commodities to the 
gentleman, but to the Committee as well, that would be 
appreciated.
    Mr. Northey. I would be very glad to.
    Mr. Costa. All right. We have come to a close, but before 
we adjourn, I would invite Ranking Member Thompson to make any 
closing remarks that he may desire.
    Mr. Thompson. Mr. Chairman, thank you for this hearing. I 
appreciate the fact that our two Subcommittees came together, 
it is very timely. Secretary Northey, thank you.
    We work really hard on this Committee to make sure we are 
doing the right things by American farm families, and that is 
evidenced by the programs that we put forward and authorize 
within the farm bill. And so, I just take great confidence to 
have somebody with your background, your experience, and quite 
frankly, your confidence executing those programs. And so, 
thank you for what you have done.
    I yield back.
    Mr. Costa. Well, we thank the Ranking Member of the 
Subcommittee, and I know I speak for Congressman Vela, we do 
appreciate the efforts to bring both Subcommittees together for 
this important hearing today, and our staff who worked hard to 
put this together as well for both Subcommittees.
    I will now recognize my Subcommittee's Ranking Member, Mr. 
Rouzer, for any closing comments he might like to make.
    Mr. Rouzer. Well thank you, Mr. Chairman, and Mr. Under 
Secretary, I too thank you for being here. We appreciate the 
work that you and the many great employees all across USDA do, 
and certainly appreciate your attention to the detail of 
implementation of our disaster assistance programs. That is 
just so critically important. This is a very fragile time, very 
precarious time for many in production agriculture, 
particularly those that have been forced to endure multiple 
natural disasters. For example, in my district we had Hurricane 
Matthew in 2016 and then followed up by Hurricane Florence in 
2018, and then low commodity prices on top of that for an 
extended period of time as well. It has been probably one of 
the most challenging times in agriculture, and throughout the 
country in general, but specifically for these areas that have 
been hit so hard by our natural disasters.
    I really appreciate your time and attention and follow 
through on that, and look forward to continuing to work with 
you to address those needs.
    Mr. Chairman, I yield back. Thank you.
    Mr. Costa. All right. The gentleman yields back, and Under 
Secretary Northey, we appreciate the time that you spent this 
morning with both Subcommittees and the testimony that was 
given and the questions that you answered. Clearly, if there is 
any follow up, both Subcommittees will reach out to you and the 
Department. We thank Secretary Perdue. As was noted by almost 
every Member, I believe, it is tough times in farm country, and 
regionally, looking across the country and from a combination 
of natural disasters that have taken place almost in every 
region of the country, to commodity prices that have been 
impacted by a lot of factors, including this trade war that is 
taking place. American farmers, ranchers, dairymen and -women 
are struggling to survive, and clearly, as I say everywhere I 
go, food is a national security item. A lot of folks take it 
for granted. Nobody does it better than the American farmer 
every day, putting food on America's dinner table at the most 
highest quality and at the most cost-effective price anywhere 
in the world. And we do it so well, we can produce more than we 
can consume, and therefore, the trade issues are critical.
    But the fact of the matter is that we must remind ourselves 
that with less than five percent of the nation's population 
directly engaged in the production of food and fiber, that this 
is a critical issue for all Americans, and we must do 
everything we can to ensure that we provide stable markets to 
ensure that all of the American agriculture can make it through 
these difficult times. Because as we know, nobody does it 
better than the American farmer.
    I will close this hearing. The record for today's hearing 
will remain open for 10 calendar days to receive any additional 
material and supplemental written responses from witness to any 
question posed by a Member.
    At this point, this joint hearing is now adjourned. I thank 
the Members of both Subcommittees.
    [Whereupon, at 12:17 p.m., the Subcommittees were 
adjourned.]
    [Material submitted for inclusion in the record follows:]
                          Submitted Questions
Response from Hon. William Northey, Under Secretary, Farm Production 
        and Conservation, U.S. Department of Agriculture
Joint Questions Submitted by Hon. Filemon Vela, a Representative in 
        Congress from Texas; Hon. Glenn Thompson, a Representative in 
        Congress from Pennsylvania
    Question 1. Please provide the Committee with the current number of 
FSA county field office employees for each state, distinguishing 
between permanent full-time and temporary full-time employees.
    Answer.

  FSA County Office Non-Federal (CO) Permanent and Temporary Full-Time
                        Employment as of 10/4/19
------------------------------------------------------------------------
                                                          Total County
                      County Office     County Office      Office Non-
                    Non-Federal (CO)  Non-Federal (CO)    Federal (CO)
       State         Permanent Full-   Temporary Full-    Permanent and
                         Time **            Time         Temporary Full-
                                                              Time
------------------------------------------------------------------------
        Alaska                   4                 0                 4
       Alabama                 127                10               137
      Arkansas                 144                13               157
American Samoa                   1                 0                 1
       Arizona                  20                 2                22
    California                  89                29               118
      Colorado                  95                 4                99
   Connecticut                  11                 1                12
      Delaware                   8                 1                 9
       Florida                  59                13                72
       Georgia                 206                19               225
          Guam                   2                 0                 2
        Hawaii                   9                 3                12
          Iowa                 446                19               465
         Idaho                  73                 2                75
      Illinois                 390                 7               397
       Indiana                 259                 0               259
        Kansas                 370                16               386
      Kentucky                 206                 0               206
              Louisiana         97                 8               105
 Massachusetts                  11                 1                12
      Maryland                  50                 1                51
         Maine                  20                 0                20
      Michigan                 167                 0               167
     Minnesota                 292                 6               298
      Missouri                 302                 5               307
   Mississippi                 147                 0               147
       Montana                 152                 5               157
North Carolina                 233                 9               242
  North Dakota                 200                 6               206
      Nebraska                 290                 7               297
 New Hampshire                  11                 2                13
    New Jersey                  18                 1                19
    New Mexico                  41                 4                45
        Nevada                   9                 2                11
      New York                 103                 3               106
          Ohio                 230                 1               231
      Oklahoma                 190                12               202
        Oregon                  53                 1                54
  Pennsylvania                 118                 7               125
   Puerto Rico                   0                 0                 0
  Rhode Island                   3                 1                 4
South Carolina                  96                12               108
  South Dakota                 229                14               243
     Tennessee                 168                10               178
         Texas                 462                11               473
          Utah                  36                 2                38
      Virginia                 116                 3               119
Virgin Islands                   0                 0                 0
       Vermont                  16                 2                18
    Washington                  67                 4                71
     Wisconsin                 226                 0               226
 West Virginia                  44                 2                46
       Wyoming                  37                 0                37
                   -----------------------------------------------------
  Total...........           6,753               281            7,034
------------------------------------------------------------------------
** Does not include permanent part-time staff.


    FSA County Office Federal (GS) Permanent and Temporary Full-Time
                        Employment as of 10/4/19
------------------------------------------------------------------------
                                                          Total Federal
                      Federal (GS)      Federal (GS)     (GS) Permanent
       State         Permanent Full-   Temporary Full-   and  Temporary
                          Time              Time            Full-Time
------------------------------------------------------------------------
                               (4)               (5)    (col. 4 + col. 5
                                                             = col. 6)
------------------------------------------------------------------------
        Alaska                   0                 0                 0
       Alabama                  21                 0                21
      Arkansas                  63                 0                63
American Samoa                   0                 0                 0
       Arizona                   9                 0                 9
    California                  31                 0                31
      Colorado                  20                 0                20
   Connecticut                   4                 0                 4
      Delaware                   1                 0                 1
       Florida                  17                 0                17
       Georgia                  35                 0                35
          Guam                   0                 0                 0
        Hawaii                  10                 0                10
          Iowa                  81                 0                81
         Idaho                  25                 0                25
      Illinois                  55                 0                55
       Indiana                  34                 0                34
        Kansas                  62                 0                62
      Kentucky                  68                 0                68
              Louisiana         40                 0                40
 Massachusetts                   6                 0                 6
      Maryland                   7                 0                 7
         Maine                  16                 0                16
      Michigan                  36                 0                36
     Minnesota                  69                 0                69
      Missouri                  54                 0                54
   Mississippi                  45                 0                45
       Montana                  25                 0                25
North Carolina                  34                 0                34
  North Dakota                  59                 0                59
      Nebraska                  64                 0                64
 New Hampshire                   3                 0                 3
    New Jersey                   2                 0                 2
    New Mexico                  14                 0                14
        Nevada                   3                 0                 3
      New York                  42                 0                42
          Ohio                  35                 0                35
      Oklahoma                  80                 0                80
        Oregon                  19                 0                19
  Pennsylvania                  32                 0                32
   Puerto Rico                  28                27                55
  Rhode Island                   0                 0                 0
South Carolina                  23                 0                23
  South Dakota                  58                 0                58
     Tennessee                  37                 0                37
         Texas                  90                 0                90
          Utah                  19                 0                19
      Virginia                  25                 0                25
Virgin Islands                   1                 0                 1
       Vermont                  12                 0                12
    Washington                  16                 0                16
     Wisconsin                  58                 0                58
 West Virginia                  24                 0                24
       Wyoming                  12                 0                12
                   -----------------------------------------------------
  Total...........           1,624                27             1,651
------------------------------------------------------------------------

    Question 2. Please provide your projected number of FSA county 
field office employees both permanent full-time and temporary full-time 
for each state, for the 4th Quarter of FY 2020.
    Answer. FSA uses the Optimally Productive Office (OPO) tool to 
inform staffing decisions. It provides dynamic data and analysis built 
on more than 600 million data points to help leaders in the field and 
at headquarters make decisions to better serve farmers and ranchers. 
The productivity tool provides data that informs leaders on the varying 
levels of productivity across offices and programs. The demand forecast 
tool provides a view of estimated future workload to help leaders 
better plan for future work. The location analysis tool provides 
leaders with data that informs where offices could be best located to 
optimize customer service and employee experience. Together, these 
tools allow USDA leadership to use a data-driven approach in 
determining where to place staff and locate offices in order to 
efficiently and effectively serve farmers and ranchers. Since staffing 
decisions are informed by these dynamic factors as well as the impacts 
of attrition, competition for talent, and changing technology and 
processes, we are unable to project what the needs will be by state in 
the 4th quarter of FY 2020.

    Question 3. Please provide the Committee with the optimal number of 
``unrestricted'' FSA field office employees for FY 2020 as determined 
by the Optimally Productive Office tool for each state.
    Answer. The OPO toolset described in Question 2 shows the 
unrestricted staffing level as of October 4, 2019 is 11,644 nationwide; 
however, similar state level data is unavailable.

    Question 4. Please provide the Committee with the staff ceiling 
numbers for FY 2020 given to each State Executive Director.
    Answer. Until a full year FY20 budget is provided, states will 
retain the hiring levels provided for FY 2019.

    Question 5. Please provide the current number of FSA county offices 
by state, distinguishing between those that are open full-time (daily, 
Monday through Friday) and those open part-time.
    Answer.

 Number of Full-Time and Part-Time Farm Service Agency County Offices as
                               of 10/15/19
------------------------------------------------------------------------
                     Number of Full-   Number of Part-
       State           Time County       time County       Grand Total
                         Offices           Offices
------------------------------------------------------------------------
       Alabama                  44                 1                45
        Alaska                   2                 0                 2
American Samoa                   1                 0                 1
       Arizona                   8                 0                 8
      Arkansas                  52                 0                52
    California                  30                 0                30
      Colorado                  32                 6                38
   Connecticut                   5                 0                 5
      Delaware                   2                 1                 3
       Florida                  30                 0                30
       Georgia                  54                12                66
          Guam                   1                 0                 1
        Hawaii                   4                 0                 4
         Idaho                  29                 0                29
      Illinois                  82                11                93
       Indiana                  73                 2                75
          Iowa                  97                 0                97
        Kansas                  94                 2                96
      Kentucky                  64                 0                64
              Louisiana         35                 2                37
         Maine                  12                 1                13
      Maryland                  19                 1                20
 Massachusetts                   7                 0                 7
      Michigan                  47                 2                49
     Minnesota                  69                 5                74
   Mississippi                  63                 0                63
      Missouri                  92                 2                94
       Montana                  46                 2                48
      Nebraska                  67                 4                71
        Nevada                   6                 0                 6
 New Hampshire                   5                 0                 5
    New Jersey                   6                 0                 6
    New Mexico                  20                 4                24
      New York                  37                 2                39
North Carolina                  65                 7                72
  North Dakota                  51                 0                51
          Ohio                  60                 6                66
      Oklahoma                  58                 1                59
        Oregon                  21                 1                22
  Pennsylvania                  37                 1                38
   Puerto Rico                   7                 2                 9
  Rhode Island                   1                 0                 1
South Carolina                  33                 1                34
  South Dakota                  55                 0                55
     Tennessee                  58                 1                59
         Texas                 168                 5               173
          Utah                  18                 1                19
       Vermont                   8                 1                 9
Virgin Islands                   1                 0                 1
      Virginia                  41                 0                41
    Washington                  23                 2                25
 West Virginia                  23                 0                23
     Wisconsin                  51                 4                55
       Wyoming                  17                 0                17
                   -----------------------------------------------------
  Grand Total.....           2,031                93             2,124
------------------------------------------------------------------------

    Question 6. According to press reports and anecdotal information, 
USDA has reduced FSA field office staff totals from 11,000 in 2008 to 
8,700 currently. Please verify this information.
    Answer. We are unable to separate out the different types of FSA 
staff going back to 2008. However, we can provide on-board staff as of 
September 30 each year. The following table sets out staffing numbers 
for each fiscal year less the mission support function series that 
correspond with positions transferred to the FPAC Business Center on 
October 14, 2018.

----------------------------------------------------------------------------------------------------------------
                 2010      2011      2012      2013      2014      2015      2016      2017      2018      2019
----------------------------------------------------------------------------------------------------------------
Farm Service     12,706    12,148    11,189    10,330     9,798    10,166    10,530    10,132     9,516    9,596
       Agency
----------------------------------------------------------------------------------------------------------------

    Question 7. Please provide the amount of late payments you have 
made in FY 2019 and FY 2020, listed by program, including interest 
paid.
    Answer.

                    FSA/CCC FY 2019 All Fiscal Months
                     (Prompt Payment Interest (PPI))
------------------------------------------------------------------------
                                      Payment Request
   Accounting Program Description          Amount        Interest Amount
------------------------------------------------------------------------
Economic Adjustment Assist.--Upland   $8,885,074.68         $14,586.94
                          Cotton
Cotton Ginning Cost-Share Program           $823.00              $7.79
                               Livestock $12,083.00aster Progra$120.88
 Non-Insured Assistance Program      $10,307.31$146.13
                      Authorized
Biomass Crop Assistance--Technical       $77,519.25            $234.17
                         Assist.
Biomass Crop Assistance--Annual          $72,237.00          $1,420.46
                          Rental
Biomass Crop Assistance--Cost-Share       $8,390.00              $9.79
 Non-Insured Assistance Program       $1,008,180.00         $42,983.92
                           NAP Loss Adjuster--$0.00y            $20.09
                           NAP Loss Adjuster--$0.00l             $6.28
                               Livestock$190,990.00Program   $5,581.34
                Emerg. Assist. Livestock$603,964.00          $7,223.00
                              (ELAP)
        Tree Assistance Program          $58,097.00            $716.70
                               Livesto$1,332,580.00gram     $28,546.74
Geographic Disadvantaged Program          $1,592.49             $26.18
                         Price Loss Co$4,090,208.00m        $28,741.26
Agricultural Risk Coverage Program--  $1,164,134.16         $14,030.30
                          County
   Agricultural Risk Coverage--         $132,118.00         $13,506.32
                      Individual
                               Loss Adjuster S$0.00--TAP        $16.68
                               Loss Adjuster T$0.00--TAP         $3.91
Geographic Disadvantaged Program            $907.82             $29.55
Geographic Disadvantaged Program         $11,121.39            $182.05
Geographic Disadvantaged Program         $63,991.42            $764.27
Supplemental Revenue Assistance               $0.00          $9,853.97
                         Program
Wildfires and Hurricanes Indemnity    $3,692,650.00          $6,906.73
                         Program
Geographic Disadvantaged Program          $3,540.77              $2.44
Market Facilitation Program--Crops   $37,155,886.00      $1,032,611.41
Market Facilitation Program--DAHG     $2,032,378.00         $34,163.96
  Market Facilitation Program--         $366,967.00         $12,094.71
                 Specialty Crops
TMP/MPF 2019 Non-Specialty Crops        $721,644.30         $26,420.93
  TMP/MPF 2019 Speciality Crops          $21,451.78            $556.64
                  TMP/MPF 2019 Livestock  $3,200.00          $1,908.81
TMP/MPF 2019 Non-Speciality Crops--           $0.00              $7.37
                               A
     Grasslands Reserve Program       $1,185,526.00          $8,212.75
                    CRP--Cancel          $32,068.00              $3.22
 CRP--Emergency Forestry Annual           $6,547.00            $377.91
                          Rental
 CRP--Emergency Forestry Annual           $4,622.00             $16.76
                          Rental
     CRP Payment--Annual Rental           $1,476.00             $34.54
     CRP Payment--Annual Rental       $1,244,967.00         $26,660.17
       CRP Old Unpaid Contracts          $12,838.50            $292.48
          Auto CRP--Cost-Shares      $14,012,690.00        $104,496.90
                  CRP Incentive             $874.00             $15.42
           CRP Common Incentive          $14,887.00         $17,451.85
 Emergency Forestry Restoration         $117,102.00            $525.03
                         Program
   Emergency Forest Restoration         $186,232.00          $1,667.72
                        Stafford
  CRP--Chesapeake Bay Incentive               $0.00            $454.81
 Emergency Conservation Program       $1,437,076.00          $4,700.44
Emergency Conservation Program FY17   $1,098,162.00          $4,469.30
 Emergency Conservation Program       $1,591,288.00          $4,984.07
                        Stafford
         ECP Cost-Share FY 2018       $8,020,742.00         $36,026.49
                               Loan Deficiency$0.00tils, Dry     $0.00
                               Loan Deficiency$0.00and Cotton    $0.00
          Miscellaneous Expense          $72,130.54          $1,117.66
  AMA Organic Cost-Share--Crops           $1,500.00              $4.54
  CCC Organic Cost-Share--Crops         $390,721.43          $2,366.41
       CCC Organic Cost-Share--Livestock $63,822.09            $345.71
CCC Organic Cost-Share--Wild Crops        $2,653.00             $12.99
  CCC Organic Cost-Share Fees--         $105,955.00            $692.37
                        Handling
Organic Cost-Share Fees--St. Org.         $2,687.25             $22.44
                       Pgm. Fees
Margin Protection Program--Dairy         $70,520.00          $7,770.48
       Margin Protection--Dairy         $563,352.60            $510.52
 Dairy Margin Coverage--Premium       $1,891,587.72          $2,138.48
                      Repayments
  Dairy Margin Coverage Program           $4,307.06            $429.07
     Interest--Cotton, Special Loan      $14,078.93              $4.82
                                    ------------------------------------
  Total............................  $93,872,449.49      $1,509,237.07
------------------------------------------------------------------------


                     FSA/CCC FY 2020 Fiscal Month 1
                     (Prompt Payment Interest (PPI))
------------------------------------------------------------------------
                                      Payment Request
   Accounting Program Description          Amount        Interest Amount
------------------------------------------------------------------------
   Non-Insured Assistance Prog.          $73,855.00              $5.39
                      Authorized
 Non-Insured Assistance Program          $11,310.00          $6,836.92
                               Livestock Indem$0.00Program   $1,101.57
                Emerg. Assist. Livestock Bees $0.00            $487.85
                              (ELAP)
                         Price Loss Cover$19,733.00m         $1,754.92
Agricultural Risk Coverage Prog.--       $41,185.00          $1,423.56
                          County
Supplemental Revenue Assistance               $0.00          $6,971.83
                         Program
Market Facilitation Program--Crops      $116,030.00          $1,643.35
Market Facilitation Prog.-Specialty      $61,584.00            $113.43
                           Crops
TMP/MPF 2019 Non Specialty Crops        $635,277.08         $40,600.37
  TMP/MPF 2019 Speciality Crops           $4,125.96          $1,968.69
                  TMP/MPF 2019 Livestock      $0.00          $2,014.13
TMP/MPF 2019 Non-Speciality Crops--           $0.00             $66.01
                               A
     Grasslands Reserve Program         $116,952.00            $957.89
     CRP Payment--Annual Rental          $10,519.00            $204.30
          Auto CRP--Cost-Shares          $20,682.00             $85.66
 Emergency Forestry Restoration          $10,792.00            $182.43
                         Program
   Emergency Forest Restoration         $149,105.00            $819.85
                        Stafford
 Emergency Conservation Program         $228,101.00          $1,881.07
Emergency Conservation Program FY17      $12,979.00             $58.25
 Emergency Conservation Program         $155,770.00            $367.78
                        Stafford
         ECP Cost-Share FY 2018       $1,047,978.00          $5,952.05
                               Loan Defic$63,980.17tils, Dry    $23.61
                               Loan Deficien$772.00and Cotton   $32.07
          Miscellaneous Expense               $0.00              $2.79
  Dairy Margin Coverage Program                                $883.14
                                    ------------------------------------
  Total............................   $2,780,730.21         $76,438.91
------------------------------------------------------------------------

    Question 8. Please provide an accounting for the amount currently 
being spent on leasing vacant or underutilized physical office space, 
broken out by leases on offices with no employees and the offices that 
are only occupied part time by appointment only.
    Answer. As of October 15, 2019, the Farm Service Agency has 187 
offices that are either zero-person offices or part-time offices. The 
total annual rent cost for these offices is $8,716,753. Of these 187 
offices, there are 94 offices with zero personnel. The annual rent cost 
for the zero-person offices is $4,606,487. Additionally, FSA has 93 
offices that are occupied part-time by appointment only. The annual 
lease cost for operating these offices is $4,110,266. The lease term 
for all FSA offices vary, but generally a lease may be terminated with 
120 day notification to the lessor.

------------------------------------------------------------------------
    Office Classification       Number of Offices         Rent Cost
------------------------------------------------------------------------
   Zero-person Offices                      94            $4,606,487
     Part-time Offices                      93            $4,110,266
                             -------------------------------------------
  Total Zero-person & Part-                187            $8,716,753
   time Offices.............
------------------------------------------------------------------------

Questions Submitted by Hon. Jim Costa, a Representative in Congress 
        from California
    Question 1. One of the farm bill provisions important to many 
California cotton producers and other cotton growers in the Far West 
region is the Extra Long Staple (ELS) or Pima Competitiveness Program, 
since Pima cotton is not eligible for the traditional farm bill safety 
net programs. Just like our friends in other parts of the cotton belt 
that produce upland cotton and are being harmed by the tariff situation 
with China, Pima cotton producers are also suffering due to lost market 
in China and quickly declining market prices. My office and others have 
worked with USDA and the cotton industry to make some needed updates to 
the Pima program and I'm very appreciative of Secretary Perdue's 
support on this. He heard about the need for this from some growers in 
my district when he was visiting my district a few months ago. However, 
it is my understanding the needed changes are being held up by OMB so 
what can you and the Secretary do to help get this done and how can 
this Committee be helpful?
    Answer. USDA has been working closely with OMB to resolve PAYGO 
issues associated with updating some of the program parameters. We 
anticipate resolution of this issue soon.

    Question 2. I am hearing from my constituents of staffing shortages 
at local Farm Service Agency (FSA) offices and delayed receipt of 
Market Facilitation Program (MFP) payments. Can you please explain the 
payment system in place for MFP payments? What is being done to ensure 
efficient delivery of payments?
    Answer. The MFP application system calculates payments based upon 
eligible acreage multiplied by an established county MFP rate for non-
specialty crop commodities, and by the established rate for the 
applicable specialty crops. In the case of livestock, the applicant's 
ownership share interest in production as recorded in the MFP 
application system is multiplied by the applicable payment rate for the 
livestock commodity. A payment record is generated once the approval 
date is recorded in the MFP application system. Nightly payment sweeps 
are conducted. Payments that are successfully pushed to the National 
Payment Service are to be certified and signed the next business day. 
Field offices have been instructed to record County Committee approvals 
the same day in the MFP application system. Complete applications are 
to be reviewed and approved within 30 days of receipt in a County 
office to avoid prompt pay interest payments.
    Delays in payments can occur if an applicant has not provided all 
of the required payment eligibility forms, such as a payment limitation 
farm operating plan or Adjusted Gross Income certification. County 
office staff follow up with MFP applicants as time permits to obtain 
the necessary documentation to record current payment eligibility 
statuses.

    Question 2a. What is being done to address reports of staffing 
shortages at FSA offices given the simultaneous rollout of the new 
disaster programs, Dairy Margin Coverage, other farm bill programs, and 
MFP?
    Answer. FSA has adjusted to handle the FY19 increased workload in a 
number of ways. Significant training was done to prepare staff for the 
new provisions of the 2018 Farm Bill which allows them to more 
confidently and efficiently serve customers. Ad hoc program workload 
was addressed in several ways. Technology improvements like automated 
payments reduced data entry. Temporary employees as well as jump teams 
were also used to meet the ad hoc program demand. Mechanisms like 
appointments and registers help staff manage the flow of customers. In 
addition, utilizing Risk Management Agency and the Authorized Insurance 
Providers (AIPs) to deliver prevented planting disaster payments as 
part of the supplemental disaster program shifted work from FSA 
offices.

    Question 3. If a dairy operation signed up for the 5 year discount 
in Dairy Margin Coverage and then goes out of business between now and 
2023, they aren't required to pay the remaining premiums for future 
years. Is that correct?
    Answer. Yes, if a DMC participating dairy operation dissolves 
between now and 2023, the dairy operation is not required to pay the 
remaining premium fee from the date of dissolution and for the future 
years in the contract.

    Question 4. What specific work has USDA done to inform farms that 
never participated in the Margin Protection Program about their options 
under Dairy Margin Coverage?
    Answer. USDA performed significant outreach before and during the 
DMC enrollment and coverage election period signup which included press 
releases, publications and FSA County Office newsletters. Additionally, 
in coordination with agriculture organizations including farm credit, 
farm bureau, and ag extension, FSA provided information and support in 
promotion of the DMC program. FSA County Offices were authorized to 
perform additional outreach as needed and promote the program 
throughout their county area.

    Question 5. In addition to or in place of the Market Facilitation 
Program, have there been any discussions at USDA about spending some 
trade aid money on domestic market development so farmers have 
additional places to sell products in the future?
    Answer. The trade mitigation assistance is focused on helping 
farmers adjust to disrupted markets caused by retaliatory tariffs. One 
part of this strategy is to help producers develop existing and find 
new overseas markets for their products. Therefore, there has been no 
discussion of domestic marketing programs in the context of this trade-
related assistance.

    Question 6. Given that dairy farmers have more tools available now 
given Dairy Margin Coverage and the new Risk Management Association 
insurance options, how are you working to demonstrate how these two 
types of risk management options can be used together?
    Answer. Moving forward, FSA and RMA will work towards developing 
documents on the attributes of the three USDA dairy risk management 
programs and complete a side by side comparison of the individual 
program details.
Questions Submitted by Hon. Collin C. Peterson, a Representative in 
        Congress from Minnesota
    Question 1. In the statement of managers for the 2018 Farm Bill, we 
asked you to ``conduct outreach to eligible operations through repeated 
contacts and multiple modes such as mailings, phone calls and local 
meetings, and to collaborate with state licensing boards, cooperatives, 
producer groups, institutions of higher education, and other 
stakeholders to thoroughly inform producers of their operations' new 
affordable options under DMC, MPP credit or refund values, and the new 
safety net options provided under DMC.''
    Would you submit a detailed written summary of the outreach efforts 
FSA has undertaken including number of contacts made by each method and 
overall percentage of operations reached for the hearing record?
    Answer. Although an independent, authoritative registry of eligible 
dairy operations throughout the country is unavailable, so a percentage 
of operations reached cannot be provided, USDA developed a multi-
faceted outreach strategy to ensure producers were aware of their 
options under the Dairy Margin Coverage program. USDA performed 
significant outreach before and during the DMC enrollment and coverage 
election period signup which included press releases, publications and 
FSA County Office newsletters. Additionally, in coordination with 
agriculture organizations including farm credit, farm bureau, and ag 
extension, FSA provided information and support in promotion of the DMC 
program. FSA County Offices were authorized to perform additional 
outreach as needed and promote the program throughout their county 
area. County Offices regularly informed dairy operations on DMC by use 
of the GovDelivery electronic newsletter. Additionally, county staff 
made calls to dairy operations reminding them of program deadlines and 
held DMC information meetings separately or in coordination with the 
affiliated dairy agricultural organizations. FSA will continue to 
employ the strategies outlined below during future enrollment periods 
as well.
    The FSA Administrator, Outreach Coordinator and Deputy 
Administrator for Farm Programs held three separate dairy industry 
stakeholder calls with over forty stakeholders on the following dates:

  Call 1: 4/22/19
  Call 2: 6/14/19
  Call 3: 9/9/19

    Summary of letters and post cards mailed in 2019 for dairy 
programs:
    MPP:

  1.  Retroactive LGM-MPP--Signup postcard to LGM dairy operations that 
            did not participate in MPP informing of MPP sign-up. 300 
            postcards mailed to this target audience.

  2.  Limited MPP--For 2018 MPP partial year contracts, 468 
            informational sessions were conducted by FSA County Office 
            staff, that covered MPP, along with DMC and LGM. 
            Additionally, news releases were distributed at the state 
            and national levels through the Agency's county specific e-
            mail lists. As a result, there were 296 applications for 
            MPP received.

  3.  MPP Repayments--Letter informing dairy operations of their 
            specific MPP repayments amounts for cash or credit. 14,404 
            mailed.

    DMC:

  1.  Notification Letter to MPP-Dairy participants of 2019 DMC sign 
            up. 28,703 mailed.

  2.  Reminder post card to dairy operations not enrolled in DMC. 9,795 
            mailed.

  3.  Receivable letter to dairy operations with unpaid premiums. 3,604 
            mailed.

    Key Updates:

   2019 Enrollment:

     23,269 producers have signed up for the program.

     10,040 producers signed a 5 year contract.

     9,157 producers applied $30 million in credit from 
            their Margin Protection Program for Dairy participation to 
            DMC.

     For Tier One, 99.3% of producers elected 95% coverage.

     For Tier Two, 98.6% of producers elected 95% coverage.

   2020 Enrollment (as of November 4, 2019):

     3,103 producers have signed up for the program.

     For Tier One, 99.2% of producers elected 95% coverage.

     For Tier Two, 98.8% of producers elected 95% coverage.

   Comms/Outreach Analytics for DMC campaign:

     69,770+ page views for dairy-related news releases, 
            blogs and webpages.

     376,200+ emails opened with dairy-related information.

     3,220+ earned media articles with an audience reach of 
            more than 10.7 million people.

     622,400+ impressions on USDA and FPAC-managed social 
            media accounts

     38,800+ visits to the DMC Decision Tool.

     150 participants in June 17 webinar.

     468 targeted outreach meetings were carried out as of 
            Sept. 30, 2019.

    Question 2. We have an issue where FSA loan officers have approved 
loans for young operators using shared facilities, only then to be told 
that they don't qualify under DMC rules. What are you doing to make 
sure that new and beginning farmers have access to DMC and your program 
rules aren't in conflict and are county committees being used to give 
guidance on whether this is a new operation and not an effort to game 
the system?
    Answer. DMC and Farm Loan Programs are administered under separate 
authorizing statutes, and these statutes have differences in 
determining a producer's eligibility for each. The DMC program allows 
new and beginning farmers the opportunity to establish a new production 
history depending on when they started to commercially market milk. FSA 
does have limitations on multiple producer operations. County Executive 
Directors (CEDs) are trained on producer eligibility and other 
requirements for DMC. They work with County Committees, which 
determines a dairy operation's eligibility for the DMC program based on 
separate and distinct operating criteria. In the case of 
intergenerational transfers, a producer is able to participate in DMC 
and also obtain a farm loan.
    Assisting beginning farmers and ranchers has been a priority of 
Secretary Perdue for 3 years. We encourage you to provide us with 
specific cases of farmers who have been unable to utilize DMC due to 
shared facilities operations to assess what may be done.
Questions Submitted by Hon. Anthony Brindisi, a Representative in 
        Congress from New York
    Question 1. What concerns, if any, are you hearing from farmers 
about the program, concerns that may be keeping them from signing up 
for the program? If so, what are your plans for addressing such issues?
    Answer. USDA is aware not all dairy operations have chosen to 
participate in the DMC program. While robust outreach efforts were 
implemented to encourage DMC participation, some producers decided not 
to participate due to declining government support and religious 
considerations. USDA will continue to communicate and encourage 
participation from all dairy operations.

    Question 2. With 2019 DMC sign-ups now closed, can you share a bit 
about the outreach work that FSA has done to encourage all producers to 
sign up for the program, even those that had not been in the Margin 
Protection Program?
    Answer. USDA performed significant outreach before and during the 
DMC enrollment and coverage election period signup which included press 
releases, publications and FSA County Office newsletters. Additionally, 
in coordination with agriculture organizations including farm credit, 
farm bureau, and ag extension, FSA provided information and support in 
promotion of the DMC program. FSA County Offices were authorized to 
perform additional outreach as needed and promote the program 
throughout their county area.

    Question 3. With the 2020 sign-up not far away, do you anticipate 
any changes being made to the process based on how this year's process 
went?
    Answer. The Dairy Margin Coverage (DMC) enrollment and coverage 
election period for 2020 is currently open until December 13, 2019. DMC 
enrollment process for 2020 is unchanged from 2019, and FSA is planning 
to employ similar outreach strategies to inform producers of their 
coverage options under the program We issued a news release at the 
commencement of signup on October 7 and we will continue to make 
departmental notifications to the dairy industry, individually notify 
producers through postcards and letters, as well as use our GovDelivery 
platform to notify producers, in addition to efforts made at the local 
levels through our County Offices to ensure producers are well informed 
about the signup process for 2020.
Question Submitted by Hon. TJ Cox, a Representative in Congress from 
        California
    Question. I have a question regarding the Dairy Margin Coverage 
Program, and organic dairy farms are also eligible for the program. And 
I would like to hear about any specific outreach you have done to reach 
this section of the industry?
    Answer. USDA performed significant outreach before and during the 
DMC signup which included press releases, publications and FSA County 
Office newsletters. Additionally, in coordination with agriculture 
organizations including farm credit, farm bureau, and ag extension, FSA 
provided information and support in promotion of the DMC program. FSA 
County Offices were authorized to perform additional outreach as needed 
including organic producers and promote the program throughout their 
county area.
Question Submitted by Hon. Doug LaMalfa, a Representative in Congress 
        from California
    Question. In the area of the PLC, Price Loss Coverage, as it 
applies to rice and/or others that are applicable, but in rice 
particularly, the crop year being what it is, producers may not receive 
a payment until November or December, even though the marketing year 
ends in the summer, in July typically. What is being done to help with 
the timely issuance of payments to those producers, especially since 
the cash flow can be an issue for some?
    Answer. The Agricultural Act of 2014 established the timing of ARC 
and PLC payments, which shall be made beginning October 1, or as soon 
as practicable thereafter, after the end of the applicable marketing 
year for the covered commodity. The Agriculture Improvement Act of 2018 
retains this provision. Based on stakeholder input during the 
implementation of the 2014 Act, the price that all short and medium 
grain rice receives outside California is used for the calculation of 
the final marketing year average price for this program. This data is 
available by the end of October, several months earlier than final 
price data from California, which allows ARC and PLC payments to be 
made in November, consistent with the statute.